The Bill

Tom Shanker reports for The New York Times that the Pentagon's $515.4 billion budget request means that if it's approved "annual military spending, when adjusted for inflation, will have reached its highest level since World War II." Indeed, that's an understatement because that figure "does not include supplemental spending on the war efforts or on nuclear weapon." Basically, military spending is way, way, way higher than it was during World War II since there's little reason to think that spending on a war shouldn't be counted as military spending. Now the country is obviously much richer than it was in the early 1940s so we can afford this kind of extravagance if the broader geopolitical context justifies it. But does it?

That above is a chart Ezra Klein made based on 2005 data. Little about that context suggests to me that we needed to add much more money than the entire Chinese defense budget to our own spending. It's worth keeping in mind the next time you hear that the country "can't afford" to do something or other. We can afford plenty when it's something that political and economic elites want us to spend money on.

Comments

what would make a nice accompaniment to that graph would be the same graph for the world war two period..

Posted by matt | February 4, 2008 2:32 PM

part of the disparity is that we're a richer country, and our labor costs are higher - this impacts soldier's wages, as well as the usual ripple effects (VA costs, manufacturing costs, etc), although this shouldn't matter in comparision to France. but yeah, the US's spending would still be way beyond everybody elses spending.

Posted by george koch | February 4, 2008 2:34 PM

what would make a nice accompaniment to that graph would be the same graph for the world war two period..

Posted by matt | February 4, 2008 2:35 PM

Nice of the Chinese to finance our astronomical military buildup, though. Good people, they are.

Posted by Glenn | February 4, 2008 2:36 PM

I like the way they call it the "defense" budget.
Who could object to "defending" the continental US?

Guess we need it to stave off that mighty Al Qaeda armada steaming over here from the other side of the Atlantic Ocean.

Posted by Don Williams | February 4, 2008 2:37 PM

It needs to be framed as a percentage of GDP for it to actually be significant. Otherwise it's just a bit of meaningless pop trivia.

Posted by fumphis | February 4, 2008 2:40 PM

A nice accompaniment would be military spending as a % of GNP for each country. This might look the US's spending look a little less extravagant, but it would be more informative.

Posted by Kurzbein | February 4, 2008 2:44 PM

A nice accompaniment would be military spending as a % of GNP for each country. This might look the US's spending look a little less extravagant, but it would be more informative.

Posted by Kurzbein | February 4, 2008 2:45 PM

On the percent of GDP thing, it seems to me that military capability isn't scaled by GDP so it would be misleading to scale the numbers that way.

Posted by matt | February 4, 2008 2:46 PM

It needs to be framed as a percentage of GDP for it to actually be significant. Otherwise it's just a bit of meaningless pop trivia.

The Solomon Islands spends 89%* of its GDP on defense. Wetting your pants yet?

(* : for some unknown value of 89%)

Posted by BP | February 4, 2008 2:48 PM

Why should our defense needs, or the propriety of a given level of defense spending, depend upon our GDP? Just because we can afford a bloated military doesn't mean we need one.

Posted by Glenn | February 4, 2008 3:01 PM

It needs to be framed as a percentage of GDP for it to actually be significant. Otherwise it's just a bit of meaningless pop trivia. Posted by fumphis | February 4, 2008 2:40 PM

Well, it's not exactly meaningless, it's useful propaganda about military spending. However, you are correct that percentage of GDP is the way to go if you are someone like Matt Yglesias or Ezra Klein and want to make a sound argument. I'd actually like to see some charts comparing percentage of GDP since WWII that include the cost of the Iraq war, I am suspecting most I have seen don't.

Posted by artappraiser | February 4, 2008 3:03 PM

Which is why it's all the more depressing that the most significant change in military policy proposed by Obama--who is otherwise better than his opponent on foreign/military policy issues--is to increase our armed forces by 92,000 people.

Posted by Tony Greco | February 4, 2008 3:09 PM

Yes, of course it is completely asinine to look at spending nominally (or adjusted for inflation), rather than as a percent of GDP. It is a cheap ploy for gullible readers such as Matthew.

In fact, the writer of the article knows that nobody with half a brain would look at the data that way. So he correctly transitions to percentages of GDP:

Still, the nation’s economy has grown faster than the level of military spending, and even the current colossal Pentagon budgets for regular operations and the war efforts consume a smaller portion of gross domestic product than in previous conflicts.

About 14 percent of the national economy was spent on the military during the Korean War, and about 9 percent during the war in Vietnam. By comparison, when the current base Pentagon budget, nuclear weapons and supplemental war costs are combined, they total just over 4 percent of the current economy, according to budget experts. The base Pentagon spending alone is about 3.4 percent of gross domestic product.

As the story notes, then, we are actually spending less than half of what we did in Vietnam, less than a third of what we did in Korea.

Posted by Al | February 4, 2008 3:12 PM

Indeed, that's an understatement because that figure "does not include supplemental spending on the war efforts or on nuclear weapon."

Huh. Let's see:

The Pentagon on Monday will unveil its proposed 2009 budget of $515.4 billion. If it is approved in full, annual military spending, when adjusted for inflation, will have reached its highest level since World War II.

Where the fuck does this number come from?

Still, the nation’s economy has grown faster than the level of military spending, and even the current colossal Pentagon budgets for regular operations and the war efforts consume a smaller portion of gross domestic product than in previous conflicts.

Again, where the fuck does the first number come from?

About 14 percent of the national economy was spent on the military during the Korean War, and about 9 percent during the war in Vietnam. By comparison, when the current base Pentagon budget, nuclear weapons and supplemental war costs are combined, they total just over 4 percent of the current economy, according to budget experts. The base Pentagon spending alone is about 3.4 percent of gross domestic product.

So, the economy is growing faster than defense increases (WOW, given the lameness of actual growth the last however many years, outside of bubbleicious increases.), the budget is 4% of GDP, the budget during the Korean War was 14% of GDP, Vietnam was 9% of GDP, and spending during WWII was higher than either of those, so where the fuck does he get 'Military spending is at it's highest since WWII'? Does he mean like 1949? Is this in special funny money wherein magically 4% of GDP becomes the equivalent of 9%? Howabout as a percentage of the federal budgets? What was the size of the budget relative to GDP in WWII, and what was defense spending relative to both that and the economy? How much per goes to military personel and how much per (miltary) cap? Relative to the size of the economy?

For that matter, what is the size of the total budget now against GDP?

Is this one of those 'certainties' like Iraq buying uranium from Niger?

max
['What's the value of a New York Times reporter's salary against the nationwide per cap?']

Posted by max | February 4, 2008 3:20 PM

You can bet the first order of business of President McCain would be to enlarge the force still further.

Why not wait until the aberration of the Iraq War is wound down before deciding to enlarge the Armed Forces?

