2) "The reality is it is not our unwillingness to tax, but the federal government’s willingness to maintain sizable mandatory spending commitments, brought about by the general public’s sacrosanct treatment of certain transfer payment systems." That seems to be doing a little slight of hand of Smith's argument. The assumption you're making is that we are fine with the tax levels we have, and that if it only weren't for welfare payments, we'd pay for all our military spending. When it seems equally likely, if not more so, that absent our welfare commitments, we'd lower taxes even further and continue to skimp on military spending. Or am I misunderstanding you here?
1) And thank you for the link! I did account for the stimulus payments in the article, but you're right, I didn't account for the increase in unemployment benefits due to the recession. In that case I did overstate the income security point, it being 2.5% of GDP and not 7.5% of GDP like I had assumed. Heath did also see a moderate increase (more people on medicaid), but the point is largely the same, which is that the vast majority of federal spending is some kind of transfer payment or welfare program (which I don't mean to demonize, just to point out it's not the kind of "public good investment" Smith talks about.)
2) I see what you're saying here; the point I was trying to make was that a smaller government without large welfare liabilities would be more likely to fund it's military to sufficiently ward of Tamerlanes. Because welfare and social security are laws/commitments, they're mandatory spending, meaning when there is a budget shortfall the discretionary spending gets cut. Military and many other public goods are discretionary, meaning a large welfare state puts these things at risk. That's why, for example, Obama cut military spending and funding for programs like NASA—the Republicans refused to raise the debt ceiling so Obama had to cut into discretionary spending programs. The main point I was trying to make with that section is that a large active state actually hurts a nation's defense against Tamerlanes because military spending is almost always more likely to be cut before welfare payments when budgets are tight, especially in the US where cutting social security is one of the most toxic political positions one can make. I remember a stat (and I could be getting this wrong so take it with a grain of salt) that in the 60s, the ratio between government transfers and government investment (in science, military, education, roads) was 1:2. Now it's 2:1 in the other direction. And with an aging population this will only get worse.
That was a lot, but hope this clarified some things :)
Thanks for introducing me to this principle, I hadn't heard of it before.
Two thoughts:
1) You use 2021 spending data, which skews thing, since the federal government spent enormous amounts on unemployment during that year because of COVID. Might be useful to look at this graph of the last 5 years: https://datalab.usaspending.gov/americas-finance-guide/spending/trends/
2) "The reality is it is not our unwillingness to tax, but the federal government’s willingness to maintain sizable mandatory spending commitments, brought about by the general public’s sacrosanct treatment of certain transfer payment systems." That seems to be doing a little slight of hand of Smith's argument. The assumption you're making is that we are fine with the tax levels we have, and that if it only weren't for welfare payments, we'd pay for all our military spending. When it seems equally likely, if not more so, that absent our welfare commitments, we'd lower taxes even further and continue to skimp on military spending. Or am I misunderstanding you here?
Thank you for reading and replying!
1) And thank you for the link! I did account for the stimulus payments in the article, but you're right, I didn't account for the increase in unemployment benefits due to the recession. In that case I did overstate the income security point, it being 2.5% of GDP and not 7.5% of GDP like I had assumed. Heath did also see a moderate increase (more people on medicaid), but the point is largely the same, which is that the vast majority of federal spending is some kind of transfer payment or welfare program (which I don't mean to demonize, just to point out it's not the kind of "public good investment" Smith talks about.)
2) I see what you're saying here; the point I was trying to make was that a smaller government without large welfare liabilities would be more likely to fund it's military to sufficiently ward of Tamerlanes. Because welfare and social security are laws/commitments, they're mandatory spending, meaning when there is a budget shortfall the discretionary spending gets cut. Military and many other public goods are discretionary, meaning a large welfare state puts these things at risk. That's why, for example, Obama cut military spending and funding for programs like NASA—the Republicans refused to raise the debt ceiling so Obama had to cut into discretionary spending programs. The main point I was trying to make with that section is that a large active state actually hurts a nation's defense against Tamerlanes because military spending is almost always more likely to be cut before welfare payments when budgets are tight, especially in the US where cutting social security is one of the most toxic political positions one can make. I remember a stat (and I could be getting this wrong so take it with a grain of salt) that in the 60s, the ratio between government transfers and government investment (in science, military, education, roads) was 1:2. Now it's 2:1 in the other direction. And with an aging population this will only get worse.
That was a lot, but hope this clarified some things :)