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What shall we do with 'surpluses as far as the eye can see'?

May be we can work toward the same debt load Ronald Reagan inherited from Jimmy Carter.

And stop worrying about the printing presses.

How bout cutting SS and medicare receipts to pay go?

Better yet how about rebate checks to the SS premium payers.

The reason I like this blog is because Steve is asking questions no one else is. Instead of "How should we pay down the debt," he's asking "Should we pay down the debt?"

You have to admit, that's an interesting question.

Do you have data earlier than 2005? If the earlier data supports your trend line, then that would add weight to your argument. However, if it doesn't, I would be interested to see if you would change your hypothesis or provide reasons why the later data was more reliable than the earlier data. (I don't think there have been major shifts in spending or taxation since early in the Bush administration.)

Albert

Yes, the data goes back several years. But one of the perpetual questions in forecasting is how far back to go to establish the trend line. I picked 12 months, for simplicity. One could make a strong argument for six months, and a strong argument for 18 months, or anything in between. Going too far back misses trend shifts; not going far enough back results in a whipsaw. Twelve months worth of deseasonlized data points is about right for this, in my experience.

Always find your posts interesting.

How does your predicted trend line relate to the budgeted spending? Could you add points at the end of the 2007 and 2008 fiscal years based on the budget for that year? How would that compare to trend line? Is there historic aggreement between the budgeted outlays and the actual expenditures? The projected annual deficits appear to show a greater uncertainty relative to the income than the spending?

I've spent some time doing multi-variate time series analysis of large municipal budgets, and my experience is that past 20 data points (months, years, doesn't matter), unless something truly grotesque happened, the data might as well be a straight line. If there *is* such an interruption, it always damps out by point 20.

crash,

Although I haven't done any rigorous back-testing of budget forecasts vs subsequent actuals, I do know that the year-ago deficit forecast by the administration was significantly higher than the subsequent actual deficit. Sandbagging? I don't know, but politics frequently seems to get in the way of both sides' objectivity, so I'm not discounting it.

The thing I like about rolling-12 data (or rolling-52 for weekly data) is that it's deseasonlized, and each data point carries a lot of momentum. It takes a huge change, Jan'07 vs Jan'06, for example, to nudge the trend in a different direction. I don't quite understand why that is such a difficult concept for some people to grasp, but it looks as if that blind spot just might win a thousand dollars for my granddaughter.

There's an impulse to pay down the debt...it's the shopkeeper's impulse. But when you take a look at the benefits of the national debt it should make you pause and examine it just a little more.

My guess is that the bet will be nullified. Although most politicians will never admit it, they know that deficits between 2-4% of GDP pose no threat to the economy. Once the politicians have a line-of-sight to balance something will change, not sure what but my guess is the Democrats will find something to spend the extra money on.

Chengster:

Only a significant change in the tax rate structure will nullify the bet. I wouldn't mind seeing extra spending on things like national security or infrastructure. If the Democrats are ignorant enough to raise tax rates, they'll more than deserve the fall in tax revenues that will generate.

Steve,

What do you mean by: "national security"?

What would you buy?

Why?

What else could be bought or refunded to a taxpayer?

Opportunity cost of "national security"?

I want to make a correction to a statement that I made about SS being part of the unified budget by law it is not. But it is without a doubt arcane part of the budget, because it has been on and off budget several times since its inception. See text below:


"The next important change in Social Security's budget treatment came in 1985 with the passage that year … as Gramm-Rudman-Hollings … [which] pushed forward from 1993 to 1986 the date by which the Social Security program would be made immune from generalized budget reductions. However, GRH also mandated that the Trust Funds be included in the budget for the purpose of determining if the total budget exceeded the deficit targets in the law. … The import of this provision was that … while the Social Security program was off-budget, and immune from sequestration or other generalized budget cuts, its surpluses were still being used to reduce the size of the budget deficit.
So, by 1986, Social Security was technically off-budget, but it was still being used in the deficit calculations. … However, in the Omnibus Budget Reconciliation Act (OBRA) of 1990 the law was changed to stop the use of the Trust Funds for any function in the unified budget, including calculations of the deficit. …
The … budget treatment of Social Security basically remains the law to the present day. Specifically, present law mandates that the two Social Security Trust Funds, and the operations of the Postal Service, are formally considered to be "off-budget" and no longer part of the unified federal budget. (The Medicare Trust Funds, by contrast, are once again part of the unified budget.) So where matters stand presently is that the transactions to the Social Security Trust Funds and the operations of the Postal Service are "off-budget" and everything else is "on-budget."
However, those involved in budget matters often produce two sets of numbers, one without Social Security included in the budget totals and one with Social Security included. Thus, Social Security is still frequently treated as though it were part of the unified federal budget even though, technically, it no longer is."

