The Government-Entitlement-Complex™
Over the years, much has been written about the "Military Industrial Complex" that is composed of defense contractors and politicians who are believed steer public policy and create wars for the express purpose of perpetuating their base of power. This narrative has been picked-up by conspiracy theorists who point to this alleged unholy alliance as the fundamental cause of our nation's economic difficulties.
However, a closer examination of the numbers paints a slightly different story. Gross Domestic product reported in the second quarter of 2010 registered at an annualized value of $14.6 Trillion dollars. Of this, approximately $800 billion or 5.5% of GDP was spent by the government on national defense. This includes everything from both wars to each military base to all national guard units in America.
In contrast to this, examine the total government transfer payments ($2.3T / 15.7% of GDP), Interest on government debt ($0.4T / 2.7% of GDP), Government Investment Spending ($0.5T / 3.4% of GDP), and the increase in total debt over the last year ($1.1% / 7.5% of GDP). When added together, these factors combine to total 29.5% of Gross Domestic Product and comprise a very real Government-Entitlement-Complex(tm).
The importance of this Government-Entitlement-Complex(tm) is that it controls so much money and hold so much political influence that it dwarfs the supposed "Military Industrial Complex" in size, scope, and impact. The staggering amount of money controlled by the Government-Entitlement-Complex(tm) makes it the single most dominant force in American electoral politics. As more people become dependent on the government for their livelihood either from subsidies or subsistence, the more resistance there will be against reforms that are necessary to develop a healthy economy.
This phenomenon will be examined further in the November release for the Financial Freedom Report where we examine the importance of understanding this dependent class, and what they mean to your wealth building plan. By understanding the structure and future of the political forces driving fiscal and monetary policy, you will be ideally placed to take the actions that are necessary to build real wealth in the midst of economic difficulty.