Posted by bob h | February 4, 2008 3:21 PM

" . . . annual military spending, when adjusted for inflation, will have reached its highest level since World War II." . . . Basically, military spending is way, way, way higher than it was during World War II since . . . .

Matt, how do you get Statement No. 2 from Statement No. 1? Inquiring logicians want to know.

Posted by David in Nashville | February 4, 2008 3:23 PM

Perhaps, Al, but it's even more asinine to compare WW2-era spending with today's spending while excluding spending on Iraq and Afghanistan or on nuclear weapons. Maybe we should only be using the WW2-era spending that wasn't on the war (or on nuclear weapons) in order to make the comparison fair.

Posted by KCinDC | February 4, 2008 3:24 PM

One would think that military spending (and most govt. spending generally) grows every year in real terms as real GDP grows. I'm too lazy to look for data to back up my point, but why is it so shocking that "annual military spending, when adjusted for inflation, will have reached its highest level since World War II" ?

Posted by nbt | February 4, 2008 3:25 PM

1. as noted above, as a percentage of the GDP, it's simply not that high (although not low either).

2. here's the thing. the lion's share of defense spending is in personnel costs. so what is a politician going to propose? cutting military salaries or health care? yeah, that'll work.

3. its not like all of the big-ticket procurements can be avoided either (as we did in the 90's). the average Air Force plane is 24 years old. our tankers are 50 years old.

Posted by Nathan | February 4, 2008 3:27 PM

Perhaps, Al, but it's even more asinine to compare WW2-era spending with today's spending while excluding spending on Iraq and Afghanistan or on nuclear weapons.

If you read the blockquote I posted above, you may notice that the 4% of GDP number includes supplemental war costs and nuclear weapons.

Posted by Al | February 4, 2008 3:36 PM

Maybe all the sophists here talking about "percentage of GDP" can explain WHY we are spending 10 times more than any potential enemy? If you throw in the spending of allies, that makes it almost 20 times more.

Isn't that the issue? In spite of all the deceitful Republican hype, Al Qaeda is more like a LA street gang than a military power like Nazi Germany.

Where is the threat to the people of the USA??

You're NOT defending us --you're defending the foreign investments of the oil companies and the superrich.

Posted by Don Williams | February 4, 2008 3:43 PM

Actually, the amount should be set by how much defense we need, although it is nice to see that people think this is magically defined by percentages of the GDP. Let's see, how much was spent as a percentage of the GDP in 2001? And how well did the military protect us against attack on our home soil?
Oh, I forgot. Our expensive military planes, on red hot alert, immediately swung into action and protected us from missiles coming in over the Atlantic, or something or other. But then we used our outstanding forces to come to a draw with osama bin laden's forces, that were fully equipped with horses and donkeys. Another huge victory for the Pentagon!

Otherwise, we spent a wholly useless trillion or two dollars in the 90s, tossed in another 3 under our current President Dingdong, and have basically as a welfare system for engineers, middle managers, and others who make up a nice, parasitic welfare culture dependent on Pentagon spending and willing to send any amount of American kids to their death in frivolous wars in defense of getting their greasy mitts on tax dollars.

The brain dead, zombified right is mostly composed of people who'd be out in the streets if it wasn't for government spending, which they will defend on lunatic grounds until the end of time. Dont get between these people and their meal ticket.

Posted by roger | February 4, 2008 3:43 PM

On the percent of GDP thing, it seems to me that military capability isn't scaled by GDP so it would be misleading to scale the numbers that way.

"Military capability isn't scaled by GDP." What's that supposed to mean?

Why would a percent-of-GDP comparison be more "misleading" than a dollars-to-dollars comparison? Misleading about what?

Posted by Mixner | February 4, 2008 3:44 PM

"As the story notes, then, we are actually spending less than half of what we did in Vietnam, less than a third of what we did in Korea."-Posted by Al

People who can read will disagree with you. "Spending" is not "spending as a percentage of GNP".

That point aside, comparing spending between wars is not very illuminating. In Korea, we were actively opposed by China, in Vietnam, we were engaged in ongoing combat operations against half the country materially backed by the Soviet Union. Iraq is an occupation in which the opposition has support that is insignificant compared to our that of our opponents in Korea and Vietnam.

The more interesting argument is whether GNP should factor into present international comparrissons of military spending. While there are good arguments that military spending in the industrialized nations, particularly the USA, reflect higher labor costs, it is not clear that dividing by GNP is a good adjustment for that. For example: China has slightly higher labor costs than Vietnam,but has a vastly larger GNP. The US also has recourse to force-multipliers that defray the higher labor costs that it pays.

It is not clear whether dividing by GNP is an inadequate or possibly overcompensating corrective factor. As such, it is of no more value than multiplying each nations spending by a random number generated from a gaussian distribution centered on 1.

Posted by Njorl | February 4, 2008 3:45 PM

Actually, the amount should be set by how much defense we need, although it is nice to see that people think this is magically defined by percentages of the GDP.

How much defense you think we "need" will depend on how much you value defense relative to other things we could be spending the money on. There is no objective answer. There are many factors that are likely affect how much money a nation spends on defense, including its overall level of wealth, the size of its population, its geographical characteristics and the size and distribution of its interests around the world, including commitments to allies.

Posted by Mixner | February 4, 2008 3:57 PM

njorl,

While there are good arguments that military spending in the industrialized nations, particularly the USA, reflect higher labor costs, it is not clear that dividing by GNP is a good adjustment for that.

It's obviously not just a matter of higher labor costs, but that is a significant factor. The obvious connection to GDP is that the richer a nation is the more it will tend to spend on products and services of most kinds. We spend a lot more than other countries on defense for the same basic reason that we spend a lot more than other countries on food and energy and highways and health care. Our unique geopolitical position as the world's sole superpower, and our historical commitments to allies in Europe and Asia from the legacy of World War II and the cold war also create unique demands on our military that tend to increase spending in that area.

Posted by Mixner | February 4, 2008 4:15 PM

2. here's the thing. the lion's share of defense spending is in personnel costs. so what is a politician going to propose? cutting military salaries or health care? yeah, that'll work.

How about cutting the size of the armed forces? That would work. And the smaller the armed forces were the less the likelihood they'd get used to start unnecessary wars. Win-win!

Posted by william | February 4, 2008 4:16 PM

realism anyone?

1) defense contractors are located in all 50 states -- asking for a defense cutback means jobs lost in someone's district -- we'll need to find a few more courageous members of congress before we see any substantial cutback. Anyone remember the base closing commissions of yesteryear?
2) any discussion of cutback also must include reducing the existing "missions", i.e. the speedbump in south korea, WW2-era bases in the pacific and western europe. Not to mention, the war on drugs & much hotter wars in Iraq and Afganistan. Ready to drop our commitments to Taiwan?
3) I didn't find the primary sources of the dollars spent but I would find it hard to believe that Russia and China only spent the displayed amount. I'm sure it is buried somewhere in agricultural or energy expenditures. For the record, I'll stipulate that we spend a lot more than anyone else (or even everyone else).
4) apropos of the above, anyone notice which industry is show substantial growth and is nearly single-handedly supporting our export industry? defense and aerospace goods.

