Follow the Money: A Resource Unit for High School Students on Deficits, Taxes, and the Military-Industrial-Congressional Complex

A resource unit for high school students on deficits, taxes, and the "military-industrial-Congressional complex"

by Alan Shapiro

"Follow the money and you will find what we truly care about and stand for as a nation" 
— Marion Wright Edelman, president, Children's Defense Fund
"If you want to understand how the Pentagon operates, like everything else in Washington you follow the money." 
— Chuck Spinney, analyst, U.S. Department of Defense
To follow the money is to examine deficits, taxes, and tax cuts, budgets, how governments spend our money and the federal budget's largest item, the military. These are subjects that are not normally appealing to students. Nonetheless, they are of the highest importance to American democracy. The attempt here is to present them in ways that connect with student experience.
This set of materials begins with four readings for students. Classroom suggestions follow.

Student Reading 1

Deficits: Why should you care about them?

This year, U.S. cities, states, and the federal government have had big-time money problems called budget deficits. The worst by far is California's whopping budget shortfall of $38 billion. But even that is dwarfed by the Bush administration's estimate of the federal government's deficit—$455 billion—with hundreds of billions more to come in the next few years. Why should you care?
Here are four people it did matter to:
This past summer David Solomon, 18, who lives in Boston, could not find a summer job. One reason is that City Hall slashed the summer jobs budget from $8 million in 2000 to $3.3 million. The percentage of teenagers holding summer jobs was at its lowest in 55 years.
Douglas Schmidt, a 37-year-old man who lives in Yamhill, Oregon, has epilepsy. He depends on drugs that cost $13 daily, a sum that had been paid for by the state. He lost this benefit because of Oregon's budget cuts and ran out of pills in February. His untreated epilepsy caused him to have a seizure in which he suffered permanent brain damage. He is now in what doctors call a "persistent vegetative state."
Tina Dean, 39, and her daughter Melissa, 20, who live in Missouri, have been able to get some of the cost of annual physical exams and other medical costs covered through a state program for uninsured low-income women. For instance, Melissa got a year's supply of birth control pills for $60, instead of the $500 they would have paid without state support. But to help close a budget gap, Missouri's legislature cut all of the state funding for the program this year.
These are just a few of a country full of examples of how cuts in government programs are affecting people.
"Across the nation," writes Nicholas Kristof, "state and local leaders have been forced to slash more than $100 billion in spending, laying off thousands of employees, cutting off health insurance for roughly one million people and lowering America's standard of living." (New York Times, 7/14, 7/19 and 7/20/03)
State and local governments were big-time spenders during the boom years in the late 1990s when tax receipts were high. Many states even cut taxes. Now, with business conditions much weaker, tax revenues have dropped sharply. This is the major reason why states and cities are broke and why they cut programs. But there are other reasons. The Bush administration's policies are forcing states to spend money on "homeland security" measures, specialized programs in education and health care, election reform, and annual school testing, among other things - but the White House and Congress provide little or no help to states to help states cover these new costs.
Unlike the federal government, all state governments, except Vermont's, require a yearly balanced budget. To get one, states may do one or more of the following: cut programs, borrow money, raise taxes, or find ways to manipulate their finances to get them through the year.
At the federal level, 53 percent of the deficit comes from a weakened economy and 24 percent results from U.S. military actions and security measures. The U.S. Office of Management and Budget says that an additional 23 percent of the deficit comes from three substantial tax cuts the Bush administration has won from a Republican-led Congress.
Basic services and the people who provided them are suffering. School districts fire teachers and aren't buying new textbooks. Libraries close. Health coverage and clinics disappear (in California alone, state officials have closed 16 health clinics and two hospitals). Environmental programs are slashed. Tuition rises at state universities. State employees are laid off (1,200, for example, in Connecticut). Even police and firefighter services are trimmed. Often, the poor get hurt the most. In California alone tens of millions of dollars have been cut from childcare, teacher aides, and job training programs.
One view is that deficits matter because cuts in all kinds of services often follow—services you, your family and your friends may depend upon. And often, taxes go up.
Conservatives, who generally support a reduced role for government, sometimes see deficits as a way to force state and local governments to reduce what they view as excessive spending. Brian Riedl of the conservative Heritage Foundation says, "Deficits provide states with a golden opportunity to examine their budgets and reduce wasteful and ineffective spending, which helps them keep taxes low and aid the economic recovery." (The Nation, 8/4/11/03)
Grover Norquist, the leader of Americans for Tax Reform, says, "I simply want to reduce government to the size where I can drag it into the bathroom and drown it in the bathtub." (National Public Radio, 5/24/01)
But what impact do these cuts have? Advocates for the poor say that the Bush administration is starving Medicaid, the health care program for low-income people. The National Parks Conservation Association complains that White House cuts mean a $600 million shortfall in national park operating funds. That means ordinary park care and the experience of visitors suffer. Public school supporters point to insufficient federal funding as one cause for poor schools.
Is there "wasteful and ineffective" government spending? Everyone would probably agree there is. But when it comes to specific items of government spending, people disagree. And there is a much larger disagreement in the U.S. about the role of government and the services it should provide. Where Grover Norquist sees "most" government spending as "wasteful and ineffective," Nicholas Kristof sees budget cuts resulting in the "decline of America's standard of living."

