When the rich abandoned America - and what that has to do with defense

[CardSharp]

A fascinating article posted in one of my daily reads.

In 1974, the military became all volunteer. In the 1980s, the Reagan tax cuts began a huge transfer of wealth to the already wealthy, top 1 percent of American society. Normally we don't connect these two events, but with the passage of time, I suspect we may come to see them together as the moment when the wealthy checked out of America and moved into physical and mental gated communities.

I've already talked about how over the last 30 years, the proportion of wealth going to the top 1 percent has gone from 10 percent of annual national income to almost 25 percent, a greater share than in the Roaring '20s. And many of the readers of this blog have contributed thoughts about the All-Volunteer Force, especially how many American parents no longer have a sense of skin in the game.

In a nutshell:

(The chart shows inflation-adjusted percentage increase in after-tax household income for the top 1 percent and the four quintiles, between 1979 and 2005.)

I bring all this up again because when I think about the Tea Party and the broader national mood of anti-incumbency, I suspect it all is part of a growing national distrust and dislike of elites. If Washington is getting whupped today, Wall Street can't be far behind on the hit parade. While I have problems with the Tea Party, I do think it is correct to suspect that the elites are not doing their part. So where I think this winds up is probably a sharp populist backlash, in five or 10 years, when all the national bills really start coming due. Ireland today may be America soon. Get ready for increase in income tax rates. But, as the wealthy will tell you after a few drinks, occupational income is really for the little people. The real game is capital gains taxes, and the rate there is just 15 percent. I suspect it will double sometime down the road.

And while we are at it, let's have a parallel debate about national service, OK?

Bringing back a draft does not mean bringing back the draft we saw in the 1960s. Rather, I think we design a new deal that offer a three-part set of options:

The military option. You do 18 months of military service. The leaders of the armed forces will kick and moan, but these new conscripts could do a lot of work that currently is outsourced: cutting the grass, cooking the food, taking out the trash, painting the barracks. They would receive minimal pay during their terms of service, but good post-service benefits, such as free tuition at any university in America. If the draftees like the military life, and some will, they could at the end of their terms transfer to the professional force, which would continue to receive higher pay and good benefits. (But we'd also raise the retirement age for the professional force to 30 years of service, rather than 20 as it is now. There is no reason to kick healthy 40-year-olds out of the military and then pay them 40 years of retirement pay.)

The civilian service option.Don't want to go military? Not a problem. We have lots of other jobs at hand. You do two years of them -- be a teacher's aide at a troubled inner-city school, clean up the cities, bring meals to elderly shut-ins. We might even think about how this force could help rebuild the American infrastructure, crumbling after 30 years of neglect. These national service people would receive post-service benefits essentially similar to what military types get now, with tuition aid.

The libertarian opt-out. There is a great tradition of libertarianism in this country, and we honor it. Here, you opt out of the military and civilian service options. You do nothing for Uncle Sam. In return, you ask for nothing from him. For the rest of your life, no tuition aid, no federal guarantees on your mortgage, no Medicare. Anything we can take you out of, we will. But the door remains open -- if you decide at age 50 that you were wrong, fine, come in and drive a general around for a couple of years.


Tom Ricks, Best Defence.