Creates a double whammy... drop defense spending = drop a lot of jobs, doesn't it. I'd rather see smarter planning, resource allocation and procurement (i.e., a lot less spending) but I'm old enough to see a tooth fairy argument when I hear it.

Posted by mike c | February 4, 2008 4:34 PM

Max:

"The Pentagon on Monday will unveil its proposed 2009 budget of $515.4 billion. If it is approved in full, annual military spending, when adjusted for inflation, will have reached its highest level since World War II."

Where the fuck does this number come from?

The sentence says it comes from the Pentagon's proposed 2009 budget request; do he think he's lying?

"Still, the nation’s economy has grown faster than the level of military spending, and even the current colossal Pentagon budgets for regular operations and the war efforts consume a smaller portion of gross domestic product than in previous conflicts."

Again, where the fuck does the first number come from?

See above.

Later,

So, the economy is growing faster than defense increases (WOW, given the lameness of actual growth the last however many years, outside of bubbleicious increases.), the budget is 4% of GDP, the budget during the Korean War was 14% of GDP, Vietnam was 9% of GDP, and spending during WWII was higher than either of those, so where the fuck does he get 'Military spending is at it's highest since WWII'?

I think he's saying that, if it is approved in full, annual military spending, when adjusted for inflation, will have reached its highest level since World War II [Now, how difficult was that?]. In 1945 the level of defense spending stood at roughly $940 billion in today's money, so I'd say he's right. He's not saying that it's the highest relative to anything other than the price level; in fact, he goes on to talk about those ratios. Exactly what is your problem?

BTW--National defense outlays accounted for roughly 37 percent of GDP in 1945.

Posted by David in Nashville | February 4, 2008 4:43 PM

mike c:

yes, China's real military budget is estimated to be about 60% higher than its published one. part of the problem is that the Red Army is a massive player (owning all sorts of profit-generating businesses) in the Chinese economy, and a large part of its funding is derived from non-standard governmental revenue sources.

Posted by Nathan | February 4, 2008 4:44 PM

There's an odd perception out there (materializing here in the comments) that how much a country spends on defense in absolute terms is irrelevant: that a country should spend X% of its GDP on defense regardless of 1) the size of its GDP or 2) the geopolitical situation. This makes almost no sense unless you happen to be writing Japan's postwar constitution. The percent of GDP matters in terms of how sustainable the spending is (though this depends a lot on how much you spend domestically), but if you're trying to compare the actual armed forces of two countries to get an idea of how much spending will make an effective deterrent, absolute numbers make far more sense. And that's what we're talking about here with the comparison of the US to China/Russia/everybody else.

Posted by Kraz | February 4, 2008 4:45 PM

but if you're trying to compare the actual armed forces of two countries to get an idea of how much spending will make an effective deterrent, absolute numbers make far more sense.

Nonsense. The amount a country would need to spend on defense to achieve a given level of deterrence will depend on, among other things, the number and strength and location of its enemies around the world, the size of its population, its geographical characteristics and the size and distribution of its interests around the world. Since these things vary enormously between different countries, an absolute numbers comparison is meaningless.

Posted by Mixner | February 4, 2008 4:58 PM

What Kraz said. The size of our potential threats don't scale with our GDP; just because we can sustain a level of outlandish defense spending indefinitely is no justification for such spending.

The military threats we face are actually pretty small, when you think about it rationally. The Chinese defense budget is smaller than what we spend on state and local law enforcement. The Russian defense budget is about the same as what we spend on the state and local prison system. The North Korean and Iranian militaries have budgets that could be hidden in the cost overruns of some large Defense contracts.

Our security depends not on our arms, but on our brains. And spending ever more money on defense without overhauling our strategic thinking will make us ultimately less secure, not more.

Posted by jlw | February 4, 2008 5:11 PM

China budget should be corrected for +60% is an interesting tidbit.

For the US, this article says it should be corrected of 100%
http://mondediplo.com/2008/02/05military

an interesting point of view is also the economic benefit or rather loss caused by military keneysianism.

Al, Mixner: your rebutting (beware, long article).

Posted by european lurker | February 4, 2008 5:17 PM

Actually, the amount should be set by how much defense we need, although it is nice to see that people think this is magically defined by percentages of the GDP

Yes, of course.

For 30 years I've been making Matt's point that politicians always seem to be able to find the money for war but we are always broke and can't afford it when we need something else.

BUT if you are playing the game of "compare with WWII era" or whatever, you don't want to be caught comparing apples and oranges. You won't persuade anyone you want to persuade that way.

Posted by artappraiser | February 4, 2008 5:27 PM

european lurker hits a home run with his link. Well done. James Fallow's 80s-era "National Defense" pegs the overall M-I-C Complex problem as well (though many quibble with the details).

Posted by mike c | February 4, 2008 5:32 PM

The size of our potential threats don't scale with our GDP

More nonsense. The correlation is obviously not a simple one, but in general the bigger and richer a nation is, the more it has to lose, the more interests it is likely to have beyond its borders, and the bigger the potential threat from foreign enemies.

But more importantly, defense spending is not determined simply by the magnitude of the threat, but by the amount of protection against that threat a country chooses to, and can afford to, purchase. The United States is a very wealthy nation that can afford to buy a much higher level of protection for its citizens than a poor nation. That is another reason why our defense spending is so much higher.

Posted by Mixner | February 4, 2008 5:42 PM

This lengthy, wonkish article on defense spending from Truthout.org is far and away the best article on the subject I've read since the proposed defense budget was released last week. I highly recommend it.
http://www.truthout.org/docs_2006/012308E.shtml

Posted by blah2 | February 4, 2008 5:50 PM

US Military spending as percent of GDP

1940 1.7
1941 5.6
1942 17.8
1943 37.0
1944 37.8
1945 37.5
1946 19.2
1947 5.5
1948 3.5
1949 4.8
1950 5.0
1951 7.4
1952 13.2
1953 14.2
1954 13.1
1955 10.8
1956 10.0
1957 10.1
1958 10.2
1959 10.0
1960 9.3
1961 9.4
1962 9.2
1963 8.9
1964 8.5
1965 7.4
1966 7.7
1967 8.8
1968 9.4
1969 8.7
1970 8.1
1971 7.3
1972 6.7
1973 5.8
1974 5.5
1975 5.5
1976 5.2
1977 4.9
1978 4.7
1979 4.6
1980 4.9
1981 5.1
1982 5.7
1983 6.1
1984 5.9
1985 6.1
1986 6.2
1987 6.1
1988 5.8
1989 5.6
1990 5.2
1991 4.6
1992 4.8
1993 4.4
1994 4.0
1995 3.7
1996 3.5
1997 3.3
1998 3.1
1999 3.0
2000 3.0
2001 3.0
2002 3.4
2003 3.7
2004 4.0
2005 4.0
2006 4.0
2007 4.2
2008 4.2

From here, pages 46-54.

