One recent frustration of mine is the lack of gratitude that many military members exhibit toward the tax payers of the United States. I know there are many fine men and women serving our nation- especially those fighting in Iraq and Afghanistan. However, I do not feel that many understand or appreciate the lavish benefits that they receive in the military.
Benefits for active duty soldiers, in my opinion, are quite generous- just as good (if not better than) in the private sector. Soldiers receive base pay, and tax-free allowances for food and housing (if housing or a government dining facility is not provided).
For example, base pay for the most junior enlisted troop is $18,000 per year; for college graduates, a junior officer will earn $30,000 a year. Housing allowance is based on rank and location (click here for rates) and the food allowance is around $200 per month. Thus, the gross salaries for soldiers are competitively priced to local wages with base pay roughly equivalent to a soldier’s net pay amount- subject only to taxes. Again, I stress that these are starting salaries, which would increase with each promotion and time in service. (As a reference point, the median household income in the US was $50,233 in 2007.)
In addition to pay and allowances, soldiers and their families also receive low cost, if not free, medical and dental care. Other benefits include tuition assistance for education, 30 days paid vacation, all Federal holidays off, and any commander directed ‘training days’. Training holidays usually coincide with 3-day weekend holidays, giving personnel a 4 day weekend. Pretty sweet, huh?
Perhaps the greatest benefit a soldier receives is rarely discussed- the retirement package. By far, the retirement package for the military rivals that of CEOs and upper management. After 20 years of service, a soldier is eligible to receive 50% of their average pay during their last 3 years of service.
The chart below provides a snapshot of the retirement benefits that a typical military member receives. The middle column is the present value of an annuity similar to what military would receive on their first day of retirement. The far right column is the ‘annual’ payment (or additional compensation) that a military member would need to save or invest to equal the value of their pension. (Note: I tried to be conservative in my assumptions, so these figures would represent the LOW end of the annuity valuations; put another way, this chart is the starting point for the value of military pensions.)
Assumes 25 years of service, 30 year life of annuity, and 3% annuity growth rate.
So let us quickly review. Military receive salaries that, by design, are comparable to prevailing market wages including time off and other benefits. The chart above shows that military members also receive a great retirement plan, which would tack on an additional $10-15,000 in compensation per year. Even with these benefits, I still do not begrudge the military their retirement. They enter into a contract with the government for the retirement, and thus the government should honor these commitments. (Essentially, the military pension could be considered a ‘forced savings’ plan, in which the soldier is never given access to his retirement savings. Many Americans would probably consider this a blessing, rather than a curse!)
Where I do question veterans is on their perceived entitlement to Veterans Administration (VA) benefits when their disabilities are not service related. I do not dispute disabilities resulting from combat or action in the line of duty (ex. parachute training jumps). However, many disabilities that the VA also approves are for ‘disabilities’ caused by aging, pre-existing conditions, and off-duty activities.
For example, many retired military that I work with have been diagnosed with ‘sleep apnea’. The primary causes of sleep apnea are: obesity or excessive weight, large tonsils or adenoids, other physical attributes, nasal congestion or blockage, and relaxed throat or tongue muscles. As a second example, a friend of mine was granted VA benefits for his knee, which he hurt playing flag football. I am baffled how military duty could cause or is related to these conditions? If diagnosed with sleep apnea, veterans can receive up to 50% disability. As a result, the military member could potentially receive up to $1,000 additional compensation per month- tax free! If you’re curious, you can look at the VA disability payment rates here to get a snapshot of these benefits.
Two common defenses I have hear when I question retired military about their abuse of the VA benefits are: “Well, we were government property for 20 years and are thus entitled to these benefits”, and “Don’t blame me… Congress granted us this benefit.” To the first point, the VA administration has provided individuals with machines to help them sleep at night. However, the people I have spoken with do not use them; they’re only interested in the cash compensation. If ‘government property’ can be fixed, should they still receive the cash compensation? To the second point, I seriously doubt that Congress intended to pay these benefits for non-duty related injuries, or a pre-existing condition such as sleep apnea. Where should the line ultimately be drawn?
