Monday, July 28, 2014

Guns and butter

In Economics 101 the phrase, “guns or butter” is used to describe spending on defense versus spending on social programs. Politically conservatives favor defense and liberals lean toward social spending. The argument is presented as an either or and that is a false picture because in an expanding economy both areas can be increased. The discussion generally centers around a static economy and which of these two areas is more important. If money for social programs is cut then people suffer. Recently money for food stamps was reduced and that will hurt. That is when Supplemental Nutrition Assistance Program, or SNAP, benefits are set to fall for more than 47 million lower-income people -- 1 in 7 Americans -- most of whom live in households with children, seniors or people with disabilities. Barring congressional intervention, the maximum payment for a family of four will shrink from $668 a month to $632, or $432 over the course of a year. While this will make life more difficult for these people cuts in defense can also be damaging and one example occurred just after WW 2 ended. After 4 years of fighting ended the country was in no mood to talk defense so the budget was cut. Five years later the United States once again was at war in Korea. Soldiers were sent off to war using WW 2 tanks and they went up against Russian build bigger and better tanks. The US tanks were destroyed before they got close enough to fire their weapons and when they did hit a Russian tank the shell could not penetrate the armor. There is no accounting for how many lives this cost. Because underspending on defense creates such danger for the troops the tendency is to overspend and with push from congressmen in districts where defense plants operate there is further wasteful spending. Another instance happened after the end of the cold war. The theory was that any future wars would be fought with hi-tech equipment and not with boots on the ground so expenditures were adjusted accordingly. When the wars in Afghanistan and Iraq started there were not enough troops and many extra tours of duty were needed to make up for the short fall. Equipment was not available and many troops complained that their vehicles were not properly armored. Once again people died. They did not suffer the discomfort of going hungry, they died. It is easy to see why there is always pressure to spend more on defense.

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