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The de-stimulus package

President Obama made an interesting remark, clearly out of frustration with the Republicans and Democrats who are just not jumping on board with his stimulus package (or Nancy Pelosi’s stimulus package, since he relegated the writing of it to her). The remark the President made was to the extent that the stimulus bill was spending, and, of course, that’s what a stimulus is…

His exact words on Feb. 06 2009  in response to “This is not a stimulus bill, this is a spending bill ,” were “What do you think a stimulus is?  That’s the whole point.”

But, there’s a problem with this:     Not just any kind of spending is going to stimulate the economy.
In the past 2 weeks President Obama requested that all branches of the military cut their budgets by 10% across the board. The 2008 military budget was $481.4 billion with an addtional $141.7 billion to fight the war on terror*.   A 10% cut would be roughly $63 billion dollars.

Now this is important:   that’s $63 billion dollars that will not be going immediately into the hands of American servicemen via their pay, which of course goes swiftly into our economy. They buy things.

Part of that $63 billion goes to American defense contractors like Boeing, Hughs, NAVSTAR but also the contractors who provide Kevlar fabrics, food for the military, network Routers and switches, building materials… the list goes on. Truly, military spending represents an immediate injection into the economy.
(We’re talking about the military that went in to New Orleans with helicopters and repelled into flooded areas to pull people out of there. We’re also talking about the same military that used one of their Navy Vessels as a floating hospital to help Victims of the Tsunami in South-east Asia – sounds like pretty good foreign diplomacy to me.)

So President Obama is asking the U.S. military to take a 10% cut, but don’t fear.  He’s got a stimulus package that includes money for the rehabilitation of prostitutes, a myriad of little weather stations to prove that global warming is really happening,  municipal golf courses (really),  student grants ( a great idea, but it’s not going to help merchants, factories, materials – movers, building contractors, and vendors of everything from food supplies to office supplies, companies that build servers, and comp-anies that sell sevices).

The cutting of military spending and that steady flow of money into the economy is ony one of the sad ironies. While Congress is crafting this huge Christmas list, another sad irony is playing out, That same Congress approved a contract for tanker planes – no not to Boeing headquartered in Chicago, but to French Airbus.  Maybe those engineers at Boeing don’t buy food, and pay taxes, and pay tuition, and buy cars… I don’t know.

Another sad irony is this:  For all the complaints leveled by the Democratic candidates against the state of the health care for Servicemen (Senator Edwards commented that many were sleeping under bridges ),  President Obama’s request to cut the military budget 10% will also negatively impact the Military’s TRICARE Health benefit program.

As long as this stimulus plan is getting loaded with pork anyway… well, how about beefing up the military’s Health Care Plan, instead of cutting their budget, or instead of having a rehab plan for prostitutes….  Yes, how about keeping some of those campaign promises for the people who defend America and spend in America.

Incidentally,  the branches of the American military  through military contractors are the originators of product that all of America and American industry use.  The list is endless, but notable in the list are Global Navigation and the Internet (started as the miltary’s ARPNET) – both originating from the military.

Both will have more positive impact on our economy than this wayward stimulus package ever will.

*  “President Bush’s Fiscal Year (FY) 2008 budget requests $481.4 billion in discretionary
authority for the Department of Defense base budget, an 11.3 percent increase over the projected
enacted level for FY 2007, for real growth of 8.6 percent; and $141.7 billion to continue the fight
in the Global War on Terror (GWOT) in FY 2008.”


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