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November 21, 2016

Inventor Granville T. Woods patented the Electric Railway Conduit in 1893.

The War on the Economy

POSTED: March 08, 2011, 12:00 am

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In every corner of the country the news is the same - municipalities and states are facing massive deficits, governors and mayors are proposing draconian budget cuts and a weary public is growing livid over the decline in their quality of life in communities large and small. While some of the rhetoric of politicians is simply gamesmanship, and a naked attempt to gain leverage, what cannot be denied is that the cupboard is bare and the nation’s checkbook is overextended. America is broke.

As a result, Americans are beginning to feel real pain. Police and fire departments are facing cuts, with downsizing in some cities resulting in dangerously low manpower levels that threaten public safety. Public school teachers and public workers in general, are under assault and becoming cannon fodder for governors in states like Wisconsin, Ohio and New Jersey. Our transportation infrastructure of roads, highways, bridges and tunnels are in disrepair, compounded by a harsh winter season as states scramble to preserve basic services. Government programs that aim to support educational equity, advance economic opportunity or prevent the further marginalization of the poor are becoming prey for fiscal conservatives who claim the nation is collapsing under the weight of its deficit.

Solutions to address the impending fiscal crisis are few and far between. Republicans view tax increases as blasphemy and Democrats salivate over the idea of forcing the nation’s highest earners to pay more for their privilege to earn more. While both parties express their willingness to cut spending, it’s what gets cut that creates the political stalemate on Capitol Hill. The GOP aims its red pen at entitlement programs and across the aisle Democrats plead for a more balanced approach that will not further dislocate the nation’s middle class and poor. The gulf between the two parties is wide and there is little sign that each side is willing to meet the other half way. Meanwhile, the cuts being made at the local level are so deep some communities will not recover for some time.

How bad is it? Contrary to what many believe, it is not only major cities such as New York, Detroit and Los Angeles that are feeling the weight of the economic crisis. In Camden, New Jersey, one of the nation’s poorest cities, half of the police force has been laid off; a decrease of 163 officers. Residents there are fearful that the city’s already high crime rate will take a dramatic tick upward. Harrisburg, Pennsylvania is on the verge of a fiscal meltdown. The capital city of the Keystone State nearly missed a $3.3 million payment on its general-obligation debt in September but was bailed out by an early receipt of funds from the state. A similar payment is now due and the city’s spending is far outpacing its revenues. In Providence, Rhode Island, all of the city’s school teachers received termination notices  from the board of education as the public school system seeks to confront a budget crisis. Some of the teachers, of course, will be rehired but there is expected to be significant downsizing.

What lurks behind these budget crises are two wars that draining the American economy to the tune of billions of dollars per day with no real end in sight. In the midst of the chaos of state and municipal level budget battles is a national commitment in Iraq and Afghanistan that currently totals almost $1.3 trillion dollars since 9/11. These monies are supplemental funds above and beyond the baseline budget of the Department of Defense for military operations in the two countries as well as the ongoing “war on terror.” According to the Congressional Research Service (CRS) in a September 2010 report, The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11, total spending in Iraq now stands at $802 billion or 62% of the total appropriations, $455 billion for Afghanistan or 35% of the overall spending, and $29 billion for enhanced security as part of efforts to combat terrorism, that represents 2% of “war” related spending.

These are expenditures that were not anticipated but were appropriated as an emergency response to the nation’s defense needs. Like any policy decision, the expenditure of such significant monies in one area means that other areas, such as domestic programs, will feel the pinch. If the nation is committing billions of dollars to war efforts, programs such as aid to municipalities, health care initiatives, and innovations in public education will feel the pinch. The CRS report details how quickly total war costs rose - going from $34 billion in FY 2001/2002 to a peak of $186 billion in FY2008. Despite the projected withdrawal of troops from Iraq in December of this year, these costs will likely remain at current levels or increase as the conflict in Afghanistan intensifies. Total war funding there has gone from $19 billion in FY2006 to $119 billion in the current fiscal year. Future funding for the war in Afghanistan will be effected by the cost to train Afghan forces, additional procurement costs, and the greater expense for the transport of troops, supplies and equipment than in Iraq due to the country’s terrain and the construction of facilities. Barring public and political pressure to end the U.S. engagement in Afghanistan, billions more will be spent on military operations that otherwise could be spent focused on resuscitating the nation’s economy and advancing efforts to expand opportunity for disadvantaged Americans.

Spending on Operation Iraqi Freedom (Iraq War), Operation Enduring Freedom (Afghanistan War) and Operation Noble Eagle (Homeland Security & War on Terrorism) is a clear example that budgets and policy making has real consequences. As the debate over the FY2012 budget heats up on Capitol Hill, lawmakers will be arguing over significantly smaller slices of a pie that has shrunk in size due to the large bite that military spending has taken. What remains to be seen is whether lawmakers, particularly those representing the nation’s cities and poor communities, will make military spending an issue as local communities and states face reductions in police and fire protection personnel, teacher layoffs and school closures, cutbacks in municipal services, elimination or reduction in college aid programs, and cuts in public health programs. The rhetoric thus far from both parties, with Republicans under Speaker John Boehner (R-OH) leading the way, has been focused on deficit reduction and cutbacks in spending. Neither party is considering adjusting tax rates to pay for ongoing war expenditures. Meanwhile, the American public seems oblivious to the connection between war spending and the current fiscal crisis.

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