Wow this is heavy

[AmericasLastHope]

Wow this is heavy

 

[NolanLawson]

Maybe the $1 trillion figure come from what we pay through inflation as well? If I'm not mistaken, if the government sells $10 worth of treasury bonds to the Federal Reserve, the Fed prints the $10 for the government deposit. So that means we not only owe $10 to the Fed (plus interest) - we also end up paying $10 in inflation, so the cost comes to $20 (plus any interest). So the cost of our foreign policy could be more than double what the stated figures are.

Someone asked about how our money supply is bounded by inflation. I think Malakai covered it pretty well, but I want to add some stuff I remember from The Creature from Jekyll Island: basically, all money is pyramided off of the original government deposit at the Federal Reserve, which comes from federal debt. Imagine that the reserve ratio for commercial banks is 10% - then the total possible amount of money is 10 x the federal debt (once the money multiplier is applied to that amount). In practice, though, the Fed only owns about 9% of the federal debt, and banks are never fully loaned up (especially not now...) so the actual money supply is much smaller than its potential size. However, the federal debt does determine the maximum amount of money in the economy, according to Griffin's book.

One thing I don't understand, though - if the Fed can buy acceptance bonds as well (p. 480 of 'Jekyll Island'), isn't that an extra source of money creation? And isn't foreign debt also a source? So why does Griffin say that if the national debt were paid off, there would be no money? Wouldn't all commercial and foreign debts have to be paid off, too, for there to be no money?

 

[Mahkato]

The last Civil War veterans benefits were paid in 2004.

Modern wars typically cost much more after they are over than while they are happening.

 

[Dave39168]

so that's the budget right? A budget isn't actually what you spend, its just what you plan to spend. If we spent outside our budget for whatever reason then those figures aren't correct....

 

[Bossobass]

Ron likes that nice round "trillion dollar" figure. Even if it is not accurate. Some people exaggerate to make a point.

Looking at the bottom line figures from the 2007 federal budget request, we see that $439 billion was officially tagged for the Defense Department, $17 billion for State Department operations, and $16 billion for international assistance programs managed by the State Department. But this doesn't tell the whole story.

The "Real" Defense Budget

A number of budget analyst point out that the "real" defense department budget should include $7.1 billion for the Coast Guard and a number of other defense related items included in the $33 billion Homeland Security budget. From the Energy Department budget, we should also add $6.4 billion for operating America's arsenal of nuclear warheads and $795 million for maintaining the nuclear reactors on U.S. Navy ships. The $80 billion authorized for the wars in Iraq and Afghanistan is also not included. This amount was approved in a "supplemental" spending bill outside the annual budget authorization.

Added together, real annual spending on U.S. defense is well over half a trillion dollars. According to Dr. Cindy Williams of M.I.T., this means the U.S. spends more on its military than all other governments in the world combined spend on their militaries. A more radical organization, the War Resisters League, says U.S. military spending is actually over $1 trillion every year... because they add in the current cost of past wars including all spending on veteran's retirement and healthcare plus 80% of the interest paid on the national debt (since the debt was accumulated largely for military spending).

Excerpts from other articles:

The Bush administration announced a proposed military budget of $614 billion, not counting the full cost of the wars in Iraq and Afghanistan.

Barack Obama has said we will probably need to "bump up" the military budget in a new administration.

The studies are only for personnel. They don't include the long-term costs of care for disabled and handicapped veterans. They don't include the costs of replacing or maintaining equipment. Nor do they factor in the costs for allies' supplies and training or the cost of interest on all the borrowed billions used to fight the war. That's how Joseph Stiglitz and Linda Bilmes reached the astronomical cost estimate approaching $3 trillion for Iraq and Afghanistan. That study estimated actual yearly cost per soldier in the field at $400,000, a number comparable to the CBO estimate for sergeants.

Perhaps the accountants who did the CBO study were themselves surprised at the costs of fielding an American army. Their objective was only to analyze the costs of hiring guards at $500,000 a year, compared to fielding soldiers. The study only incidentally shows the individual costs of American occupation forces facing resistance.

Given these costs, which are only part of a military budget and other defense expenditures that approach a trillion dollars, it's easy to see how the wars are bankrupting America. Washington has borrowed the money, and the impact can already be felt in the dollar's declining value and America's deteriorating infrastructure. The national debt, since the war started, has increased from six to nine trillion dollars. Ancient Rome simply taxed its citizens into ruin and clipped the coinage to pay for its armies. Higher taxes, a lower standard of living, and unending wars will drive us to the same end.

9/10/01, Rumsfeld: "$2.3 Trillion missing from pentagon budget...national emergency..."

5/18/03, Bush: "$1 Trillion missing..."

It would be impossible for the Pentagon to be missing 3.3 trillion dollars in 3 years if their total budget was $400 billion a year.

So much money is funneled into Empire through every department and agency through programs most have never heard (and will never hear) of that it boggles the mind. Most of those agencies (like USAID, for one example) have no discernible actual budget numbers and much of their budget requests are listed as "supplemental".

It's a wild goose chase to account for every dollar in annual spending on the Britain/American world empire by the US taxpayer. That's why it takes 'research' and 'studies' by PhDs from MIT and Harvard.

I only need to know that it's around a trillion bucks and I only need to know that I can trust that figure because it comes to me from an unimpeachable source...not a grandstander who exaggerates for the sake of impact.

Bosso

 

[SimpleName]

I've heard that balanced budget statement is quite misleading. I'm pretty sure I read somewhere that Clinton left neither a surplus nor a balanced budget, he paid some obligations by borrowing against others. I'm sure someone will correct me if I'm wrong however.