Student Reading 2

Tax Cuts: What difference do they make to you?

Why does President Bush say he favors tax cuts so strongly? In his speech of January 7, 2003, he said tax cuts "will speed up economic recovery and the pace of job creation" and "bring real and immediate benefits to middle-income Americans [that will] help pay the bills and push the economy forward." On July 30 he said he views the tax cuts "as a jobs program, a job creation program" and sees "hopeful signs" of economic growth over the next 18 months.
Many people dispute Bush's claims. They point out that the Bush tax cuts are responsible for almost a quarter of the U.S. budget deficit. The non-partisan Congressional Budget Office says the tax cuts have cost the U.S. nearly three times as much as the wars in Afghanistan and Iraq, reconstruction after 9/11 and "homeland security" measures combined. (Newsweek, 7/20/03) And as for Bush's claim that his tax cuts create jobs: Since the Bush presidency began, the unemployment rate has risen from 4.1 percent to 6.1 percent. For blacks the unemployment rate is 11.1 percent, for Latinos it is 8.2 percent). The overall unemployment rate would be substantially higher if it included people who have stopped looking for jobs because they can't find them. And three million jobs have disappeared, though not the people who held them.
Who is benefiting from the Bush tax cuts and how much?
a. A low-income family receives little or nothing.
b. A family in the middle-income bracket gets to keep $261 per year.
c. A middle-aged couple with two children under 17 with an income of $75,000 saves $1,122.
d. A person with an income of $1 million or more pockets $92,526.
(Sources: National Priorities Project and AARP Bulletin, July/August 2003)
Economists differ strongly about the effects of the tax cuts on job creation and stimulating business. Stephen Moore, president of the Club for Growth, writes, "Some of the Bush critics ask: Why cut taxes for the wealthy? The answer is that half of all people paying the highest tax rate are small business owners. And small businesses are the lifeblood of our free enterprise economy. Jobs don't come out of thin air, and they certainly don't come from the benevolence of government. They come from the creativity of entrepreneurs who create new products and new wealth....My bet is that over the next several years we will see a boom in the job and stock market...."
Bush tax cut supporters also argue that individual consumers will spend the money they save on taxes and that will put money into the economy that will help to create jobs. Supporters also argue that the wealthy pay the most in taxes— therefore they should receive the biggest cuts.
But James Medoff, a Harvard University economist who has studied the benefits of different kinds of spending, says that one of the best ways to create jobs is to increase government spending on education and health. (New York Times, 7/10/03)
William G. Gale and Peter R. Orszag, co-directors of the Tax Policy Center in Washington, D.C., argue, "In the next year or so, the recent tax cut will boost spending a little. But it could have given a bigger boost at less cost by directing more to families living paycheck-to-paycheck and to beleaguered state governments, which would have spent the funds immediately. Instead, most of the benefits go to the very highest income households, which tend to spend little if any additional funds. Over the long term, the new tax cuts will hurt the federal budget and the American economy." (AARP Bulletin, July/August 2003)
Daniel Altman, an economic analyst, offers another view: "In the debate about tax cuts and federal budget deficits, both sides are making arguments that can never be proved....If the economy does begin to expand faster, however, there will be no way to prove that the tax cuts were mostly responsible. Dozens of other factors, from....oil prices to technology and innovation, can wield separate, significant influences on the economy." (New York Times, 7/19/03)
Taxes make a difference to you because you pay them. And they pay for what your government does—for better or for worse. Tax cuts matter because they put more money in your pocket—though they may also reduce or eliminate services you want. In our country the income tax system is supposed to be progressive—that is, the more you make, the more you should pay. But have recent tax cuts been fair? Have they honored the progressive principle? Is U.S. economic policy favoring the rich? Are public services for most Americans dwindling?

