Which Program Is The Efficient Use of Tax Payer's Money: Defense or Entitlement Programs?

With the budget ceiling deadline coming soon on August 2nd, Obama is meeting with Congressional leaders to find some kind of solution on the real issue of reducing the national debt. So far, no deal has been reached. Some are pointing fingers at House Speaker John Boehner for walking away from $ 4 trillion deficit reduction deal. However, John Boehner did the right thing by walking away from this "grand bargain" because Obama reneged on the deal by insisting on more taxes and withdrew his support for entitlement reforms:

The White House dished out the spin that suddenly the Tea Party crowd had nixed a deal. In reality, the White House had upped the ante on taxes. A Republican House aide told me that the White House “started to backpedal on entitlement reforms too.” He explained, “They [the White House] had started to go back on some of the Medicare and Medicaid reforms they had previously said they were ok with.” In other words, either the White House never intended to present a viable grand bargain, or, if Obama did, the left got to him. 

The Republicans insist that they can reduce the deficit without raising taxes by simply cutting the budget. However, the Democrats insist that they can turn the economy around by raising taxes, keeping the status quo on entitlement programs and slashing the defense budget. 

It isn't a surprise that Democrats want to raise taxes and preserve entitlement programs. It isn't surprise that they want to make deep cuts in military and intelligence programs. But their insistence on cutting the defense budget is unrealistic and stupid since no one disputes that entitlement programs, in the long run, will increasingly consume a larger share of the United State's income. At some point in the future, the only thing can spend money on is entitlements and we won't be able to spend money on anything else such as education, defense, transportation, or anything else. The Democrat's denial of our country's dire need for entitlement reform is dangerous for America. 

The Democratic position to save entitlement programs at any and all costs at the expense of our nation's national security at a time when our President has engaged in another war on humanitarian grounds is illogical and unrealistic. You can't simultaneously maintain entitlement programs and make cuts in defense spending while keeping our military in Iraq, Afghanistan, Libya and other places around the world. Yet, the President and the Democratic Senate insist this is possible. But it isn't.

The liberal and progressives want to reduce what we spend on the military in order for us to afford the entitlement programs we have. One blogger, Omri Ceren, points out that this approach to fixing the economy shows that Democrats are incompetent on the economy because they're pouring the taxpayer's money into programs that will not help the economy or reduce the debt:

In fact, everything else being equal, Democrats are politically and institutionally inclined to divert resources to the least efficient sectors of the economy, which is where their permanent constituencies have quite literally set up shop. Those groups — construction unions, green tech companies, etc. — not coincidentally, require government intervention to remain financially viable. That’s the deal they have with the Democratic Party. Democratic politicians insulate uncompetitive constituencies from the market via onerous regulations and the occasional wave of government fiat. In turn, those groups mobilize electorally for Democratic politicians. So we end up in a situation where progressive groups targeted for Democratic largesse are in sectors that have been most distorted by government intervention. Maybe that’s justifiable on social grounds — unions are the bedrock of the middle class, green tech will save us from rising oceans, whatever — but it’s flawed economic policy.

I'd like to point out that while defense and intelligence programs are not known for being efficient spenders of taxpayer's money but that is acceptable because we don't look at the defense industry for economic prosperity but for national security.  Which is why we we will spend money on national defense regardless of how the economy is doing. As a result, the tax payers are willing to tolerate such the excesses of military spending because its the one part of government that produces tangible results of having the best and most advance military on the planet. The tax payer knows their money is being put to good use even the money isn't handled more efficiently as it could be. 

Omri Ceren explains that if Democrats wanted to put tax payer money to good use while minting their support for bigger government, they put it in defense spending: 

The defense sector isn’t completely efficient and defense procurements are notoriously Byzantine. But at least it’s not a part of the economy that’s designed by regulation to be economically inefficient. The defense spending multiplier is usually pegged at somewhere between .05 and 1, which isn’t great but is a lot more than the zero we get from funding education and plugging up state budget shortfalls. And we can be certain that defense appropriations will be spent quickly on stuff, which is what Keynesians are looking for anyway. In the worst case, we can just ship weapons over to our NATO allies, who — thanks to decades of propping up their welfare states at the expense of their militaries — are now running out of bombs to drop on Libya. At least they’re guaranteed to be used.

In contrast, entitlement programs are a poor investment for American taxpayers. These programs are designed to be inefficient. like most government programs but they also produce inefficient results. American doesn't get benefit from these programs financially or socially. These programs get bigger and bigger and require more and more money to keep it afloat. Furthermore, many of these programs produce dependency on the government rather than self reliance on one's own skills, education and character to be financially independent. 

A blogger named Ace gives us the best explanation of why entitlement programs are economically and mathematically unsustainable: 

It is not wrong to wish that every citizen have free health care, free food, free housing, and some money to spend even if they have no job. It's not wrong; it's just impossible. Health care is a service that has huge costs associated with it. These costs cannot be "magicked" away just because we find them inconvenient. Food must be grown, transported, packaged, and prepared -- all costs that must be accounted for. Shelter does not precipitate out of thin air. We cannot delude ourselves into thinking that "the government" can provide these things to us at no cost, because "the government" must pay for these things just as individuals do, and because the government has only one source of wealth -- the citizens -- that's where it must go for the money. So if Bob is given 'free' health care, 'free' food, and a 'free' apartment, the government isn't paying for it; Tom, Jane, Howard, and Sue are paying for it. And at a vastly inflated cost due to the innate governmental inefficiency that dilutes every dollar that passes through their hands. Soon the social welfare costs eat up the money intended for good and necessary governmental expenditures like the military, the police, and infrastructure. Social welfare becomes a beast that eats everything.

Its not just that these entitlement programs are inefficient but it has given life to liberal/progressive programs, causes and organization that survive directly or indirectly from entitlement programs. In fact, Omri Ceren, points out that the taxpayer's money often times doesn't go to the very programs the democrats claim they are defending: 

But academic Keynesian economists don’t direct stimulus funding. Elected big government liberals, beholden to permanent Democratic constituencies, are those who actually make the decisions. So as a matter of policy, if not economic theory, money ends up getting diverted into progressive causes rather than into expansionary programs.

In the end, there is only one true solution to the deficit problem. The Republicans know it and the Democrats refuse to believe it because they're blinded by the special interest groups that they're beholden to. 

Democrats insist that America should keep on investing in these entitlement programs and remain loyal to these very programs that are bankrupting us. They demand that we make no major or substantial changes in the programs that are the main drivers of our national debt while taxing the rich and cutting defense in order for us to afford the entitlement programs we have because its they only way they can keep these liberal/progressive organizations afloat. 

The Democrats plan for reducing the debt is really just accelerating our downward spiral towards bankruptcy by shoveling more and more money to keep entitlement programs going. What this really means is that they're ballooning the deficit just to keep the liberal/progressive special interest groups happy and financially sound while making it harder to afford other government programs in the future. Not only will we not be able to afford defense spending, but other government programs.

Americans can accept the the fact that our government will use taxpayer money inefficiently if we get a major benefit from these programs. However, Americans cannot and will not tolerate taxpayer money that is being used for programs that produce little or bad results while it benefits liberal and progressive organizations.

Its obvious that the Democrats haven't learned their lesson from the Republican victories of the 2010 midterm elections. Its clear that they need to learn those lessons again in 2012.