It seemed a bit odd he restricted the time span to the last 50 years. Perhaps because he didn't want facts clouding the issue?

Actually its worse than that. He used the gross federal debt which includes the amount held in federal "trust funds"

http://www.census.gov/statab/hist/HS-49.pdf

instead of the net, which is the total amount of tradeable securities outstanding, see:

http://www.whitehouse.gov/omb/budget/fy2005/pdf/spec.pdf

go to chapter 15 at p.235.

The net is a lower and more controllable number. It's post ww2 peak was in 1993 at 49.5%. We will come in lower than the original 2004 estimate of 38.6% because the GDP is higher than originally estimated and revenues are higher which has made the deficit about 80 billion less. OMB is projecting that it will hold steady around 40% for the rest of the decade.

Of course, no one minimizes the problem of Social Security and Medicare, espesially OMB.

go to: http://www.whitehouse.gov/omb/budget/fy2004/danger.html

"As noted frequently in this document, the federal government appears likely to spend more than it takes in for at least the next few years. Although the resulting deficits are manageable by any reasonable standard, they are cause for legitimate concern and attention. But whatever judgment one reaches about the deficit of this year or even the next several years combined, these deficits are tiny compared to the far larger built-in deficits that will be generated by structural problems in our largest entitlement programs. Social Security and Medicare combine to provide financial support to 39 million seniors—14 percent of our population—and account for one-third of total federal spending. As our population ages and health care costs continue to escalate, the costs of these programs will grow enormously, in fact, so rapidly that they will threaten to overwhelm the rest of the budget.

Over the long term, the actuaries of the Social Security Administration project that the cost of all benefits paid to current beneficiaries and promised to future retirees exceed Social Security revenues by almost $5 trillion. The Medicare shortfall is even worse at more than $13 trillion. Citizens and policymakers rightly monitor and debate the size of the national debt, which stands at $3.5 trillion in public hands, with another $2.7 trillion credited to various government trust funds. But in 2002 the combined shortfall in Social Security and Medicare . . . was about five times as large as today’s publicly held national debt.

Ironically, Business Week appears to be the most anti-capitalist and anti-business publications on the rack.

I truly don't know what is its purpose for being.

Robert - is that a reason to feel good about the budget deficit?

What everyone is leaving out is that the national debt is on top of record consumer debt and record trade deficits. These trends are not going to get better going forward, but worse.

Weisbrot seems to be setting up a few straw men here -- shooting down arguments against "empire" that no responsible person, certainly in the administration, is making. His statemenst about the debt, deficit and SS/Medicare are true but, as Robert says above, old news. So what's his point? That we can't do something we have no expressed desire to do, because of financial conditions we already know about?
The Iraq atrategy was a brilliant choice precisely because it's relatively cheap compared to other options. That may sound cavalier, but we can't make war on every state sponsor of terrorism. If Weisbrot is suggesting that the correct choice was to cower in the bunkers of a Fortress America, he should say so.

Mr. Schwartz:

That was an excellent post--thanks for taking the effort.

You've heard me say this before: infantry is the Queen of Battle.

Last night I was reading some Canadian World War I veteran's recollections and was reminded that during 1914-18, 25% of English men enlisted.

Think about that.

One reason we went for massive deterrence in the late '40s and '50s was that it was deemed to expensive to keep a standing army big enough to deal with the USSR army.

Nukes were cheaper.

Right now, our standing army is 4% the size (proportionately) of what it was in World War II (and less than 1% the size of the British Army in 1914-18).

Yet people say it's too big, or at any rate, needs to be no larger.

Money is not the issue. We have lots of that.

Robert Duquette:

"Is that a reason to feel good about the budget deficit?"

I try not to work on emotion here. The amount of Federal debt that ought to be outstanding is a question of prudence. The amount is clearly greater than zero, because federal debt securities are the basis of our currency, bank reserves and insurance company capital as well as the liquid reserves of many of our trading partners. Furthermore the Federal balance sheet contains substantial assets that are not monetized, such as millions of square miles of land and offshore mineral rights. What is the value of the CVN Ronald Reagan? $10 billion? Of our fleet?

"What everyone is leaving out is that the national debt is on top of record consumer debt and record trade deficits. These trends are not going to get better going forward, but worse."

