How to find $168 billion in annual spending cuts while saving the world

by Stephen Cobb on February 23, 2014

Allow me to explain where the U.S. federal government can find $168 billion. That could be a $168 billion cut in annual spending from the current budget, or $168 billion of spending shifted to more worthwhile endeavors. It could even end world hunger while giving us all tax rebates.

Lately, I’ve been looking at a lot of numbers related to safety and security, like how much money we spend on fighting wars and cyber crime, how many people die from different causes, and so on. I was inspired to research such things by a comment made to the press by my friend and boss, Andrew Lee, CEO of ESET North America, who was asked what he thought of General Keith Alexander’s keynote at Blackhat last year. (The General spoke about mass surveillance by the National Security Agency (NSA) as revealed by former federal contractor Edward Snowden.) Andrew said that we should be asking ourselves if the levels of surveillance now being revealed constitute a proportionate response.

Personally, and I stress that this is my personal opinion, I think that the $50 billion my country spends annually on spying is way too much (BTW, for new readers, “my country” = the United States of America, the country of which I have been a citizen for more than 30 years).

To put that $50 billion spend on spying in perspective, it dwarfs the total spend on life-saving health research by the federal government is $30 billion (that’s funding for over 300,000 researchers at more than 2,500 institutions). I’m pretty sure that $50 billion is about the same as the operating expenses of Google and Microsoft combined. Aside from the sheer amount, the challenge of oversight and efficiency across multiple agencies is huge, leading to some terrible decision-making, as revealed by some of the Snowden papers.

But let’s leave the spy budget aside and consider what we spend to defend our country. Suppose we were to decide that the appropriate annual budget for defending America is twice the total annual military spend of our two closest rivals, China and Russia. Those two countries spend $166 billion and $90 billion respectively, or $256 billion combined; double that is $512 billion, which is $168 billion less than the $680 billion that the U.S. spends.

military-spendingSurely we can adequately defend America by allocating twice what China and Russia spend combined. Still nervous? Want a comfort zone greater than 2X?

Consider the $272 billion annual military spending by our six strongest allies (UK, Japan, France, Germany, Australia, Canada). Figures are from SIPRI Yearbook 2013.

Want more perspective? With our $168 billion savings we could drastically reduce the deficit, lower taxes, and still have enough left over to END WORLD HUNGER (estimated cost of that is $30 billion).

So, let’s recap, the Cobb budget plan for America would:

  • Spend more on defense than China and Russia combined
  • End world hunger
  • Reduce the deficit
  • Enable lower tax rates

What’s not to love about that?

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