This suggests that we can afford this level of military spending; Ezra's chart goes to whether we need to.

Posted by lemuel pitkin | February 4, 2008 5:55 PM

Re Mixner's comment "The United States is a very wealthy nation that can afford to buy a much higher level of protection for its citizens than a poor nation "
----------------
Really. If it can "afford it", then why the need to steal $3 TRILLION out of Social Security/Medicare Trust Funds in just the past few years ALONE?

If the US government can afford this military empire, then can it also come up with the additional $8 Trillion needed for Social Security and the $40 Trillion needed for Medicare??

And if we're so wealthy, why has the world markets marked our currency down by roughly 34 percent in the past few years???

PLus the $Hundreds of Billions needed every year just to pay for the INTEREST on this mess?

Posted by Don Williams | February 4, 2008 5:57 PM

but if you're trying to compare the actual armed forces of two countries to get an idea of how much spending will make an effective deterrent, absolute numbers make far more sense.

Not really. You also have to take into account the efficiency of the weapons involved. We're more "advanced" in our ability to kill people.

Throwing numbers around isn't the best argument for slashing the military budget.

Posted by Happy Jack | February 4, 2008 6:03 PM

Re Mixner's comment "The correlation is obviously not a simple one, but in general the bigger and richer a nation is, the more it has to lose, the more interests it is likely to have beyond its borders, and the bigger the potential threat from foreign enemies."
----------------

1) Why is that whenever people talk vaguely of "vital interests beyond our borders" -- but don't specify what those interests are -- I feel that someone is raiding the public treasury on behalf of special interests?

E.g, those industrialists who have tossed millions of American workers out on the street in order to invest overseas and who now want the taxes (and blood) of those same workers confiscated to protect their foreign investments?

Posted by Don Williams | February 4, 2008 6:04 PM

Re lemuel pitkin's comment "This suggests that we can afford this level of military spending "
-----------
The baby boomer generation was young in the 1960s --and had decades of productive work years before it. By contrast , we now have an aging population.

Plus much of past defense spending has been done by making Social Security and Medicare more and more into a Ponzi scheme. Ponzi schemes eventually collapse. When they do, no one argues that the con artist was fiscally responsible.

Our rate of technological innovation and our competitive position in the world's economy has declined and is declining more rapidly.

Finally, you have to ask if "we" had any say in this matter. The facts presented above by Matthew and others are never presented by our news media to the people for debate .

I bet 98 percent of the US voters have NO idea of how our military spending compares to that of potential competitors like China and Russia. Much less realize what gnats Al Qaeda , Iran etc are.

In 2002, when Bush was telling his ghost stories , did the NY Times inform us that the military power of Saddam Hussein was roughly 84 -- whereas the conventional military power of the USA was roughly 2400 on the same scale? Or did the NY Times feed us a bunch of Judith Miller's bullshit?

If people work for 40 years ,they should see some improvement in their standard of living -- but US standard of living has been flat or declining for the vast majority of US citizens.

The parasite is sucking blood and the host is getting more and more anemic. But right -- the host hasn't collapsed yet. But 7000 years of history says it's just a matter of time.

Posted by Don Williams | February 4, 2008 6:19 PM

This suggests that we can afford this level of military spending; Ezra's chart goes to whether we need to.

Ezra's chart tells us precisely nothing about how much we "need" to spend on the military. Without some defined standard of need, it's not terribly meaningful to talk about how much we "need" to spend on the military, or anything else. How much do we "need" to spend on roads, or food, or energy, or housing, or televisions, or foreign aid? It's not a matter of how much we "need" to spend, it's a matter of how much we choose to spend and can afford to spend. Given that our current level of spending is close to historical lows as a share of our total wealth, it's hard to take seriously the claim that we're spending more than we can afford.

Why is that whenever people talk vaguely of "vital interests beyond our borders" -- but don't specify what those interests are

It's not exactly rocket science. We obviously have an interest in protecting our supplies of vital raw materials, such as oil. More generally, the global economy, and our own economy, are highly dependent on international trade. Military aggression between nations threatens that trade. So we have a strong interest in minimizing military aggression in general, not just direct threats or attacks against our sovereign territory.

Posted by Mixner | February 4, 2008 6:25 PM

I can't get lemuel pitkin's link to work, but if the numbers are correct, it shows that we are spending less as a percentage of GDP than every year between 1949 and 1993. So it really is funny to see people claiming that we are bankrupting ourselves with excessive military spending when we spent relatively more money every year for almost a half century after WWII.

The reality is that we are spending too little on defense, not too much. Hell, we can't even occupy a middling country like Iraq properly. Spending on defense should be increased, not decreased - maybe up to as high as half the level of 1968.

What we ought to be complaining about, if anything, is excessive spending on health care. Now THERE'S a spending category that has increased by a heck of a lot over the past few decades. THAT'S what's bankrupting us, not defense.

Posted by Al | February 4, 2008 6:31 PM

If people work for 40 years ,they should see some improvement in their standard of living -- but US standard of living has been flat or declining for the vast majority of US citizens.

Your assertions just get more and more ridiculous. Do please elaborate on this alleged flatness or decline in living standards. Let's see: Housing has gotten bigger and better. Cars are much better. Food and beverages are much better. Travel and vacations are cheaper and better. Health care is much better. Leisure and entertainment is much better. Communications are much better. Americans are also better educated than ever, retire earlier than ever, and live longer than ever. And yet we're supposed to believe that living standards have stayed flat or gone down. It's nonsense.

Posted by Mixner | February 4, 2008 6:35 PM

it really is funny to see people claiming that we are bankrupting ourselves with excessive military spending when we spent relatively more money every year for almost a half century after WWII.

The argument isn't that America's bankrupting itself; the argument is that the level of military spending is out of proportion to those external threats that can be most sensibly addressed militarily. And I think that's the point that Ezra's chart is making.

I take the point that labour costs are higher in the US, which distorts the figures. But this also reflects the higher opportunity cost to America of keeping people in the military, where they are essentially being unproductive, as opposed to freeing their time and the money used to pay them to go somewhere where it could be of some use.

(BTW, if we want to talk about it simply in terms of manpower, here's Wikipedia's list of countries by size of armed forces to inform the discussion better. However, a straight man-on-man comparison misses the point: even if they were to want to invade America, how would all those people get there? Also, if you look at the chart, it's clear that China's army is there to defend against Russia and Vietnam and India, India's is there to defend against Pakistan, Turkey's to defend against Iran, and so on... the porportion that plausibly poses a threat to America is tiny).