Now for my real post. Democrats use to be that tax and spend group, not any more! With the ushering in of President George W. Bush a new type of Republican was born. These new Neo-con Republicans are for low taxes and big spending and regard debt and deficits as nothing more then accounting issues that have no meaning.

So lets examine these trivial issues

1. In the last 6 years we have paid approximately 1 trillion in interest.----trivial?
2. FY 2007 will be about 250 billion in interest.-----trivial
3. Over the next 10 years we will spend about 2.5 trillion on interest---(if interest rates stay low) If interest rates go up as they probably will to reflect long term historic risk premium spreads it could add another trillion to the 10 year amount.

Since not even the Neo-cons have figured out how to repeal the business cycle we are due for a down turn in the economy---that means bigger deficits and debts.

But no worries mate—we can just print more money---monetize the debt so that the dollar is on par with the peso---of course it may take $5000 to buy an oz of gold---but at least we can say we had low taxes.

I am a micro type person here among bankers and macros.

I get no answers.

I think the con in conservative is the active part.

I have saved thousands on taxes since Bush came in.

I loaned that money back to the treasury making decent interest, no risk.

Great deal for me.

No taxes but lend them the money I should have paid.

It is a circular flow thing.

Being a micro person means I have a production background, physics and thermo says there are no everlasting closed cycles.

Maybe in the con there are.

Great site.

Dont dispute your methodology, but your bet is a bad one. Considering the fed gov has run a deficit 41 of last 47 years, i dont see why things will change.

ilsm:

applying physics to the economy is a very bad idea. but in some self-aware irony, i would say that the deficit (need to inject money) is exactly what keeps the economy from being a "closed cycle"

Gun,

You're absolutely right. The interest we have paid and will pay on the debt is NOT trivial. Wow, think about all those bond holders, particularly Americans, who are going to enjoy all of that interest they earned on their investment. That'll be GREAT for the economy!!

Of course, it's a good thing that those people know how safe an investment US Treasury Bonds are - otherwise, the interest rate they charge wouldn't be one of the lowest in the world.

I find absolutely none of that to be trivial.

Gun,

You're absolutely right. The interest we have paid and will pay on the debt is NOT trivial. Wow, think about all those bond holders, particularly Americans, who are going to enjoy all of that interest they earned on their investment. That'll be GREAT for the economy!!

Of course, it's a good thing that those people know how safe an investment US Treasury Bonds are - otherwise, the interest rate they charge wouldn't be one of the lowest in the world.

I find absolutely none of that to be trivial.

gunthestops, I am not sure you are asking rhetorical questions or if you are making a meaningful points for discussion. Assuming the latter, history has shown that moderate deficits coupled with sound monetarist policy has produced stable and consistent growth of the economy. Sure there have been some recessions along the way but not counting the '71-'73 recession, these slowdowns have been statistical regressions toward the mean. Even your Democratic hero Bill Clinton showed that proper fiscal management with Rubin at Treasury, did not cause any harm.

The billions that you mention, in absolute terms, are meaningless. Surely, you are more intelligent than to think that readers here would be baited into that discussion.

And finally, yes, we print more money, but we are printing on a rate that is equal or less than the monetary rates of growth of every major world currency. No harm or foul there either. And if that is still your concern, then follow your own recommendation and buy the gold. Heaven forbid the speculators and hedge funds drive your investment the wrong way...

Q: Anyone care to guess when the longest stretch of budget surplus occured in the past 100 years?

