Be Careful What You Wish For . . .

By Peter Galuszka

For several years, BR readers have read a steady stream of warnings about out-of-control government spending. Some of it has been sound and some shrill.

The arguments tend to strike first at predictable conservative targets including entitlements and support for the poor and education. On occasion, defense spending is brought up, but it is done reluctantly.

Well, we’re now seeing the results of all the Sound and Fury over spending and just how Congressmen and Senators on both aisles have made a real hash of it. To blame for much of the intransigence is House Majority Leader Eric Cantor from Henrico Count, but on to the point.

The nuclear-powered attack aircraft carrier Harry S Truman was gearing up at her Norfolk pier for six to eight-month deployment to the Persian Gulf. Since 2010, the Navy has had a policy of keeping two carriers in the region as troops start to withdraw from Afghanistan, Iraq tries to get back on its feet and the conflict over nuclear weapons in Iran still stirs.

Deploying means lots of preparation for the sailors and Marines that make up the 5,000-plus crew of the Truman. Families move back home to save month, goods are put in storage, lower-paid enlisted families get ready for the extra combat pay, day care has to be stepped up, and so on.

But an angry Defense Sect. Leon Panetta did something highly unusual if not unique. He abruptly canceled the Truman’s deployment, saying that the Navy just can’t afford it with all the budget uncertainty in Washington. Keeping the Truman at home could save $300 million a year. “This will badly damage our national defense and compromise our ability to respond to crises in a dangerous world,” Panetta said.

The crew and their families from the Truman and her support ships are now quickly dealing with the stay-home scramble.

There have been defense spending booms and busts. The roar-up in World War II was followed by big cutbacks, led by none other than the namesake of the aircraft carrier in question. Same thing happened after Vietnam and since Lyndon Johnson and Richard Nixon never really paid for the Vietnam War, we got stuck with the bill with lots of inflation in the 1970s.

What’s different this time is that, whether one likes the foreign policy at the time, the military has more or less been able to ratchet up or down in a fairly organized way.

The Truman debacle shows just how screwed up the deal has become. President George W. Bush never explained how he would pay for two wars after the 9/11 terrorist attacks. We still don’t know.

Virginia ended up a major beneficiary of the consequences, getting up to $12 billion a year or more extra in defense contracts. Scarfing up defense dollars were IT firms dotting the Capital Beltway, Northrop Grumman, Lockheed Martin and even Flowers Foods Inc., which makes baked goods.

It’s coming to a crashing halt. The fact that the Truman has been ordered to stick home reminds one of the rusting hulks of Soviet Navy ships in places such as Vladivostok after the USSR collapsed in December 1991.

Meanwhile, if a U.S. military unit under fire in Afghanistan needs quick air support, they may have to hope for a pilotless drone. If the Iranian nuclear weapons program suddenly takes a dramatic and dangerous turn, our Navy won’t be there, other than the one aircraft carrier in the area. Ditto if the civil war in Syria completely destabilizes the Middle East.

What makes me rather annoyed is the role the Tea Party idiots have played in this. They were riding high a couple of years ago with their spending cut mantra that few of them really understood. Some were holding the American flag and dressing up like Patrick Henry to say to the rest of us, rather arrogantly, that they were patriotic Americans and we, of course, weren’t. Certain bloggers at BR, nameless here out of courtesy, followed along with the spending cut mania.

Be careful what you wish for. . .

17 Responses to Be Careful What You Wish For . . .

  1. “The Truman debacle shows just how screwed up the deal has become. President George W. Bush never explained how he would pay for two wars after the 9/11 terrorist attacks. We still don’t know.”.

    The numbers just don’t add up, Peter. Obama tells us that he has ended the war in Iraq and he is ending the war in Afghanistan. However, he added more to the deficit in his first term than Bush added in both terms.

    How is this possible?

  2. From the article: “I understand that part of being in the military is living with uncertainty, but this isn’t the result of an international crisis; this is mismanagement …”.

    Yes it is. The deployment was canceled 48 hours ahead of the scheduled “anchors aweigh”.

    That is mismanagement by Leon Panetta and Barack Obama, nobody else.

  3. Looks like another casualty of the funding cuts. This time there looks to be a pretty clear impact to jobs:

    http://news.usni.org/2013/02/08/navy-lincoln-refueling-delayed-will-hurt-carrier-readiness

  4. re: ” However, he added more to the deficit in his first term than Bush added in both terms.”

    a slight inconvenient detail here. Obama cannot spend a dime without Congress authorizing it.

    and the same is true of cuts.

    The President has the bully puplit. He can submit a budget or he can watch others submit a budget but at the end of the day – the only power he really has is the veto and even that can be overridden.

    Saying that Obama has spent more than Bush is just blather.

    The spending is spending that Congress has voted for – in a majority – that’s the simple truth.

    • Ah, Larry of the two faces:

      Obama can’t spend money but Bush can cut taxes and declare war?

      Presidents are judged by the policies they pursue. Effective presidents bully, threaten, coax and legally bribe Congress to go along. If Congress goes along then the President is effective. If the policies are viewed as beneficial then the President is a good president.