It infuriates me that benefits Congress passed to benefit legitimately disabled veterans are being abused. Fact: very few veterans ever see combat. The ratio of combat troops to support personnel is still 1 to 9- roughly where it was in World War II and Vietnam. Although support personnel in combat zones are still in harm’s way, their bodies are not being ‘damaged’ in the same way. Perhaps I am naïve, but I would suspect performing a support role in logistics or similar function does not damage the body to the same extent as kicking down doors or throwing yourself to the ground to protect against mortars and small arms fire. Additionally, support personnel are compensated with the same Hostile Fire Pay and tax-exemptions (CZTE) that the combat troops receive.
I apologize for this rant, but it really disappoints me when I see this ‘entitlement’ mentality for several reasons. First, it steals from the many veterans who legitimately deserve these benefits. How many veterans have returned home from World War II, South Korea, Vietnam, or Iraq and failed to receive proper attention because these resources were being inappropriately consumed by these other veterans. If you need proof, Secretary of Defense Robert Gates fired the commanding general of the Walter Reed Medical Center for not addressing deficient facilities and care for wounded troops. The problem is not lack of resources, but of the allocation of those resources. For a quick overview of the size and amount of money spent by the VA, visit their website.
Second, it steals from the American taxpayer. If the median household income is $50,000 and subject to a 25% federal tax rate, roughly $12,500 in tax is collected. If all of that money is used to support the military, it would take at least two households to support one junior enlisted troop, and three households to support one junior officer. Now consider this- there are over 1.4 million troops in all branches of the US military. Thus, approximately 10-15 million households are required just to support our troops- not including veteran benefits. How many of these households that labor day-in and day-out to support the military have (at least) a $700,000 retirement? 5%, maybe?
Third, it precisely shows why socialist systems fail. People are greedy and act in their own interests because they do not feel the repercussions of their actions. Give an entitlement to a small group, and suddenly there is a line of people waiting to receive the same handout. The TARP and similar bailout programs that are being passed are no better.
Ironically most of the veterans I know vote predominantly Republican and seem to favor fiscal conservatism. Frequently I challenge them on this contradiction: the military and its benefit package resemble something more socialistic than the traditional Republican beleifs. There is no pay for performance and the government provides a safety net from cradle to grave. However, when the government seeks to promote a new social program, their response is, “Why should they deserve that benefit? They don’t pay taxes!” In my opinion, that is like complaining about government without voting in any election. Unless you have paid more in taxes than you have received from the government, you have zero right to complain about how your taxes are spent.
My hope is that Barack Obama drastically cuts the defense budget and decreases the size of the armed services. The United States has become trapped in the ‘industrial military complex’ which is draining resources needed to prepare the nation for the next century. Prior to World War II and the Cold War, the United States never had a large standing army. If it were not for conflicts in Europe, it is unlikely that we would have fought any war. If it were not for the fact that we have a million-man standing army, would we have ever been involved in the many foreign conflicts of the past 15 years: Iraq, Bosnia, Somalia, Afghanistan, and Iraq (again)? In spite of conventional wisdom, it seems it IS difficult to build goodwill by continually exerting our military influence.
In summary, if a soldier is receiving food stamps, it’s because of his (her) own poor financial planning, not because he (or she) isn’t being paid enough. Second, there are many veterans who abuse the system, receiving benefits that far surpass those intended by Congress or equivalent to the private sector. Due to the wars in Iraq and Afghanistan, it is unpopular to question these military entitlements. However, I firmly believe that we must examine these benefits because of the strain they (will) put on the system. Could the incident at Walter Reed be precursor for other large, government run entitlement programs such as Social Security, Medicare, or universal health care?
Every gun that is fired, 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. The world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. – Dwight D. Eisenhower
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I am compelled to correct some errors noted in Mr Haas’ commentary. As a former Air Force finance officer, he should know better.