Posted by willi | February 4, 2008 7:06 PM

I posted a comment with a number of links but it was held for moderation probably due to the link count. So here is one link: a table at GlobalSecurity with estimates of world military spending. Very interesting.

Posted by Bengt Larsson | February 4, 2008 7:31 PM

The argument isn't that America's bankrupting itself; the argument is that the level of military spending is out of proportion to those external threats that can be most sensibly addressed militarily.

No one has made any kind of serious argument to that effect. Just various versions of "Look how much more we're spending than everyone else!" and "We're spending more than we NEED!" and "We can't AFFORD to spend this much!"

Like others, you seem to think that the only important consideration is the magnitude of the threat, as if there's no value in spending more to achieve greater protection against that threat.

However, a straight man-on-man comparison misses the point: even if they were to want to invade America, how would all those people get there? Also, if you look at the chart, it's clear that China's army is there to defend against Russia and Vietnam and India, India's is there to defend against Pakistan, Turkey's to defend against Iran, and so on... the porportion that plausibly poses a threat to America is tiny).

Another bizarre argument. I'm not sure why you think the only threat that should matter to America is the possible invasion of its sovereign territory. An invasion of China by Russia, or of Turkey by Iran, would have highly adverse consequences for the United States, and it is obviously in our interests to deter such an event. The U.S. and its European allies didn't fight the Gulf War because they thought there was a risk that Saddam would invade their homelands.

Posted by Mixner | February 4, 2008 7:48 PM

Re Mixner's comment "Your assertions just get more and more ridiculous. Do please elaborate on this alleged flatness or decline in living standards "
--------------
What is ridiculous is for someone to assume that their favored position is representative of the majority of citizens in this country.

Better food? Then why does McDonalds and Burger King serve so much to so many?

The income of the bottom 50 percentile of US households has been basically flat for the past 40 years, when adjusted for inflation. See
http://en.wikipedia.org/wiki/Image:United_States_Income_Distribution_1967-2003.svg

35 years ago, most young mothers could stay at home and raise their children. Today, two incomes are required for blue collar working families to survive.

35 years ago, almost everyone with a high school graduation was sure of finding lifetime employment. Today, the majority of college graduates fear layoffs. And good luck finding a job that allows you to support a family if you only have a high school graduation.

At one time, college education was an education. Now it's a trade school. Only the rich can afford to pay for a liberals arts education -- the education of a "free man". For good reason.

Better homes? The size of suburban lots are a mere fraction of what they were 35 years ago. The houses from that time here on the Main Line are an acre or more. Now the housing developments squeeze people into postage size lots of a quarter acre or less. And that's the Middle class -- tell me that the ghettos of today are better than what they were 35 years ago. Or smaller.

35 years ago, one could get on an Interstate and drive with little attention --because there was about 200 yards separating cars. Now, you'll have traffic blocked in both lanes ahead and a tractor trailer riding your butt.

35 years ago, you could take a plane flight and COACH seats were bigger than today's First Class seats.

35 years ago , this country was shared among a much smaller population. You could go into the national forests and camp without encountering others. Now many places are a zoo.

Plus huge amounts of irreplaceable resources have been consumed and are being depleted at an increasing rate -- our oil, coal, fertile land, underground aquifers,etc. Large amounts of fertile soil have been washed out to sea and lost.
From an airliner, The USA -- a once beautiful land -- more and more resembles a rotting candaloupe being consumed by mold.

Better health care? Then why do 40 million citizens have no health insurance?

Plus our debt burden -- especially the federal debt per citizen -- is much higher than 35 years ago. We have to pay a large chunk of our income every year just to pay interest on that burden.

Posted by Don Williams | February 4, 2008 8:04 PM

I'm not sure why you think the only threat that should matter to America is the possible invasion of its sovereign territory. An invasion of China by Russia, or of Turkey by Iran, would have highly adverse consequences for the United States, and it is obviously in our interests to deter such an event. The U.S. and its European allies didn't fight the Gulf War because they thought there was a risk that Saddam would invade their homelands.

I guess this is confirmation that Mixner is arguing from the vantage point of insanity. We have a ginormous military to keep China from invading Russia? Please explain that one to the American taxpayer, 'cause that's the quickest way to slash the defense budget.

None of our core international problems can be solved through military means. Interdicting terrorists, curbing greenhouse gases, securing fissile material, to name three--those are all diplomatic issues. Using the military to accomplish these goals is like using a sledgehammer to open a peanut.

Posted by jlw | February 4, 2008 8:20 PM

Don Williams,

You're just spouting nonsense. Take your claim about income. According to the Census Bureau, median real income of persons in 1974 was $18,474. By 2005, it had increased to $24,325. Thus, even traditional families with only one working parent are better off now than they were 35 years ago. And most families now have at least two working members.

The rest of your claims are also either false, irrelevant or both. Unemployment is close to historical lows. You claim that suburban housing lot sizes have become smaller. I don't know if that's true, but house sizes have increased significantly. And their quality has also increased significantly. Many more homes have central heating and air conditioning. Multiple bathrooms. More and better appliances. Better insulation. More durable materials. And so on.

Similarly, your claim about air travel is false. Coach seats are not smaller. And citing the size of coach seats as if that tells us anything meaningful about overall changes in the quality or cost of air travel is nonsensical. In real terms, the cost of air travel has fallen dramatically, and as a result it has grown dramatically. There are many more routes, and service is much more frequent. And with the rise of the internet and computerization, researching flights, buying tickets, and checking in have become much easier.

The fact is, there isn't a single major class of products and services--housing, food, transportation, entertainment, travel and lesiure, communications, health care, etc., etc.--in which the standard of living for the typical American today is not significantly higher today than it was thirty years ago.

Posted by Mixner | February 4, 2008 8:36 PM

The Als are pretty funny tonight. This old conservative chestnut is always good for a laugh at the Heritage smokers:

"What we ought to be complaining about, if anything, is excessive spending on health care. Now THERE'S a spending category that has increased by a heck of a lot over the past few decades. THAT'S what's bankrupting us, not defense."

Yeah, just think, if the government wasn't doing that spending on health care, it would just go away. Nobody would spend on health care! But due to some black magic, people still get sick whether the government is doing the spending or not. Gee, can you believe it? And the one system that depends most on private health care - the U.S. - spends more of its GDP on health care than any other.

