I hope somebody in Washington paid attention to Greece, Ireland, Portugal, and Spain finally succumbing to deficit spending. We’re no better, those nations just fell faster.
In the past ten years, our nation’s debt as a percentage of GDP has risen from 32% to 66%. Even worse by 2020 the Congressional Budget Office’s “most politically likely scenario” predicts the debt to GDP ratio to rise to 90% by 2020, and to 233% by 2040. These figures don’t include promised medicare and social security payments. In comparison, during the Second World War this ratio was 106%.
Something’s gotta give. In 2009, the U.S. spent $187 billion (more than China’s defense budget) paying off interest on government debt. More debt equals more interest payments, Eventually the U.S. will have to implement “austerity measures.” What will it be… medicare? Social security? According to Harvard historian Niall Ferguson, a declining power cuts military spending first. With interest payments on the national debt infringing on government spending, voters want their entitlement payments over a new EFV for the Marines.
Congress does not want to cut military spending during wartime- as we are seeing with the current resistance to the modest cuts offered by the SecDef (even though the defense budget will still increase). But basic arithmetic will force the U.S. to downsize its military. At least the Pentagon is getting a head start.