Guns or Butter?

http://click2.thesovereigninvestor.com/t/Cg/AA/AA/AA/AA/MzEzMTM2fGh0dHBzOi8vcHJvLmJhbnlhbmhpbGwuY29tL20vNjYyMDYyP2VtYWlsPXRlc3QlNDBleGFtcGxlLmNvbSZhPTEwJm89MCZzPTAmdT0xJmw9MzEzMTM2JnI9TUMyJnZpZD05M2Jybl8mZz0w./AQ/ld3M

Shortly after becoming Roman emperor in 193, Lucius Septimius Severus disbanded the imperial household’s Praetorian Guard.

severus(This was wise: They had murdered the last few emperors, auctioning off the position to the highest bidder.)

Severus replaced them with veterans of legions he’d led.

To ensure they didn’t turn on him, he increased all legionnaires’ base pay from 900 to 2,000 sestertii a year. He also increased the military pension, the aerarium militare, from 12,000 to 20,000 sesterces. Then, embarking on a series of foreign wars, Severus increased the size of the Roman army by 15%.

To pay for his new endeavors, virtually all the taxes raised by the imperial government annually went to the military … about 2.5% of the empire’s gross domestic product (GDP).

But it was never enough, and taxes went up every year.

The civilian population soon came to resent this.

So Severus did what rulers in a pinch always do: He debased the Roman currency.

When Severus acceded to the imperial throne, the silver purity of the denarius was 81.5%. Three years later it was down to 54%.

The price of grain tripled accordingly.

Two hundred years later, the empire was gone … unable to pay its mercenaries, who proceeded to sack Rome and dethrone the last emperor.

Fast-forward to today, and I’m afraid our government is marching the United States of America down this same damning path…

Look at the evidence.

The IRS collects about $1.1 trillion in individual income taxes every year. The annual cost of the U.S. military, including pensions, interest and veterans’ health care, is about $1 trillion a year. (Hence, when you file your taxes on April 18, know that almost all of it will go to pay for our military.)

So, just like Rome, all of our annual income tax payments effectively go to the annual military budget.

Our military expenditures amount to $57 million per hour — 3.3% of GDP. Remember, Rome’s was 2.5% of GDP before it collapsed.

President Donald Trump, like Emperor Severus, has proposed raising the military budget another $54 billion and has expanded our efforts into further areas … recently launching 59 Tomahawk missiles against the Assad regime in Syria at the cost of $60 million.

I want to know your thoughts: Do you think our elected officials are leading us down the same path as Rome?

But before you comment … consider the following.

Five Alarming Facts

  • U.S. military expenditure is bigger than the next seven countries combined, including Russia and China.

Do we have enough guns already? Or must we do without even more butter so we can keep growing our military — even if it means more deficits?

  • Americans are 4% of the global population, but our military spending is 37% of the global total.

Do we have enough guns already? Or must we do without even more butter so we can keep growing our military — even if it means more deficits?

  • Our annual military tab exceeds the combined budgets of all 50 states for health care, education, welfare and safety.
  • The U.S. military has almost as many administrative personnel (1,014,000) as active-duty troops (1,300,000). Of those administrative personnel, over 70% are either contractors or civilians.
  • One of every four dollars spent on the military goes to administration. Two of every three of those administration dollars go to civilian employees or contractors. Those contractors comprise about 25% of civilian military personnel but consume 50% of the civilian workforce budget.

Now, keep in mind that none of these figures include the billions spent every year on weapons procurement from U.S. defense contractors such as Lockheed Martin, Boeing, Raytheon and General Dynamics.

And I haven’t even mentioned the enormous financial waste that’s the natural result of being an institution that’s seldom questioned, much less criticized.

The “War on Terror” Is Different … in Many Ways

Unlike all other military conflicts in U.S. history, the “war on terror” and its offshoots have not entailed any immediate financial contributions from U.S. citizens.