A: 1920-1930

well that turned out great! (get it? great? as in depression?)

Q: How many years since 1930 has the fed gov run a surplus?

A: 12 out of 77

Q: Anyone know the second longest stretch of budget surplus occured in the last 100 years?

A: 1998-2001

Dont even get me started on the HORRORS (gasp) of the ...

TRADE DEFICIT!!!!

AHHHHHH!!!!

RUN FOR THE HILLS!!!!

Hummm, thanks for the clarification. Not sure I would have made that bet. Don't get me wrong I believe the trends and I would be very surprised if the economy slowed enough to change the revenue line, but spending is a gigantic question mark. You're essentially betting on spending restraint by a Democrat congress or the President imposing that restraint with his veto power. I'm not sure I'd stake $1000 on either. But good luck, your blog is great and you make more sense than most.

islm:

Answers to your questions...

What do you mean by: "national security"?
The ability to defend ourselves and prevent destruction; specifically, intelligence, diplomacy, military force potential, and the will to use each as necessary.

What would you buy?
One example: In the mid-1990s, I would have reduced the surplus by a few tens of millions and used it to beef up embassy antiterrorist measures in Kenya and Tanzania, using the same measures we employed at other embassies around the world.

Why?
To prevent terrorist truck bombs from blowing up the embassies and killing diplomats. (As you may recall, the "surplus" took priority over defending those embassies, unfortunately.)

What else could be bought or refunded to a taxpayer?
Bought (example): Better, broader technological measures at major ports to detect nuclear devices hidden in containers.
Refunded (example): Tax dollars required to support agricultural subsidies.

Opportunity cost of "national security"?
None. National security is destruction-prevention, a form of investment in the future (...difficult as it is for some to grasp the idea that destruction-prevention is an investment in the future).

Steve,

Thanks!

Your list runs in the few tens of millions. How come it gets crowded out by billions for things that are not needed? I suggest the F-22 and MV-22 unrelated but aerospace welfare as examples.

I could discuss star wars and missiles in silos in Alaska which never went off on time nor hit anything. Good thing the threat missiles exist only in someone's business plan

There are opportunity costs.

Destruction-prevention as the examples above compete.

What was averted in spending money on a fighter aircraft, when the enemy attacks where we have not planned.

There are alternative uses.

If destruction (or lose of life) preventions are inestimably great public goods, okay.

But I would suggest there are other inestimable public goods thus the debates.

I have direct experience with destruction preventing military systems that are so impervious to opportunity cost concerns that we build them even though they do not work, and are not therefore needed.

Somethings are just so important to destruction prevention we buy them as we see they do not meet most of the technical requirements.

Those engineers just gold platethe requirements.

I do appreciate you taking time to inform me about another 'reason' for sending good money after bad to the warfare welfare state.

I may quote you in explaining the theory and proceses of warfare welfare.

Steve,

"...difficult as it is for some to grasp the idea that destruction-prevention is an investment in the future."

I had not heard that warfare welfare excuse in a long time.

Some say continuous mobilization is good too. We build stuff that is not needed then wear them out practicing for the war we failed to mobilize for in 1940.

If it is to be run as a business maybe there should be real reviews and when the stuff overruns, they enforce the contracts or kill them.

Not lower the specs and send more money.

That goes with the argument we need these inept incompetents in the warfare welfare infrastructure should the bear rise again and is so kind as to attack our strengths.

I sold my war bonds years ago.

It is bad investment and bad opportunity analysis.

But maybe we should get Greenspan to build a scheme for general surplus accounts filled with cash anticiapting the great new investments on destruction prevention on the horizon.

Or even better sinkig fund accounts with cash to pay for replacements to the new investments after we wear them out wasteful mobilized for the war we won in 1945..

Thanks again.

SalvatireM,

This question is definitely not rhetorical:

How does sound monetarist policy fit with kicking dollars out of helicopters?

Same question if you meant monetary instead of monetarist.

I am a micro, somewhat hard science person so be gentle.

Patrick,

I am here for learning new things.

Was the gold standard a closed system?