Student Reading 3

The Federal Budget: How Do You Want Your Tax Dollars Spent?

The words "economy" and "economics" come from two Greek roots referring to management of a household. In this reading "the economy" refers to the entire "household" of our country. The blizzard of abstractions like "budget deficit" and staggering numbers like $455,000,000,000 have to do with its management.
"The ideas of economists...both when they are right and when they are wrong are more powerful than is commonly understood. Indeed the world is ruled by little else," wrote John Maynard Keynes, an economist himself and a famous one. His statement is important because, if true, the ideas of economists are playing a major role in your life even if you don't realize it.
The U.S. budget is shaped by many people—the president, economists, politicians and an army of lobbyists for special interests. What's in the federal budget? How is your money being spent? Imagine the Smiths, a median income family living in Brooklyn. In 2002 the Smiths paid about $1,383 in federal income taxes. Here is how the government spent it:
  • Military and Defense: $362.65
  • Interest on Debt (Military): $82.08
  • Interest on Debt (Non-military): $230.96
  • Veterans Benefits: $46.97
  • Health: $262.13
  • Education: $43.57
  • Nutrition: $34.92
  • Natural Resources: $22.22
  • Housing: $22.07
  • Job Training: $5.52
  • Other (science, agriculture, government operations, etc.): $534.79
(This tax-dollar breakdown is based on information from the U.S. budget and compiled by the National Priorities Project.)
As you can see, the military (including, from past wars, veterans' benefits, and interest on the military debt) took more than one-third of the Smith family's income taxes. Military costs are rising. Next year the U.S. will spend $40 billion more on the military than this year—about $400 billion in total and at least another $65.5 billion on operations in Iraq (mainly) and Afghanistan. (Much of this money goes to big private corporations that contract with the government to supply equipment and provide services.) U.S. military spending is more than twice as high as that of Russia, China, Japan and Britain combined — and they are the next four top military spenders.
At the same time, billions of dollars in tax cuts, more than half of which go to the wealthy, will increase the debt and force cuts in social programs.
How do you want your tax dollars spent? Most Americans probably agree that national security is a priority for our tax dollars. But what do we mean by "national security"? Most people associate it with a strong military and the best weaponry.
But what about the health of Americans—is that part of "national security"? Forty-one million of us have no health insurance. Many old people must have certain prescription drugs but Medicare does not provide them with prescription drug insurance. Some have to choose between drugs and food. Thirty-two other countries have lower infant mortality than the U.S. Almost one in every five American women have little or no prenatal care, which puts our country behind other rich nations.
What about education? A majority of America's fourth-graders do not read or do math at grade level and two out of every five children eligible for the pre-school Head Start program can't get in because of lack of funding. (Business Week, 7/8/02)
Nutrition? Thirty-three million of us live in households the government calls "food insecure," because they may have to miss meals and feel hungry. (New York Times, 2/23/03)
Job training? Millions have no jobs or poorly-paying jobs.
Poverty? 16 percent of America's children live in poverty; 30 percent of African-American children are poor; 28 percent of Latino children are poor. (By comparison, the poverty rate among children in Britain is 8.4 percent, and in France it is 2.9 percent.) More children today in the U.S. are living in poverty than there were 25 to 30 years ago. Over the past ten years the number of homeless children in New York City has increased sharply. (New York Times, 6/13/02 and 2/14/03)
What should we include in our definition of "national security"? A strong military? healthy people? well-educated people? decently-fed people? people with jobs? children who have homes? Would you add anything? Would you leave anything out? If so, what and why?
The meanings we give words have consequences—including financial consequences. If we decide that the meaning of "national security" includes having healthy and well-educated people, for example, what programs will have to be funded and where should the money come from? Should we raise taxes? Cut military spending and use the money for health and education programs?
A recent survey by the Federal Reserve reported that economic inequality has increased significantly in the U.S. "The concentration of income at the top is a key reason that the United States, for all its economic achievements, has more poverty and lower life expectancy than any other major advanced nation," Paul Krugman, an economic analyst, writes. He points to the Bush tax policies as a factor and goes on to argue that "as the rich get richer, they can buy a lot of things besides goods and services. Money buys political influence....This obviously raises the possibility of a self-reinforcing process. As the gap between the rich and the rest of the population grows, economic policy increasingly caters to the interests of the elite, while public services for the population at large—above all, public education—are starved of resources. As policy increasingly favors the interests of the rich and neglects the interests of the wider population, income disparities grow even larger." (New York Times, 10/20/02)
Kevin Phillips, in his book Wealth and Democracy, writes, "Either democracy must be renewed, with politics brought back to life, or wealth is likely to cement a new and less democratic regime—plutocracy by some other name."
Krugman comments that Phillips' view is "a pretty extreme line, but we live in extreme times. Even if the forms of democracy remain, they may become meaningless. It's all too easy to see how we may become a country in which the big rewards are reserved for people with the right connections; in which ordinary people see little hope of advancement; in which political involvement seems pointless, because in the end the interests of the elite always get served."
"Follow the money and you will find what we truly care about and stand for as a nation," says Marion Wright Edelman, president, Children's Defense Fund. (New York Times, 7/8/02)