      Bush owns the wars. Obama owns the massive deficit increases.

      • Bush cannot cut taxes. He can advocate for it and he can sign the bill that congress gives him but he can’t cut by himself – NOR can he spend money on two wars without Congress authorizing it.

        The POTUS – ARE defined by the policies they pursue – I agree But the spending in the budget is spending that was voted on BEFORE he got to office and what you (and the GOP) is blaming him for is not advocating cuts.

        But when you are only taking in 1.5T a year (because or prior tax cuts) tell me what you will cut?

        Do you want him to cut both entitlements and DOD/National defense back to the level BEFORE the bush tax cuts so the spending actually tracks the actual revenues we do get?

        Obama did not create the deficits. They were built into the budget when he took office and a very large part of those increases are in DOD and National Defense – two areas the GOP refuses to cut now.

        They want Obama to not cut DOD/National Defense and instead take ALL the cuts out of entitlements to, in essence, make up for the increases in DOD/National Defense so they won’t have to be cut.

        Now I ask you – how honest is that? Be honest DJ.

        how can Obama get to a balanced budget without serious cuts in BOTH entitlements AND DOD/National Defense? And what is he supposed to do if the GOP refuses to cut DOD/National Defense and insists the all the cuts come from entitlements?

        How honest is that? What would you do if YOU were Obama and that was the game being played?

  5. we have doubled DOD spending since 2000. We now spend about 1.5T on National Defense while our tax revenues equal 1.5T.

    In that context – I will ask an open question.

    What percentage of our total tax revenues do you think we should spend on National Defense?

    All this talk about “devastating” our National Defense – leaves me wondering – do we really believe that every penny that we take in – in tax revenues must be spent on National Defense and if we don’t we are truly damaging the country?

    If you do think this – then you are left with two follow on choices:

    1. – increase tax revenues

    OR

    2. – cut entitlements to zero…. and make every other cabinet run on user fees.

    we are being willfully ignorant of the simple fiscal realities that are right in front of us.

    we actually refuse to look at real numbers and instead play games with words like “readiness” or “hollowing out the military” or ” we have a spending problem” … but we fight tooth and nail to NOT look at the real numbers of the budget – and they are horrifyingly simple.

    We take in 1.5T in taxes. What percent of that do you want to spend on National Defense? If you won’t deal with that number – then you’re not really serious about actually dealing with the problem.

    • Cuts in defense spending are both necessary and inevitable. However, canceling a carrier group deployment 48 hours before it is scheduled to deploy is incompetent.

      • some say cuts, some say not – but none look at the reality of the numbers – though I do agree the last minute changes are basically DOD cutting things that are most visible and most likely to cause an outcry. This is a tired old – but tried and true – tactic with DOD as well as many other agencies targeted for cuts – they’ll go right for the things they hope will cause the most outcry.

        but I say so again. We only take in about 1.5T in taxes. That’s the harsh truth that people will not face when they continue to talk about a “spending” problem.

        Not only that – they apparently believe it is Obama who all by himself is spending more and that he can cut the spending.

        This is willful ignorance of people who too readily will accept a propaganda sound bite and are too lazy to go for themselves to get simple facts.

        Here are the simple facts:

        http://en.wikipedia.org/wiki/File:U.S._Federal_Receipts_-_FY_2007.png

        subtract out the 845 billion that comes from FICA and is dedicated to SS and look at what remains. That’s your available revenues to spend on – DOD, National Defense, entitlements and the rest of govt.

        choose what percentage of it you want to spend on DOD/National Defense and tell me what that number is …

  6. 6% of the sub-prime loans were CRA. 94% of the sub-prime loans were not FDIC nor were they CRA.

    even if you accept the premise that CRA encouraged riskier lending – only 6% of the sub-prime market was involved.

    the vast, vast majority of sub-prime loans were NOT made in red-lined neighborhoods but in “hot’ real-estate markets in upscale areas like Florida Condos and Arizona/California 300-500K+ homes.

    96% of companies who made sub-prime loans were not subject to banking laws of any kind – not FDIC, nor CRA.

    also the banks that WERE subject to CRA were ONLY subject to it in the neighborhoods where they took deposits.

    if they did not do business in a redlined neighborhood, CRA did not apply to them.

    that’s the simple truth.

    I call this willful ignorance. too inclined to believe a sound bite propaganda talking point and too lazy to get the real facts. The folks who spout the propaganda know this and that’s how they traffic in this stuff.

    94% of the sub-prime crisis came from unregulated banks not subject to CRA…. you can verify this fairly easily if you really want to.

    • The simple truth is that CRA was an act of Congress not a loan type. Banks did not want to be forced into federal oversight so they kept loosening their standards. Many bad loans were the result of banks trying to avoid direct federal CRA oversight.

      The 6% CRA loans are just the tip of the iceberg of the bad loans banks were forced to write as a result of federal action under the CRA.