"[I] would say that the deficit (need to inject money) is exactly what keeps the economy from being a "closed cycle".

There are no closed systems in any process I have worked.

Why do we need to inject money all the time?

Steve,

I do not mean to imply I need to learn much about the warfare welfare scams.

I was in the 'national security industry' on either side for many years.

Ilsm,

Did Steve say anything about warfare welfare? I thought he was talking about national security. I would think there's a clear distinction between destruction-PREVENTION ideology and a certain administration's foreign policies. Specifically, how the current war continues to be funded would be a different conversation.

I also believe we all want to eliminate wasteful spending, wherever we find it. Because you're right, wasteful spending falls under the category of "bad investment". But every facet of government expenditures has wasteful spending, so that doesn't necessarily discredit defense spending as a priority. Unless, of course, your examples were meant to suggest that 100% of defense spending is wasteful? Of course we want all of our spending to be as economical and efficient as possible.

Regardless of your politics and regardless of which war is or is not currently going on, defense spending and beefing up national security as a means of destruction prevention is necessary, and it's a good investment. It keeps America from suffering casualties, losing freedom and property, and defaulting on our bonds. It also gives bondholders confidence that America won't suffer casualties, lose freeom and property, and default on bonds. And because their bonds are so secure, the bondholders will only charge a pittance for interest. So not only are we safe, but our bonds become one of the safest investments in the world - one that people want to take advantage of.

Andy,

You might have missed my point.

Interest rates in the UK and EU are very low. Japan's are less than zero.

They spend less than .5% of GDP and do not have oceans, nor any stops at all on the EU borders

There is huge waste, made up definitions of security threats and then the most costly approach to tactics.

Then the stuff fails most design tests and is broken more than acceptable in the field.

But, you have not been in the JCIDS lately or you drink the kool aid and make more money in the building than you could in the real world.

And no one inspects a huge per cent of the containers entering any US port nor the trucks crossing the borders.

There are several views of the common defense.

The consideration of bonds holders is not one.

The 5000 miles across the pacific and the 3000 miles across the Atlantic are security.

But assuming the bond investors really think (I do not think George Washington expected the congress to care about bond rates) a dollar level of defense spending is in order,they ought to be looking at things like I am and making sure there is whatever, "destruction prevention" in the dollars of US "investment"?

I think the bond holders don't know nor care about our defense budget.

They certainly do not know that the worst threats and the most fearsome enemy is the one who attacks the weakness.

I do not think concern for bondholders' view of US national security is an issue.

I see no evidence to state it.

Unless they are just not watching the waste and abuse and are conned that there is any measure of common defense in the national security welfare state.

I think the bond holders of defense sector companies care that their company gets a share of the racket.

War is a Racket.

MGen Smedley Butler, USMC 1933.

True then and today.

Ilsm,

"And no one inspects a huge per cent of the containers entering any US port nor the trucks crossing the borders."

Well, that sounds like something to improve upon. It also sounds like something that requires budget spending. We should take care of it.

And I didn't mean concern for bondholders is what should drive the need for defense spending. Bondholders' opinion is just one of the effects.

You bring up vast misuses of defense spending, and it sounds like you think anyone would disagree with you that it needs to stop. No one argues that. We all hope that our defense money is going toward infrastructure which will add to our security, not waste our money.

However, we all realize it will never be 100%. You would assess it to be far, far less than that. Fine. Perhaps we should spend some money on better project management/auditing. Making our defense more efficient would certainly make us safer.

The point is that no matter how much you point out how efficient the military ISN'T, it doesn't take merit away from the fact that defense spending should always be approached as a good investment.

About borrowing money for defense, Steve says it best:
"You agree that it's okay to borrow money to win a war. Tell me, though: Why is it not okay to borrow money beforehand, to prevent that very same war from happening in the first place?"

Well, I'm sure the unexpected rebuilding of our embassies in Africa required some deficit spending. Would it or would it not have been better to have spent that money on more anti-terrorist intelligence & recon beforehand in order that it MIGHT have been prevented?

I am not sure I would disagree if we borrowed 100% of GDP one year to fight WW II.