The correct term for the compensation provided to retired military personnel is “retired pay.” This is because retired personnel as subject to recall to active duty.
This retired pay is a percentage of only the “base pay” received on active duty. No allowances or other pay (housing, food, hazardous duty pay, etc.) are included.
The last I looked any tax free VA compensation is deducted on a dollar-for-dollar basis from the retired pay. If you received $500 in VA compensation, then $500 is deducted from the military retired pay. It’s not piled on top of the retired pay.
Do I have a problem with VA compensation for sleep apnea? You better believe I do unless it’s clearly service-connected. Most of the veterans I know receive their VA compensation for combat wounds (shrapnel/gunshot wounds, missing/non-function limbs/eyes, joints that no longer work correctly) or clearly service-connected disabilities. For those, they are probably under-compensated since the only actual benefit is the tax-free advantage on that compensation because it’s deducted from retired pay for those few who actually get to retirement.
Dear Mr Haas. Your lead-in comment “One recent frustration of mine is the lack of gratitude that many military members exhibit toward the tax payers of the United States.” rather set the tone for your entire diatribe.
I would never deride your contributions to our country during your tour as a finance officer. However, as one who likely spent his entire tour of duty working in an air-conditioned office and never heard a loud noise, certainly none made in anger) I don’t believe you really have a grasp of the hardships endured by, and the true sacrifices made by those who went to the field, lived in the desert heat, humid jungle mud, frigid winter cold, and actually saw the elephant.
I would bet you never had your body lifted out of the mud by the blast of an enemy mortar round detonating ten feet from you. I would imagine you’ve never experienced the feeling of a hot piece of jagged metal, traveling at a several hundred feet per second, ripping into your side. I trust you’ve never felt a bullet rip through your hand, explode the stock of your shotgun and continue on into your abdomen, have you? You’ve probably never seen your buddy struck in the neck and chest by three enemy rifle bullets or know the feeling of having him die in your lap on the floor of a helicopter on the way to the aid station. You’ve probably never been revisited in the night by the vision of being sprayed by bits of flesh, brains, and skull when your buddy’s head exploded from the impact of an enemy 51cal. machinegun bullet.
There are so many areas of your comment that I could and would like to address. However, Mr Robbeloth seems to have addressed many of them quite adequately and, based on the attitude you display, my thoughts are and comments I make would be lost on you. I will merely state that I am a retired military officer with almost 30 years of Marine and Air Force service. I saw combat in Vietnam, Grenada, the Gulf War, and Somalia and hold three Purple Heart Medals. I receive a 90% VA disability pension; 50% of that is for PTSD…..and make NO MISTAKE, Mr Haas, I prepaid every percent of that with my blood, sweat, and tears.
I will leave you with a comment on one of my biggest frustrations; the ingratitude on the part of American citizens for all of the sacrifices made by active duty military members.
Good day to you and enjoy your freedom. It’s been bought and paid for.
While writing this article, my intent was to provide a general overview of military benefits, which are complex and dependent on a myriad of factors. Thus, I tried to present the general case for simplification and comparability with the private sector.
With that said, I would like to address the issues raised by Mr. Robbeloth:
1) The calculations in the chart were only based on base pay- no other allowances were included. The center column represents the total value of the ‘retired pay’ cash flows as an annuity, thus showing the total present value on the first day of retirement. (For example: O5 monthly base pay (2008 rates) for 25 years is $7,631. $7,631 * 2.5% * 25 years * 12 months/year = $57,233 per year in retired pay. Assuming a 3% growth rate per year and 30 years until death, the present value of the annuity would be $1,121,797.)
I hate this calculation because it is heavily dependent on the assumptions. So I tried to be conservative with the guaranteed rate of return and life of the annuity. I chose 3% because it approximates the growth in retired pay (this year it will increase 3.9%), and serves as a conservative discount rate for a ‘risk-free’ rate of return. I chose 30 years because a member, who joins at 25 years old, serves for 25 years, would receive 30 years of benefits if he/she lives to 80 years of age. I felt these were reasonable assumptions to simplify the value of the retired pay as an annuity.
