Stories That MSM Don’t Want You to Hear- Part 3 “Pentagon Awash in Money”


Our CONgress and the media are constantly flooding the air waves with how concerned they are about government spending. Conservatives have proposed to cut the three major social programs, Medicare, Medicaid, and Social Security by $1 Trillion dollars over the next five years. The ironic part of this is that the Social Security fund is funded by separate revenue and in fact currently has nearly a $2.76 Trillion balance as of 2013! Even with a significant portion of Baby Boomers hitting retirement age, the fund had receipts of $885 Million in 2013 with expenditure of $822 Million adding $32 million to the account balance. Given full employment (6% unemployment) the social security fund would actually be solvent until at least 2052. It would be expected to remain solvent after that since most, if not all, of the “baby-boomers” would have passed. If these proposed cuts were implemented, it would mean that the average social security check would be decreased from $1,250 to just $870 per month. Given the government’s own guidelines of defining extreme poverty ($11,670), a majority of social security recipients would be expected to survive on just $10,440 per year. In 2015, social security recipients will receive a 1.7% increase in benefits when the true inflation rate was arguable 6-8% over the last 24 months. This is in fact a defacto cut in benefits.

This is ironic since even the media fails to report that Social Security was NEVER part of the general budget until 1968 when President Johnson made that move by executive order to partial fund the Vietnam War. Since then, the government has been “spending” these retirement dollars, putting I.O.U.’s in place of the actual cash.

When you hear that the Federal Deficit has reached an all time high, it’s actually even more than you think. To arrive at the “true” and “correct” total of the U.S. Deficit, cash of the Social Security Trust funds need to be SUBTRACTED to the reported deficit. As it is now the assets of the Social Security Trust Funds are added into the Budget as a positive cash flow which offsets the “true” Federal Deficit.

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In other words, plain and simple, the politicians in Washington have been lying to you since 1968 about the “true” Federal debt of the U.S. Government. It is being reported that the U.S. has a $17.6 trillion dollar deficit. However, $2.76 trillion dollars of Social Security Trust Fund monies are added in as an asset into the Budget. That would make the true deficit at over $20 Trillion dollars! To put this in perspective, this means that every man, woman, and child in this country owes somebody (mostly China) nearly $58,000.

However, Congress doesn’t seem to have the same fiscal restraint concerns as related to expanding the Pentagon’s 2014 budget by $32 billion. The Pentagon currently receives over $600 billion, when its current budget is combined with supplemental war funding. One out of every five US tax dollars is spent on defense, cumulatively more than the total of the next ten countries’ defense budgets combined. Where does the money go? “The exact answer is a mystery,” wrote Dave Gilson for Mother Jones. “That’s because the Pentagon’s books are a complete mess.” As the Government Accountability Office dryly noted, the Pentagon has “serious financial management problems” that render its financial statements “inauditable.”

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Despite a 1997 requirement that federal agencies submit to annual audits, the Pentagon, Gilson reported, claims it will not “achieve audit readiness” until 2017. Lack of budgetary accountability has led to risky investments by the Pentagon, Gilson reported, including the F-35 Joint Strike Fighter, for example. As Gilson summarizes, the F-35 program is “years behind schedule, hugely over budget, and plagued with problems that have earned them a reputation as the biggest defense boondoggle in history.”

The Mother Jones report also analyzed how congressional interests and coalitions contributed to the protection of the Pentagon budget, even at a time when Congress was imposing spending reductions to food stamps and other mandatory social programs. Though fiscal conservatives in Congress favored defense cuts (like their liberal dove counterparts), they aligned with conservative hawks to impose social cuts, rather than reduce the Pentagon’s budget. Similarly, those conservative hawks found allies among liberal hawks, who were not supportive of domestic cuts, but also wanted more money for military spending. As Gilson observed, military spending was “the glue holding the budget deal together.”

The wars in Iraq and Afghanistan cost $1.5 trillion, about twice the cost of the Vietnam War when adjusted for inflation. Those funds came entirely from borrowing, contributing nearly 20 percent to the national debt accrued between 2001 and 2012. And that’s just the “supplemental” military spending passed by Congress for the wars—the regular Pentagon budget also grew nearly 45 percent between 2001 and 2010.

No wonder, perhaps, that defense watchdogs found the Pentagon’s wailing about the sequester less than convincing. “These ‘terrible’ cuts would return us to historically high levels of spending,” snapped Winslow Wheeler of the Project on Government Oversight. According to Lawrence J. Korb, a senior fellow at the Center for American Progress, the Pentagon could reduce its budget by $100 billion a year without undermining its readiness. The sequestration cuts for 2013 amounted to $37 billion. So in essence the expansion of the DoD spending authorized by congress of $32 Billion pretty well “exempted’ Defense from the sequester.

Who benefits from the DoD windfall? According to Department of Defense documents, since 2001 contracts for services have increased 137%, compared to a 1% increase for payrolls of active duty military personnel over the same time period (in 2011 dollars), and is labeled as “increasingly unaffordable.” From this fact it would seem that the “toys” of war are far more valuable than the brave men and women who are sent into battle.

To understand the spending involved, CNBC.com analyzed data from USASpending.gov, which was established in 2006 by the U.S. Office of Budget Management to make federal awards publicly available. According to the site, in FY2011 there were $536.8 billion in government contracts awarded to approximately 170,000 contractors. The data presented here are based solely on U.S. government contracts and do not include assistance, insurance, grants, loans or other forms of payment.

To put this into further perspective, Lockheed Martin, the number 1 government contractor, realized nearly $45 Billion in revenue as of December 2013 and had a net income of nearly $3 billion dollars! This is the real story of how corporate America has usurped our CONgress and is stealing us blind, while forcing more and more Americas into poverty. Forget the crap that middle class Americans are diminishing in number because it is far worse than that. A majority of Americans are being forced into poverty by the irresponsible and unethical acts of major corporations to maximize their profits on the backs of the taxpayers and under paid employees, and these irresponsible acts are being supported by our elected officials! This is the real economic story of our time and because these same corporations control the media, you don’t know or realize the true extent of these irresponsible acts. Again this should not be a political issue, but instead, should be an issue of who we are as a people. Why do we tolerate this level of mismanagement and wrong priorities in our government and our congress? Now you know.

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Author: redhawk500

International business consultant, author, blogger, and student of life. After 35 years in business, trying to wake the world to a new reality. One of prosperity, abundance, and most importantly equal opportunity. it's time to redistribute wealth and power.

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