It all goes on the national credit card: our federal debt (which is quickly approaching $20 trillion).

Our post-9/11 wars in Afghanistan and Iraq, for example, were fought on credit: $4.8 trillion, plus $7.9 trillion in interest. Eventually the interest cost will exceed the cost of the wars themselves … interest payments that accrue to Treasury bondholders in places such as China.

As George W. Bush administration economist Alan Viard put it: “When you borrow to pay for war, you feel it less.”

It’s like the shift from conscription to an all-volunteer military: The burdens of war are still there, but most of us never see them.

It’s all abstract. We don’t have to pay any extra taxes. We’re not pressured to buy war bonds. We’re not collecting bacon grease and growing victory gardens.

But eventually our descendants will have to pay the bill … either through taxes or immediate cuts.

It’s already started, in fact.

The new Pentagon budget will be paid for in part by eliminating critical federal funding that’s helped restore my beloved Chesapeake Bay. Not long ago, saturated with pesticides, fertilizers and livestock manure, its waters could no longer sustain its famed crabs and oysters. Since a lot of this runoff came from upstream in Pennsylvania and New York, only federal intervention could get the restoration ball rolling.

Now it will end.

I know that oysters and steamed crabs might not mean a lot to you. But it means a lot to me, as well as to the hard-bitten Tidewater men I know — a conservative lot if there ever was one — who are appalled by the cut.

Many similar cuts are in the works. It’s only a matter of time before one of them lands in your backyard.

But even after all these cuts, the new Pentagon budget won’t balance. The deficit will keep going up … beyond $20 trillion.

We Must Choose

Do we have enough guns already? Or must we do without even more butter so we can keep growing our military — even if it means more deficits?When I studied economics, we learned about the “guns and butter” model (as seen to the right).

It’s a straightforward application of an empirically proven fact: You can’t have everything. You must choose. If you don’t choose now, someone will have to choose in the future.

Again, I would love your input on this matter … because, to be frank, I’m concerned about our country ending up like Rome.

My father, Robert Bauman, and I sat down and talked about military spending in an interview about two years ago, and how it robs you of $10,300 every year. Take a look at the video for yourself.

I understand why the U.S. has a large military. We’re the world’s cop.

But … can we keep it up?

Do we have enough guns already? Or must we do without even more butter so we can keep growing our military — even if it means more deficits?

Are America’s elected officials marching us down the same path Rome took nearly 2,000 years ago? Will our empire cease to exist in 200 years?

I would appreciate your feedback on this.

If you scroll below, you have a chance to comment and read feedback from your fellow Sovereign Investor Daily readers.

Kind regards,

Ted Bauman
Editor, The Bauman Letter

P.S. After hundreds of hours of rigorous backtesting with 10 years’ worth of data, nothing else comes close to topping Smart Money Alert’s level of performance and safety. Not even Warren Buffett’s Berkshire Hathaway, Jim Cramer’s famous Action Alerts PLUS portfolio or most high-end hedge funds were able to beat it. And my system is so simple that even a 12-year-old can use it. Click here to learn how this new research service can help you retire without financial worry.

  • Cody Delong

    It’s insanity, (or corruption) to keep pumping nearly all our nations wealth into the military (whom I love and respect) when we need roads and bridges and jobs for joe average, not more for the military contractors. Infrastructure, education and the environment we all need to live in, should get increased spending, not the already bloated military budget.

