More Guns vs. Butter

Via CNBC on 7 Feb, then Secretary of Defense Leon Paneta warns we may become a second-rate power:

Looming across-the-board budget cuts present the U.S. military with the most significant readiness crisis in more than a decade and quick action is needed to avoid the spending reductions, Defense Secretary Leon Panetta warned during testimony Thursday before the Senate Armed Services Committee.

If the billions of dollars in cuts are allowed to stand, Panetta said, he would have to throw the country's national defense strategy "out the window,"and the United States would no longer be a first-rate power. "This will badly damage our national defense and compromise our ability to respond to crises in a dangerous world," Panetta said.

Panetta said that the department understood that it needed to do its part to help deal with the federal deficit and has been working to adjust its plans to deal with the lower spending levels. But adding sequestration on top of that creates an untenable situation, he said.

As "time went on and the erosion that would take place in our capabilities, instead of being a first-rate power in the world, we'd turn into a second-rate power," Panetta told the committee. "That would be the result of sequester."

Let's examine this claim, shall we?  Mr. Panetta did not define "second rate," so I will propose an operational definition of being second place on the planet in military spending, rather than the first place we hold currently.

First this chart, courtesy of Wikipedia, sourced to the Stockholm International Peace Research Institute (SIPRI):

So if I read this right, for the United States of America to become a "second rate" power, we could whack our $711 billion annual budget for Defense all the way down to say, $118 billion, thereby just sneaking in under China's $119 billion annual expenditure.

For purposes of perspective, our $711 billion annual defense expenditure outranks the spending of the next 14 countries on the list--China, Russia, United Kingdom, France, Japan, India, Saudi Arabia, Germany, Brazil, Italy, South Korea, Australia, Canada, and Turkey--combined.  COMBINED!

What is the magnitude of the sequester's defense cuts that had Panetta's hair on fire?  From the same CNBC story:

The Pentagon faces a $42.7 billion budget cut in the seven months starting in March and ending in September. The reductions through sequestration would be in addition to a $487 billion cut in defense spending over the next ten years mandated by the Budget Control Act passed in 2011.
 

So Defense could absorb more than 13 sequester-level cuts without us becoming "second rate." 

I'm sorry, but I fail to see the urgency here.  I say we go ahead and whack Defense down to a reasonable level--say to about half of what it is now, I'm not greedy--and use that approximately $350 billion saved to fully fund Medicare and Social Security. 

How's that for some sensible priorities, Mr. Panetta...and Mr. Obama?