Thursday, July 15, 2010

Austerity Affects Butter and Guns

Given that austerity planning has come into vogue in the US Congress, new issues are certain to emerge that will influence how austerity measures might be implemented nationally. Of course, imposing austerity upon a nation implies cuts in government spending and increases in taxes. However, if the American people are to endure deep cuts in public spending, then certain long-held budgeting assumptions may require adjustments. Said another way, if the US economy is so bad that the government must impose austerity measures upon its citizens, then the time has also come to discuss bringing our troops home and cutting the defense budget as well.

Austerity affects butter and guns…

Global Military Spending 2009 [click to enlarge]

5 comments:

Anonymous said...

What if austerity causes increased social unrest? Would an increase in spending on police and law enforcement be advisable?

Dr William J McKibbin said...

Hi Anonymous, increasing police forces at the state level will be impossible due to budget constraints. Plus, the scale of the unrest will be beyond the capacity of police forces to handle. The army will no doubt be used should civil unrest breakout in cities or in specific localities or regions of the country. Keep in mind that the military is likely to be a protected segment of society, along with Federal workers, Wall Street bankers, and unionized automobile companies. The depression that is unfolding on Main Street is likely to be a profound experience for our nation...

Dr William J McKibbin said...

PS: See my post below for more about where the army fits in to the social order...

http://wjmc.blogspot.com/2010/07/capitalist-system-according-to.html

Anonymous said...

"We shoot at you."
That would be a rather nasty twist on the "soldiers protecting freedom" theme politicians are so fond of peddling.
:(

Anonymous said...

The US, main street, and its middle class need a new force of economic engineers to use the available infinite fiat currency of the sole superpower of the world to employ US citizens in societally useful occupations. The US military -along with ts aging nuclear arsenal - fits that utilitarian requirement and supports the value of its currency placing an influential blanket around the oil producing world. The only people protected by the new austerity conspiracy, now that the financial industry has been re bankrolled by the US treasury courtesy of bought and paid Goldman Sachs politicians, are the holders of US bonds and euro sovereign debt. These are generally the super rich elite, the same members of the bailed out financial industry, who disproportionally hold more wealth than the French aristocrats did in the 1780's, just before the guillotine became operational. Let the rich bond holders eat paper. Pay them off in the odd denomination of 21 million dollar bills. Pay the US citizens and the economic engineers created useful jobs in ones, tens, and hundreds. Later mandate 21 million dollar bills are no longer legal tender.
This country can rise again when the financial engineers and the non value real economy added competing Wall Street casino have been regulated to a guillotine equivalent, taxing speculation earned and financially gamesmanship derivatively earned dollars into oblivion and into the citizen's coffers. Let the redistribution of wealth commence and let the reemployment of the US middle class begin again. It's morning in America..... http://www.economicfractalist.com/

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