  • Robert Stone

    Mr. Bauman, I admit my own bias as a retired military servicemember. What I think you have failed to consider is that in the past 30 years, the military budget has been reduced significantly at the expense of those who risk their lives in service to our country. Secondly, the Rules of Engagement have been managed by the politicos over the past 15 years which have allowed the wars in which we are involved to be protracted beyond what should have been limited engagements. I do not argue that civilian oversight of the military is a necessary function, but when those civilian overseers declare those wars, then fail to provide means and opportunity to win those wars, the military budget becomes excruciatingly overwhelming. That is so, not because we don’t need a modern military, but because the civilians think they know the business of war better than those who conduct it. The Johnson administration and the Obama administration meddled immeasurably in the conduct of the wars that they oversaw requiring military leaders to be involved in the conduct of political policy rather than in conducting the war and bringing it to a just end. Thirdly, I wonder if you would continue the path upon which those politicians have ventured by cutting budgets, minimizing the weapons necessary to conduct a just war (Just War Theory is my rationale), and putting our national security and the lives of our military servicemembers at risk? And finally, we must also not forget that China and Russia are not global peace leaders, but they are continuing to spend more on military growth and increasing research, capacity, capabilities, espionage costs and other threats to us and our way of life. Those countries, along with their surrogates, are a growing threat to who we are. So, I conclude this limited SWOT analysis by asking, with the desire to maintain our lifestyle, albeit challenging as you have expressed in so many previous letters, what would you give up in order to be able to live within the margins you have proscribed? Sincerely, Robert Stone, CDR, USN (Ret)

  • Cornelia Sieber

    I think you are absolutely correct! This ‘no-war’ president has to be stopped somehow, from sabotaging our future for short term glory. How is the best way to shrink the military in the quickest way possible?
    Cornelia

  • David Crellen

    You’re referring to the Roman Empire and the emperor a dictator. We’re not quite there, yet. But we do seem to be in an era like the closing years of the Roman Republic. Our congress and senate could be a parallel of the debates and conflicts that Cicero and his fellow senators endured toward the tumultuous waning years of that republic. Public finances, taxation, and, yes, military expenses were primary causes of its fall into a dictatorship but Caesar, a strong, narcissist character was a major contributor to the demise. Sound familiar?

  • Mack Lowery

    Dear Ted…you are so Right-on. Our military spending is completely out of control not too mention the waste and the non value factor. It is all about power and big money making more money at the expense of you and me. So many important and valuable projects such as your Chesapeake Bay will be cut in the name of making us safe. Not only is the military far too expensive but we often don’t even accomplish our goals as in the case of Iraq. Truth is we often don’t even align ourselves with the Right side.

  • Kevin Dooley

    There are monumental shifts taking place, in all this Waste and Winner’s and Looser’s pocket, in my opinion 20 – 30 % of all government spending, along with stacking their pension funds..not to mention family and friends…i.e. Michelle O’s , Canadian friend who provided the crashed Medical Care website….$ 1,000,000,000.00 Kick back..and thousands and thousands more each and every year in power…Slush fund after slush fund using every conceivable gov’t run program whether federal or State or Local…Billions daily, not to Mention Fed Reserve or Bank and Friends….hey the Printing Press $$$$$$ has been running 24/7 till now….I am constantly amused each time I spend a 100 or 50 dollar bill and the clerk checks it’s authenticity.. while Barrak and Bill have stole Fort Knox….we will be fine…..when the light shines on the real crime….Kevin

  • Tom Morrissey

    Hi Ted, I believe this to be one of the most important threats to the future of our (still mostly) free nation. In discussions with so many people I know, if I’m not in-favor of every new entitlement and government giveaway, I’m branded a bad-guy. And yet none… none of the people I know who are in-favor of this ridiculous spending have any concern for the national debt. To them I might as well be talking about the eventual destruction of the sun and our solar system. It’s so far away from their thinking. And when pressed, their simple answer is that the “rich” need to pay more of “their fair share.”

    I honestly fear that our government-regulated educational system has succeeded in every way to remove any ideas of individualism, liberty, freedom from government, etc. in the minds of our younger generation. It has worried me that my kids didn’t learn the basics of the Declaration of Independence and US Constitution, but they certainly know a lot of names, dates, and events 😉

    As a libertarian I try to engage people I know to think more and look beyond today, but it is a hard battle when the government promises “free” everything if you “vote for us.”

