P0wn’d!!! (those who think US Defense spending has gone through the roof)

In fact, Robert Samuelson of the Washington Post reports, it’s just the opposite. The real story is the rise of the American welfare state. Whereas in 1956 (see chart) defense spending was nearly 60% of the US budget, now it’s just less than 20%.

In comparison, the roles have switched: in fiscal year 2006, the US Federal government spent $2.7 trillion, of which Social Security, Medicare, and Medicaid combined formed approximately $1 billion. Almost $200 billion came from payments to poor, earned-income tax credit and food stamps.

Those who are concerned with the size of the U.S. Defense budget should take a good look at all U.S. government expenditures before spending their talents barking up a sapling: European governments now are largely considering reversing decades of welfare-state policies, and going the American route (and more recently British route) by privatizing state industries and minimizing the welfare state.

So for 50 years, we’ve been striving to be more French. Sacre bleu! Bring on the wine and cheese! If we can’t beat ’em, join ’em! (What was the quote about monkeys?)

Lime

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6 Comments

Filed under Culture, International, Political Commentary, Politics, Social Sciences and History

6 responses to “P0wn’d!!! (those who think US Defense spending has gone through the roof)

  1. Fredegar

    It’s amazing what you can do when you choose selective endpoints (guess what? Defense spending is up infinity percent since 1775!)

    You might point out defense spending is up 35% since 2001 and the US now spends more on defense than the rest of the world combined.

    I’m curious about your statement regarding European countries. Eastern Europe aside, most state industries have already been privatized. Both Deutsche Telekom and Elf Aquitaine, for instance, were privatized over a decade ago. And despite certain problems, given the politics in Europe even a ‘minimized’ welfare state would look generous in comparison with the situation in the U.S.

  2. Following your reductio-ad-absurdum logic, it’s equally amazing that welfare is up infinity times 300%, apparently.

    In fact, Fredegar, the key word is the considered “ought”: they are “considering” doing so, through democratic institutions.

    Reporting from the daily newspapers: both media, and my personal sources (you know who) confirm that European states are, by large majority, including the Scandinavian countries (which are in fact out ahead of “Old Europe”), either beginning to or on the verge of reversing the long trend towards state-owned industries/welfare mechanisms, citing their own problems and the success of the American model. It’s been widely reported, good articles on same in the Economist of late, and of course, it’s indisputable that the heads of state currently in office have run on those very platforms.

    14 July 07 “France Key Economic Indicators”, Business Recorder: “There has been recent movement toward privatisation, with the government reducing its holdings in many companies, although it still controls energy production, public transportation, and defence industries.”

    Summer 07 “The euro effect”, Management Services: “privatisation is taking place across Europe, which recently included the telecoms and energy sectors.”

    16 Jul 07, Economic Intelligence Unit, reports on Denmark’s plan to diminish its welfare state–a welfare reform that will “dominate the political agenda.” The Economist reported on the same, characterized by huge numbers of Danes as a fix to past failures and an overweening welfare state.

    No, my friend, the winds of change blow in the opposite direction.

    Lime

  3. Fredegar

    Reporting from the daily newspapers: both media, and my personal sources (you know who) confirm that European states are, by large majority, including the Scandinavian countries (which are in fact out ahead of “Old Europe”), either beginning to or on the verge of reversing the long trend towards state-owned industries/welfare mechanisms

    Sweden de-nationalized its industries in the 60s. There hasn’t been a ‘long trend towards state-owned industries’ for decades. You’re behind the times.

    Here’s an article on bank privatization from 1994:

    http://www.iht.com/articles/1994/06/18/mreuro.php

    The French defense contractor Thomson-CSF was privatized in 1999:

    http://en.wikipedia.org/wiki/Thomson-CSF

    France-Telecom was privatized in 1998:

    http://en.wikipedia.org/wiki/France_T%C3%A9l%C3%A9com

    The German defense industry has already been privatized, as has the French oil industry. Most of the privatization you are referring to has already happened. It’s old news.

