KbQV - The High Costs of a Suicide Economy

Max and Stacy in the market talking about the inefficient American economy that sends its jobs to China while increasing the costs of Iraq by six times.

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[daniel987878]

In the real world you need to defend the nation 100%. You cant go out empire building though and wasting your scarce resources on building weapons and debasing the nation's economy.

The military has to be financed by increasing taxation which slows the economy or borrowing from your enemies which gives them an advantage and is a true sign of weakness.

[gerry301]

I stand by my statements and I'm sure you feel the same about yours. So we disagree. No sense beating a dead horse.

Military spending is needed as it is still a real world and not everyone abides by the same rules. Every country has its military, and spends for it according to their needs and means. %of GDP is perhaps the best way to show acuurately how much of a countries wealth is spent on military. NATO uses % of GDP for military expenditures for each of its members.

[daniel987878]

You like to compare one years expenses against another in terms of as a % of GDP. Ever heard of the cumulative costs of wasteful military spending? This is eroding the country's productivity as production is diverted to making bombs instead of other necesary spending year on year. You should do the same with yearly subprime mortgage lending as a % of GDP and it is less than 4%.

Economics is simple. Spend more than your revenue for extended periods of time and you will end up with problems.

[daniel987878]

Your telling me my argument does not hold water and you are on record calling Max Keiser an ignoramus. This guy predicted this crisis and is a former wall street broker. Your argument is not too credible either then is it?

My viewpoint is that empire building isnt exactly worth investing in on economic or moral grounds, especially if it is deficit financed. National defence is very important though.

All this socialism and big government bullshit is the problem. So much waste.

[gerry301]

Yes subprime lending is lending allowed by our congress to people who could not afford to by a house otherwise. As a result the "trillions" of dollars in subprime morgages and its derivitives, collapsed when the market was oversold and people who couldn't afford what they bought and began defaulting on their loans.

The policies began during the 1990s.

But again, military expenditures were 5.2% of GDP in 1990 and are currently at 4.0.

Your argument does not hold water.

[gerry301]

Government revenues as % of GDP. 2007-20.0%,1991-22.3%, 1968-20.5%. US government revenues have remained between a high of 23.5% and a low of 17.2% since 1962. Current revenue is 20.00%.

As you know Social security and medicare that comprise the largest % of the US government is not productive either.

And no, homeland security is a combination of former departments in the US that were combined. They are not "military".

[daniel987878]

It is a bit misleading to compare military expenditures to GDP because GDP is the final value of all goods and services in the country. Since the government pays for the military a more relevant measure is to compare military expenditures to government revenue. if you take into account homeland security, the military budget and all the rest its like 80% of tax revenue. as you know the military is not productive it is just designed to kill. Its mostly waste if your sending it to the Middle east.

[daniel987878]

The military expenditures are a fundamental pillar of the fiscal overextension and malinvestment which caused this crisis. Equally responsible for this crisis are derivatives markets, credit excesses including leverage and subprime lending.

The current situation the US finds itself is the result of years of misguided policy which were only viable in years past as the US squandered its wealth and dominance. It appears the tipping point may have been reached.

[gerry301]

I agree with you that the current crisis is due to Congressional incompetance, greedy Investment firms, and a lack of control over the borrowing system.

But the bottom line is that the military is less of a factor than during most previous periods of peace.

My figures are from the Congressional Research Service July 2008, using 2008 dollars and % of GDP. (As requested by Congress)

[gerry301]

Again I respectfully disagree with you. The crisis is the result of the subprime mortgages, and not the national debt. Our national debt is huge in dollar amounts yet still relitively small(moderate) in comparison to GDP (Gross Domestic Product). I believe the US (as far as Debt, as a part of GDP) is rated at #59 in the world following countries such as England, France, etc.

Current military expenditures,(including both wars) are 4.2% of GDP.Gulf war 1, was 4.6%, Vietnam 9.6, Korea 13.2.