    I’ve been very glad to find the Banyan Hill writers and thinkers. Thanks for bringing to light such a critical subject. Now what do we do to protect our hard-earned earnings from the high spenders?

  • George Escola

    Ted, thanks for another great article. Empires must do what empires do, and the US is no exception. The US demize will probably not be exactly like the Roman’s, but, with a hat tip to Mark Twain, it will probably rhyme. I currently live in Central America, but if nukes start flying around, I might need to move further south – South Africa might work. Keep up the good work!

  • James Green

    Excellent article!
    Shows what we are facing today.

    And it demonstrates why the Founders were inspired NOT to have a standing Army in the USA (only a standing Navy).
    The US Constitution does not have a provision for a standing Army.

    Even General Dwight Eisenhower warned if we allow a standing Army to exist they will always be looking to pick a fight.
    Which is exactly what we have done for the last few decades.

    We are putting our Grandchildren in *******!
    And it must stop!

    We have Troops permanently stationed in “154 nations!”
    That is absurd!

    Our presence abroad has caused much hatred and bitterness toward America, that did not previously exist!
    It has done us little good.

    We need to bring ALL the Troops home, balance our budget, stop being the Police to the World…
    And begin preparing to be able to defend our own shores if the need arises.

    A bankrupt nation will be very vulnerable!

    Kind regards,
    Captain Jim Green
    Profits Unlimited Subscriber
    Retired Airline Pilot

  • Ellen Waldman

    I choose peace and whatever it takes to maintain it! Forget the war machine and take care of US citizens first.

  • C Jean

    Defence is good, however paranoia is unhelpful. I am not in favor of this much spending on defence as described here. It is not that I object to paying salaries or pensions, because they have to be paid in any case, no matter what route is taken. I don’t have a problem with the route being via taxes for some jobs. If it is via industry/commerce, that is fine with me too, but pensions are still covered somewhere along the line by the prices we pay for goods and services. My problem is with the proportion of our spending that is on military. I love America; but no one asked us to be the world’s cop. We have taken on that role in many cases to protect our own economic interests abroad, so we shouldn’t kid ourselves that we are this amazing humanitarian agency when often we do not even treat our own population humanely. I share your concern that our present path could make us go the same was as the Roman Empire.

  • Aaron

    I’m concerned. Its as if Trump is ready to take on the world. That’s not how he can “make America Great again.”

  • deltadave

    Great article, Ted. I’m not sure if the parallel to the fall of Rome is an exact fit as it seems that currency debasement wars are not just limited to the US. That said, I read a recent ranking by historians of the best presidents and the warriors seem to dominate. This is bigger than Eisenhower warned us about. The military industrial complex is out of control and its influence has permeated our culture as any criticism might dishonor our troops. I had hopes that Trump would show us a pragmatic, non-interventionist side. Last week was a complete reversal after raining Tomahawks ineffectively on a sovereign nation’s airfield, then deploying the big toy to destroy the tunnels dug by the CIA in the ’80s. What next? 150,000 ground troops in Syria and the return of nightly transports of metal caskets? Isn’t the greatest dishonor to accept our losses in blood and treasure in the name of patriotism?

  • Thomas Waldenfels

    “We’re the world’s cop.”

    Well, that’s the problem, now, isn’t it?

  • iliad007

    This military budget is a major reason this country is $20 trillion in debt. Forget about food-non-GMO, we’ll eat bullets to get our daily lead dosage. No matter how you look at it, the US is fucked. This is a great time to find another country to take up citizenship.

