Huge Deficits May Alter U.S. Politics and Global Power
The deficits are so big that serious stuff is going to have to happen. Growth or policy changes. Both, actually. The US is big trouble, and it is going to have to find someplace to cut. And the best place to cut will be ..... the defense budget. As the interactive graphic shows quite clearly, that is where nearly all of the discretionary funding is. Hard to cut the defense budget during a time of two wars. The good news is that Iraq is going to become much cheaper as we pull out over the next two years. Afghanistan, unfortunately, is just going to be more expensive as we increase the number of troops and the pace of operations.
Yes, the US outspends its rivals by a large margin, even combined. But as the US has learned in Afghanistan, it really is the only player in town that can and will act military with both capability and resolve (few caveats). Relying on allies is a dicey way to go. But cuts will need to be made. Indeed, in budgetary terms alone, Afghanistan may be a very bad investment. We cannot just think in terms of dollars, but we cannot ignore them either. Big weapons programs will have to be cut, we may want to re-think what kind of air force is needed in these times of drones. The Navy will have to take some hits. The Army will have to figure out what it can afford. Yes, there is a need to balance the wars of tomorrow, so that the US is strong enough to deter conventional wars, but this also means fighting the unconventional wars that folks choose to fight instead.
Similarly, tough cases are facing us with the mandatory programs--social security and medicare (interest payments are also mandatory but not subject to reform). Changing the rules on social security taxes makes much sense but is hard to do. I have no clue about medicare.
But, of course, all of this requires tough decision-making at a time where one party desperately wants the other to fail, even if it means hurting the country. So, I doubt that we will see much progress made. Not a good way to start a new year or a new decade at all. Makes me want to go back to bed.