On the other hand, maybe the Als are getting heretical and promoting the sensible idea that the government should use its bargaining power to lower the costs of drugs, which could easily be done through the program that expanded Medicare, pushed through by Bush. Of course, St. George, using the up is down logic he is famous for, has pretended that it would go against the sacred dictates of free enterprise for the government not to be a legal captive to the drug industry, bound to pay top dollar to those inefficient, top heavy and unproductive corporations. Any reform of this madness has been vigorously opposed by all true GOP-ers on the grounds that the government exists solely as a cash cow to be milked by corporations - which is why they love the military too. If this Al's getting so daring, , he or she is gonna have to explain this to his or her employees. Going against the son of God, George Bush, is sacrilege, and surely grounds for dismissal.

But - in the magic world view of conservatives - this is solved by making more people spend more money in the private sector on health care. This is a form of economics that is also practiced at many an impromptu table set up on the sidewalks of Manhattan in a game called three card monte. Suckers always lose.

Posted by roger | February 4, 2008 8:39 PM

We have a ginormous military to keep China from invading Russia?

No, we have a ginormous military for a complex array of reasons, of which deterring acts of military aggression between foreign countries is only one. On a scale of probability of likely invasions, China invading Russia is probably very low. China invading Taiwan is another matter, however.

Posted by Mixner | February 4, 2008 8:43 PM

Military spending as a percent of GDP or GNP is a better way of measuring military spending in a single country over time. Absolute spending seems to me to be a better way of comparing our military spending to all other countries' military spending, because the real issue is how much military do we have compared to all other potential threats, not how much of our wealth is spent on the military.

A lot of posters here seem to be confusing this comparison with comparisons of relative U.S. military spending over time.

Posted by Glaivester | February 4, 2008 8:45 PM

China invading Taiwan is another matter, however.

And that's America's problem how, exactly?

I mean, too bad for the Taiwanese, but sending American boys to die to keep one type of Chinese from annexing another kind of Chinese seems pretty far from our core concerns. More like a "military solution" seeking out a "problem" to solve.

Posted by jlw | February 4, 2008 8:49 PM

From "How to Sink America" by Chalmers Johnson"

"It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense's planned expenditures for fiscal year 2008 are larger than all other nations' military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defense budget, is itself larger than the combined military budgets of Russia and China. Defense-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. The United States has become the largest single salesman of arms and munitions to other nations on Earth. Leaving out of account President Bush's two ongoing wars, defense spending has doubled since the mid-1990s. The defense budget for fiscal 2008 is the largest since World War II.

Before we try to break down and analyze this gargantuan sum, there is one important caveat. Figures on defense spending are notoriously unreliable. The numbers released by the Congressional Reference Service and the Congressional Budget Office do not agree with each other. Robert Higgs, senior fellow for political economy at the Independent Institute, says, "A well-founded rule of thumb is to take the Pentagon's (always well publicized) basic budget total and double it." Even a cursory reading of newspaper articles about the Department of Defense will turn up major differences in statistics about its expenses. Some 30-40 percent of the defense budget is "black," meaning that these sections contain hidden expenditures for classified projects. There is no possible way to know what they include or whether their total amounts are accurate.

There are many reasons for this budgetary sleight-of-hand – including a desire for secrecy on the part of the president, the secretary of defense, and the military-industrial complex – but the chief one is that members of Congress, who profit enormously from defense jobs and pork-barrel projects in their districts, have a political interest in supporting the Department of Defense. In 1996, in an attempt to bring accounting standards within the executive branch somewhat closer to those of the civilian economy, Congress passed the Federal Financial Management Improvement Act. It required all federal agencies to hire outside auditors to review their books and release the results to the public. Neither the Department of Defense nor the Department of Homeland Security has ever complied. Congress has complained, but not penalized either department for ignoring the law. The result is that all numbers released by the Pentagon should be regarded as suspect.

In discussing the fiscal 2008 defense budget, as released to the press on Feb. 7, 2007, I have been guided by two experienced and reliable analysts: William D. Hartung of the New America Foundation's Arms and Security Initiative and Fred Kaplan, defense correspondent for Slate.com. They agree that the Department of Defense requested $481.4 billion for salaries, operations (except in Iraq and Afghanistan), and equipment. They also agree on a figure of $141.7 billion for the "supplemental" budget to fight the "global war on terrorism" – that is, the two ongoing wars that the general public may think are actually covered by the basic Pentagon budget. The Department of Defense also asked for an extra $93.4 billion to pay for hitherto unmentioned war costs in the remainder of 2007 and, most creatively, an additional "allowance" (a new term in defense budget documents) of $50 billion to be charged to fiscal year 2009. This comes to a total spending request by the Department of Defense of $766.5 billion.

But there is much more. In an attempt to disguise the true size of the American military empire, the government has long hidden major military-related expenditures in departments other than Defense. For example, $23.4 billion for the Department of Energy goes toward developing and maintaining nuclear warheads; and $25.3 billion in the Department of State budget is spent on foreign military assistance (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic, Egypt, and Pakistan). Another $1.03 billion outside the official Department of Defense budget is now needed for recruitment and reenlistment incentives for the overstretched U.S. military itself, up from a mere $174 million in 2003, the year the war in Iraq began. The Department of Veterans Affairs currently gets at least $75.7 billion, 50 percent of which goes for the long-term care of the grievously injured among the at least 28,870 soldiers so far wounded in Iraq and another 1,708 in Afghanistan. The amount is universally derided as inadequate. Another $46.4 billion goes to the Department of Homeland Security.

Missing as well from this compilation is $1.9 billion to the Department of Justice for the paramilitary activities of the FBI; $38.5 billion to the Department of the Treasury for the Military Retirement Fund; $7.6 billion for the military-related activities of the National Aeronautics and Space Administration; and well over $200 billion in interest for past debt-financed defense outlays. This brings U.S. spending for its military establishment during the current fiscal year (2008), conservatively calculated, to at least $1.1 trillion."

In other words, DOUBLE the "official" figure.

So the "100% increase in China's budget" really is fucking irrelevant. That would be paid for by the cost of our VA bill, the Retirement Fund and Homeland Security alone.

As for Mixner's crap, oh, please. He babbles all these generic crap about "national interests", and blah, blah, blah, none of which is relevant.

This crap is supposed to be PAID FOR by the taxpayer to a bunch of corporations who contribute campaign funds to the politicians. It's welfare for the rich paid for by corruption of the state, nothing more.

Period. End of story.

It has fuck all to do with the actual "defense" of the continental US and its possessions, and even its access to raw materials or even its mutual defense treaties - which we do not even HAVE with Israel.

Anybody saying different is a complete and total moron.

Further Johnson:

"Many neoconservatives and poorly informed patriotic Americans [that would be Mixner and Al - RSH] believe that, even though our defense budget is huge, we can afford it because we are the richest country on Earth. Unfortunately, that statement is no longer true. The world's richest political entity, according to the CIA's World Factbook, is the European Union. The EU's 2006 GDP (gross domestic product – all goods and services produced domestically) was estimated to be slightly larger than that of the U.S. However, China's 2006 GDP was only slightly smaller than that of the U.S., and Japan was the world's fourth richest nation.