  • disqus_KxAHnCo4Tu

    Eisenhower warned us about the military industrial complex….and that they would ruin the country….they have.
    We do not need to be the worlds cop. Do we really care if Mrs Muhammad can drive a car and get out to vote?!. If YOU DO, then YOU go to that country and try and lobby for Mrs Muhammad’s rights. You will be jailed within 5 minutes. The USA does not owe any one the right to try democracy. Remember Viet Nam?….Supposedly 50,000 Americans went over to that country and DIED……for what?…for Democracy?…..The people of Viet Nam were mostly subsistence farmers, except for the corrupt elite who were in the cities and wanted to get rich like the French who treated Viet Nam like their colony. There was no need to go to Viet Nam because the people really did not care if they were under Democracy, a King, Socialism or the Wiccan religion!!. The proof of this is that the Viet Namese army never really fought the Communists. US Advisors would turn around at the troops there were “leading” and the soldiers were cowering in their fox holes. This was reported from the mid 60s, onward. Thats why we sent US troops over there as the indigenous people would not even fight the invaders in their country. So, if the local people don’t care,.. why should we?….ANSWER: the Military industrial complex gets to have their toys funded. Wars make millions for the industrialists…..WE did the same in the middle east. US interests were really US business interests. We can shrink the Military budget by 75%….balance the budget…..and keep out of foreign entanglements as George Washington warned us about,.. 300 years ago….Its time to tell the 1%ers who come from the industrial leaders who run the country…NO MORE….I remember a war protest movie form the 1960s….” suppose they gave a war and no body came?”…..The mantra, today, should be..” Suppose they gave a war and the Americans refused to pay for it!”…You would see how quickly there would be nor more wars….IF the Sunnis and the Shiites want to kill each other…what of it?….Why should America be the Arbitrator?….The Turks hate the Greeks since the atrocities of WW1…….In Africa, after the Western European powers left the African countries, did the people join in peace?….NO there were ethnic wars and dictators rose to power….The answer is NON-Intervention…on the part of the USA….we are not the peace keepers…we are hypocrites going around the world….protecting US BIG BUSINESS interests….Turn off the spigot of money and it will all end…..Go to the web site non-intervention.com…see why the world hates us…its due to our hypocrisy……we go into a country saying we are here to help you and all we do is steal……..shame….

  • Chuck Potter

    The problem is that the facts in your article are not part of the general discussion in the daily news or editorials. Until there is accountability in our government and reasonable transparency we can only protest and vote. I do not see relocation as the answer. The only way we can make changes is by staying in the stupid game and shedding light in our own corner. We do this by walking our talk and investing in creativity and cooperation instead of sabotage and deception. I hope catastrophe is not what brings us together, rather common sense.

  • Richard Drakes

    I am reminded of a non published interview when a reporter asked Frank Zappa why he had been so critical of military spending. The reporter asked ” just who do you think will defend the country without the army?

    Zappa’s reply: “From what? The biggest threat to America today is it’s own federal government…. Will the Army protect anybody from the FBI? The IRS? The CIA? The Republican Party? The Democratic Party?….The biggest dangers we face today don’t even need to sneak past our billion dollar defense system….they issue the contracts for them.”

  • ALI KHAN

    U.S. does not own any money to the banker, federal reserve bank for example. the $20 Trillion depth can be remove with a stike of a pen. because all the wars U.S. fought were from the criminal bankers. WWI, WWII, all the wars including wars after 911 fraud, which was planed and executed by Isreail and there agents in U.S goverment such Bush, **** cheney, Rumsfeld etc…
    the 1913 federal reserve bank was fraudulently establish right after that U.S enter WWI and ever since the depth increased
    the Depth is just another Fraud, in fact these banker own U.S. around $32 Trillion.

    -leaving this country or any other country is not the solutions, expose these criminals and fight back. most of them are stain agents.

  • David Johnson

    I’ve watched our nation wage war for profit my entire life. Don’t see where any of it is good. We create conflict and rush to war to solve the conflict. Waste of money but it does make a few families and politicians rich . I look at the world and from my point of view the nation’s that are doing better are the ones we don’t mess with. Sadly we have become the bad guys, the evil empire. So many of our children get killed , maimed, mentally damaged and for no real reason other than profit for a few.

    I agree we are similar to rome and the fall of the Empire isn’t far away. At what point will folks have had enough of the corruption and realise we need to clean out the folks who are harming not only usa citizens but citizens from other nations as well.

