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Any turbulence in defense spending is merely a temporary dip.
This media spin on the “drop” in defense spending is bogus. And it reveals how most “reporters” don’t look beyond the press release they are handed.
Except for the irrepressible Brad Plumer, who wrote this in the WonkBlog:
Was this big plunge in defense spending unusual? Yes and no. To a certain extent, it’s part of a pattern: Defense spending often rises in the third quarter of a year and drops in the fourth quarter.
and
There’s a reason for this pattern. The fiscal year ends in September, and government agencies typically try to spend all the money Congress allotted them for that year by then — otherwise, they fear, they’ll get a smaller budget next time around.
and, from the great Larry Korb:
“In the Pentagon, you have to use it or lose it by the end of the fiscal year in September,” said Lawrence Korb, a former assistant secretary of defense now at the Center for American Progress, in a recent interview.
So, this will be spun as a reason to avoid the sequester and to make sure the economy doesn’t head back into severe recession…but it is really just a matter of accounting and a the pre-fiscal year spending spree that happens annually.
The annual fluctuation was sharper than usual, but don’t expect any real shift away from this post-WWII addiction to military Keynesianism. The Military-Industrial Complex is one of the most effective wealth reallocation systems ever devised, and this blip is just that…a blip.
Photo by Beverly & Pack released under a Creative Commons license.
19 Comments
Hi there, wondering how current this is, and I quote:
Pls advise, that was 4 yrs ago.
it’s current. i wrote it this morning. not sure why there is a date snafu on the mainpage, but look at the date on the article page.
Well, blips do happen, so unfortunate in this case. Otherwise, excellent, carry on. But be assured that I would ask again in similar circs. As for me personally, I just assume that “defense” spending will increase, despite the fact that America’s Enemies ™ are *very* officially inferior and therefore totally and existentially clobbered by our officially superior military (OMG!!!! we da BESTE!!!!)
Umm, something is very wrong here, I don’t know at this time what.
I’m not sure the “bogus” is as descriptive as unanticipated. What federal agencies generally do is try to be tight on expenditures in the first quarter, adjust the second quarter to prime the next year’s budget burn rate, tighten in the third quarter, and spend to budget authority in the fourth quarter. In truth, it’s no peace dividend.
But in this case, I think the uncertainty of the budget sequester made managers tighten more than usual for the first quarter. That uncertainty is still there since the Congress kicked the can down the road. Second quarter expenditures are likely to be flat or even down unless there is an early compromise on the sequester.
What I sense is going on in defense policy is a shift to a “no boots on the ground” policy. You might even begin to see some withdrawal of bases from forward positions in Europe after 66 years.
That however does not mean less meddling in the rest of the world; it could mean more. It’s looking to me like a posture similar to the one Eisenhower adopted in the 1950s.
fair enough, but they also had a spending spike that preceded the usual spending dip that come after the end of the fiscal year. in fact, the spending spike actually distorted GDP numbers, inflating it prior to the usual cut off at the end of the fiscal year. this created a larger gap in between the two numbers and it now being sold as a big decline in spending. funny, but that spending spike was, in part, sold as part of the economic recovery when, in fact, it was part of the usual cycle of defense spending prior to the end of the fiscal year.
Propaganda alert: I’m trying to figure out if today’s special terror alert from the Israeli Lobby may be somehow related to possible defense cuts. Its scary how this hyped garbage is all over MSM.
http://www.usatoday.com/story/news/world/2013/01/30/report-iran-hezbollah-terror-threat-rising/1876623/
I meant to say Israel not Israeli Lobby.
Scrolling across the screen on the local morning news:
“Iran’s elite Quds Force and Hezbollah pose a growing threat to the U.S. and other Western targets as well as Israel.”
Nice news to wake up to eh?
My Yale room mate ran the Pentagon budget under the two Bushes. The whole business was like a card shark game or the one with the pea under one of the three shells. Budget items would ne removed to miraculously reappear in the next fiscal year. It was like zenron accounting on speed.
My Yale roommate ran the Pentagon budget under the two Bushes. The whole business was like a card shark game or the one with the pea under one of the three shells. Budget items would ne removed to miraculously reappear in the next fiscal year. It was like zenron accounting on speed.
Please excuse the repeat post.
You could tell this “story” was bullshit just from knowing that 3rd quarter GDP growth was 2.7% and 4th quarter GDP growth was -.1%. I mean come on here, the entire defense budget is 4% of GDP so…..
Either the MSM is a bunch of mathematically challenged idiots or they’re just liars shilling for the defense department to keep its budget from getting cut.
If the sequester means the spending must be cut beginning in Jan then I would suppose the defense dept started slowing things down in the first qtr last year. I think this is about what you said. Also, cuts in war spending may have worked to make it all worse. If they went too far towards the end of last year, be assured they will catch up soon. So what was quoted in the post could be exactly what happened only more severe.
I would add to this that defense contracts are often longer duration such that the money is spent over several months. (Years in some cases) So if you are a contracting officer you have to be aware of that.
Rest assured. Military Keynesianism is alive and well.
Could be, but do we know to what extent defense contributed to GDP in the jul to sep qtr?
If they end up leaving defense spending alone and don’t cut anything else in its place, we could have a mini boomlet.
Excellent points. Of course, military Keynesiansism is alive and well. It’s the only Keynesianism that neoliberalism allows the US.
Recommended … thank you JP Sottile … needs to be seen and said
Knut @ 8 … imagine that … Pentagon/CIA using “zenron” accounting tactics … ;-)
It would be an improvement if both Pentagon and CIA annual and multi year budget amounts were no longer called “defense spending” or “intelligence/national security funding”.
Instead call this trillion $$ year after year spending and funding what it is–
>>> Cost(s) of American Empire
>>> American Imperial Will Imposition Funding
>>> American Militarism Expansion/Drill Down/Ongoing Up Keep Funding.
This would be a honest way to define/describe what has been done / is being done by WashingtonDC decade after decade since 1950.
But then it is likely being honest in non-Enron ways was / is not main intent or goal.
imagine that …Pentagon/CIA using zenron accounting and budget funding no ethics
We have so many agencies in charge of investigating and protecting–the Secret Service, the FBI, the CIA, the D of D, Homeland Security, units within every agency. It’s insane. And not a one of them prevented 911 anyway. Surely, there is room to streamline and cut.
Same with the military. There seems to be no sane reason why the USAF is the first largest air force in the world and the second largest is the Navy’s.
And on it goes.
Most departments are cutting back spending in preparation for the sequestration cuts. My significant other works in contracting and they are stopping research spending and working only on necessary maintenance items. Don’t know what will happen in March when the maintenance accounts have been used up. This quarters GDP will probably be even worse.
Turns out that the Israeli Gov. is worried:
1:… about Syrian chemical weapons falling into the hands of Hezbollah…
2:… the recent announcement from Iran: “An attack on Syria is an attack on Iran.”
3:… Israel wants to continue air-strikes– hence the terror alert.
http://www.atimes.com/atimes/Middle_East/OB01Ak02.html
Nice post, rec’d, sorry about getting off topic.