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Is Actually Recording
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Economy in U.S. Contracts as Defense Spending Slumps - Bloomberg

According to the first pass released earlier today, GDP growth in 4Q12 was -0.1%. This number is subject to another two rounds of revisons before it'll be considered "final" (more or less) so we could very well go positive again, but the headline number is hardly exciting.

That said, if you look at the split, you see a growing (though slightly less fast than Q3) private sector and a shrinking public sector. Public spending decreased -6.6%, driven largely by a -22% drop in defense spending quarter over quarter. Combined, a decrease in government spending subtracted -1.3% from quarterly growth on an annualized basis.

I guess bigger picture this isn't awful news, but I think it drives home the point that cutting public spending during tough economic times should not be done lightly...
 

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I guess bigger picture this isn't awful news, but I think it drives home the point that cutting public spending during tough economic times should not be done lightly...
...b-b-b-but cutting public spending = jobs!

:crooks:
 

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Is Actually Recording
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You COULD argue that reallocating from public to private spending will drive growth, if you believe the private sector is more efficient than the public sector (as many do). However, if you just turn the spigot off, things will dry up. Now's not the time, you know? :lol:
 

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You COULD argue that reallocating from public to private spending will drive growth, if you believe the private sector is more efficient than the public sector (as many do). However, if you just turn the spigot off, things will dry up. Now's not the time, you know? :lol:
Also you need some mechanism to encourage private entities to hire those displaced public workers, which we currently don't have. If companies can get by with having one person do the work of two or three people for the same pay, their physical and mental health be damned, why would they take on extra salaries?

I'd also argue that higher taxes would encourage re-investment and hiring, since just sitting on the money like a lot of companies are currently doing would mean losing a bigger chunk of it to Uncle Sam.
 

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I totally get the "creative destruction" argument - you have to break a few eggs to make an omlette, and that some of those displaced public workers will be driven to start new ventures and increase their worth to the economy (and in turn the GDP) in ways they wouldn't be. I get that.

However, I think it's pure common sense that inasmuch as we have the flexibility to do so, we should choose the timing of that destruction, and not make cuts that will shave 1.3% off GDP when we're looking at status-quo GDP growth of 1.2%.
 

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I am Groot
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If we had elected a business mind, we'd be out of this recession by now. Goddamn socialists... :noway:
 

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I totally get the "creative destruction" argument - you have to break a few eggs to make an omlette, and that some of those displaced public workers will be driven to start new ventures and increase their worth to the economy (and in turn the GDP) in ways they wouldn't be. I get that.
The problem is this only happens if they have the financial capability to start a new venture. This is the part of the thread where I remind everybody for the umpteenth time that Scandinavian countries with strong safety nets and generous unemployment programs are producing more start-ups and entrepreneurs per capita than the US is. It's kind of difficult to start a business when you can barely afford to feed yourself.
 

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The other thing I would like to point out is that in certain areas that truly need to be cut rather than across the belt-tightening, namely defense spending, I'm ok with it having a few negative results at first. The defense budget is obscene and I don't think "but the economy!" is a good enough argument to keep it that high.
 

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I have a crazy idea - let's cut that money from defense spending-because really, we have more than enough ways to blow up brown people in third world countries-and spend it on shit that will help people here! I guarantee that the government paying somebody to build roads and schools is just as, if not more, beneficial to our GDP as paying somebody to build bombs.

It always kind of amuses me to hear Republicans talk about how the government can't create jobs but then claim the defense budget is sacred because it creates jobs. :nuts:
 

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I have a crazy idea - let's cut that money from defense spending-because really, we have more than enough ways to blow up brown people in third world countries-and spend it on shit that will help people here! I guarantee that the government paying somebody to build roads and schools is just as, if not more, beneficial to our GDP as paying somebody to build bombs.
That's a little (ok, a lot..) on the insane-left-wing side of things man. Saying that the defense budget is mostly about "blowing up brown people" is no better than the NRA nuts saying that the assault rifle clip ban is "Obama taking away everyone's guns".

The defense budget keeps you safe, our deployed troops safe, our embassies safe, and protects our everyday way of life. Without a defense budget, there would be more 9/11s and more Benghazis. That same budget saves our citizens when Somali pirates capture US/Allied vessels, and protects the solders whose job it is to rescue those people. The defense budget is protecting you, right now, wherever you are posting from, from things like cyberattacks, credit card fraud and identity theft.

Every government program is full of bloat and bullshit, and I agree that defense needs to be cleaned up - but so does transportation, agriculture and everything else you can think of.

With the bullseye of every nutjob dictator, technological rival and religious fanatic fully centered on the United States right now, screaming for broad and sweeping defense cuts is, IMO, not a very good idea. Cuts to the programs that keep our country safe need to be made with a scalpel, not a machete.

It always kind of amuses me to hear Republicans talk about how the government can't create jobs but then claim the defense budget is sacred because it creates jobs. :nuts:
The "industry" of trying to do harm to the United States and it's allies is booming right now. Defense is indeed creating jobs, because it serves as a countermeasure. Do you not want smart people being hired to prevent planes from slamming into buildings, or roadside bombs killing our troops? Should our people on the ground both at home and away have less intel by cutting things like the drone budget? It's the information age. Information is power, and information is expensive. It also saves lives.
 