2) Military retirees are subject to recall to active duty: I did not include this because it would not affect the compensation figures. Also, to my knowledge, retirees have never been recalled to active duty- even during Vietnam when a draft was occurring. (I fully admit I could be incorrect on this point. I searched for the correct answer, but I could not find it.)
3) In 2004, the law was changed to allow concurrent receipt of retired and disability pay, provided the veteran is over 50% disabled. (http://www.military.com/benefits/military-pay/retired-pay/retired-concurrent-receipt-overview ) As I understand it, the rates currently paid are about 70% of VA disability pay, and will increase to 100% in the next 7 years. I was incorrect for not disclosing that the VA payment would be a reduced amount.
If the member is 40% disabled (or less), they are ineligible for concurrent pay and must waive their retirement pay, as Mr. Robbeloth described. Thus, the monthly, net benefit would be the VA compensation rate * the individual’s effective tax rate. (Ex. $1,000 * .25% = $250/month).
I apologize for the confusion. I should have presented the more general case of 40% (as I did in the rest of the article). As I stated, many retired veterans I know receive combined disability over 50% due to sleep apnea, high blood pressure, and similar, age-related ailments.
Again, I have no problem supporting legitimately disabled veterans. Given my current perspective, I believe the system is being abused by some, which is stealing from those that legitimately deserve benefits. Additionally, the magnitude of VA benefits is not small. Here is a link to the size of VA obligations: http://www1.va.gov/vetdata/docs/4X6_fall08_sharepoint.pdf
If anyone sees other discrepancies, please address them- I want the information to be correct! Military pay is very complex and I do not want to present a distorted picture. (Thank you Mr. Robbeloth for your comments.) It has been several years since I handled military pay issues, and the rules could have changed.
I have witnessed the military waste vast sums of money on personnel and material. Additionally, I have seen many soldiers avoid deployments and other hardship duties due to ‘permanent profiles’, which place greater burden on their fellow soldiers. Yet, at retirement, the ‘profiled’ soldier receives the same, if not more, in benefits. I don’t have the solution, but something just isn’t right with that situation.
WHW,
I appreciate your service to the country. However, your response (while emotionally charged) fails to provide any counter arguments to the issues that I raise. After I read your response, I was left wondering whether you read past the first paragraph?
Could you please identify where I state that combat veterans, such as yourself, should not receive benefits? I reiterate: Veterans harmed in combat should receive benefits (ref. paragraphs 8, 11, and 12). I believe we both agree on this point.
Where you might disagree is on this point: Do you believe veterans, who are predominantly support personnel, should receive 50% disability for non-combat, non-service, age-related disabilities? According to laws, they are entitled to the same benefits. Some people believe they should. I do not. If you believe they should, please provide me reasons for your position. If you do not, are we not raising the same issue?
As I state in the article, most veterans serve in support functions that do not suffer the same hardships that you experienced. From my time in finance, I feel these veterans are abusing the system by receiving benefits that were intended to provide for combat veterans. I maintain that support personnel are abusing the VA benefit system at the expense of other veterans (you!) and the US taxpayer.
Finally, your response highlights why military and VA benefits will never be curtailed. Because of your service record, you are the poster-child for increasing benefits. No one disputes your contribution to freedom and the nation. However, remember 8-9 support personnel will benefit from increasing your benefits. Are they being overcompensated, or are you being undercompensated? Or, are you both being adequately compensated? I cannot answer this question, but Congress does each year by passing more and more laws.
I believe the U.S. is caught in the military industrial complex. The precious resources that we waste on the military should be decreased (or used more efficiently) to prepare the US for the future. Large scale, government run entitlement programs are inefficient and unable to meet the complexity of every situation. I believe military entitlements are an example of such a system, which my ‘diatribe’ was seeking to highlight. With every entitlement passed, a recipient and special interest is created. How long can this go on before the liabilities break the back of the government?
