What is 3% you ask. It's the portion of our current defense budget we would need to reallocate in order to pay for Medicare and Social Security. I'm sure you must be asking, how did I arrive at that number?
Economist Michael Hudson noted on Democracy Now on Friday, that the government was able to find $16 trillion to bail out Wall Street during the crash of 2008. Some of this has been paid back, but as he points out, $13 trillion has been added to the national debt since September 2008. He went on to say, "The question is, if they can create $13 trillion…taking over Fannie Mae and Freddie Mac, and the federal reserve can give this money, why can't they over 50 years give $1 trillion for Medicare and Social Security, obviously it's a charade."
As Senator Bernie Sanders put it, "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."
This statement really stuck with me. So I decided to do a little basic math. Over the course of the next 50 years, we would need just $20 billion each year to cover the projected deficits of these vital programs. Now you may be asking, what is that 3%. The answer is simple, that is how much of our existing annual defense budget we would need to reallocate in order meet that $20 billion target. By doing this we would ensure that all Americans get to retire with the social safety net of Medicare and Social Security still intact. Our defense budgets have been running on the order of $680 billion annually in recent years. If you take that $680 billion and divide by the $20 billion you get the 3%.
Now I did some research, and it's hard to find anyone who will give an actual number for the next 50 years of deficits for Medicare and Social Security. So for the sake of argument let's say that our economist Michael Hudson is off by a factor of 100%, then the defense cut required would be 6%. Let's assume that he is way off, that he is an economist who is really bad at math, and let's say he is off by a factor of 10, then we would need to cut defense by 30%.
I know that there are some moderates and conservatives who look at that number and become concerned that we would be weakening our nation by cutting defense budgets by 30%, so let's take a look at the facts. According to a recent study by a Swedish-based think tank, in 2010 $1.6 trillion was spent worldwide on defense. Almost half of that was spent by the United States, 42% to be exact. In addition, since 2001 we have increased our defense spending by 81%. If we were to cut our defense spending by half, we would still outspend the next closest nation by a factor of 3.
Now I'm not arguing that necessarily we should cut defense by 30% and spend it on Medicare and Social Security, but I am suggesting we can do the things that we decide we want to do. We were able to increase defense spending by 81% over the last decade. We were willing to spend $16 trillion to rescue the financial sector when their speculation and gambling came back to haunt them. As a result, we were willing to add $13 trillion to our national debt. We were willing to spend about $1.3 trillion on the Bush tax cuts which went largely to the rich. Why are we so hesitant to invest in the rest of our citizens by protecting them with a stable social safety net?
It's important to point out to the conservatives among us who might try to argue that Medicare and Social Security are government handouts, that this is your money. This isn't just your tax dollars, this is literally your money paid into these programs so that it will be there when you retire. It is an insurance policy, and as a nation we borrowed against that money to do the things listed above. Now that the bill is coming due, republicans and some democrats are arguing that we just don’t have the money to pay you back.
Now when the crushing debt of those bad decisions has come home to roost, the answer put forth by the Republicans and President Obama is to transfer the burden of the bounty given to the rich to the poor and middle class. The argument goes that we can't possibly ask the wealthy or the corporations to pay their fair share, in spite of the fact that they have received the overwhelming majority of the benefit of the debts we have incurred in the last 10 years. You'll hear them make the following excuses as to why we can't possibly afford our social safety net. Let's look at these arguments alongside the facts:
1. Taxes are already too high, we can't possibly add more burden to the wealthy
Fact: Taxes are at a near historical low and have been steadily declining since 1961.
2. Corporations are already overburdened and can't be expected to pay their fair share, otherwise they won't create jobs.
Fact: Corporate tax receipts accounted for 30 percent of US federal revenues in the mid-1950s. In 2009, they made up just 6.6 percent of federal revenue streams. (source: Alternet )
3. The cost of Medicare and Social Security is accelerating faster than GDP and is therefore unsustainable.
Fact: The largest generation we have ever seen, the baby-boomers, is entering retirement. A large portion of these increases can simply be attributed to this well known and easily foreseeable fact. This is not a permanent factor affecting these programs. This problem will eventually subside.
Should we look to put sound measures in place to improve the stability and longevity of these programs? Of course. Should we look at ways of reducing the rising costs of medical care? Of course. Should we look at ways of reigning in fraud and abuse? Of course. But this doesn't mean that we should deny American citizens the benefits they deserve. This doesn't mean that we should be forced to retire at a later age. This doesn't mean that we should bear the majority of the burden when we are not the cause of the majority of the problem. This doesn't mean that we should be offering up these programs as part of a routine vote to raise the debt ceiling.
This current debt ceiling debate is silly. Everyone knows this, yet somehow we are expected to make great sacrifices in order to do what we know must be done. However, it does bring into focus just how disassociated from reality the Republican party has become and just how willing some in the Democratic party, President Obama among them, are to go along with the Republican insanity.
Is this the country we have become? Is this the country we want to be? We don't have to dismantle our defense, we don't have to wage a class war on the wealthy, we don't have to drive business to foreign countries with large tax increases, we just need to find 3% for the rest of us.
This is really happening. It is happening to you. It is happening in your lifetime. It is happening now. YOU can stop it. All you have to do is get involved, call your congressman and senators, and always be sure to vote.