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I read the title as:

"Well, I guess this is the best possible reason for negative GOP growth"

Maybe they'll both be true.

Ray
 

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This:
The defense budget keeps you safe, our deployed troops safe, our embassies safe, and protects our everyday way of life. Without a defense budget, there would be more 9/11s and more Benghazis. That same budget saves our citizens when Somali pirates capture US/Allied vessels, and protects the solders whose job it is to rescue those people.The defense budget is protecting you, right now, wherever you are posting from, from things like cyberattacks, credit card fraud and identity theft.
and this:
With the bullseye of every nutjob dictator, technological rival and religious fanatic fully centered on the United States right now, screaming for broad and sweeping defense cuts is, IMO, not a very good idea. Cuts to the programs that keep our country safe need to be made with a scalpel, not a machete.
Can't be ignored. I'd love to have the U.S. Military be 100% defensive, holed-up CONUS, but unfortunately, it can't be. There are too many "disconnected" (information-wise, education-wise, trade-wise, playing-nice-with-others-wise) nation states out there that serve as breading/training grounds for groups like al-Qaeda, Somali Pirates, etc. or are out-right threats on their own (N. Korea, etc.) that we just can't pack-up out toys and go home. Doing so would just make these areas worse and increase the threat towards us.

That said, we do need to be smarter about our "See, it pays to play nice with 'us' (not just the U.S.)" activities and $'s.

Ray
 

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That's a little (ok, a lot..) on the insane-left-wing side of things man. Saying that the defense budget is mostly about "blowing up brown people" is no better than the NRA nuts saying that the assault rifle clip ban is "Obama taking away everyone's guns".

The defense budget keeps you safe, our deployed troops safe, our embassies safe, and protects our everyday way of life. Without a defense budget, there would be more 9/11s and more Benghazis. That same budget saves our citizens when Somali pirates capture US/Allied vessels, and protects the solders whose job it is to rescue those people. The defense budget is protecting you, right now, wherever you are posting from, from things like cyberattacks, credit card fraud and identity theft.

Every government program is full of bloat and bullshit, and I agree that defense needs to be cleaned up - but so does transportation, agriculture and everything else you can think of.

With the bullseye of every nutjob dictator, technological rival and religious fanatic fully centered on the United States right now, screaming for broad and sweeping defense cuts is, IMO, not a very good idea. Cuts to the programs that keep our country safe need to be made with a scalpel, not a machete.

The "industry" of trying to do harm to the United States and it's allies is booming right now. Defense is indeed creating jobs, because it serves as a countermeasure. Do you not want smart people being hired to prevent planes from slamming into buildings, or roadside bombs killing our troops? Should our people on the ground both at home and away have less intel by cutting things like the drone budget? It's the information age. Information is power, and information is expensive. It also saves lives.
That's all well and good, and justifies a large defense budget. It doesn't justify a defense budget which dwarfs most of the rest of the world combined by a significant margin. I'm not suggesting we cut all defense spending, but we do spend far, far more than is reasonable, and on things we don't need. You can have an effective intelligence network and protect your bases and embassies at a sustainable cost if you're not pissing away insane amounts of coin elsewhere.

Much of the excessive cost is driven specifically by the government overpaying private contractors to build all kinds of ridiculous weapons and vehicles, half of which run severely behind schedule and over budget. Does it cost trillions upon trillions to protect embassies? No. Do we need to be building aircraft worth billions of dollars that are designed to be counters to threats which do not exist? No. We almost have more aircraft carriers that have been decommissioned and turned into museums than the rest of the world COMBINED has active carriers, and yet one of our recent Presidential candidates was advocating we build more! Not to mention, the whole "when all you have is a hammer, every problem looks like a nail" factor. I'd venture that part of our over-eagerness to keep sticking our collective dick in various beehives around the world is probably tied to the fact that the brass always has some shiny new toy they're itching to test out.

We've gotten to a point where we are essentially maintaining a WWII level of defense spending as a matter of course. That's ridiculous and unnecessary. There are plenty of other countries who have dealt with/are dealing with groups of people who want to blow up their buses and malls-in fact many of them have such groups within their borders and not across an ocean- and they manage to get by without bankrupting every non-defense segment of their budget.
 

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I am Groot
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That's a little (ok, a lot..) on the insane-left-wing side of things man. Saying that the defense budget is mostly about "blowing up brown people" is no better than the NRA nuts saying that the assault rifle clip ban is "Obama taking away everyone's guns".

The defense budget keeps you safe, our deployed troops safe, our embassies safe, and protects our everyday way of life. Without a defense budget, there would be more 9/11s and more Benghazis. That same budget saves our citizens when Somali pirates capture US/Allied vessels, and protects the solders whose job it is to rescue those people. The defense budget is protecting you, right now, wherever you are posting from, from things like cyberattacks, credit card fraud and identity theft.