Student Reading 4

How Do You Want Your Defense Dollars Spent?

"Every gun that is made, every warship launched, every rocket fired signifies—in the final sense—a theft from those who hunger and are not fed, those who are cold and are not clothed. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity dangling from a cross of iron." (1953)
"This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence—economic, political, even spiritual—is felt in every city, every statehouse, every office of the federal government....In the councils of governments, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist....Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that liberty and security may prosper together." (1961)
—President Dwight Eisenhower
As he came into office in 1953 for the first of his two terms as president, President Eisenhower called spending on guns, warships, and rockets "theft." As he left office in 1961, he warned of a growing "military-industrial complex," the conjunction of a huge arms industry and a military establishment on the future of the United States. Chuck Spinney, an analyst for the Defense Department over many years, calls this conjunction a "military-industrial-Congressional complex."
President Eisenhower led U.S. forces to victory in World War II and had a long military career. Chuck Spinney, who served eight years in the air force, then 25 years in the Pentagon's Defense for Program Analysis and Evaluation, was recently awarded the Good Government Award by the Project on Government Oversight. Both men supported and gave their working lives to the legitimate needs of U.S. "security." Both were devoted to the protection of Americans. Yet both were outspoken in their concerns about what Eisenhower called "the potential for the disastrous rise of misplaced power" and "unwarranted influence" by those charged with that protection.
In the sense used by President Eisenhower and Chuck Spinney, a "complex" is a group of closely related units—in this case, the military, the defense industry, and the Congress. This close relationship began following World War II, evolved during the cold war with the Soviet Union and has continued into a new century. The relationship works this way: The military fights America's wars; industries supply the weapons and equipment; Congress approves budgets with the money to pay for the weaponry, the equipment and the salaries and other benefits for the military. Congress also has the responsibility for providing standards and oversight about how the money is spent through such entities as the Armed Services committees in each house of Congress. The military can't fight without weapons provided by industries that won't supply them without being paid through Congressional budgets. Military-industrial-Congressional complex.
The U.S. military budget for the coming year stands at $400,000,000,000. This buys weapons - everything from simple pistols and rifles to precision-guided missiles and nuclear bombs. It buys equipment ranging from soldiers' shoes and socks to the immensely sophisticated bombers air force pilots fly and the tremendous carriers the navy sails. It also buys a wide ranges of services: Increasingly the U.S. military contracts with private companies to perform aspects of its work.
All these goods and services are supplied by many thousands of industries operating in every state in the nation and employing many hundreds of thousands of workers.
The national defense budget is a huge document, includes countless items and authorizes the spending of enormous sums of money.
Money. This is the key word to understanding the military-industrial-Congressional complex. Every year the Pentagon, the headquarters of the Department of Defense and the U.S. military establishment, has hundreds of billions of dollars to spend and to account for. Like every other business, its operations require auditing. How much money came in? How and where was the money spent? Do the figures add up?
A recent study by Defense Department's inspector general found that the Pentagon could not properly account for more than $1 trillion. The director of Congress' General Accounting Office has announced that the Pentagon is unable to complete an audit. The Secretary of Defense, Donald Rumsfeld, says, "The financial reporting systems of the Pentagon are in disarray." (San Francisco Chronicle, 5/18/03)
Chuck Spinney maintains that the Pentagon is not being held accountable for these failures. "I think basically you have in Congress the oversight committees for defense," he says. "And the defense appropriations subcommittees in both houses are so tied in to the Pentagon and the defense contractor base that essentially oversight has been displaced by what some of us call overlook. They're basically watching the money flow out the door and encouraging it to go."
The contractors who produce the shoes, the guns and the missiles have an obvious interest in selling as many of these items for as much as they can. But Congress also profits from the flow of money to the contractors. The contractors pump money into the political campaigns of representatives and senators who support their contracts to help them win elections and stay in power. For example, Lockheed Martin, the government's largest aerospace contractor, and Northrup Grumman, the second largest, contributed, respectively $2.5 million and $735,000 during the 2000 election period. Like other defense contractors, they cover their bets by contributing to both parties—in this case, 60 percent to the Republicans and 40 percent to the Democrats. For the 2002 Congressional election campaigns, defense contractors contributed $14 million. (Center for Responsive Politics online)
