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Hegseth welcomes DOGE to the Pentagon, says national debt a security issue

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Defense Secretary Pete Hegseth said he plans to welcome President Donald Trump’s Department of Government Efficiency to the Pentagon.

Hegseth, who joined troops for morning physical training excercises on Tuesday, spoke to reporters as he was leaving the U.S. Africa Command headquarters in Stuttgart, Germany, during his first official trip overseas.

Hegseth said he wants to see additional investment in the U.S. military but noted the consequences of growing U.S. debt.

“You always want more, but we live in fiscally constrained times where we need to be responsible with taxpayer dollars,” he said. “We’re $37 trillion in debt. That’s a national security liability as well.”

Secretary of Defense Pete Hegseth speaks to reporters in Germany on February 11th, 2025

The U.S. Department of the Treasury reports the country holds about $36.2 trillion in debt, but the real figure is much larger. The Penn Wharton Budget Model estimates that extending tax and spending projections to cover all current and future generations, the infinite horizon fiscal imbalance is $162.7 trillion, or 6.6% of the present value of all future GDP, according to a recent report. GDP, or gross domestic product, is a measure of economic output.

Hegseth also said he would welcome DOGE and its leader Elon Musk to review the Pentagon’s $849.8 billion budget.

“We’ve been talking with them, in partnership with them and as I said on social media, we welcome DOGE to the Pentagon,” Hegseth said. “There are waste, redundancies and headcounts and headquarters that need to be addressed. There’s just no doubt – look at a lot of the climate programs that have been pursued at the Department of Defense. Defense Department is not in the business of climate change, solving the global thermostat. We’re in the business of deterring and winning wars.”

Secretary of Defense Pete Hegseth speaks to reporters about DOGE on February 11th, 2025

He also mentioned weapon system procurement as potentially ground for DOGE to investigate.

“There’s plenty of places where we want the keen eyes of DOGE, but we’ll do it in coordination,” he said. “We’re not going to do things that are to the detriment of American operational or tactical capabilities.”

Hegseth suggested there could be “billions” to cut from the Pentagon’s budget.

Shortly after Trump created DOGE, Musk turned his eye to the U.S. Department of Defense. U.S. Sen. Bernie Sanders, an independent from Vermont, has publicly said he agrees with Musk when in comes to the Pentagon’s budget.

“Elon Musk is right,” Sanders wrote on X. “The Pentagon, with a budget of $886 billion, just failed its 7th audit in a row. It’s lost track of billions.”

Musk wrote in a November op-ed that the military was on his list.

“The Pentagon recently failed its seventh consecutive audit, suggesting that the agency’s leadership has little idea how its annual budget of more than $800 billion is spent,” the op-ed said.

The U.S. Department of Defense’s annual audit once again resulted in a disclaimer opinion. That means the federal government’s largest agency can’t fully explain its spending. The disclaimer this year was expected. And it’s expected again next year. The Pentagon previously said it will be able to accurately account for its spending by 2027.

Musk has gone even further in his criticism of military spending. He called the military’s most expensive ever project, the F-35 stealth fighter, “obsolete.”

In May 2024, the U.S. Government Accountability Office found the cost of the Pentagon’s most expensive weapon system was projected to increase by more than 40% despite plans to use the stealth fighter less, in part because of reliability issues.

The U.S. Department of Defense’s F-35 Lightning II is the most advanced and costly weapon system in the U.S. arsenal. It’s a joint, multinational program that includes the Air Force, Navy, Marine Corps, seven international partners and foreign military sales customers.

The Pentagon has about 630 F-35s. It has noted plans to buy about 1,800 more, and it intends to use them through 2088. DOD estimates the F-35 program will cost over $2 trillion to buy, operate, and sustain over its lifetime.

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New climate plan simply hides the costs to Canadians

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From the Fraser Institute

By Kenneth P. Green

Mark Carney, who wants to be your next prime minister, recently released his plan for Canada’s climate policies through 2035. It’s a sprawling plan (climate plans always are), encompassing industrial and manufacturing emissions, vehicle emissions, building emissions, appliance emissions, cross-border emissions, more “green” energy, more “heat pumps” replacing HVAC, more electric vehicle (EV) subsidies, more subsidies to consumers, more subsidies to companies, and more charging stations for the EV revolution that does not seem to be happening. And while the plan seeks to eliminate the “consumer carbon tax” on “fuels, such as gasoline, natural gas, diesel, home heating oil, etc.” it’s basically Trudeau’s climate plans on steroids.

Consider this. Instead of paying the “consumer carbon tax” directly, under the Carney plan Canadians will pay more—but less visibly. The plan would “tighten” (i.e. raise) the carbon tax on “large industrial emitters” (you know, the people who make the stuff you buy) who will undoubtedly pass some or all of that cost to consumers. Second, the plan wants to force those same large emitters to somehow fund subsidy programs for consumer purchases to offset the losses to Canadians currently profiting from consumer carbon tax rebates. No doubt the costs of those subsidy programs will also be folded into the costs of the products that flow from Canada’s “large industrial emitters,” but the cause of rising prices will be less visible to the general public. And the plan wants more consumer home energy audits and retrofit programs, some of the most notoriously wasteful climate policies ever developed.