Mr Haas. I read your entire article and you’re correct….my reply was, indeed, emotionally charged; I am not ashamed of that and offer no apology for same. Revisiting combat memories has a habit of eliciting emotions. I’m glad you picked up on that, even if you don’t have a frame of reference for the reason. After 42 years, my demons still visit me in the night and it’s not a pleasant experience.
As I said, I’ve earned each and every percent the VA gives me (and probably then some) and do not need to “back up to the cashier’s window to cash my disability check. As for your proposition that non-combat veterans be ineligible to draw disability…I most strenuously disagree. I have absolutely no problem with any military veteran (even you) drawing a disability percentage for any service-connected disability.
As you pointed out, the military has a much larger ratio of tail to fangs. Not everyone is afforded the honor of serving this great nation in combat. In honesty, I really don’t care about the charts, percentages, dollars, et al. that your initial comment contained. There in more to doing the right thing than figures and statistics. What I care about are the service-connected disabilities my brothers and sisters in arms are suffering as a direct result of military service – whether the precursor was combat or other non-combat related.
If disability payments are stressing the government’s wallet, you’re pointing your finger in the wrong direction. If the government could not afford to care for its veterans, it should not have been so quick to call up and/or recruit so many fine men and women into the military over the years.
I do believe that veterans should be closely and fairly screened and rated for those service-connected disabilities. Stop trying to take benefits out of the pockets of those who have earned them. If you want to get mad about something, get mad at all the fakers and pretenders out there and work to weed them out of the system. Do you know how many false claims have been paid out to individuals who never even served in the military at all? Do you know the dollar amount that represents? Check that out and then come back and reply to me if you wish.
Good day to you.
@WHW – Sir, when I separated from the military I was encouraged to be as creative as possible in listing potential conditions that could lead to official disability. As a matter of honor, since I had worked in a cushy office throughout my service, I promptly dismissed these suggestions. I know that many of my peers were not quite as forthright regarding the nature of their ailments.
There are just a few points I wanted to bring to the attention of this forum:
1) Combat veterans deserve every penny of present compensation packages, probably more
2) There is a good deal of fraud, waste, and abuse in the system
There will always be inefficiencies in any large program, particularly politically charged ones, so we should not expect significant reform any time soon. It is not in politicians interest to seek reform in veterans programs.
Rather, the bigger issue is revising foreign policy and how we employ our military. I am very much in favor of reverting to Constitutional limitations on use of armed forces, rather than enabling individuals effective unilateral authority to commit this country to combat.
Further, a Republic has no business maintaining an empire. Our troops are in too many countries, and have engaged in far too many conflicts over the last century. What we have now is not what our government was meant to be.
It is not the fault of the brave men and women who have served that they were asked to serve. For their contribution they absolutely deserve full and fair compensation. I fault our political leaders-with whom we consistently place too great a trust-for breaking Constitutional and healthy restrictions on use of our military potential.
@WHW –
WHW,
On the entitlement issue, I suppose we have to agree to disagree. No hard feelings.
On a positive note, I feel this dialogue has been great for the forum to read! I constantly ask myself: is the current process efficient? Perhaps it is. If military pay and entitlements were more (or less), the voters would elect new officials to decrease (increase) benefits.
In my opinion, the more dialogue that occurs on this subject, the better the military and voters will be in making informed decisions. It should improve the efficiency and ‘pricing’ of military service risk (via the mechanism above). After all, we do have a volunteer military that will allow supply to meet demand.
Unfortunately, it is taboo to question these entitlements. Why should that be? If I question the entitlements, what objective criteria should I use so as not to offend the veterans? Dollars, charts, and numbers are the only way I see to objectively view the value that our military performs. Pain and suffering are both subjective criteria, and as I have seen, easily manipulated. Maybe we should just dissolve the entire military and hire mercenaries?
One last statistic- The 2008 budget for DoD was $481.5 billion, not including an additional $141.6 billion in funding for the Global War on Terrorism. The various VA budgets consumed another $131.0 billion. Total cost: $754.1 billion.
