The Economy And The National Security State

The corporate media and front groups for big business and political parties leave out what we believe are important details. That’s why at It’s Our Economy we focus on articles that go deeper into current news. This week: the real national security budget is bigger then acknowledged, the growth in GDP before the election seems to be due to government spending being sped up, the poor don’t live well as the right wing claims, and the U.S. is a ‘managed democracy’ or polyarchy where the people do not rule.

Economist David Cay Johnson digs deep to show that while attention is focused on the President’s budget proposal for military spending and cuts to Social Security and Medicare, a large sector of spending is being ignored. That is total spending on the National Security State and it is as much as 2.5 times the base Defense budget; that’s $1.3 trillion not the $525 million the corporate media trumpets.

And labor economist Jack Rasmus reports that GDP was artificially inflated in the third quarter last year (just prior to the elections) by record levels of federal defense spending. Was this to make the economy look good for the election?  We may never know the reason for this rapid spending of government funds. It might not had even been noticed, but on the other side, in the fourth quarter, the GDP declined.  Why? A rapid drop in military spending. The shrinkage of GDP in the fourth quarter had people looking more closely at the numbers. Rasmus still cautions that we are headed for a double-dip recession in 2013-14. A recession can be mitigated by job creation, but unemployment is rising and technology is permanently destroying middle class jobs. The likelihood of a recession is increasing because of an unprecedented drop in federal spending. As we warned, experience shows that cuts in spending during an economic collapse makes a long and deep recession more likely…


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