Meanwhile, Pentagon officials establish connections with contractors as a normal part of their work, preparing themselves in the process to go through the "revolving door."
What is a revolving door? A military general works at the Pentagon, then retires, only to be hired by one of the defense contractors he's been connected with to lobby for the company before Congress. Or a Congressman who has connections with defense contractors leaves office, is hired by a defense contractor-and later may even return to politics.
One man who dramatically demonstrates the revolving door is Vice President Dick Cheney, who served as a Congressman for many years, and later became Secretary of Defense under the first President George Bush. Then, between 1995 and 2000, Cheney served as CEO of Halliburton Company, the nation's largest oil field services firm. Now he is George W. Bush's vice president. And Halliburton has now "won contracts worth more than $1.7 billion out of Operation Iraqi Freedom and stands to make hundreds of millions more dollars under a no-bid contract awarded by the U.S. Army Corps of Engineers," reports Michael Dobbs in the Washington Post (8/28/2003). "The size and scope of the government contracts awarded to Halliburton in connection with the war in Iraq are significantly greater than previously disclosed and demonstrate the U.S. military's increasing reliance on for-profit corporations to run its logistical operations," the Washington Post reports. "Independent experts estimate that as much as one-third of the monthly $3.9 billion cost of keeping U.S. troops in Iraq is going to independent contractors."
Dick Cheney's wife, Lynne Cheney, is also part of the revolving door system: She received $500,000 for her services as a director of the Lockheed Martin Corporation from 1994-2001. Lockheed Martin is the nation's largest defense contractor and has won billions in defense contracts.
Eight policy members in the Bush administration had direct or indirect ties with Lockheed before joining the administration. Other top Bush administration officials previously worked at Northrop Grumman, the third largest defense contractor, or such other major defense contractors as General Dynamics and Raytheon. The revolving door. (Jan.-Feb. 2003 online Multinational Monitor)
"Economic decisions, which should prevail in a normal market system, don't prevail in the Pentagon, or in the military-industrial complex," Chuck Spinney says. "If you want to understand how the Pentagon operates, like everything else in Washington you follow the money....Basically the cost of weapons increases faster than the budget. And this has been going on for 40 years. And when the budget increases, that basically creates an incentive structure to jack up the cost even further."
Defense contractors also continue to sell billions of dollars worth of planes and ships that Defense Secretary Rumsfeld once said he wanted to get rid of because they are obsolete. But to representatives and senators in whose districts or states those planes and ships are produced, they are not obsolete at all. For producing them provides tens of thousands of jobs to constituents whose votes are essential to remaining in power. The legislators also typically receive major campaign contributions from the companies whose projects they are protecting. As a result, it is almost impossible to close down unneeded military bases in a particular district or state.
The operation of this military-industrial-Congressional complex is, for the most part, legal. But for Spinney it creates "a moral sewer." "Essentially you have all the pretensions of a democracy....the representatives are under certain strictures to behave in a certain way. And in fact they're not behaving that way....A lot of people that are involved in this don't realize the moral implications of what they're doing. They regard what they're doing as being for the most patriotic of motives."
Today, many Americans are afraid of terrorists. The military-industrial-Congressional complex caters to this fear by constantly increasing the defense budget. But what's in that defense budget, however, may have little or nothing to do with the terrorist threat and everything to do with a threat to a defense contractor's profits and a senator's reelection.
Says Spinney: "If you start thinking about how you deal with these kinds of threats, you don't need B-2s. You don't need ballistic missile defense. You don't need Comanche helicopters. Basically what you need are really highly trained individuals that...understand economics, anthropology and...fighting, particularly in close quarters combat.
"The risk that the promoters of something like Star Wars bear is that the program might be canceled," says Spinney, but others bear risks too: the taxpayer bears the economic risk, and the soldier bears the military risk. But "those risks don't really have much of an impact on decision-makers, who are more interested in the preservation of their program." (Interview on "NOW with Bill Moyers," PBS, 8/1/03)
The taxpayer also has to live with a federal budget devoted largely to the military and not social needs:
  • 1 cluster bomb costs $14,000, enough money to enroll two children in Head Start
  • l hour of the war on Iraq costs $46 million, enough to improve, repair and modernize 20 schools
  • l Stealth bomber costs $2.1 billion, enough to provide annual salaries and benefits for 38,000 teachers
(Source: United for a Fair Economy:
Why should you care about the military-industrial-Congressional complex? What difference does it make to American democracy? What difference does it make to you how your money is spent?