By comparison, this is roughly equivalent to a TARP every year. On a per household level, the stimulus checks that were distributed last year cost $120 billion. Think about that! Each year the government could refund 6 times the amount of last year’s stimulus check to the taxpayers, if zero was spent on defense related expenditures. Perhaps it isn’t efficient?
One last joke- If the last bastion of communism is the American university, is the last bastion of socialism the American military? (The mercenary comment was an attempt at humor as well. I doubt anyone laughed though.)
Mr Haas: As far as dialog, it is always good when opposing views are aired for everyone’s consideration. You and I are quite clearly viewing the issue from diametrically opposed positions; positions I think neither you nor I are willing to moderate to any degree. When we reach such impasse, the only option left, save endlessly going “’round and ’round” wasting time, is to agree to disagree and call it a day. I think one more comment with a few thoughts is in order before I do just that.
1. The system is not perfect; no “system” is but the one in place world acceptably well. There has been and continues to be abuse, i.e. charlatans who were never veterans but claim to be and their supporting documentation is not properly scrutinizes by the VA. The VA has been working to expose these walking talking rectums and, when they are discovered, they should be prosecuted to the fullest extent of the law. These individuals are committing theft of money from the government as well as stealing the honor of vets who truly are service-connected disabled; much like the Stolen Valor Act which I also heartily support.
By the way, I did notice that your reply made no mention of the information I challenged you to research and provide regarding the number of phony vets claiming disability or the dollar amount this is costing the VA and the taxpayers.
2. I don’t think questioning service-connected disability entitlements is taboo as long as it is done for the right reasons. Mean-spirited and and agenda-driven motived will always be met with extreme resistance by me and those like me. Charts, figures, and statistics have a place but they are not the only information that must be weighed in the equation and they only go so far.
I don’t know your age so I don’t know if you remember all that much about the Vietnam War. In the 1960s Robert McNamara tried to “manage” the war relying almost exclusively on his charts, figures, and statistics. Anyone old enough to remember the Vietnam War is painfully aware of how his MBA approach worked out. Common sense, compassion, integrity (a sense of what’s the right thing to do), emotional issues if you will, must also be considered in this equation.
3. Sorry but I found your “joke” entirely lacking of humor. Socialism is basically the redistribution of wealth/assets/etc. based on “someone’s” arbitrary assessment of entitlement rather than the basis of what one has worked for and earned. I maintain that service-connected disability benefits were EARNED – bought and paid for – by each and every veteran who is now suffering from such disability long before those benefits were bestowed…..hardly socialism, that.
Good day to you, sir.
Finally, a quick comment to Mr Viglione before dropping off for the day. You didn’t say in which branch of service you served or whether or not you were ever deployed overseas or saw combat so I don’t know your frame of reference in making your comments but I do detect a rather literalistic and, perhaps, anti-military – as an institution, though not necessarily anti-individual service member – tone to them.
I obviously agree that combat-disabled veterans deserve every penny given them, probably more. There is fraud and abuse in the system. However, that fraud is not the result of benefits paid to service-connected but non-combat disabilities. As I indicated in my comments to Mr Haas, where we diverge is that I also believe that any veteran, truly suffering from a non-combat but undeniably service-connected disability also deserves every penny they get. The fraud and abuse lies in the significant number of odious and vile individuals who were never in military service but maliciously and fraudulently claim veteran status and service- or combat-related disabilities.
Let me throw out a couple categories of service- but not combat-related disabilities, In the late 50s and early 60s a small group of military men parachuted from high-altitude balloons (from over 100,000 feet altitude) to test the the effects and survival possibilities of high-altitude ejection from combat aircraft. When these men were later disabled and from the effects of resultant frostbite and other disabilities, would you deny them their disability? Men rode centrifuges at excessive G-forces in the line of duty to test the effect of these forces on aircrews flying high-performance combat aircraft and the men and women who would ride our spacecraft into space. When these individuals latter suffered disabilities from these actions, would you deny them? Veterans have also been disabled as the result of deep-sea rescue and salvage efforts in the line of duty. Would you deny them? Each year servicemen and women are killed and seriously injured during combat-training exercises (service but not combat-related). Would you deny them? I could go on and on with tens or hundreds of other examples but I think the point is made.
