There are no conceivable tax increases that can keep up with this spending rise. The Democrats had their best chance in a generation to raise revenue just now, and all they got was a measly $600 billion over 10 years. This is barely a wiggle on the revenue line and does nothing to change the overall fiscal picture.
As a result, health care spending, which people really appreciate, is squeezing out all other spending, which they value far less. Spending on domestic programs — for education, science, infrastructure and poverty relief — has already faced the squeeze and will take a huge hit in the years ahead. President Obama excoriated Paul Ryan for offering a budget that would cut spending on domestic programs from its historical norm of 3 or 4 percent of G.D.P. all the way back to 1.8 percent. But the Obama budget is the Ryan budget. According to the Office of Management and Budget, Obama will cut domestic discretionary spending back to 1.8 percent of G.D.P. in six years.
Advocates for children, education and the poor don’t even try to defend their programs by lobbying for cutbacks in Medicare. They know that given the choice, voters and politicians care more about middle-class seniors than about poor children.
So far, defense budgets have not been squeezed by the Medicare vise. But that is about to change. Oswald Spengler didn’t get much right, but he was certainly correct when he told European leaders that they could either be global military powers or pay for their welfare states, but they couldn’t do both.
Europeans, who are ahead of us in confronting that decision, have chosen welfare over global power. European nations can no longer perform many elemental tasks of moving troops and fighting. As late as the 1990s, Europeans were still spending 2.5 percent of G.D.P. on defense. Now that spending is closer to 1.5 percent, and, amid European malaise, it is bound to sink further.
The United States will undergo a similar process. The current budget calls for a steep but possibly appropriate decline in defense spending, from 4.3 percent of G.D.P. to 3 percent, according to the Congressional Budget Office.
But defense planners are notoriously bad at estimating how fast postwar military cuts actually come. After Vietnam, the cold war and the 1991 gulf war, they vastly underestimated the size of the cuts that eventually materialized. And those cuts weren’t forced by the Medicare vise. The coming cuts are.
As the federal government becomes a health care state, there will have to be a generation of defense cuts that overwhelm anything in recent history. Keep in mind how brutal the budget pressure is going to be. According to the Government Accountability Office, if we act on entitlements today, we will still have to cut federal spending by 32 percent and raise taxes by 46 percent over the next 75 years to meet current obligations. If we postpone action for another decade, then we have to cut all non-interest federal spending by 37 percent and raise all taxes by 54 percent.
As this sort of crunch gradually tightens, Medicare will be the last to go. Spending on things like Head Start, scientific research and defense will go quicker. These spending cuts will transform America’s stature in the world, making us look a lot more like Europe today. This is why Adm. Mike Mullen called the national debt the country’s biggest security threat.
Chuck Hagel has been nominated to supervise the beginning of this generation-long process of defense cutbacks. If a Democratic president is going to slash defense, he probably wants a Republican at the Pentagon to give him political cover, and he probably wants a decorated war hero to boot.
All the charges about Hagel’s views on Israel or Iran are secondary. The real question is, how will he begin this long cutting process? How will he balance modernizing the military and paying current personnel? How will he recalibrate American defense strategy with, say, 455,000 fewer service members?
How, in short, will Hagel supervise the beginning of America’s military decline? If members of Congress don’t want America to decline militarily, well, they have no one to blame but the voters and themselves.
1c)Yes, Obama, There Is A Spending Problem

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Deficits: Apparently, President Obama never got around to reading the final report of his own deficit commission. How else to explain his belief that federal spending isn't the cause of the nation's debt crisis?

That's apparently what Obama told House Speaker John Boehner during their recent "fiscal cliff" negotiations.
"At one point several weeks ago," Boehner told the Wall Street Journal, "the president said to me, 'We don't have a spending problem.'"

That would be news to Obama's debt commission, which in its final report made clear that spending is the driving force behind the nation's debt crisis.

Here's what the report said: "Even after the economy recovers, federal spending is projected to increase faster than revenues, so the government will have to continue borrowing money to spend."

The panel added, "Over the long run, as the baby boomers retire and health care costs continue to grow, the situation will become far worse."

And it recommended: "We should cut all excess spending — including defense, domestic programs, entitlement spending, and spending in the tax code."

The commission was hardly breaking new ground here. Indeed, anyone who has looked at the federal budget can quickly see that out-of-control spending, not insufficient revenues, is the problem.

