11% of Every US Tax Dollar Goes to War Contractors
May 7, 2018
Almost half of the military budget -- and 11 cents out of every tax dollar -- goes to corporations. Military contracts pulled in more than $300 billion in 2017. The average taxpayer contributes twice as much to military contractors in 2017 ($1,600) as the amount paid to care for all military vets, from WW II to kids just returning from Syria and Afghanistan. Meanwhile, new research finds federal spending on domestic programs creates far more American jobs and yields more broad-based benefits than military spending.
It's Time to Cut the Contractors Loose
Lindsay Koshgarian / OtherWords
(April 11, 2018) -- How much of your paycheck do you plan to hand over to corporate Pentagon contractors this year?
The average American taxpayer will have paid $14,520 in federal income taxes in 2017. And that's not even including the taxes that every working person pays to take care of our elders (and one day, ourselves) through Social Security and Medicare.
If that seems like a ton of money, it is. A full-time, minimum-wage worker earning $7.25 an hour would have only earned $15,080.
Of course, how much you pay depends on how much you can actually afford to pay. But no matter how much you pay, your income tax dollars get divvied up the same way.
And one of the biggest items on your tax receipt? The US military, of course.
Nothing wrong with that, it might seem. We all want security. We all want our troops treated well. The problem comes when you look at where that money is really going.
Start with the contractors. Almost half of the military budget -- and 11 cents out of every tax dollar you pay -- goes to corporations that pulled in military contracts to the tune of more than $300 billion in 2017.
If you're the average taxpayer, you contributed twice as much to corporate military contractors in 2017 ($1,600) as you paid to take care of all our military veterans, from World War II vets to kids just returning from Syria and Afghanistan ($876).
This imbalance has real consequences. In Ohio alone, a 1 percent cut in Pentagon spending could buy health care for 15,000 veterans.
Contractors don't want you to think about this.
They don't want you to know that their CEOs make 100 times what the secretary of defense makes in a year. They don't want you to know that ISIS is actually good for their stock prices. And they don't want you to know they make billions off the hard-earned dollars you pay in taxes.
There's plenty of room to cut waste and pork in the Pentagon budget.
There's the F-35 jet fighter that Senator John McCain -- no slouch when it comes to supporting the military budget -- called a "scandal and a tragedy" due to its cost overruns and the fact that it's never been used in combat. Then there's the Littoral Combat Ship, which is so impractical that it was literally stranded in ice off the coast of Canada.
And, of course, there's the $125 billion in bureaucratic waste uncovered in a report the Pentagon sponsored, and then buried when it saw the results.
The contractors don't want you to know any of that.
That's how a single corporation, Lockheed Martin, gets more from the federal government in a year than your whole state probably does; more than the federal government spends on K-12 education; and way more than the government spends to cure cancer. And that's just one company.
For contractors, the bigger the Pentagon budget, the bigger the windfall.
There's just one real argument for keeping this pork party going, and that's the jobs. Spending federal dollars really can create jobs.
The kicker is that the Pentagon is actually pretty lousy as a jobs creator. If you want real job creation for your tax dollar, evidence shows you'd be better off spending on infrastructure, health care, or education. Even a tax cut for ordinary, struggling Americans works better for creating jobs than spending on the Pentagon.
It's time to cut the corporate freeloaders at the Pentagon loose. Use that money instead for our veterans, schools, curing cancer, and creating more jobs.
Study Says Domestic,
Not Military Spending, Fuels Job Growth
Costs of War Project / Brown University
PROVIDENCE, R.I. (May 25, 2017) -- New research by the Costs of War Project based at Brown University's Watson Institute for International and Public Affairs finds that federal spending on domestic programs creates far more American jobs and yields more broad-based benefits than military spending.
The study by economist Heidi Garrett-Peltier documented how many jobs are created in a variety of domestic sectors for every million dollars of federal money spent. She compared that to the number of jobs created for every $1 million spent on defense and found that domestic spending outpaces military spending in job creation by 21 percent (for wind energy development) to 178 percent (for elementary and secondary education).
"The US has a bloated military budget, and one of the reasons it has historically remained outsized is that defense spending creates jobs, both in the military and in the industries that supply goods and services to the armed forces," said Garrett-Peltier, an assistant research professor at the Political Economy Research Institute at the University of Massachusetts, Amherst.
"But when we compare federal spending on defense to the alternatives, such as health care, education, clean energy or infrastructure, we find that all of these areas create more jobs than an equivalent amount of military spending."
Strikingly, Garrett-Peltier found that investments in elementary and secondary education create nearly three times as many American jobs as defense spending, while health care creates about twice as many jobs.
Whereas $1 million spent on defense creates 6.9 direct and indirect jobs, the same amount spent on elementary and secondary education creates 19.2 jobs. $1 million spent on healthcare creates 14.3 jobs.
$1 million in federal spending creates fewer jobs than the same spending in nine other areas. Spending on elementary and secondary education creates the most jobs, at 19.2 per $1 million.
She used an economic model called an Input-Output (I-O) model to analyze how many jobs are created for every $1 million in spending, drawing on information from the US Economic Census, Internal Revenue Service tax documents, the US Bureau of Labor statistics, US Bureau of Economic Analysis data and other sources.
"I-O models estimate the various components of the supply chain or the inputs that go into producing any good or service," Garrett-Peltier wrote in the study. "They also show the outputs, where each industry sells its goods or services to various categories of customers."
"By using an I-O model, we can estimate both the direct and indirect jobs associated with any type of spending," Garrett-Peltier continued. "For example, with military spending, the direct jobs are those created in the Department of Defense whereas the indirect jobs are created in manufacturing, transportation, IT and other industries that supply goods and services to the military.
"Similarly, in education, the direct jobs are those for teachers, principals and office staff; the indirect jobs are in industries such as textbook publication, furniture manufacturing, electric utilities, and so on."
That snapshot helps explain why domestic spending creates more American jobs, she noted. First, some of the jobs created by defense spending "leak" overseas, whereas construction or nursing jobs created by investing in infrastructure or health care are created, and remain, in the United States.
Second, the labor intensity involved in domestic spending is greater than defense spending. Whereas the military is more dependent on equipment, and funds allocated might go to products, Garrett-Peltier said, education requires people, like teachers, aides, principals and others.
The Costs of War Project has found that war-related spending between fiscal year 2001 and fiscal year 2016 is $230 billion per year.
The data shows that the Trump administration's proposal to increase military spending by $54 billion would create fewer jobs than equivalent spending on health care, education, clean energy or infrastructure, Garrett-Peltier said, and would offer less economic benefit to the nation.
"This report is especially important in helping put fact and public interest rather than myth or self-interest at the center of discussions of the Trump administration's plan for vastly increased military spending," said Catherine Lutz, co-director of the Costs of War Project and the Thomas J. Watson, Jr. Family Professor of International Studies at Brown.
"How our tax dollars are spent should reflect our priorities," Garrett-Peltier said. "We can have a healthier, more educated population living in a cleaner environment at the same time that we can create more jobs.
"Looking at the $230 billion per year that the US has been spending on strictly war-related purposes since 2001, we could have created up to 3 million more jobs if we had spent these funds on various domestic priorities rather than war."
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