    As for the Danish welfare reform, it will consist of modest increases in retirement ages, and small adjustments to the voluntary early retirement pension. These are the kind of reforms that will eventually be used to ensure the long-term viability of Social Security. They hardly represent the dismantlement of public welfare like Bush proposed for Social Security.

    http://www.issa.int/engl/publ/Trends/1/DK-3791.htm

    No, my friend, the winds of change blow in the opposite direction.

    What opposite direction? We’ve had a trend of increasing privatization for 25 years at least. That trend is continuing, not accelerating. European welfare benefits will continue to be generous compared with those in the US.

  4. Aidyn

    I believe it’s technically “Pwned.”

  5. Fredegar, you blind me with your lawyerly evasions. 2007 news isn’t old news. Of course European countries, some more and some less, have undergone privatization. It’s a far cry from the U.S. experience, however. My point is that Europe, much of which was long too socialized and welfare-entrenched, still has a long way to go–and that we’ve gone and are going in the opposite direction re welfare. There are numerous current examples of vigorous anti-privatization and pro-State ownership/control especially in France and Germany–in spite of your examples–that differs from the general U.S. stance.

    I’ll just quote from the 2006 paper “Privatization in Western Europe: Stylized Facts, Outcomes, and Open Issues,” by Bernardo Bortolotti and Valentina Milella: “[despite the] privatization process of the 1990s . . . [a]t the turn of the century, we find European governments firmly controlling (by voting rights and golden shares) a large part of privatized companies, especially in strategic sectors.” Using World Bank data, that same report shows that of all of Europe, Portugal and UK lead with the largest contraction in State property during 1977-2000, Spain and Italy fell in the “middle high position,” and France and Austria had the lowest level of contraction in State property.

    The problem is “partial privatization”–which is nothing other than socialism. Few argue with a straight face that Russia’s majority control or outright ownership of media outlets is a “privatized” system. Similarly: “Obviously, a distinction has to be made between public offerings, which involve the largest companies and often more profitable SOEs floated in the stock market, and private placements, which instead are typically used to sell small sized firms operating in non strategic sectors. The data show that privatization of the latter tends to be more complete especially in countries such as the United Kingdom, Sweden, Germany, France and Finland. On the contrary, partial privatization is typical of larger SOEs, which are usually sold by tranches. Indeed, lower averages of capital are sold trough public offers of shares in almost all major European countries, with the exception of the United Kingdom.”

    That continues to be the case. Everyone has heard of the French government’s tremendous influence and support to EADS, which is used to foist Airbus as a competitor against free-market airlines. Just a few days ago, Germany proposed creating “golden shares” in EADS in order to secure French and German government control over strategic decisions by EADS. This “partial privatization” is endemic, and the State direct control over ersatz “privatized” firms is quite significant, in comparison to the U.S. “model.”

    More from the article: “As of 2000, the State is still the largest shareholder in almost 30 percent of the privatized firms [in our sample of corporations in Europe] . . . The high percentages of State-controlled firms observed in year 2000 feed the suspicion that privatization has been carried out reluctantly during the 1990s.”

    Unlike much of the rest of the world, and particularly Europe, the U.S. gov’t does not own common stock. So too, outstanding corporate equity is not distributed to the government–it is in Europe. Banks in the U.S. are prohibited generally from owning stock except “passively”–not so in Europe (and in Germany, which has government-supported public sector banks (including Sparkassen and Landesbanken, owned by the Lander), there are no restrictions).

    It’s not that you’re wrong–you’re quite right! But it’s irrelevant to my point. Those same articles I cited you note the entrenched socialisation/state ownership of different sectors as compared to the U.S. That’s my point, and I’m sticking to it.

    We agree on the facts, we disagree on the policies, good friend.

    Lime

  6. h lime stfu

    This article is very misleading, it is comparing relevant data in same terms and units that counts

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