From what I understood in I.O.U.S.A. (Ron did excellent), Clinton took a lot from the social security "fund." in order to balance the budget.

 

[AJ Antimony]

so that's the budget right? A budget isn't actually what you spend, its just what you plan to spend. If we spent outside our budget for whatever reason then those figures aren't correct....

DING DING DING Finally someone understands that revenue and expenditures are not the same thing.

Ron Paul says "we spend $1 trillion overseas maintaining our empire"
He does NOT say "we appropriate $1 trillion of the budget maintaining our empire"

 

[Pauls' Revere]

remember, there are costs for the "War on Terror" that do not appear in the budget. Do the bailouts appear in the budget? I do not think Ron was exaggerating.


*I sure as hell would not trust Wikipedia or even the White House with truly accurate figures.

Bingo!

When was the last time the Govenment had an accuarate estimate?

Answer: Never

 

[Fox McCloud]

One thing I don't understand, though - if the Fed can buy acceptance bonds as well (p. 480 of 'Jekyll Island'), isn't that an extra source of money creation? And isn't foreign debt also a source? So why does Griffin say that if the national debt were paid off, there would be no money? Wouldn't all commercial and foreign debts have to be paid off, too, for there to be no money?

If you will recall, Lawson, G. Edward Griffin said that all debts would have to be paid off; public and private, therefore I tend to think that that would indeed include foreign debt.

what's scary about our current system is that someone, somewhere always owes somebody something.

 

[spudea]

This has probably been covered before but from where does Congressman Paul draw his, "trillion dollar foreign policy" figure? I suppose he is mistaken...

It HAS been covered before, multiple times. Ron Paul is not mistaken. It EXCEEDS 1 Trillion! Total moneys spent overseas is not encompassed simply by Department of Defense budgets. If you understand Ron Paul, you shouldn't accept government numbers as truth.

ZippyJuan needs a new hobby, because he fails as a Ron Paul critic

 

[Zippyjuan]

Show me where you get $1 trillion a year in overseas spending. Bossobas's numbers do not add to $1 trillion overseas either.

 

[Zippyjuan]

Back during the campaign, Ron Paul said that we could help get rid of the income tax if we were to cut our expenditures on foreign policy which he said at the time were about a trillion dollars.
http://www.msnbc.msn.com/id/22342301/

REP. PAUL: I want to cut spending. I want to get a--use the Constitution as our guide, and you wouldn't need the income tax.

MR. RUSSERT: Let's talk about some of the ways you recommend. "I'd start bringing our troops home, not only from the Middle East but from Korea, Japan and Europe and save enough money to slash the deficit."

How much money would that save?

REP. PAUL: To operate our total foreign policy, when you add up everything, there's been a good study on this, it's nearly a trillion dollars a year. So I would think if you brought our troops home, you could save hundreds of billions of dollars. It's, you know, it's six months or one year or two year, but you can start saving immediately by changing the foreign policy and not be the policeman over the world. We should have the foreign policy that George Bush ran on. You know, no nation building, no policing of the world, a humble foreign policy. We don't need to be starting wars. That's my argument.

and at that time, FactCheck looked into it.
http://www.factcheck.org/elections-2008/wrong_paul.html

In debates, Paul has claimed the U.S. spends a trillion dollars on a "foreign operation" each year to maintain an "empire":

Paul (Jan. 30): So, yes, this money should be spent back here at home. We have a $1 trillion foreign operation to operate our empire. That's where the money is. You can't keep borrowing from China. You can't keep printing the money.

One should be suspicious of this number right away. The nonpartisan Congressional Budget Office projects total spending for the current fiscal year to be about $2.9 trillion. President Bush's proposed fiscal 2009 budget would top $3 trillion for the first time. In fiscal 2008, a total of almost $1.8 trillion goes to mandatory spending on programs like Medicare and Social Security and to interest on the debt. That leaves just under $1.1 trillion in total discretionary spending, of which $572 billion goes to defense spending. Even if we called the entire defense budget an overseas cost of maintaining an empire – and then kicked in the entire $50.6 billion budget for the State Department and international programs – Paul is still $378 billion short.

When we asked the Paul campaign for some documentation for the $1 trillion claim, it directed us to an opinion piece by a fellow at the libertarian-leaning Independent Institute. The article argues that in 2006, the U.S. actually spent just under $1 trillion on defense. To arrive at that figure, the study included a number of items that one might generally not think of as defense spending, including the Department of Homeland Security, the State Department, one-third of the funding for the FBI and half of NASA’s funding. The numbers also include medical and retirement pay for veterans and a large portion of interest on the debt.

So it turns out that what Paul says is a trillion dollars for a "foreign operation" includes a lot of things that seem pretty domestic to us. For example:

The entire U.S. Border Patrol
Every military base in the United States and all the 1.4 million full-time military personnel (not just those serving overseas)

Background checks for new immigrants
Inspections of incoming cargo
All airport security programs
The issuing of U.S. passports
The FBI's counter-terrorism unit
92 percent of the interest payments on the national debt

Obviously Paul isn't advocating defaulting on U.S. Savings Bonds or doing away with border security, or even closing all U.S. embassies overseas. But that makes it all the more misleading for him to suggest that cutting out this "foreign operation" could save $1 trillion per year.

And as I said earlier, I only viewed it as exaggerating to make a point although he repeated it constantly during the campaign. My only intent is to try to correct the trillion dollar figure.