That being said spending; 4 or 7% of GDP to prevent the unthinkable or unexpected is also not supported by the supposed failures in 1935 or 1947 to invest in preventing destruction. I would prefer damage ILO destruction as a less agressive or emotional term.

But I cannot categorically agree with: "You agree that it's okay to borrow money to win a war. Tell me, though: Why is it not okay to borrow money beforehand, to prevent that very same war from happening in the first place?"

You need to show how continuous mobilization, aside from enriching a group of people will stop anything.

Arms races are an example, the arms races in Europe in the early 20th century and then in Germany in 1936 stopped nothing.

Historically being armed to the teeth makes wars possible.

Why have the stuff except to use it?

Being armned to the teeth did not prevent nor mollify the innovative attack on 11 Sep 2001.

It is unreasonable to think the Germans were better armed than the French, in fact it is patently false untrue, in 1940.

In the Ardennes the French tanks had better armor and guns, they did not have radios!!

The french were wrongly armed relied on the Maginot Line (think Star Wars). And tanks who operated as armored knights on their own, with no coordiantion.

The Germans were totally disarmed in 1933. They did not have better tanks they had better strategy.

They went around the French and British strength. They fought their weaknesses. No amount of rpofitable defense investment would have changed the outrcome in 1940.

See, 1950 as well.

In fact see the ChiCom assault in Nov 1950 for beating the high tech stuff with low tech tactics and strategem.

So, I disagree that wasteful profitable continuous mobilization yields anything other than profits and opportunity lost in the economy.

Investing, your ideas of preventing damage are mirages.

So no I would not agree......

Andy/Steve,

I see from this thread you both think war or preventing damge or destruction is a good investment.

So, if it a good investment and so important why don't you both invest a few years?

If you are too old how about your kids?

Do not say you have anything more important or you serve as exceptional investment bankers, I do not buy that.

So, If you think it is so important why not raise taxes and not borrow for it?

I am too old and I have invested a few more than a couple of years in the US military.

And I won't encourage my kids.
Particularly, if you all think it is not important enough to go yourselves or to tax for it.

Would I agree?

Would you tax?

"Why have the stuff except to use it?"

In my opinion, we have the stuff precisely so that we don't have to use it. The ability to defend ourselves well keeps outside parties from wanting to risk coming at us.

Of course, the exception is terrorists' guerilla tactics. But that attacks the same weakness each of your other examples share: lack of intelligence. When we talk about defense spending, it's not just tanks, jets, and the ability to continuously mobilze. Intelligence is a huge part, and these days it should be ever-increasingly important.

Which brings us back to the Africa embassies and 9/11. Intelligence was our weakness, and it shouldn't have been. A great book on this issue is "See No Evil" by Robert Baer - a recommendation I would give to anyone.

There is a large distinction between being able and willing to defend ourselves and actually going to war. I never said going to war was necessarily a good investment (that's yet another conversation). However, preventing that very same war from happening most certainly IS a good investment.

And since any banker will attest that borrowing money to fund good investments is sound financial practice (one of the central themes of this site), it would be unwise and certainly detrimental to assume we have to raise taxes for the funding. No, I would not tax.

ilsm,

The Japanese and Europeans spend between 1 and 3% of GDP on defense expenditures (depending on which nation you mean exactly in Europe), while America spends around 3.5% of GDP (you might think it is higher if you add in pensions, medical liabilities and so forth, but Japan and Europe don't for their numbers, so why should we?). On top of this, the reality is that, at least to some extent, our implicit and explicit offers of protection are what keep the defense budgets of our allies down.

Perhaps we do spend too much on defense, and perhaps it is a bad investment. However, attempting to prove this by showing that America is out of whack with the rest of the industrialized world requires a lot of sleight of hand, and is unlikely to convince anyone.

Also, Butler was an idiot. His military actions helped to prevent European wars in the New World. He saw it as an attempt to shake down the poor for capitalist masters on Wall Street, when most of the people clamoring for blood were French, British, German, and Russian investors who were ready to send in their troops if they didn't get money.

ilsm,

You seem about as concerned with an honest dialog as every other radical Lefty who admits to knowing nothing about the subject. I'm a "micro" and a "science" guy so treat me nice...