      • Don – do you read boy? CRA applied ONLY to red-lined neighborhoods WHERE the bank actually took deposits.

        Yes CRA wrote some sub-prime loans and yes perhaps they wrote some riskier ones to meet their numbers but out of all the sub-prime loans that were written – only 6% came from banks that were subject to CRA law.

        You are citing propaganda guy. The 94% of the “banks” that made the sub-prime loans were essentially un-regulated – and that’s why there was a disaster.

        There were no regulatory standards for those banks to meet. They did not have to meet FDIC capital standards and if they made loans outside of CRA-designated neighborhoods – they were not subject to CRA regs.

        The vast, vast, vast majority of sub-prime loans were NOT MADE in low-income neighborhoods but in “hot” real estate markets where the price of the homes was 300, 500K, a milion and higher.

        you are drinking the Kool Aid here … guy

        the reall funny thing is that those who oppose regulation – like for these banks that made the 94% of bad loans – they cite regulation as causing the problem and therefore oppose regulating.

        It’s convoluted as hell but what else can they say if they don’t want the regulation? So that’s exactly what they do – and the heck of it – is – it works for the lazy whose beliefs are based mostly on sound-bites and not facts – readily available facts.

        The “study” you cite – have you actually looked at the contents of it? Do you know how many banks they actually studied and other facts about those banks? You should. Especially if you are going to buy the conclusion of the study (which by the way applies ONLY to CRA banks – not the other 94% who made sub-primes).

        this is why we cannot get past the present and move forward.

        we cannot even agree on history or for that matter – even the current realities.

        the question is – what would you do, if anything, to not have another sub-prime disaster?

        well we have an answer – for some it’s regulations that will cover the banks that were previously not covered.

        For others, it’s leave the banks alone and also get rid of CRA. in other words, get rid of bank regulation all together. Next thing we’ll hear is that we need to also get rid of FDIC.

        think – Don. Do you REALLY believe that FDIC is a problem and we need to get rid of it? That’s where these guys are headed.

  7. The Navy is 4.6 billion short in current funding. If sequestration kicks in, they will be another 4 billion short. Things have been business as usual the whole FY, until all of a sudden Panetta starts with the whining. You tell me, is this political theater? When did the FY start? And DoD can’t figure out their budget to be so short so soon?

  8. I keep bringing up these inconvenient facts. here’s the chart:

    http://en.wikipedia.org/wiki/File:U.S._Federal_Receipts_-_FY_2007.png

    subtract out the 865 billion that comes from FICA and is dedicated to SS and tell me what you get. You’ll get about 1.6Trillion – tops and that would include other dedicated taxes such as the Federal gas tax.

    Now take that number and compare it to what we current spend on ALL of National Defense – which is way more than just DOD.

    The truth is that the so-called “spending problem” that DJ says is Obama’s fault – is, in addition to entitlements – national defense and DOD.

    The harsher truth is that Hampton Roads and NoVa are top suckers of the DOD/National Defense TEAT!

    On a man-to-man level I identify with and sympathize with Darrell but on a fiscal responsibility level – what Virginia is doing is not only unsustainable – it’s part and parcel of a grossly irresponsible policy of spending by the govt – that predates Mr. Obama by a long time.

  9. isn’t it curious that we are STILL litigating the CRA kerfuffle? What’s the purpose of that? Let’s suppose the folks who say the CRA caused it are right (when pigs fly maybe) – what actions would be taken as a result? get rid of regulation? why are we still discussing this?

    but back to the sequester….

    we have a trillion dollar deficit. Half of it is attributable to the doubling of DOD/National defense spending since 2001. The other half due to entitlement creep, some of it associated with the recession and more people getting assistance.

    DOD/National defense cuts- stretched out over 10 years is 50 billion a year – now mind you this is out of a 700+ billion DOD budget and a supplemental 700+ billion National Defense budget.

    we are told that 50 billion a year – out of a trillion dollar deficit will “devastate” DOD/National Defense.

    Let’s take those who say this at their word. What should we do instead?

    just cut entitlements?

    not raise taxes?

    what?

    for 4 years the GOP has said that we have a spending problem and I totally agree with them – at least in part but I just don’t think cuts alone are going to do it.

    but when you say we have a spending problem and it’s Obama’s fault and you won’t cut DOD/ND – then what exactly is the game plan?

    cutting entitlements only is not going to get you to a balanced budget so what exactly does the GOP want Obama to do to cut spending and balance the budget?

    so basically, Obama is getting the blame for the deficit and the debt – not because he caused it, but because he won’t make cuts, cuts the GOP won’t advocate because they would be all entitlement and no DOD/ND and they fear the voters would whack them if they came out and said it. (with good reason).

    And so the GOP ran us to the fiscal cliff over this…. then they ran us to the debt limit and now they are running us to the sequester. why? What exactly do they want?

    I’m trying to figure out what the heck we are supposed to do….if the cuts cannot include DOD – to the level of 50 billion a year….

    It’s as if we have fiscal gridlock and no way to escape it and it’s Obama’s fault….

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