Friday, October 10, 2008

Resolving the Financial Crisis - Step 1

The brand new 2009 U.S. defense budget – a World War II-level extravaganza nearly the size of last week’s bailout of the rich – that was slipped through v-e-r-y quietly in the midst of the financial meltdown is the most obvious source for funding to deal with that meltdown. Instead of a frenzy of military spending equivalent to the total defense budgets of the whole rest of the world that builds nothing of value for society and, worse, tempts us to undertake all sorts of ill-advised adventures, our U.S. national offense budget should be downscaled to a legitimate defense budget. That is, the 2009 budget should be thought through again, with the explicit requirement of cutting, say, one-third, leaving $200 billion that could be applied to emergency small-business loans or helping people facing foreclosure stay in their homes or some other specific project.

Would this solve the financial crisis? Of course not. The point is to make a dramatic gesture about new national priorities but a gesture of substance that would make a significant contribution to the needs of a real group of disadvantaged people (specifically not a group of millionaire Wall Street types). To see a substantive policy decision giving real help to a specific group of common people would encourage all the rest.

It would also do something even more important. It would signal that the Government takes the financial crisis seriously enough to admit that it must alter its own behavior, that the adventurist party—the wars of choice, the construction of huge new military bases throughout the world—is over. Perhaps the American people would get the message that their own party is also over—that cutting back on the fun and focusing on rebuilding both personal and national finances is long, long overdue. We do not need a World War II-level military budget; we need World War II-style determination and sacrifice.

1 comment: said...

Global crisis is not only about companies of financial services. It is about common people as well. The ones with loans, credits, mortgages. The ones with jobs to preserve, houses to retain, families to maintain, relatives to support, children to send to colleges. The ones with budgets, where every cent has its destination. How many of the people lose jobs, cars, homes? How many have to cut out the spendings, which they considered a normal part of their lives? -