But the ironic icing on this plan’s climate cake is the desire to implement tariffs (excuse me, a “carbon border adjustment mechanism”) on U.S. products in association with “key stakeholders and international partners to ensure fairness for Canadian industries.” Yes, you read that right, the plan seeks to kick off a carbon-emission tariff war with the United States, not only for Canada’s trade, but to bring in European allies to pile on. And this, all while posturing in high dudgeon over Donald Trump’s plans to impose tariffs on Canadian products based on perceived injustices in the U.S./Canada trade relationship.

To recap, while grudgingly admitting that the “consumer carbon tax” is wildly unpopular, poorly designed and easily dispensable in Canada’s greenhouse gas reduction efforts, the Carney plan intends to double down on all of the economically damaging climate policies of the last 10 years.

But that doubling down will be more out of sight and out of mind to Canadians. Instead of directly seeing how they pay for Canada’s climate crusade, Canadians will see prices rise for goods and services as government stamps climate mandates on Canada’s largest manufacturers and producers, and those costs trickle down onto consumer pocketbooks.

In this regard, the plan is truly old school—historically, governments and bureaucrats preferred to hide their taxes inside of obscure regulations and programs invisible to the public. Canadians will also see prices rise as tariffs imposed on imported American goods (and potentially services) force American businesses to raise prices on goods that Canadians purchase.

The Carney climate plan is a return to the hidden European-style technocratic/bureaucratic/administrative mindset that has led Canada’s economy into record underperformance. Hopefully, whether Carney becomes our next prime minister or not, this plan becomes another dead letter pack of political promises.

Kenneth P. Green

Senior Fellow, Fraser Institute
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Government debt burden increasing across Canada

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From the Fraser Institute

By Tegan Hill, Jake Fuss and Spencer Gudewill

As governments across Canada unveil their 2025 budgets, outlining their tax and spending plans for the upcoming fiscal year, they have an opportunity to reverse the trend of deficits and increasing debt that has reigned in recent years.

Indeed, budget deficits, which fuel debt accumulation, have become a serious fiscal challenge for the federal and many provincial governments, primarily due to high levels of government spending. Since 2007/08—the final fiscal year before the financial crisis—combined federal and provincial net debt (inflation-adjusted) has nearly doubled from $1.2 trillion to a projected $2.3 trillion in 2024/25. And you can’t blame COVID, as combined federal and provincial net debt (inflation-adjusted) increased by nearly $600 billion between 2007/08 and 2019/20.

Federal and provincial net debt (inflation-adjusted) per person has increased in every province since 2007/08. As shown in the below chart, Newfoundland and Labrador has the highest combined (federal and provincial) debt per person ($68,516) in 2024/25 followed by Quebec ($60,565) and Ontario ($60,456). In contrast, Alberta has the lowest combined debt per person ($41,236) in the country. Combined federal and provincial net debt represents the total provincial net debt, and the federal portion allocated to each of the provinces based on a five-year average (2020-2024) of their population as a share of Canada’s total population.

The combined federal and total provincial debt-to-GDP ratio, an important fiscal indicator that compares debt with the size of the overall economy, is projected to reach 75.2 per cent in 2024/25. By comparison, the ratio was 53.2 per cent in 2007/08. A rising debt-to-GDP ratio indicates government debt has grown at an unsustainable rate (in other words, debt levels are growing faster than the economy). Among the provinces, the combined federal-provincial debt-to-GDP ratio is highest in Nova Scotia (92.0 per cent) and lowest in Alberta (42.2 per cent). Again, the federal debt portion is allocated to provinces based on a five-year average (2020-2024) of their population as a share of Canada’s total population.

Interest payments are a major consequence of debt accumulation. Governments must make interest payments on their debt similar to households that must pay interest on mortgages, vehicles or credit card spending. When taxpayer money goes towards interest payments, there’s less money available for tax cuts or government programs such as health care and education.

Interest on government debt (federal and provincial) costs each Canadian at least $1,930 in 2024/25. The amount, however, varies by province. Combined interest costs per person are highest in Newfoundland and Labrador ($3,453) and lowest in Alberta ($1,930). Similar to net debt, combined federal and provincial interest costs are represented by the total of the provincial and federal portion with the federal portion allocated to each of provinces based on a five-year average (2020-2024) of their population as a share of Canada’s total population.

Debt accumulation comes with consequences for everyday Canadians as more and more taxpayer money flows towards interest payments rather than tax relief or programs and services. This budget season, federal and provincial governments should develop long-term plans to meaningfully address the growing debt problem in Canada.

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