Several ways of getting started
1. Ask students:
What government programs supported by taxes of one kind or another do you and your family benefit from?
List responses on the chalkboard. The list may include such items as:
  • education (Taxes pay for everything from the chalkboard the teacher is writing on to students' desks and books, the teacher's salary and perhaps subsidized lunches)
  • postal service
  • public library
  • maintenance of roads, highways, city bus and subway services
  • garbage collection
  • health (Have students ever gone to a government-sponsored clinic or received shots for which they paid nothing?)
  • the justice system (courts, prisons)
  • unemployment benefits
  • natural resources (They include many things—city, state and, national parks as well as the air we breathe, the water we drink)
  • housing (subsidized apartment buildings and government-backed mortgages.)
  • job training
  • agriculture (Various crops are subsidized, making food extraordinarily cheap in this country.)
  • military and defense
  • retiree's benefits, including Social Security and Medicare
The class should be able to produce a sizable list. Next, consider the kinds of taxes Americans pay and where the money goes to: sales taxes, property taxes, state and federal income taxes (and perhaps a city income tax as well).
Ask students:
  • What happens when taxes are insufficient to pay for programs?
  • What choices do government officials have?
  • Who influences these choices?
  • What differences does it make to taxpayers which ones they choose?

2. The federal government has the most money and spends the most. How much does it spend on major items like the ones listed in the table for Student Reading 3? Before students have had a chance to examine that table, list the items it includes on the chalkboard. Ask students to speculate how the $1,383 in taxes paid by the Smith family of Brooklyn are allocated for each category listed by preparing a table. When students have finished, ask for a sampling of responses. Then compare with the actual figures.
3. Do students know anyone who has benefited from a government program that's been cut back or eliminated? Discuss.
4. Use an item bearing on budgets, taxes, tax cuts or cutbacks in programs from the daily news that has some direct connection to students as a way to get into "Follow the Money."

