We can have guns or we can have butter… but we can’t have both
There is a theory I studied in a macroeconomics class long ago which states that a society can spend on guns or it can spend on butter – but it’s very difficult to spend on both.
Judging by the size of the nation’s deficit, I probably should have paid more attention in that class.
The last time the United States saw a balanced budget was in the year 2000. As they say in wine parlance, it was a very good year. The country had produced a budget surplus thanks to a vibrant economy and some good government management, allowing us to pay down some $230 billion from the nation’s $5.7 trillion national debt. What’s more, we had managed to balance the budget without raiding the Medicare Trust Fund – the first time that had happened since 1965.
Speaking on the nation’s financial success, President Clinton reminded us,
The key to fiscal discipline is maintaining these results year after year. We need to put our priorities in order.
Via CNN Archives
Say what you will about Bill Clinton, but it’s hard to disagree with him on this one.
Today, the national debt sits at about $12 trillion…and climbing. We are very much a debtor nation with a large chunk of our obligation sitting in the hands of China, our greatest challenger on the world stage and the nation many believe is destined to step into our shoes as the world’s top super-power.
Without rehashing the old gripes of out-of-control spending during the Bush years, we can clearly see that today’s debt is the direct result of wanting both guns (two foreign wars and heavy spending for homeland security here at home) and butter (massive tax cuts totaling over $3 trillion in costs to the federal government, the creation of the Medicare drug benefit at an estimated cost to the government of over $1 trillion, and huge increases in annual budget spending.)
To be fair, there is little so far to lead us to the conclusion that it will be any different in the Obama era.
While our national leaders, on both sides of the ideological and cultural fence, toss the blame for the dangerous debt back and forth, both sides are being completely disingenuous. Neither wants to put the real question that must be answered to the country because each knows that it just doesn’t play well on either side of the political divide. The question?
Will it be guns or will it be butter?
Let’s begin with the conservatives. The record reveals that there has been overwhelming support for foreign wars and domestic security spending among those who identify with the conservative movement. And if that is what they believe is the best thing for the country, fine – but admit that you can’t spend big on wars and cut taxes at the same time. Admit that you can’t point the finger of blame at big government for creating the huge debt and then turn around and pour huge sums of the government’s money into military expansionism without acknowledging that it takes cash to fuel that expansion -cash we just don’t have.
The conservatives’ complaint is not with ‘big government’ – it is with government spending on both the guns and the butter. The conservatives aren’t wrong about this, but if they want to pursue their goals of keeping the United States on top of the world pecking order, they are going to have to admit that they are prepared to sacrifice the well being of a fairly large number of Americans at home to keep us there.
The progressives have played their own role in this mess. While the desire may be strong to take care of the nation’s ills here at home, whether it be hunger, health care, the environment or whatever, you can’t have the butter if the nation is going to continue to spend heavily on the war and security fronts. Progressives have been loathe to admit to this reality as they feign concern over our strategies in foreign wars and then turn around and vote to continue paying the bill for America’s dominance abroad because it plays well with the folks back home.
At the end of the day, economies are not built to support wars that stretch out over extended periods (we’ve been at war now for eight years with no end in sight) while trying to take care of the folks back home. It has never worked before and it isn’t going to work now.
As for the President, he too has to face up to these facts as he goes about setting the nation’s agenda.
Did we need the stimulus funds? Most economists believe we did.
But our leaders don’t care to face up to the real question raised by the need to stimulate the economy with huge sums of federal money.
If we needed the stimulus, we needed the stimulus. But we cannot spend this kind of money to bail out our ailing economy while continuing to pretend we can afford to do everything else at the same time.
Conservatives would tell you that I just made the argument against the proposed health care reform. Maybe. But I would argue that I’ve just made the argument against wasting huge sums of money on foreign wars we are not likely to win along with the huge sums expended to maintain the American empire abroad.
I would argue that saving lives in the United States by getting health care to millions who don’t have it trumps the need to kill people (theirs and ours) in a country half way around the world to keep the bad guys from gathering -particularly when we know full well that the bad guys will return to their home field the moment we leave. And we are going to have to leave someday. Not everyone will agree with this and that is fine. But we can’t do it all so we might as well pick our poison and get on with it.
Like any entity that mismanages funds, and we have most certainly mismanaged our funds, there is a price to be paid. So, how will we pay for our mistakes? Will Obama be willing to risk political suicide by suggesting that maybe the time has come for the U.S. to back off on the world stage while we get our financial house in order? Or will he avoid the slings and arrows of the Center-Right by pretending he can continue our dominance abroad and still meet his obligations here at home? It’s a brutal choice for a politician -but somebody better stand up to it and do it before it’s too late.