As the chart shows, even with the $620 billion in tax hikes Obama won during the fiscal cliff fight, plus the $500 billion in new ObamaCare taxes, spending will continue to outstrip revenues as far as the eye can see.
By 2022, federal revenues will top 19% of GDP, which is significantly higher than the post-World War II average. But spending will exceed 22%, and keep climbing.

Meanwhile, a Government Accountability Office report concluded that spending is "on an unsustainable long-term fiscal path" and blamed entitlements.

And countless Congressional Budget Office reports have documented how, left unchecked, federal entitlement programs will soon swamp the entire budget.
Apparently Obama didn't read any of those, either.

When it comes to federal spending, Obama is like the alcoholic who says that the only drinking problem he has is when he can't get a drink.


By Barry Rubin


If we reach the following highly unpleasant conclusion, what are the implications?
The United States has taken a political turn which, at least for the next four years, will guarantee that it does not play the role of a great power mindful of and willing to protect its own true interests, to support its allies, and to combat its real foes. On the contrary, through inaction or active effort the leadership of America will take counterproductive actions that achieve the opposite result. And there are certain factors — radical ideological hegemony, a weak economy and growing debt, structural social changes, the weakness and disorganization of the opposition — that may make this situation regarding America’s international behavior and policies a long-term, partly irreversible condition. In other words, we don’t know if America is finished as the world’s leading power, but we do know that it will not have leadership and certainly not leadership in a good direction for a while and perhaps will never fully recover.


So what do those outside the United States do to face this situation? (Please note that I am speaking here only of U.S. foreign policy and just remarking on the domestic situation.)

There are those readers who would contest the accuracy of this statement. They will say that Barack Obama is a great president, or at least a decent one, and there is no big problem regarding U.S. foreign policy at all. In fact, he and his team, which now includes Secretary of State-designate John Kerry, will be just fine, or at least okay. They will make the point — valid, but irrelevant — that the United States doesn’t control everything in the world.
Of course, but what about the things it can affect? Unfortunately, American allies and clients cannot afford the luxury of clueless optimism or wishful thinking. Some will grumble publicly and scramble to limit the damage. Others will smile, praise the president, and scramble to limit the damage.
To put it another way: it doesn’t matter whether you agree with me. I’m telling you what’s actually happening.
Other readers will want to debate endlessly on the cause of the problem. Why is this happening? Is it deliberate or due to incompetence and bad ideology? Various conspiracy theories will be raised, and time wasted on them. To put this another way: for the purposes of this particular article at least I don’t care who or what you blame or what you intend to do about it, I’m talking about what’s happening right now.
It is fortunate that in these post-Cold War times there is no candidate to replace America as world leader. Instead, we have candidates to be regional leaders: China in Asia; the European Union already playing that role in Western Europe; Russia trying to do this in Central/Eastern Europe; and Egypt, Iran, and Turkey competing for hegemony in the Middle East.
But here’s the real issue: things look bad. What does this mean specifically, and how can potential victims react? Let’s begin with a very brief survey of the world scene.
Latin America: there are now several radical regimes in the area — most notably Venezuela — alongside, of course, Cuba. America’s allies in the region are dismayed that the former group (except for Cuba) gets soft, even favorable, treatment by Washington. Fortunately, radical revolutions or major armed insurgencies don’t seem probable. So leaders in the region will worry a lot, be frustrated (why should we be nice to the United States when it doesn’t help us, and even rewards being anti-American?) but get through it. Ironically, of course, the current administration favors policies that are sure to fail in South America, so to the degree Washington has influence it will be to help sabotage the region’s economic progress.
Sub-Saharan Africa: what is truly remarkable is how the Obama administration has done nothing to change U.S. policy in the area. One might have expected that given its worldview and certain ethno-racial factors and ideas in the U.S. leadership, Obama would have wanted to make this region a showcase of how he differed from his predecessors; a model of reparations for past colonialism and racism. But no such luck for the Africans. They will continue to suffer economic and political hardship without significantly increased U.S. help. Bad, but not a change from the usual neglect. Let them eat rhetoric!
South Asia: the pro-Pakistan policy will continue; India will be mistreated. Again, bad but no big change. It will just be more watching Pakistan help conceal al-Qaeda terrorists, working for a radical Islamist Afghanistan once the U.S. forces withdraw, and sponsoring terrorism against India as Washington pays more billions in aid money. The Afghanistan issue might cause a crisis: why did hundreds of Americans die there? Someone — albeit not likely someone in the mass media — might ask this if and when Kabul is taken over by a new anti-American regime.
Also slated to be killed: Afghans who helped the Western forces. They will start seeking new protectors very soon.
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