I am not sure why you are adding consumer and federal debt together. You get a bigger number that way. But, unless there is an Argentina style melt down I do not know what the relevance of the addition is.

The trade deficit is a double count. If goods are sold into the american market and the proceeds of sale are not used to purchase american goods, they are used to purchase securities, most often Federal treasury debt.

Jeff Guinn:

"Thank you very much."

You are most welcome. It was an educational exercise.

Yeah, great post Mr Schwartz.

Quite educational.

Harry:

"Starship Troopers" aren't so very far away...
No need for million-person armies when every combat-arms soldier is the equivalent of a WWII infantry company.

Although, that won't help us through this rough patch, during the next ten - twenty years.

I'm just glad I put my time in during a period of comparative peace.

Gotta look after the conquered territory after the army surrenders.

Target acquistion is the name of the game, and we're not very good at it, and technique isn't making us that much better.

From Aegis cruisers that cannot recognize airliners to infantrymen who cannot recognize 'insurgents' to airport screeners who cannot detect shoe bombers to presidents who cannot recognize who the enemy is, the problem is target acquistion.

We already have the explosives to blow everybody away.

Sure, for America, the problem has come to be that of Alexander, but in the future, what if only two or three soldiers need to be on any patrol ?

We won't need hundreds of thousands of people to occupy and administer a hostile country if one soldier could take out squads of insurgents, and one platoon could clean out Fallujah.

With camera-equipped drones circling areas of interest 24/7, we'll come to be better at identifying an enemy hiding within a population.

"I am not sure why you are adding consumer and federal debt together. You get a bigger number that way. But, unless there is an Argentina style melt down I do not know what the relevance of the addition is."

Because, in the end, the Federal debt is the consumer's debt. All debt eventually has to be paid back. Where will economic growth be generated when an increasing percentage of income will be needed for debt service? What do you think the rising interest rate environment will do to the debt service burden of the Federal budget, not to mention the 20% of homeowners with variable rate mortgages?

"The trade deficit is a double count. If goods are sold into the american market and the proceeds of sale are not used to purchase american goods, they are used to purchase securities, most often Federal treasury debt."

If the proceeds purchase American goods, then they employ American workers who pay American taxes. If they purchase Federal treasury debt, they don't. The debt is a future tax obligation for the workers who aren't being employed by those proceeds.

Debt is all fine and good as a financial tool. Prolonged reliance on debt to fund a level of current consumption that cannot be maintained by current income is a recipe for financial disaster. There is no political will within either party to balance the Federal Budget or to deal with the upcoming entitlement shortfalls.

Michael,
I guess I will stay in character as the blog pessimist, but I don't think that we could ever get to the point where 1 platoon could pacify an entire city. It is not just a matter of locating the enemy and killing him. Even with perfect intelligence, a single soldier can only pay attention to one target at a time. If a mob of insurgents rushes the soldier, they will overcome him before he has a chance to kill them all. You need to clear and secure an area at a time, and that means positioning troops to defend the area taken while other troops move into new areas. There is a limit to how small a force can get, and that limit has to do with how many human decisions have to be made.

Quite right.

DoD is attempting to use some abstruse algorithms developed to manage currency trading to figure out the correct mix and force level for that sort of thing. (The only reason I know about this is that a friend of mine sold it to them.)

I don't see how a photo drone can discriminate among targets, especially in the kind of combat we're in.

Who's the more valuable target anyway? The kid with a rocket launcher or the imam recruiting him?

Where were our occupying troops for the USSR & Eastern Bloc in the 90s?

robert:

After subtracting all of that debt from our net worth there's still trillions left over, even before you consider the value of our 300 million citizens.

Since we didn't conquer, we didn't get to occupy.

Then where are the regimes?

"even before you consider the value of our 300 million citizens."

Those are the guys with all the debt.

Robert:

When a doctor graduates from medical school she may have several hundred thousand dollars worth of debt. A bum has none. Who is in a better financial position.

Of course this comparison doesn't quite work, because if America is the doctor it has just graduated with savings equal to four or five times its salary.

Fell of their own weight.

Yes, so will the remaining totalitarian states. Infantry isn't needed.