    Bring our entire military home, yes some countries will struggle to define themselves but in the end that’s their job, not ours. I know mainstream will say we cannot just stop because the world will go crazy but to me it’s just more smoke and mirrors.

  • Hi Ted, I think you are being very optimistic with your 200 years idea for the survival of the US Empire. after all Septimus Sverus was 193 AD and the Roman Empire went down in 450 AD approx, but the Spanish Empire went down in 50 years (AD 1590). . Other Empires also went down much faster once the currency debasement had started. The Hapsburgs and the German Empire went down in less than 10 years. I think you also need to take into account you have a NASA forecast 100 year mega drought in western USA (12 states) already started; you have a wild boar runaway population explosion in 5 states in central USA (see Animal Planet) and also an antibiotic apocalypse culminating with a possible total population wipe out within 100 years!!! (Already happened before in South America 4000 years before the Incas.) This is all not to mention 5 to 10 years of CMEs (again see NASA) culminating in a mini-ice age lasting 100 years. I have a feeling that Mr Trump has no idea what he has on his plate yet. If he dares to take on China…!!!

  • Katzenjammer

    ‘ I have a feeling that Mr Trump has no idea what he has on his plate yet. If he dares to take on China…!!!’

    I have a feeling that Mr Trump has no idea… would suffice

  • Rodney Baldwin

    Some really clever comments & divining of USAs future here so I as an outsider in sunny Australia bring this to the discussion table!Firstly retired military man Robert Stone partly refuted a lot of the arguments against Americas defense of itself(& so others)whilst not disputing the unsustainable cost of such. Aly Khan provided a refreshing if badly mispelt take on the military industrial complex that a true patriot Robert Eisenhower warned of inc unconstitutional ‘standing armies’ that he as a great ex general realized would institutionalize war,& that insightful take encompassed the ELEPHANT UNSEEN in this room,which John F Kennedy & his attorney general brother Bobby warned of & lost their lives to via use of programmable stooges & Manchurian candidates like Lee Harvey Oswald & Sirhan Sirhan;that unseen behemoth is the Illuminati & its affiliates permeating every level of government & the aforesaid military industrial establishment & waxing strong in American life since the Federal Reserve Act in 1913(which decline in currency integrity is matched around a similar time & act in Australia).The USA is wise to withdraw from policing the world,though MUST push back decisively against communist Chinese IMPERIALISM that follows from Maos Party MANIFESTO IN 1941 since repeated by several premiers ‘to overtake the world economically & then militarily inc culturally’. However as Aly Khan indicated any financial gain or indeed loss is just a bleep on a digital balance sheet that can be altered at the convenience of the ‘BANKERS’ referred to,& who have bigger fish to fry than merely indebted nations,& the end game is in sight,which is George Bush seniors ‘New World Order’ & his quisling son,both MADE MEN by the Illuminati for dirty deeds done dirt cheap,& in George Ws case later overseeing the greatest false flag successful conspiracy in all of history ‘9/11’ which fulfilled many purposes as Donald Rumsfeld et al well knew,& one of those was test running new military technology in a joint Mossad & deep CIA black op!To any rational & enquiring outsider Navy Intelligence & the New York fireman & police along with medical teams were the true heroes here,& the formers entire investigative apparatus & personell were wiped out that infamous day so that further enquiry into the Pentagons lost 2.3 trillion ceased & the military industrial machine stepped up several gears to chase down RADICAL ISLAM! We now have in the world at large ISIS subhumans etc,though until those TRULY RESPONSIBLE FOR 9/11s atrocity of ruthless & precise planning on so many levels its ALMOST A MASTERPIECE are exposed to JUSTICE,then America can NEVER HEAL!To all you wise men who love your country,I say its no use counting the coins of ‘FREE TRADE’ when the MOTHER OF FREEDOM is being RAPED,& all currencies have been DEBASED!Rod J Baldwin