November 10, 2019

Where is the world’s largest purchasing department?

The Pentagon is the world’s largest purchasing department! And it’s rife with statesploitation.

The numbers help prove the case.

Congress spent a total of $4.1 trillion in 2018. Of that amount, $3.16 billion involved mostly payments to individuals. Specifically…

  • $982 billion went to Social Security checks
  • $639 billion went to veterans benefits, transportation, education, and housing assistance
  • $582 billion went to Medicare (healthcare for seniors)
  • $572 billion went to unemployment insurance, food assistance, military retirement, the earned income tax credit, and a few other programs
  • $389 billion went to Medicaid (healthcare for the poor)

The remainder – $623 billion – went to the Pentagon. But is that really an accurate measure of defense spending?

Most people believe that the defense budget is the second biggest expense after Social Security. But notice that things like veterans’ benefits and military retirement are included in other categories. So real military spending is actually pretty close to what Social Security costs.

But for comparison’s sake, let’s assume the military budget is merely $623 billion. Amazon had gross revenues of only $200 billion in 2019 – less than a third of that amount.

This makes the Pentagon the world’s largest purchasing department!

Is it right to call the Pentagon a purchasing department? The majority of government programs are direct payments to individuals, such as Social Security, Medicare, Medicaid, SNAP, etc. The Defense Department is the biggest agency that buys things.

Checks must be written not only to pay soldiers and buy weapons, but also to purchase every item used on the 800+ U.S. military bases scattered around the world. This includes things like paperclips.

Think about that: If you were in the paperclip business, what customer would you want most? Amazon might be second on your list. But you would prize the Pentagon’s paperclip contract above all others.

What would you do if Congress tried to cut spending or close bases? You would fight to preserve your paperclip piece of the action.

All federal spending works this way! Try to cut Social Security, Medicare, or SNAP and those who benefit will resist. Indeed, a very perverse incentives takes over, and it’s called…

The Collective Action Problem – a.k.a., Concentrated benefits and dispersed costs

  • Those who receive tax-funded benefits have a strong incentive to protect them.
  • But the cost of any given benefit is spread among all taxpayers, providing only a small incentive to reduce it.
  • This means the lobbyists for a program always have an advantage over people looking to cut taxes or reduce borrowing – and that’s a problem.

At least direct payments to individuals clearly match the stated goals of those programs. For example, Social Security achieves its stated purpose each time a check goes out. But defense spending works differently.

Can you distinguish national defense need from military-complex greed?

How can you tell when military spending is harmful rather than helpful?

Is the F-35 really needed? Will the world be a better place if we invade Syria? Does having bases around the world make us more secure, or does it create resentment and enemies? Most people have no clue, so they rely on experts.

  • Foreign policy experts
  • Intelligence experts
  • Military experts

But all of those experts have a strong incentive to tell you how desperately you need what they provide. How do you know when they’re telling you the truth, versus just feathering their own bed? For example…

If the Navy tells you they need a command-center plane that can survive a nuclear attack, who are you to disagree? But, if it turns out that the plane breaks down after contact with a single bird, might you be justified in questioning the level of expertise involved? In reality…

You can’t rely on experts to make your decision because you can’t tell an expert from a con-artist.

Is there anywhere you can turn for guidance? History provides pointers. So-called defense spending has always been fraught with scandals, from the American Revolution forward.

Military procurement may be the premier example of…

#statesploitation – a small (often hidden) lobby manipulating the tax-paying majority for their own benefit.

Indeed, Harry Truman built a reputation that led him to the Oval Office by investigating fraud in the “world’s largest purchasing department” during WW2. And Truman’s successor, Dwight Eisenhower, warned us about the growing danger of military spending, NOT from the standpoint of simple waste and fraud, but in terms of freedom and social stability. Said he…

Our toil, resources, and livelihood are all involved. So is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.

Downsize DC dug into these matters very deeply in our military history articles. We’ve shown how most military actions, and therefore, most military spending, has done more harm than good.

But we have not yet provided a solution.

How can you control a feature of The State that is the most important function authorized by the Constitution?

You must apply a fundamental cure to #statesploitation. This cure would solve the collective action problem (concentrated benefits and dispersed costs). It would also remove the need to rely on experts. Indeed, it would put those alleged “experts” in their place.

The real question is NOT how much military spending the self-proclaimed experts and military providers want. The real question is…

How much military are you willing to pay for?

Imagine that there were no taxes. Imagine that the experts had to sell you on their weapon systems and their foreign interventions, one at a time. Imagine that you had to fill out a form each pay-period to direct specific amounts to specific aspects of the Defense Department.

How would that change both your thinking and the Pentagon’s behavior? We’re going to explore this idea more deeply in an upcoming article…

What if WW2 had been voluntarily funded?

Stay tuned.

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  1. Charlie
    Posted November 11, 2019 at 9:28 am | Permalink

    We don’t need one hundredth of one percent of the military they force on us.

    • Perry Willis
      Posted December 9, 2019 at 11:20 am | Permalink

      I agree.

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