With debt now running at about 90% of GDP we are going to have to make some choices – and soon. To do it, we are going to have to stop buying into the false arguments that keep us whipped up in a cultural and ideological frenzy, lest we actually take note of what is really happening. Don’t be fooled. This is not about big government or small government. The ship sailed on the whole big government thing when the federal government started borrowing all that money to keep the nation stocked with both guns and butter. Like it or not, there’s no turning back on that now.
It’s about politicians failing to tell the simple truth to the nation that we can no longer have it all. That’s a hard message at election time, but it is what it is.
We can still have the guns or we can still have the butter. We just can’t have both.
It’s up to Americans to make their choice, but they better make one soon before we loose the ability to afford either.
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[...] This post was mentioned on Twitter by Ron Simon, rickungar. rickungar said: http://trueslant.com/rickungar/2009/11/22/we-can-have-guns-or-we-can-have-butter%E2%80%A6-but-we-can%E2%80%99t-have-both/ [...]
Thanks.
For years I have thought our path insane and have been ranting about so long that my friends think I’m insane. It’s a moral choice and our President needs to have a long talk with the country to explain where the current course is taking us. We cannot grow out of this mess and we can live without trillion dollar weapons systems.
RE:Did we need the stimulus funds? Most economists believe we did.
How many of these economists foresaw the economic disaster we are in?
Most of the stimulus money has gone to state and lcoal government, to buy off their loyalty to Obama…..I doubt if one honest private sector job was created, if so show me where?
In fact since the stimulus we have been losing a steady half million jobs per month….some stimulus…..
The fact is teachers have benefits most from the stimulus….not the private sector…..
1. Even the most cynical appraisal of the stimulus does not support the idea that ‘not one job was created in the private sector.” Since I don’t keep tabs on anyone who got a job due to the stimulus, I guess I can’t prove it. But then again, I also don’t know anyone who happens to be a nuclear scientists but I’m pretty sure they still exist. .
In response to another comment. See in context »2. If it were only teachers who benefitted, as you say, this is somehow a bad thing?
3. Most importantly, you made it through a comment without calling anyone an axe-murderer or worse and for that, I congratulate you!
I don’t believe Obama ever said it was going to be an education stimulus….there isn’t 12% unemployment at the schools.
His key phrase I believe was “shovel-ready jobs”.
In response to another comment. See in context »“How many of these economists foresaw the economic disaster we are in?”
Joe Stiglitz did: http://www.vanityfair.com/politics/features/2007/12/bush200712
Hell, I did too, and I’m just a schlub with a Bachelor’s Degree from middle America. And he, like I, think the war needs to end and that the stimulus was about half of what it should have been. Sadly, this is not the reality we live in in post-Bush America.
In response to another comment. See in context »The free traders, thats not what it really is but that agenda has created an unemphatic well heeled class of citizen throughout the world, while the ranks of the disenfranchised grows larger and larger. Most disturbing about this is most of us have not a clue where this can all take us, ie the Roman Empire. Hard choices are coming, and if not, theres a real chance of another world war worse than anything before. How can these economists not speak out about these unprescendented times, you know the politicians won’t. There may be a new world order and not a nice one if we don’t wake up as a people, and that wake up is the only way these politicians will ever move.
The economist may speak out – and some do – but nobody listens. It is going to have to be national leaders standing up and telling it like it is.
In response to another comment. See in context »We can start by going back to Reagan. Specifically, let’s raise income taxes to where they were in Reagan’s final term.
Next, let’s listen to Ron Paul. I believe that Ron Paul has an excellent guideline for spending on foreign wars where Americans are not directly threatened: don’t.
These are my *conservative* recommendations for dealing with the issues you have so accurately reported.
There is a lot that Ron Paul says that makes sense. THe problem with him as the ‘messenger’ is that some of the things he says that get kind of out there and his credibility gets destroyed.
In response to another comment. See in context »It is interesting that you suggest raising taxes to where they were when Reagan finished up. That may be a wise suggestion but not one typically identified with a ‘conservative’ approach which is all about cutting taxes.
Rick,
In response to another comment. See in context »Groucho Marx said “I don’t care to belong to a club that accepts people like me as members.”
I may be change averse but there’s no conservative club in the US that would accept me as a member. But sometimes conservative tactics make sense even if conservative ideology has been disproved by history.
sounds reasonable.
In response to another comment. See in context »[...] Without serious cuts in our defense budget, it becomes almost certain that we’ll be unable to afford programs like those the Europeans have, or to even maximize the potential of our private-sector economy and innovation. One trillion dollars a year is a lot of money that could have gone to innovation in the markets. We can’t have it both ways, of course, even though everyone in Washington will tell you that we can. Indeed, it is the European governments which are freed from this military spending which are spending the most on butter, while Americans find themselves more and more mired in debt. You can have guns or you can have butter, but you can’t have both. [...]
[...] The Globe’s Policeman, How Glenn Beck Can Save the Right, The FY 2010 Defense Authorization, We can have guns or we can have butter… but we can’t have both, and Blaming Bush for the Budget [...]