A more telling comparison that reveals just how much worse we're doing can be found among the "current accounts" of various nations. The current account measures the net trade surplus or deficit of a country plus cross-border payments of interest, royalties, dividends, capital gains, foreign aid, and other income. For example, in order for Japan to manufacture anything, it must import all required raw materials. Even after this incredible expense is met, it still has an $88 billion per year trade surplus with the United States and enjoys the world's second highest current account balance. (China is number one.) The United States, by contrast, is number 163 – dead last on the list, worse than countries like Australia and the United Kingdom that also have large trade deficits. Its 2006 current account deficit was $811.5 billion; second worst was Spain at $106.4 billion. This is what is unsustainable."

More:

"It's not just that our tastes for foreign goods, including imported oil, vastly exceed our ability to pay for them. We are financing them through massive borrowing. On Nov. 7, 2007, the U.S. Treasury announced that the national debt had breached $9 trillion for the first time ever. This was just five weeks after Congress raised the so-called debt ceiling to $9.815 trillion. If you begin in 1789, at the moment the Constitution became the supreme law of the land, the debt accumulated by the federal government did not top $1 trillion until 1981. When George Bush became president in January 2001, it stood at approximately $5.7 trillion. Since then, it has increased by 45 percent. This huge debt can be largely explained by our defense expenditures in comparison with the rest of the world."

"The result was the militaristic National Security Council Report 68 (NSC-68) drafted under the supervision of Paul Nitze, then head of the Policy Planning Staff in the State Department. Dated April 14, 1950, and signed by President Harry S. Truman on Sept. 30, 1950, it laid out the basic public economic policies that the United States pursues to the present day.

In its conclusions, NSC-68 asserted, "One of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living."

With this understanding, American strategists began to build up a massive munitions industry, both to counter the military might of the Soviet Union (which they consistently overstated) and also to maintain full employment as well as ward off a possible return of the Depression. The result was that, under Pentagon leadership, entire new industries were created to manufacture large aircraft, nuclear-powered submarines, nuclear warheads, intercontinental ballistic missiles, and surveillance and communications satellites. This led to what President Eisenhower warned against in his farewell address of Jan. 17, 1961: "The conjunction of an immense military establishment and a large arms industry is new in the American experience" – that is, the military-industrial complex.

By 1990, the value of the weapons, equipment, and factories devoted to the Department of Defense was 83 percent of the value of all plants and equipment in American manufacturing. From 1947 to 1990, the combined U.S. military budgets amounted to $8.7 trillion. Even though the Soviet Union no longer exists, U.S. reliance on military Keynesianism has, if anything, ratcheted up, thanks to the massive vested interests that have become entrenched around the military establishment. Over time, a commitment to both guns and butter has proven an unstable configuration. Military industries crowd out the civilian economy and lead to severe economic weaknesses. Devotion to military Keynesianism is, in fact, a form of slow economic suicide.

On May 1, 2007, the Center for Economic and Policy Research of Washington, D.C., released a study prepared by the global forecasting company Global Insight on the long-term economic impact of increased military spending. Guided by economist Dean Baker, this research showed that, after an initial demand stimulus, by about the sixth year the effect of increased military spending turns negative. Needless to say, the U.S. economy has had to cope with growing defense spending for more than 60 years. He found that, after 10 years of higher defense spending, there would be 464,000 fewer jobs than in a baseline scenario that involved lower defense spending.

Baker concluded:

"It is often believed that wars and military spending increases are good for the economy. In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment."

In an important exegesis on Melman's relevance to the current American economic situation, Thomas Woods writes:

"According to the U.S. Department of Defense, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985, the Department of Commerce estimated the value of the nation's plant and equipment, and infrastructure, at just over $7.29 trillion. In other words, the amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock."

The fact that we did not modernize or replace our capital assets is one of the main reasons why, by the turn of the 21st century, our manufacturing base had all but evaporated."

So take your Pentagon and shove it!

Posted by Richard Steven Hack | February 4, 2008 9:22 PM

Re Mixner's comment "Similarly, your claim about air travel is false. Coach seats are not smaller"
-------
Yes they are. I remember flying cross country from LA to Washington DC in coach decades ago --the seats were much larger.

Posted by Don Williams | February 4, 2008 9:24 PM

Hi Mixner,

Me: The argument isn't that America's bankrupting itself; the argument is that the level of military spending is out of proportion to those external threats that can be most sensibly addressed militarily

Mixner: No one has made any kind of serious argument to that effect. Just various versions of "Look how much more we're spending than everyone else!" and "We're spending more than we NEED!" and "We can't AFFORD to spend this much!"

I think you'll find that my argument is exactly the argument Matthew himself is making in the original post: Now the country is obviously much richer than it was in the early 1940s so we can afford this kind of extravagance if the broader geopolitical context justifies it. But does it? ... Little about that context suggests to me that we needed to add much more money than the entire Chinese defense budget to our own spending. It's worth keeping in mind the next time you hear that the country "can't afford" to do something or other. You can agree or disagree with the argument, but he's explicitly saying that the question is not what America *can* afford, it's what (and why) it *chooses* to afford.

Like others, you seem to think that the only important consideration is the magnitude of the threat, as if there's no value in spending more to achieve greater protection against that threat.

Sometimes the marginal value of spending more isn't worth it. I don't live in a bomb shelter or drive a bullet-proof car. Both of those would make me safer in a sense; but I don't do it because I have better things to spend the money on.

I'm not sure why you think the only threat that should matter to America is the possible invasion of its sovereign territory. An invasion of China by Russia, or of Turkey by Iran, would have highly adverse consequences for the United States, and it is obviously in our interests to deter such an event. The U.S. and its European allies didn't fight the Gulf War because they thought there was a risk that Saddam would invade their homelands.

I'm not arguing that. I'm arguing that the threat of invasion to the US is vanishingly low, and so the labour costs argument is a red herring. And I'm arguing that strategically, if the US finds itself the majority supplier of forces to a mission that doesn't involve a threat to the US homeland, then it's probably not using its forces wisely.

Posted by william | February 4, 2008 9:58 PM

Re Mixner's comment "median real income of persons in 1974 was $18,474. By 2005, it had increased to $24,325. Thus, even traditional families with only one working parent are better off now than they were 35 years ago"
-------------
1) In my opinion, an example of how to lie with statistics. The Single "median" point lets the huge incomes of the superrich pull up the median.

But Mixner IGNORES the citation I gave to him:
http://en.wikipedia.org/wiki/Image:United_States_Income_Distribution_1967-2003.svg

2) I REPEAT:
The income of the bottom 50 percentile of US households has been basically flat for the past 40 years, when adjusted for inflation.
But people like Mixner don't give a Shit for 150 MILLION American citizens.