I can hardly take your “empire” comment seriously as it’s merely a speculative and pejorative label, used by you to portray your particular political agenda. I don’t want to waste time here commenting on speculation that has no real legal standing. We do have a legal basis, “business” in your words, maintaining troops on foreign soil. It has to do with Congressionally mandated or sanctioned security agreements and treaties with those countries.
That Constitution, and the treaties and security agreements made in accordance with it, are what allowed deployment of military forces to places like Europe, the Pacific, Vietnam, Grenada, the Southwest Asia, various African nations including Somalia, Panama, and the Balkans. Don’t like it? Change the Constitution.
Good day.
WHW,
1) I did not even seek to find the information you requested, because the ‘phony vets’ are outside the scope of our argument, which was legitimate veterans’ benefits. Obviously, I agree that ‘phony vets’ should not receive benefits. The question I anticipated you asking was “how many veterans are receiving disabilities for non-service related conditions, such as sleep apnea?” Unfortunately, I was unable to find this info on the VA’s website.
2) I am familiar with McNamara and the ‘Whiz kids’, which is why I thought the entire Iraq War was comical. I was always told the decisions were left to the generals. Rumsfeld’s and his band of merry men (including Cheney, Bush) decision making seemed eerily similar to that 30 years earlier (ex. weapons packages on bombing strikes and troop levels). I guess we never learn from history?
3) Lighten up man! You must be awesome to have at a party. Second, I shouldn’t have compared the military to socialism in this article (along with several other sentences) because it digresses off topic and weakens my overall argument. Maybe this will be my next topic for an article? Stay tuned!
@James Haas –
Mr. Haas,
Our benefits are “fair” not “lavish”. You compare us to the average American household as if we are the average American household. The average military person works more hours, spends more time away from their family and takes more risks than the average American. What is wrong with generous compensation for generous sacrifice? For these reasons I personally do not consider it “generous” (liberal compensation) or lavish compensation. I consider it “fair” compensation.
I am not going to thank you for paying me fairly (not always but since Bush was in office) for the sacrifices I have made. When I joined under the Clinton administration I did not care that my compensation was less than appropriate. Twelve years later I have a daughter that spends nearly half her life without her Daddy, a loving wife and extended family that make huge sacrifices, a family that easily pays more than my compensation in taxes and a country that depends on me. For these reasons I do care about my compensation and would no longer be a volunteer if I were not compensated appropriately.
I am guessing you make more than the average American with your Ivy League education and MBA. Would you consider your compensation lavish or fair? Shouldn’t your employer compensate you more than average for your education that is above average? Should your employer not provide your additional compensation for the hours of overtime that you work? If you were running your own company would your employees that were loyal and dedicated be compensated more than the average employee? It is completely misleading to compare military compensation to the average American Household and then call the compensation “lavish” because it is better than average.
I will say that I believe government spending needs to be checked across the board. That includes military spending. I have witnessed abuse of taxpayer dollars at all levels of the government and it angers me greatly. However, the abuse is not in the pay and entitlements provided to military members.
Your hopes for President Obama to drastically reduce military forces and cut the defense budget saddens me. Nearly all Presidents have at least a few failed policies. President Clinton himself reduced military forces and cut the defense budget. However, less than 9 months after he left the Presidency thousands of Americans paid the price for his failed policies. While his policies are not completely to blame for 9/11. They definitely didn’t help. You are asking for the same failed politics. Some people will never learn.
Daniel,
Since writing this article, I have since moved more toward the ‘fair paid’ camp. (I am not there, but slightly closer than before). I still feel the military is better paid than Americans performing similar jobs. Perhaps this is the ‘price’ for an all volunteer force? As I wrote earlier, I constantly question whether the process is efficient. Maybe it is?