But I've got a comeback for literally anything you could type. Because you're WRONG, you see. And I'm Right.

Even though above I admit not knowing anything about the subject matter at hand.

*****************

Seriously, do you get tired of your own fatuousness?

*****************

And the whole chickenhawk argument you made is so... 2004. The more recent argument made by William Arkin is that those who ARE actively serving in the armed forces have no right to dissent from the Leftist worldview.

Didn't you get the memo?

Laser: invented at Bell Labs with military funding to replace radar guided bombimg systems

GPS: developed entirely by the DOD, now shared with the world for free

Jet engine: developed and perfected by miltary

Missle defense: will likely be perfected in the next 20 years and shared with the world for free

Internet: essentially invented by DARPA in the 1950s (later switched to NSF development)

the list could go on...

what a racket!

Laser: invented at Bell Labs with military funding to replace radar guided bombimg systems

GPS: developed entirely by the DOD, now shared with the world for free

Jet engine: developed and perfected by miltary

Missle defense: will likely be perfected in the next 20 years and shared with the world for free

Internet: essentially invented by DARPA in the 1950s (later switched to NSF development)

the list could go on...

what a racket!

ilsm,

Please check the following chart and answer if you truly think we spend more on warefare than welfare?

http://www.qando.net/details.aspx?Entry=5444

Also, regarding programs like the F-22, please read some military history and see what happens to armies at war who do not have air superiority during the conflict.

Aaron,

What makes you think the F-22 is critical to air superiority?

When does the next army appear for us to have superiority over/

You want to fight on the Asain land mass?

Military history, you should consider Santayana's other statements..

Patrick,

Do you suppose the taxpayer should get royalties?

Jon Thompson,

On top of this, the reality is that, at least to some extent, our implicit and explicit offers of protection are what keep the defense budgets of our allies down.

What justifes our taxpayers covering themA?

Or is it they do not have the fears or the political pork the US has?

I won't argue % or what we pay.

Patrick,

I was too terse.

When was the last time the 'pentagon' introduced a new technology?

Radio, airplanes, internal combustion engines, turbine (basis of jet engines) were all developed by private sources.

You are reaching to the post WW II boom in building things like the jets, radar and computing which were born of necessity in WW II.

The defense establishment now is far from the innovation engine we saw in 1950.

One of my points has been its demise as a technology innovator, everything is cost plus!

Some think we have an innovative monoploy on war making technology.

No longer the case, sad but okay since there are no technological competitors.

GPS is neat for wandering the wood or sea or unfamiliar cities but the circuitry to get it on your fingertips is from the Taiwanese, nothing close to the things the DoD establishment ever did.

ilsm,

Because it is a mutually beneficial arrangement. We all get to spend less than if we didn't work together. If Russia attacks Germany, they know they have to go to war with us. Similarly, if Russia attacks us, they know that German and American forces will be launched from Germany. This means that each nation has to spend less, not more, overall.

Also, your argument that the DoD hasn't been good for anything since the end of the second world war would sound more reasonable if your argument weren't that an event even farther back in time (WWII itself) illustrates the idea that we don't need a defense industry. I can't help but point out that it is much easier to think of farmers picking up muskets to defend their homes against an enemy armed with similar muskets than it is for me to imagine how modern Americans could defend themselves from tanks and jets, let alone nuclear missiles.

Jon,

What will Russia attack Germany with, what will Germany defend themselves with?

I cannot go into detail but your scenario was hokey in 1970 even with 40,000 soviet tanks and thousands of attack aircraft. The Red Army cannot afford to keep the rust off.

The Reds are no longer there.

They were tossed out by velvet rebellions.

So, who is coming over here?

As to air superiority, how come the events in Korea and Vietnam were not clear wins?

I know Walter Cronkite.

I am better served by not enriching any one to keep "them" and their stuff from crossing those two oceans so I can do to them like the Iraqis are doing to our high tech profit machine.

The myth of WW II being caused by failing to maintain continuous mobilization is a myth.

I csnnot see your points.