3) That is why Mixner can say:
"The rest of your claims are also either false, irrelevant or both"

I guess it is "irrelevant" that 40 Million Americans have no health insurance. If you are in the 2 percent richest income group -- or if ,like Rush Limbaugh, you are a paid prostit..er pundit.. for that income group -- them I suppose it is irrelevant.

4) Similarly , Mixner seems to think that it is "irrelevant" that Bush and the Republican COngresses dumped almost $4 Trillion of debt on us.

Or that Ronald Reagan and George H Bush dumped another $4 Trillion of debt on us by spending almost 7 percent of GDP per year on "defense" -- at a time when Japan and Germany (located mere miles from the "Evil Empire") were spending less than 1 percent and 3 percent of GDP on defense, respectively.

Posted by Don Williams | February 4, 2008 10:19 PM

Re william's comment "I'm not arguing that. I'm arguing that the threat of invasion to the US is vanishingly low "
--------
1) I concur. Except for the United States, very few countries can project power to any extent beyond their national boundaries. Which makes the "defense" term such deceitful bullshit.

2) From James Dunnigan's 2003 book "How to Make War", the world's most powerful navies and their combat power:(p.642)

United States: 302
Great Britain: 46
Russia: 45
Japan: 26
China: 16
France: 14
India: 10
Taiwan: 10

3) Why is the US Navy spending so much money? Is it trying to rescue Gilligan?

Posted by Don Williams | February 4, 2008 10:34 PM

much of past defense spending has been done by making Social Security and Medicare more and more into a Ponzi scheme.

As a claim about Social Security, this is completely false. About Medicare, it doesn't even rise to that level.

Posted by lemuel pitkin | February 4, 2008 10:35 PM

Re pitkin's comment "About Medicare, it doesn't even rise to that level."
---------
Clarify-- are you saying Medicare doesn't even rise to the level of a Ponzi scheme -- or that my assertion doesn't rise to the level of being false?

Posted by Don Williams | February 4, 2008 10:47 PM

Although I agree with Don on the big point (our military spending is higher than a reasonable degree of safety requires), I have to point out that Don's last post betrays a total misunderstanding of statistics, which goes beyond his failure to understand "median" to reach the level at which he can't read numbers.

While I'm on the topic of median, I'll note that it refers to the middle of the range - what does the center of the 50th percentile have? The quote "The Single "median" point lets the huge incomes of the superrich pull up the median." is the single most statistically false statement that I can remember reading. You are thinking of the "mean". This is 9th grade Algebra material. The median cannot be inflated by the already rich getting richer while the middle class stagnates - THAT'S WHY WE USE THE MEDIAN INSTEAD OF THE MEAN!

If you look at the numbers that are on the chart Don's belaboring, you can see that real household income at each percentile has risen over the period 1967-2003. For instance, 10th percentile has gone from 7790 to 10536. 10536 is bigger than 7790. Ditto for all other percentiles included on that chart. Now, there's an argument to be made (which I liked better when it was Krugman making it with correctly interpreted statistics instead of some commenter making it with WikiStatistics that he can't bother to read) that the super-rich have a higher percentage of total income, are increasing income faster than the lower class, and/or aren't paying a sufficiently high level of taxes, but don't tell me that real income has been flat and then show me data where it's clearly risen. I can tell when some numbers are bigger than others - stop embarassing decent arguments with terribly incorrect statements.

Posted by cgaros | February 4, 2008 10:50 PM

Re Mixner's comment " We obviously have an interest in protecting our supplies of vital raw materials, such as oil. "
---------
As I've noted before, we are spending almost $40 PER GALLON for Middle Eastern gasoline -- $3/gallon at the pump and roughly $37 per gallon on income taxes to support military operations in the Middle East. And that's wasteful consumption that has to be repeated year after year.

Meanwhile we INVEST practically nothing on developing alternative energy supplies -- and we are running out of time to do so, given Peak Oil.

This policy is obviously idiotic. It's supported by people who think the profits of Empire should go to Dick Cheney's oil buddies in Houston --while the enormous costs are handled by stealing $Trillions from Social Security/Medicare's Trust Funds.

Of course, that's not stated. Instead, Big Oil's supporters make vague statements about defending "vital interests". Well, Congressional whores certainly consider campaign donations "vital". Whether they come from Big Oil or Big Defense.

Posted by Don Williams | February 4, 2008 10:57 PM

Re cgaros's comment "If you look at the numbers that are on the chart Don's belaboring, you can see that real household income at each percentile has risen over the period 1967-2003. For instance, 10th percentile has gone from 7790 to 10536. 10536 is bigger than 7790. Ditto for all other percentiles included on that chart."
------------
Oh bullshit. I said "basically flat" and if you look at the damm chart you will see that the bottom 3 lines are flat. 7790 to 10536 OVER 40 YEARS is flat.

I guess if they got a rise to 11000, that would be raging prosperity.

And the "median" is misleading -- because it disguises the fact that a hundred million people are far worse off than what even the median would suggest.

And I don't echo Paul Krugman's "false liberal "shtick because we don't just have one income group doing a little better than another -- we have a vile, deeply unjust system.

Posted by Don Williams | February 4, 2008 11:09 PM

Re cgaro's comment "The quote "The Single "median" point lets the huge incomes of the superrich pull up the median." is the single most statistically false statement that I can remember reading. You are thinking of the "mean". This is 9th grade Algebra material. The median cannot be inflated by the already rich getting richer while the middle class stagnates - THAT'S WHY WE USE THE MEDIAN INSTEAD OF THE MEAN! "
-------------
Again, bullshit. I know the mathematical definition of the median.

But if you're looking at economic systems, income groups are linked. The superrich make money and (partially) pass some on as raises to Executives. The Executives (partially) pass some on as raises to Middle Management. Middle Management (partially) passes some on to workers.
The top income groups also can pay more to service workers with whom they trade.

As you can see from the chart I cited, a rising tide does NOT lift ALL boats. It partially lifts SOME boats -- the next income group below. But the bottom 20 percentile don't get shit-- they're anchored on the bottom.

Use of the "median" conceals this -- and SUGGESTS a far more prosperous situation than is the case. Similar to giving the mean of a distribution without giving the standard deviation. The median overemphasizes the incomes of those getting some of the trickle down from the superrich-- while hiding the fact that a large percentage of the population is desperately poor.

Example: If I say a country has a median income of $70,000, then that country might be well off if the income is evenly distributed from $60,000 to $80,000.

However, suppose it is a country with highly inequitable distribution of income -- one in which 30 percent of the population only has an income of $5000. That group is obviously in bad shape --especially if prices are bid up by the other percentile groups who are far richer. Yet both countries have the same median income.

Posted by Don Williams | February 4, 2008 11:43 PM