Every government program is full of bloat and bullshit, and I agree that defense needs to be cleaned up - but so does transportation, agriculture and everything else you can think of.

With the bullseye of every nutjob dictator, technological rival and religious fanatic fully centered on the United States right now, screaming for broad and sweeping defense cuts is, IMO, not a very good idea. Cuts to the programs that keep our country safe need to be made with a scalpel, not a machete.

The "industry" of trying to do harm to the United States and it's allies is booming right now. Defense is indeed creating jobs, because it serves as a countermeasure. Do you not want smart people being hired to prevent planes from slamming into buildings, or roadside bombs killing our troops? Should our people on the ground both at home and away have less intel by cutting things like the drone budget? It's the information age. Information is power, and information is expensive. It also saves lives.
Spoken like the employee of a large defense contractor. :lol:
 

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I am Groot
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It's more that it's spoken like a guy that lost friends in 9/11.
I did, too, dude. That doesn't mean we have to be stupid about defense spending. We don't need dozens of F-35 jets at $130 million a pop to fight insurgents in a desert. We keep building monolithic cold war relics, yet it took three years to get our troops body armor. The Pentagon fucking sucks.
 

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I did, too, dude. That doesn't mean we have to be stupid about defense spending. We don't need dozens of F-35 jets at $130 million a pop to fight insurgents in a desert. We keep building monolithic cold war relics, yet it took three years to get our troops body armor. The Pentagon fucking sucks.
I'm pretty sure I didn't say anything even remotely close to that. I'm not disagreeing with the fact that there need to be cuts. What I'm saying is that knee-jerk sweeping cuts are not the right thing. Again, scalpel, not machete, when it comes to the safety of the entire country. Discounting all of defense spending as "programs to blow up brown people in third world countries" is a Glenn Beck level of silliness.
 

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I am Groot
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I'm pretty sure I didn't say anything even remotely close to that. I'm not disagreeing with the fact that there need to be cuts. What I'm saying is that knee-jerk sweeping cuts are not the right thing. Again, scalpel, not machete, when it comes to the safety of the entire country. Discounting all of defense spending as "programs to blow up brown people in third world countries" is a Glenn Beck level of silliness.
I wasn't saying what you said. I was simply saying the DoD is a titanic money waster, and I take exception to the statement that we have to continually blow up people half a world away to stay safe. ;)
 

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That's all well and good, and justifies a large defense budget. It doesn't justify a defense budget which dwarfs most of the rest of the world combined by a significant margin.
Who's the number one military power in the world? Who's the number one military TARGET in the world? Hint: both of those are the United States. If you're expecting the US to have a defense budget the size of Sweden, it just isn't going to happen.

I'm not suggesting we cut all defense spending, but we do spend far, far more than is reasonable, and on things we don't need. You can have an effective intelligence network and protect your bases and embassies at a sustainable cost if you're not pissing away insane amounts of coin elsewhere.
I agree here. What I'm saying though, is that EVERY department spends far, far more than is reasonable. All of them. Targeting defense as the golden ticket to prosperity if we just stop making new hardware and putting R&D into new technology is naive.

Much of the excessive cost is driven specifically by the government overpaying private contractors to build all kinds of ridiculous weapons and vehicles, half of which run severely behind schedule and over budget.
Yes and no. Are there examples of the above? You bet. Are there also examples of important pieces of new tech that have a monstrous amount of R&D behind them that a government agency just can't do? Yes there are. You can't just focus on one side of the coin, which is what you're saying - or at least how you're coming across. For every 1 stupid-ass overpriced waste of money there is something that was worth every penny.

Does it cost trillions upon trillions to protect embassies? No.
Who said it does?

Do we need to be building aircraft worth billions of dollars that are designed to be counters to threats which do not exist? No.
The average age of an F15 is something like 25 years old. The Air Force is chock full of antiquated old planes. At some point, you'll need to concede that we need a few new ones.

I'd venture that part of our over-eagerness to keep sticking our collective dick in various beehives around the world is probably tied to the fact that the brass always has some shiny new toy they're itching to test out.
Generalizing the work that the US armed forces do across the globe as nothing more than "collectively sticking their dicks in beehives to test out some brass's shiny new toy" is doing an absolutely gigantic disservice to the men and women who are enlisted right now. In fact, it's pretty disgraceful.

We've gotten to a point where we are essentially maintaining a WWII level of defense spending as a matter of course. That's ridiculous and unnecessary. There are plenty of other countries who have dealt with/are dealing with groups of people who want to blow up their buses and malls-in fact many of them have such groups within their borders and not across an ocean- and they manage to get by without bankrupting every non-defense segment of their budget.
You need to stop comparing the USA to other countries and open your eyes. The USA is the most powerful nation in the world. You can't compare the defense spending of the most powerful, most at risk country in the world with any other. You just can't.

If you can peel the super-left-wing blinders back for half a second, read this. Not everything we do is a titanic waste of money meant to show off someone's new toy, and not everyone deployed overseas is there to "blow up brown people", as you so delicately put it.

The Americans are coming - CNN
 
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