You apparently cannot see that no one is tilting on our field.

There are a new set of paradigms for war, which we won't recognize.

The Israelis don't in the main either.

Birkel,

If you read my dialog as threatening to a chicken hawk, it was not especially meant that way.

If the shoe fits

The point is many people are pro military but very few of them wants to make a career, nor go to a hot zone. That is a personal priority thing.

Not everyone who has more pressing things to do than protect the US is a chicken hawk.

A draft was needed for the Civil War, WWI WW II and the undeclared wars up to first Gulf. Are all draftees chicken hawks? I do not think so

You certainly may be better as an investment banker if you really do not think making war is for you.

Are you a chicken hawk if you think that way? Most likely not.

I did not call everyone a chicken hawk.

Otherwise thanks for labeling me a ‘librul’.

No one suggested WWII was caused by the failure to maintain continuous mobilization. In fact, no one was debating it in the first place.

Also, defense spending has so much more to it than your "continuous mobilization" definition. It kinda seems like we're not getting anywhere with this.

Ilsm,

You are arguing "an end to history" argument that says Russia would never fight Germany again (which I agree is not likely in the near term) but who knows what will happen within 30 years?

Note that Japan was an ally in WW I and yet within 30 years they were an enemy!

In fact, programs like the F-22 are not only to fight the Russians, but more likely the Chinese or countries that might buy the advanced Eurofighter.

Would anyone here in 1977 or 1987 have predicted the USA would be engaged in a counter-insurgency in Afghanistan in 2007? (In 1997 perhaps someone very prescient could have predicted it.)

Missile defense is even more important as more and more countries will be able to build ICBMs and arm them with who knows what.

ilsm,

First off, I can't believe I let you get away with stating you don't want to argue the numbers on defense spending. You brought them up! Also, I don't know what, "I know Walter Cronkite," means, unless you are saying it as some kind of veiled threat, the way someone might hint they know someone in the mafia or something.

As for Russia and Germany, to be clear, those were two examples, and not the only ones that exist. The point was only used to illustrate the paradigm. However, if you like, I'd suppose that Russia would attack with tanks and airplanes, and they might even use the few hundred nukes they still have, and Germany would respond in kind (barring the nuclear weapons aspect).

I'm literally not clear why you brought up Korea and Vietnam.

However, I'd like to reiterate my point. I can see the idea that a force could be brought up easily to defend a city-state before the gunpowder revolution. Just grab the young men, give them pikes and horses and crossbows and throw them out there. The same holds true with muskets, rifles, and so forth. I can even see the idea that a nation could have brought up a defense from scratch in the early age of the tank and the jet plane. But, do you really still think that is true?

In the age of nuclear weapons and heavy armor, I'm just not sure I see it. If you are saying we could fight as effectively as the Iraqis are, and therefore we don't need defense spending, I'd make several points. One, they have tons of military hardware lying around their country. Two, we control the sky completely, huge parts of the country, and are killing tons of them. We can't maintain the peace and we are sustaining heavy losses, but I'd hardly say that I'd face the position of the Iraqis with equanimity.

Jon,

Post the UK, and FRG % of GDP for the past few years, and we can argue numbers. I did not want to do the research. You also said their budgets do not include retirement and nedical care which is carried somewhere else implying at any rate we overstate our GDP percent here.

I will not go into apples and oranges.

Korea and Vietnam were just walks in the park, forget them.

Germany and Russia, well I can see them fighting eachother. But I do not see that as likely nor are they preparing. But we must consider every possibility regardless of how remote.

I do not agree. I also do not see spending debt for that.

"In the age of nuclear weapons and heavy armor, I'm just not sure I see it."

I cannot see who in the world will tilt on the fighter plane, heavy armor battlefield. That is Funda Gap mentality.

We are always ready to fight the war we know, with the tools we have. They are not the wars we get into.

"I'd hardly say that I'd face the position of the Iraqis with equanimity."

Come on!! What is different about blowing things up and killing people whether you are a guerilla doing it where you see the gore or pushing a button in a missile silo.

You have to live with yourself if you survive.

War is hell.

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