An inquiry-oriented approach

Begin with any of the suggestions above and/or ask students directly what they know about government budgets, deficits and tax cuts. List responses on the chalkboard.
What are their sources of information? Consider them for accuracy and reliability. To what extent are students uninformed? misinformed?
What are their questions? List them on the chalkboard for examination (See "Teaching Critical Thinking" on this website for specific suggestions).
Then begin independent and small-group inquiries into each question that seems worth close study. For background and class discussions, all students can read the materials in the resource materials here.

Questions for the readings

Reading 1:
  • What is a budget deficit?
  • Why have there been deficits at every level of government?
  • What effects do deficits have?
  • What differences of opinion are there about deficits?
  • With specifics, define "wasteful and ineffective spending"?
Reading 2:
  • What is a progressive tax system?
  • What are pros and cons about tax cuts?
  • Have recent tax cuts been fair? Why or why not?
Reading 3:
  • Do you think the U.S. military budget is about right? too low? too high? Why?
  • How do you define "national security"?
  • With specifics, what would you include in a national security budget?
  • What evidence do you know of that "money buys political influence"?
  • What is a plutocracy?
  • What is your view of Phillips' claim that plutocracy is a danger to American democracy?
  • Do you agree or disagree with Edelman's statement? Why?
Reading 4:
  • Why is money "the key word" to understanding the military-industrial-Congressional complex?
  • Why isn't the Pentagon held accountable for its accounting failures?
  • What is "the revolving door"?
  • Why do defense contractors contribute so much money to politicians running for office in Congress?
  • Why does Spinney call the complex "a moral sewer"?
  • Do you agree with him? Why or why not?
  • How would you answer each question that concludes this reading?


Assign an essay in which students discuss and offer, with specifics, a reasoned opinion about
1. how "national security" should be defined
2. Marion Wright Edelman's statement: "Follow the money and you will find what we truly care about and stand for as a nation."
3. Chuck Spinney's view that the military-industrial-Congressional complex is "a moral sewer."

For further inquiry

  • What has been your state's budget deficit and how has the state dealt with it?
  • What evidence is there that past tax cuts have or have not helped with job creation?
  • What are the most recent monthly unemployment numbers?
  • What, if anything, do they say about the Bush tax-cut policies?
  • What are the records of your representatives and senators on issues having to do with the budget deficit, military spending, and tax cuts?
  • How do they explain their votes?
  • What evidence, if any, is there that money buys political influence in any of the following areas?: U.S. energy policy; legislation affecting drug prices and/or health care programs; contracts for reconstruction in Iraq; defense contracts; agriculture

Student action

1. Have students decide on speakers they might like to hear on budget, military spending and/or tax policies and then invite them to the class.
2. Form small groups to investigate how the town or city budget deals with programs of interest to students. When the investigation is completed, have students express their views to town officials either in writing or in person at a town meeting.
3. Have students plan a school assembly on budget and tax issues as they affect their school.
4. Have students write to state and/or federal officials on issues they regard as important.
Useful internet sources on tax, defense spending and budget issues
  • Americans for Tax Reform:
  • Brookings Institute:
  • Cato Institute:
  • Center for Defense Information (
  • Center on Budget and Policy Priorities:
  • Citizens for a Sound Economy:
  • Citizens for Tax Justice:
  • Club for Growth:
  • Heritage Foundation:
  • National Priorities Program: (an especially useful site that provides detailed information on budgets and taxes; enables visitors to create their own charts and graphs, to determine how the federal government spent his/her specific tax bill and to work out alternative ways of spending that money)
  • Public Broadcasting System: (another very useful site; click on NOW for information on budgets and taxes and to have access to many additional sites presenting different perspectives)
  • United for a Fair Economy:
This lesson was written for TeachableMoment.Org, a project of Morningside Center for Teaching Social Responsibility. We welcome your comments. Please email them to: