War, Children: It’s Just a Welfare Check Away


by Thomas Knapp
http://c4ss.org/content/13717

War, Children: It’s Just a Welfare Check Away

When pundits name-check “the welfare-warfare state,” we usually mean, and are usually understood to mean, something along the lines of “bread and circuses at home, military adventurism abroad.”

That’s as good a definition as any, I suppose, and certainly an accurate description of today’s global political environment, but it fails to really capture the nature of the post-WWII trend in US politics.

In America, the “welfare” and “warfare” aspects of the state have, over that period, achieved a near-perfect merger. Rather than representing one side of two mutually reinforcing but nominally separate sets of policies, US “defense” spending has become the single largest, and by far most redistributive, welfare program in the federal budget.

This phenomenon is best illustrated by the Hobson’s Choice offered in the final debate between US president Barack Obama and Republican presidential nominee Mitt Romney: “Draconian cuts” of 10% growth (yes, you read that right) over the next five years (Obama) or 18% growth over the same period (Romney). Real cuts aren’t even on the table. Like Henry Ford said, you can get any color Model A you want, as long as it’s black.

The numbers are constantly changing, but a 2010 baseline looks like this:

Approximately 1.4 million Americans work as members of the armed forces, and another 1.6 million workers labor in the civilian “defense” industry. These Americans are welfare clients of the “workfare” variety.

As an economic factor, they might just as well be digging holes and filling them back in (in fact, as a US Marine infantryman, I did quite a bit of exactly that!). The vast bulk of the work they do serves no “legitimate” function with respect to actual defense of the United States from attack or invasion, and in fact more likely increases the risks of such.

Some high double-digit percentage — I think 75% is a reasonable and conservative estimate — of “defense” spending is not about “defense” in any meaningful sense of the word. It’s about keeping those 3 million workers on the clock, and keeping their politically connected employers in profit.

Those 3 million workfare clients cost the American taxpayer $700 billion per year — $233,000 per client. But they don’t take that much home, of course. If their average income tracks to US per capita, they take home an average of $41,500 per year each, or a total of nearly $125 billion.

Where does the other $575 billion go? That’s the gross rakeoff, after workfare costs but before other overhead, of the real welfare queens: “Defense contractors.” If we generously assume that 25% of that rakeoff actually does produce “legitimate” defense benefits, they are knocking down more than $430 billion in welfare checks. But let’s be fair: According to the US Department of Defense, the top 20 “defense” contractors average a profit margin of only about 4%. So, $17 billion.

With that much money at stake, the $30 million or so that “defense”-related contributors have spent on the 2012 election so far is chump change: About 2/10ths of 1% of the profits they get from having politicians on their side.

If that was the end of it, it would be pretty bad — one out of every five dollars earned by American workers siphoned off on an incredibly inefficient welfare program. But that’s not the end of it at all. The existence of the welfare program is a major incentive for going to war early and often.

First, when you have a $700 billion hammer, it’s easy to fall into the habit of looking at every problem as a nail.

And secondly, welfare programs are expected, by everyone involved, to demonstrate their own necessity. If peace breaks out, the workfare clients go back to doing something else … and “defense” contractors have to cut back on the caviar and brie.

There’s no easy way out of the situation. If we have a welfare-warfare state, we’re going to spend a lot of blood and treasure on wars. And if we have a state, it’s going to become, and do everything in its operators’ power to remain, a welfare-warfare state. You can have politics or you can have peace, but you can’t have both.

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25 responses to “War, Children: It’s Just a Welfare Check Away

  1. Military spending has been a declining share of the American economy for many decades.

    To have a meaningful discussion on the growth of government over the last century, as proportion of civil society, one has to look at what has grown – and by how much.

    The information exists – I advice readers to go find out for themselves.

    As for whether people like Thomas Knapp are really ignorant enough to think that rising military spending is the problem that is going to bankrupt the United States (and all other major Western nations)…..

    I do not think it really matters if they are honestly ignorant, or liars.

    What matters is the out of control “social justice” Welfare State.

  2. Sorry Paul, I’m with Thomas on this one.

    One of the recognisable characteristics of the US economy is that it does a particular form of corruption- “pork barrelling”- which us backwards Europeans are mere amateurs at. If we move from defense for instance to a different but similar state industry- the space programme- we see the same thing. It is not an uncommon criticism that NASA is a huge job creation scheme (though tiny compared to defence).

    I remember reading an article (but can’t remember who by) about the potential for Obamacare, and the author pointed out that Western Europe has a unique knack for being socialist without collapsing into overt tyranny but that America’s knack for pork would ensure that any attempt by the USA to create a National Health Service would immediately collapse into a stew of corruption and profiteering, and that was why (the author suggested) that it would be disastrous for the US to attempt a European-style state health system.

    I can’t resist quoting my favourite economic writer, Frederic Bastiat-

    At first sight, there would seem to be some compensation. What took place at the village, now takes place at Metz, that is all. But the loss is to be estimated in this way: – At the village, a man dug and worked; he was a worker. At Metz, he turns to the right about, and to the left about; he is a soldier. The money and the circulation are the same in both cases; but in the one there were three hundred days of productive labour; in the other, there are three hundred days of unproductive labour, supposing, of course, that a part of the army is not indispensable to the public safety.

    Now, suppose the disbanding to take place. You tell me there will be a surplus of a hundred thousand workers, that competition will be stimulated, and it will reduce the rate of wages. This is what you see.

    But what you do not see is this. You do not see that to dismiss a hundred thousand soldiers is not to do away with a million of money, but to return it to the tax-payers. You do not see that to throw a hundred thousand workers on the market, is to throw into it, at the same moment, the hundred millions of money needed to pay for their labour; that, consequently, the same act which increases the supply of hands, increases also the demand; from which it follows, that your fear of a reduction of wages is unfounded. You do not see that, before the disbanding as well as after it, there are in the country a hundred millions of money corresponding with the hundred thousand men. That the whole difference consists in this: before the disbanding, the country gave the hundred millions to the hundred thousand men for doing nothing; and that after it, it pays them the same sum for working. You do not see, in short, that when a tax-payer gives his money either to a soldier in exchange for nothing, or to a worker in exchange for something, all the ultimate consequences of the circulation of this money are the same in the two cases; only, in the second case, the tax-payer receives something, in the former he receives nothing. The result is – a dead loss to the nation.

  3. Paul,

    I oppose the “social justice welfare state” as well as the “military welfare state.”

    However, if you look at the two from the standpoint of which is most redistributionist, the military side wins hands down.

    Medicare and Medicaid combined are partially, not wholly redistributive, and cost a little more than budget-visible “defense” spending.

    Social Security is partially, not wholly, redistributive, and costs a little more than budget-visible “defense” spending.

    “Defense” spending — which is not wholly budget-visible, as much of it is hidden in other budget lines (e.g. Veterans Affairs) is almost 100% redistributive and is larger by a full order of magnitude than any other welfare program which is nearly as redistributive (e.g. food stamps).

    I don’t think it will be “defense” spending that bankrupts the US government. For one thing, the US government has been functionally bankrupt for years. For another, it was bankrupted, and will continue to held in insolvency, by a combination of all of its spending. That doesn’t change any of the previously mentioned facts, though.

  4. Ian – you seen to have ignored what I actually typed.

    Thomas – repeating a lie (as you have done) does not make it the truth.

    Military spending does not “win hands down” in relation to Welfare State spending. The military share of the American economy has been going down (repeat down) for many decades, and the Welfare State share has been going up (repeat up). Of the two the Welfare State (not the military) is now vastly the bigger.

    As for military spending being “redistributionist”.

    People paid for making weapons are paid for doing a job – you might prefer it if they were being paid for making weapons for private protection companies, but they are not on welfare. No more than people who build roads for the government are on welfare – although I would prefer it if these private contractors worked building private roads.

    And people actualy in the military are also paid to do a job, often a highly dangerious job. Comparing, for example, the more than 2000 Americans who have died in Afghanistan to peoiple “on welfare” is vomit inducing.

    I happen to believe that these people should be withdrawn from Afghanistan (the “secret” talks with the Taliban indicate that they have already been stabbed in the back – so going out every day risking their lives is pointless). But, I repeat, comparing them to welfare claiments is vomit inducing.

    Do you have the same opinion of the Americans who faught to defend Korea?

    We both know that it is not the specific conflict – you just have utter contempt for the troops. And no modern military can be raised from scratch (after an attack) people have to be trained and armed in advance – and that means a peacetime military. Both on land, and at sea, and in the air.

    “No I do not have contempt for military people” – then do not come out with disgusting lies about how their pay is “redistribution” and how they are not “really” working to provide the income for their wives and children. As well as putting their lives on the line.

    I repeat that people who wish to know the truth about the size of military spending in comparison with the American economy (and in comparison with Welfare State spending) should look it up for themselves. The changes over the decades are obvious.

    As for the truth about military people doing a job (not being lazy bums dependent on “redistribution”) no one should have to look up anything to understand that this is a falsehood.

    • “Military spending does not ‘win hands down’ in relation to Welfare State spending.”

      1) Military spending IS welfare state spending.

      2) Of four largest welfare state spending programs, military spending is the second largest (slightly smaller than Security, but larger than Medicare or Medicaid).

      3) Of the four largest welfare state spending programs military spending is the most grossly redistributive due to its small clientele and the fact that those other programs are at least nominally based on prior clientele contribution.

      Those three facts are facts, and they will remain facts whether you like the fact that they are facts or not.

      The situation is actually worse than described above, because the above applies only to DoD-budgeted military spending. If you include military spending not budgeted to DoD, US military spending climbs from 19% of the federal budget to 28% — it dwarfs even Social Security, it dwarfs even Medicare and Medicaid COMBINED, and it comprises more than half of all discretionary federal government spending.

      Yes, the food stamp program sucks, and it is tied into other welfare spending such as farm subsidies. But even at its current greatly inflated levels, the food stamp program is a full order of magnitude smaller than “defense” in terms of US government spending (last year it cost $78 billion).

      As far as the “as a percentage of GDP” dodge — and it IS a dodge — goes, when non-DoD-budgeted military spending (veterans affairs, “Homeland Security,” emergency war supplementals, interest on war debt, etc.) is included, “defense” spending has been climbing as a percentage of GDP for a decade now.

      Those are facts, too, and will remain facts whether you like them or not.

  5. The US military needs to be raked in, however it pales in significance, to Americas funded and unfunded liabilities in welfare/food stamps/medi-whatever/various federal departments(about the only thing to grow in the US in the last few years

  6. Thomas – I say again that repeating a lie does not make it the truth.

    Actually you are, de facto, repeating two lies.

    You are pretending that military spending is on the rise when, for many decades, it has declined both as a share of the budget and as a share of the economy.

    And you are pretending that military spending is welfare spending – it is not.

    None of the above means that military spending can not be cut.

    For example, all money spent in Afganistan should be stopped – at once.

    The Afghan war is already lost (the “secret” talks prove that, “the fix is in”) so further spending (of money – or human blood) is pointless.

    As for the political process making military projects more expensive than they need to be – of course it does.

    The same could be said of government road spending.

    Road spending is not “welfare” either – and people employed in building roads are no more “on welfare” than people engaged in building tanks.

    Although, yes, it would be better if all roads were private.

    • “You are pretending that military spending is on the rise when, for many decades, it has declined both as a share of the budget and as a share of the economy.”

      As I point out above, if non-DoD-budgeted military spending is included, US military spending as a percentage of GDP, and of the budget, has been climbing for a decade.

      And as I also mention, the “as a percentage of” dodge is a dodge. If I bought one loaf of bread last week and I buy two loaves of bread this week, I’m buying more bread this week than I bought last week. That is true even if my income also tripled between last week and this week, and it is true even if the size of my family quadrupled over that same time period.

      I’m not sure where you are from, but in the US a considerable portion of road spending is, indeed, welfare — even setting aside the possible factor of subsidies from non-drivers to non-drivers, much road spending is undertaken to “provide jobs” at least as much, if not more so, than to facilitate transport (the most ballyhooed recent example is the “bridge to nowhere”). It’s not a coincidence that the biggest lobbyists for new highways in most states are the construction companies.

      The situations are actually quite similar. In the column you are responding to, I do allow as to how some percentage of “defense” spending might be plausibly related to actual defense. That doesn’t change the fact that the bulk of “defense” spending is simply welfare redistributionism.

      This first really came to my attention back in the 1990s when I noticed a story that the US Navy had taken two ships off its “wish list,” only to have them put back in the “defense” budget as an earmark by US Senator Trent Lott — because the shipyard where they were to be built was located in Mississippi, the state he represented. Those ships were not purchased to “defend the United States,” they were purchased to “create/preserve jobs” among his constituency.

      It seems to me that most of your angst with my article has to do with a false perception on your part that I support NON-military welfare spending. I do not. I oppose Social Security. I oppose Medicare. I oppose Medicaid. I oppose food stamps. I oppose farm subsidies. I oppose road construction boondoggles contrived to “create jobs.” In fact, I oppose all state spending, because I oppose the existence of the state. I was merely pointing out that one particular kind of spending which people normally don’t notice as “welfare spending” is, in fact, exactly that.

  7. I believe that all military aid is pointless at this stage. The Republic of Korea could (now) fund all defence with ease, as could Israel (if the Welfare State establishment was hit). Ditto other nations that get military aid from the United States.

    Either they do not need it because they are wealthy enough to look after themselves, or it is pointless because the local govenrments are hopeless anyway (such as the govenrments of Iraq and Afghanistan)

    As for the correct proportion of the Federal budget that should be military spending – historically (before the New Deal) it was 90% or more of Federal government spending (minus money spent on the national debt). This seems about right.

    Of course with a 16 trillion Dollar Federal national debt (not even counting “unfunded liabilities”) and a one trillion Dollar Federal deficit – de facto default would seem very likely (if not inevitable – so people who hold government paper are nuts).

    What percentage of GDP should be military spending?

    Historically it was about 2 or 3 percent of the economy – which also seems about right. Although under President Kennedy (and before the Vietnam way) it was well over 10% of GDP.

    Presently total government spending (Federal, State and local) is over 40% of the economy.

    Obviously unsustainable.

    As recently as 1928 total government spending (Federal, State and local – and including debt interest payments) was only 12% of the economy. Mostly it was State and local spending – mainly on the folly of the government education system.

  8. Thomas you are assuming that people are idiots and can not look these things up for themselves. A couple of minutes and just about anyone can look up what parts of the Federal budget have grown over the decades and what have not.

    As for politics making military stuff more expensive than it needs to be – that is actually true, but it does not matter much in terms of the overall budget.

    The military budget is not the reason the United States is going, de facto, bankrupt.

    • “A couple of minutes and just about anyone can look up what parts of the Federal budget have grown over the decades and what have not.”

      And a couple of minutes and just about anyone can read what I wrote and realize that your response isn’t, um, responsive to it.

      “The military budget is not the only reason the United States is going, de facto, bankrupt.”

      There, fixed that for ya.

  9. Both as a proportion of the budget and and as proportion of the budget military spending has been in decline (decline) for many decades – whereas the Welfare State has grown and grown.

    Nor is being the military (or making stuff for them) “welfare” – your claim is not just wrong, it is in fact an example of “bullshit” (see Harry Frankfurt’s little essay “On Bullshit”).

    By the way I half like the “make it my district” stuff one gets from Congress – not like in financial terms, but in political terms as it least it means that Congress matters.

    Parliament does not matter – no M.P. can say “make this in my …..or……” – Congress does matter.

    At least in the past – although the power of Congress is in steep decline. This will prove to be a bad thing.

    I happen to regard the Executive branch (which has near total power in Britain) as for more dangerious than the Legislative branch.

    Even in financial terms the Pork that Congressmen bring home is small change. And Ron Paul does it also – he carefully writes roads and stuff into a Bill, then votes against the overall Bill (knowing it is going to pass).

    I do not attack that – the vote against the overall Bill is a good thing, and making sure the Bill contains the road (and other) stuff for one’s own District is politically vital.

    The alternative is total power for the Executive – in practice for the bureaucracy.

    “But it would be better for all roads to be private roads”.

    I agree – but they are not.

    And if I was a Congressman (and could not stop the taxes) I would not tolerate the roads in my District being full of potholes with the money going to build “bridges to nowhere” in some other District.

  10. Although, of couse, the Legislature deciding where the money goes should be within the context of balanced budget – no “bond issues” and other……

    The truth (which you keep dodgeing Thomas) is that the budget is out of line because of the Entitlement Programs – the Entitlement Programs have built in uncontrollable increases built in to the very concept (the military budget does not). After all destroying Civil Society is what “social justice” is all about (that was what was behind the Fabian “Minority Report” in early 1900s Britian – and it was behind the Cloward and Piven types who used the very guy they said they hated, LBJ, in the 1960s – just as previous intellectuals used Franklin Roosevelt).

    And Congress was pushed to pass the Entitlement Programs (including the last one – Obamacare, “last” in more ways than one) by Executive action.

    Corrupt Pols would not have come up with crazyness on this scale.

    Only intellectuals (working via Presidents and the Executive branch in general) could have done that.

    Even in the big cities – the “Machines” tended to cost less (especially in the long term) than the schemes of the high minded reformers (although in some cases one actually had someone who was both corrupt and a high minded reformer – such as Mayor Wagner in New York, the worst Mayor of all).

    A man is seldom so innocently engaged as when he is after money (Doctor Johnson) – as if he is not after money he is after power or love (and going after those things leads to much worse consequences).

    • “The truth (which you keep dodgeing Thomas) is that the budget is out of line because of the Entitlement Programs”

      I don’t “dodge” that. Entitlement programs are certainly a big part of why the budget is out of line.

      So is military spending.

      The fact that I wrote an article about the latter instead of about the former does not mean that I deny the former.

      “the Entitlement Programs have built in uncontrollable increases built in to the very concept (the military budget does not).”

      Incorrect. Both types of programs use the “baseline budgeting” scheme to build in uncontrollable increases.

      The entitlement programs have built-in uncontrollable THEORETICALLY MANDATORY increases built into their very concept.

      The military programs have built-in uncontrollable THEORETICALLY DISCRETIONARY increases built into their very concept.

      Of course, Congress could act to end the mandatory status of entitlements.

      And of course, Congress could use its discretion to cut back defense.

      Congress isn’t inclined to either of those courses.

      One of the main points of my article was that the latter course isn’t even on the table. Both major parties propose to continue increasing defense spending above and beyond the “baseline budgeting” increases already built into it.

  11. “Both as a proportion of the budget and and as proportion of the budget military spending has been in decline (decline) for many decades”

    And as I have now pointed out several times, “proportion of (budget or GDP)” is a bullshit dodge.

    US military spending in 1975 was about $550 billion dollars (in 2011 dollars).

    US military spending in 2012 is about $1.2 trillion dollars (in 2011 dollars).

    That includes both the DoD budget line and non-DoD military spending — veterans, homeland security, interest on war debt and so forth.

    If you do not think that $1.2 trillion is bigger than $500 billion, I suggest putting down the crack pipe and picking up a basic math text.

    “Nor is being the military (or making stuff for them) ‘welfare’”

    The vast majority of it is “workfare” — FDR’s WPA writ military.

    The normal state of things is “we employ people to make X.”

    The logic of the state is “we make X to employ people.”

    Most military spending is of, or a consequence of, the latter variety. It’s understandable — governments hate expensive ramp-ups and prefer to keep a larger peacetime infrastructure instead. But that larger peacetime infrastructure takes on a life of its own.

  12. The proportion of the budget and the proportion of the economy are not bullshit – they are what matters.

    The fact that you clearly do not understand this (or pretend you do not understand it) indicates that you are not a serious person Thomas.

    • Paul,

      I made $20,000 last year. I bought a $12,000 Kia Soul.

      This year, I made $10 million. I bought a $250,000 Lamborghini Countach.

      In which year did I spend more money on my car?

      Between 1975 and 2012, the borders of the US did not get longer, nor did the earth get bigger around, nor did the volume of global airspace increase. The US has precisely the same territory to defend now as it did then.

      That its population and that population’s productivity increased is completely irrelevant to whether or not it should have spent more on “defense,” except in one respect: In a free market, the cost of commodities DECREASES over time. It should cost LESS now to do the same things than it did then, not MORE.

  13. By the way – I have already given ideas on how to reduce the military burden. Not that it is much above its historical level anyway.

    No one is talking about a President Kennedy (pre Vietnam) 12% of more of GDP military budget.

    I doubt that even 4% of GDP can be maintained.

    Still it is all vain anyway….

    Unless Social Justice (the basic principle of all totalitarian movements – not just orthodox socialism, but Fascism, National Socialism, Islamism and even Greenism, also) can be defeated (i.e. the New Deal and Great Society programs contained and rolled back) there is not going to be a United States of America.

    Ditto for every other major Western nation – with their own out of control Social Justice ideology.

    And I see no sign that this ideology is being defeated.

  14. Let’s just stop arguing for now and concentrate on getting rid of those bloody central banks.

  15. The Navy and so on are in steep decline. I can remember (and I am not that old) when there was close to a 600 ship navy – now things are heading for a 300 ship navy.

    The Welfare State is doing the same thing to the U.S. Navy (indeed the U.S. miltary in general) what it did to the Royal Navy – - i.e. destroy it.

    Although the Parkinson’s law point (about how the government requires more and more money to do less and less) is clearly true.

    Sadly I do not think it matter what you and me think or say Thomas, the game is over bancktuptcy is inveitable now.

    I am just arguing in an historical sense.

    “It was not …… that destroyed the Res Publica it was ……. that destroyed the Res Publica”.

    The important point is that Res Publica is going to be destroyed (not “just” the United States – but the West in general) and there is nothing that two bald guys like you and me, can do about it.

    Could the financial situation be saved?

    Sure it could – Senator Rand Paul (and lots of other people) could draw you up a plan to do so (which includes mililtary reductions by the way) – indeed they have done so. Even I could do it – and, yes, the plan I would draw up containes military cuts (for example no money for Afghanistan or….). Although the vast majority of the work has to be done on the Entitlement Programs – because that is where the increases are (and have been all my life).

    But Thomas – it is not going to get done. Comrade Barack is a Cloward and Piven person(he wants the “Capitalist West” to be destroyed), and Romney is a management consultant type (he will be obsessed with saving a bit of money on paper clips – whilst the building is burning down around him).

    Still we might as well continue to play our tunes as the Titanic slips beneath the waves.

    • Paul,

      I suspect that the navy is indeed in steep decline — but not because of the number of ships it has afloat. Much as I hate to admit that Barack Obama is right about anything he is definitely right about that.

      These days, a single Carrier Strike Group (it was called a Carrier Battle Group back when I was a Marine grunt) disposes of more firepower than all the navies and air forces that duked it out in World War II combined, and can project that firepower farther, faster than at any time in history. And the US operates 11 of them.

      Even assuming that only half of them can be readily fielded in theatre at any given time (the others being out of rotation or on their way to and fro), that’s five times the force projection of all forces in action in the largest war in history, and it’s from a standing start, not after a long buildup from scratch or even from mothball.

      For the sake of comparison, I am aware of a total of 13 non-US aircraft carriers at the disposal of the entire rest of the world. The Chinese have four, the Russians have one, the Indians have one (dating from 1959; they do have two more in construction), the French have one, the British have one (they have two more in construction and scheduled for deployment in 2019; the current one is serving as a helicopter carrier, not a fixed-wing platform), the Spanish have one, the Brazilians have one, the Thais have one and the Italians have two.

      It’s a reasonable bet that even the four Chinese carriers combined cannot project the amount of force available to a single US CSG, nor can they project that force over a similar range or within a similar timeframe.

      If the US mothballed half of its existing CSG-organized ships, I’m guessing it would still be at least 30 years, and probably more like 50, before the entire rest of the world caught up with the US in terms of surface and air force projection ability. And that’s not counting US submarine capabilities.

      The cause of any decline in the US Navy is the sheer cost of perpetually manning, operating and maintaining at least twice the naval power any reasonable defense plan would call for. It could mothball half the fleet and still be in better position for a very large-scale war than it has been at the beginning of past such wars (the naval ramp-up for World War II was extraordinarily quick; my grandfather sailed in 1944-45 on one of the quickie-production “Liberty Ship” supply vessels).

  16. By the way – I hate baseline budgeting also.

    If Constitutional government is to have any meaning – then each budget (of course the Feds have not even passed a budget in three years – forget Thomas Jefferson having them all shot, John Adams would have shouted them into some shame by now) should start with a big fat “Zero”.

    With anyone who wants government spending (on anything) having to justify their case.

    Oh well perhaps the “Republic of Texas” (or the Republic of South Dakota – or what, if anything, emerges from the collapse) will take this idea to heart. In Britain we will be too busy eating each other.

    Although, I suspect, if you have any children – you should be teaching them to speak Chinese.

    The backstory to Firefly?

  17. JFen

    Future historians may see things differently from the way we do – they may date the final collapse to a little known thing 50 years ago.

    You see that is when (both in Britain and in the United States) the government coins stopped being even partly silver – the Central Bank inflation had already got so extreme (even half a century ago) that they could not be.

    In Switzerland they (the establishment elite) broke the link with gold in the new Constitution (1992 was it?).

    Everyone was so busy argueing over the P.C. …… in the new Constitition (“we celebrate our diversity” and ……) that they missed the important stuff.

    Most people still, most likely, think that the Swiss Franc has a gold link – but it does not (not even a figleaf).

    The academic intellectuals (including the Central Bankers) have f….. us so hard – we are like a young guy who has been sent to prison for “tax fraud”.

    As far as the governments are concerned we are all “Suzy”.

  18. As a side note, I agree with you that “pork,” a/k/a earmarks has an up side in terms of leaving some spending control in the hands of Congress rather than just handing a bulk appropriation to the executive to play with however he chooses.

    I’d date the “currency collapse as a cause of general collapse” back much further. In the US, I’d say it started with “The Congress shall have Power To … borrow Money on the credit of the United States … To coin Money, regulate the Value thereof …”

  19. Today war is very much a “come as you are” affair – although I may be biased by some of the border I have looked out from (and where I will be again in a few days). No margin for error (or delay) on those borders.

    “borrow money” – yes if there is a emergency spending there can be emergency taxes (no need to borrow money). And as President Martin Van Buren showed (the only President to have been a professional banker – and the President who trusted bankers least, I wonder if there is a connection between those two things….) there is no reason why government can not have a physical stock pile of tax money (from taxation – taxation in gold and silver) and spend it real pay-as-you-go style from an “Independent Treasury” (no need for any involvement with bankers – a strict divide between “bank and state”).

    And “coin money, regulate the Value thereof”.

    Yes again – in the West private mints provided the coins till the 1850s (when Congress finally got around to banning them).

    Giving the power to borrow money and to create money to politicians – is like giving razor blades to babies.

    Or giving a loaded pistol to a three year old.