Feeding frenzy on the Peace Dividend

You’ll never have more friends than if you’re a government bureaucrat presiding over hundreds of billions of dollars in unclaimed funding.

In this case, the money is the result of drawing down our troops and shrinking our military budget as we wind down the wars in Iraq and Afghanistan.  This “peace dividend” is the natural result of de-escalation, and has occurred after each of the major wars since the American Revolution.

Critics say that the cuts to defense leave us ill prepared for — and may even beget —  future wars, and that we’re really not at peace anyway.  We still have troops on the ground in Afghanistan. Proponents argue that there are a bevy of ways we can put that money to use more productively, leaving the country on better financial footing for the next conflict.

That sounds really boring — unless you need some federal dollahs, pronto.  Then, it gets pretty interesting.

Take the case of the sustainable growth rate, aka the Doc Fix (details on why its a terrible idea and how it started here).  The point is that it costs hundreds of billions of dollars, paralyzes the normal budget process, and wreaks havoc on the medical delivery system because someone, fifteen or so years ago, lacked an ounce of foresight.

The American Medical Association wants to use the peace dividend to permanently fix the problem.  “Permanently fixing the problem” is complicated but, in theory, it’s one of the few good uses of any extra dollars we have (ideally, we’d actually use the “savings” to “save” and decrease our long-term debt, but nbd).

Some other thoughts on what to do with the cash from very smart people (I vote #4!):

  • Keep cutting Defense spending for the sake of long-term deficits
  • Don’t cut Defense spending at all — in fact, spend more to prepare for future wars
  • Send the money to the cities to re-build our roads and bridges
  • Send the money to a nice girl named Kim Paull to fund her graduate education and a future of paying an effective tax rate of 15%.

PS — thanks for the tip, Dad!

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2 thoughts on “Feeding frenzy on the Peace Dividend

  1. I see you eventually paying an effective tax rate of no less than 30%. When this happens, remember the little people, aka, ME. I’ll be the one living in your pool house. (I can be your personal chef to pay for rent) Thank you in advance.

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