Guns versus butter is a terminology that goes back to Nazi Germany and then to President Lyndon Johnson. And it seems highly relevant now. No, the issue is not about butter. Butter is easy for most people to identify with but the statement ought to read something like guns versus other stuff. Guns versus butter refers to a choice that society often has to make -- with limited resources do we prefer to spend more of them on national defense or on other things?
It begins with the assumption that we can't have more of everything. Limited incomes or limited resources means that we often have to make choices. I want a new car but I also want a new condo. I can't afford both. So I have to make a decision -- a new car or a new house?
Guns versus butter is meant to meant to relate to how we use the government's budget to attain national goals. More "guns" means more national defense. More butter means more of other things. For example, more transfer payments.
Why bring this up today? We know all the above already. The reason is that we are now very preoccupied with how we should respond to Russian aggression in Ukraine. Some experts believe we should prepare for a war and maybe even a nuclear war with Russia. Russia's aims in Ukraine worry some folks that in the near future Russia will invade Ukraine and perhaps other areas in that part of the world.
If we are serious about constraining these Russian ambitions, then it will take money and resources. Those resources must be pulled from somewhere. Maybe they will come from other places in the government defense budget. Or maybe that won't be enough. Maybe we will have to find the money in other government programs. Thus -- guns versus butter.
As of 2022 this is how OMB says we spent our federal government money:
Defense 14%
Human Resources (Health, Education, Training, Medicare, Income Security, Social Security, etc) 72%
Physical Resources 5%
Net Interest 7%
Other 2%.
Clearly, if we are to pull more money into defense it will have to come from human resources.
Here are the annual spending numbers for national defense (in billions of dollars) for 2012 through 2027 in five year increments:
2012 678
2017 599
2022 780
2027 867
After dropping by $79 billion from 2012 to 2017, defense spending rose by $81 billion from 2017 to 2022 and then is projected to rise by another $87 billion in 2027.
If we go to war with Russia, those defense numbers will likely rise even more.
That $867 billion or more will have to come from somewhere. Will we raise taxes that much or will we cut nondefense? Or maybe we won't raise defense spending. I guess we will have to wait and see.
Dear LSD. You say $867B will have to come from somewhere ‘n offer either increased taxes, reduced non-defense spend’n, or not raze defense spend’n. Obvious choices. But, the Tuna offerz a much less painful choice, brilliantly simple, ‘n already tried ‘n twue, right out’a the the ol’ box cuz we been there ‘n done it before. R U reddy . . . . drum-m-m-m-m roll-l-l-l-l-l pleaz-z-z-z-z . . . . the simple solution be juz to simply print more moola. Clever, eh?
ReplyDelete‘appy ‘our jez ‘round de ol korner . . . cheerz! ‘N speak’n of butter . . . one of my favz is Butter Chardon-n-n-n-ay-y-y-y-y!
Nice one Tuna. Thank goodness inflation is under control and we don't ever have to worry about that. Pour on the money!
DeleteUnfortunately our choices are limited because Ukraine contain a large portion of metals used in electronics which support our modern technology and farmland that supports a large portion of Europe. Eastern Europe is similar to our Midwest. Basically, the bad guys…. Russia and Iran are our enemies and China is just looking to control world trade. So butter has to wait.
ReplyDelete