NOTES ON POOR GDP PERFORMANCE

Do not panic. In a way, the anemic growth in the United States GDP is good not bad. It is an indication that the government is preparing to cut pentagon spending, therefore the economy is reacting—contracting.  As a peace-loving liberal, I do not think cuts in our bloated military spending are bad. It is no different than a big war had just ended. Don’t you remember reading about the economic storm after WW I and then WW II. However, the economic turmoil was somewhat muted six years after WW II because we slipped into the Korea “police action” followed by Vietnam, then Iraq (twice). Now the Afghanistan war is on the steep slope of winding down. The point is we have been under the economic drain of the military industrial complex since the fall of Japan in 1945. In addition too or perhaps because of the political influence of the neo-cons we have shifted spending money for defense, then for protection and lately spending money for offence. The war machine has cost us great sums of money with nothing in return.

There has been a terrific change in governing philosophy.  Obama was elected! Finally, we have a president who looks at the threats we face as a nation in a realistic way. Although he is a combination of peacenik and warrior, the world has changed. He is president who is not driven by the tired old cold war arms race logic. He knows we no longer need horses and bayonets but we do need “submarines that go under the sea and ships that planes can take off and land”. We do need the CIA and drones as well as highly trained special operations troop, we do not need a standing army and thousands of heavily armored tanks led by multiple starred generals to fight huge imagined armies in front line wars.

So too, the balance sheet has changed. Shrinking of pentagon spending will is being shifted to paying off the huge debt cause by all the foolish barrowing to pay for a war—a war we did not need or want. Political rhetoric about our nation’s debt by those who want to cut entitlement programs has masked this change in spending. I think we are in a spending hiatus between wartime and paying off the debt and are preparing to spend for what we need: school, highways, bridges, and thousands of other projects; peaceful spending that we have neglected for half a century in order to feed the war machine. The poor GDP performance is a reflection of all of this. As an aside, peace is a lot less expensive than war; therefore, once Obama engineers the shift, taxes can decrease.