After all, off-setting the ‘more hours’ of work, ‘time-away from family’, and ‘additional risk’ that you mentioned are the benefits (just to name some) of job security, family separation pay, hazardous duty and combat zone tax exclusion. As I state in the article, the abuse of veterans benefits and the military retirement are outrageous when compared to private sector compensation. Personally, I think it would be better to eliminate the retirement system and provide additional, annual compensation. I think this would help to retain quality people, and allow the military to force out the ‘dead weight’ waiting around for the retirement package. (I REPEAT: this does not include service related disabilities. I can hear the hate mail now!)
As with everything in big government, the problem is not with lack of resources, but with the inefficient allocation of those resources. We could live in a police state, and 9/11 may have or have not occurred- there’s really no point in arguing about hypothetical situations. As I understood it, Clinton cut defense spending (rightly) because the US no longer faced a large Soviet threat.
Also, I just don’t buy the ‘sacrifice’ argument that you and other critics make. First, many people would not stay in the military if wages weren’t competitive with the private sector. (A point you confirmed by stating “For these reasons I do care about my compensation…”) Secondly, from my experience in the military, many soldiers only wanted to be in the military when it was convenient for them. When it came time to deploy (ie. do their job) or perform some other ‘hardship’ duty, these people were looking for the exits. If the ‘sacrifice’ wasn’t forced upon them, I doubt there would be anyone to fill the gaps. It’s great to feel patriotic and thank people for ‘sacrifice’, but at the end of the day, the military is doing its job- just like policemen, farmers, firefighters and mechanics.
Lastly, I don’t understand the argument that military pay should not be compared to the American labor market. Does the military not belong to the US labor market? In difficult economic times, do more citizens not consider the military as a job option, and do current soldiers not delay or rethink their decision to separate?
The whole point is this: the military does not ‘create’ anything. When a soldier collects $100 in income, but pays $30 in taxes, how much did the soldier really create? The way I see it, the soldier consumes $70 of resources that could have been used elsewhere in the economy, in addition to his own use of time (opportunity cost). Granted, he does ‘create’ some demand for goods and services by buying GI Joes with his $70. But, this is still small when compared to the $70 that he consumes.
Likewise, R&D funding for military projects (ex. Fighter planes, nuclear weapons), it could be argued, improves the development for commercial goods and services, and patrolling the shores prevents piracy. However, for the other $400+ billion that is spent per year, it is essentially a bunch of people training for the next war, while waiting around and creating work for themselves. Yes, we do need some sort of military, but is a million man standing army somewhat extreme for national defense?
The military industrial complex is great if you’re receiving $70; not so great if you’re paying $100.
Here are answers to your questions (in no particular order with some humor added):
Q: What is wrong with generous compensation for generous sacrifice?
A: What generous sacrifice? See paragraph 4 above.
Q: Would you consider your compensation lavish or fair? Shouldn’t your employer compensate you more than average for your education that is above average?
A: My compensation is determined by the market not a pay scale. Fair is what the market is currently paying- especially in these tough economic times- regardless of my education or experience.
Q: Should your employer not provide you additional compensation for the hours of overtime that you work?
A: I wish. I am salaried and work as directed.
Q: If you were running your own company would your employees that were loyal and dedicated be compensated more than the average employee?
A: Most likely. But, I’m torn between these two sayings: 1) You’re only as good as your last idea and 2) heavy is the head that wears the crown. It would probably depend on something arbitrary, like whether the barista that day correctly made my double shot espresso with cream, syrup, and vanilla flavor. (Seriously, I don’t drink that crap. What happened to milk and sugar?)
@James Haas – Mr Haas,
Mr. Haas,
It has been nice debating with you. I do find your ideas interesting and I enjoy the fact that it makes me think.
Sacrifice: Forfeiture of something highly valued for the sake of one considered to have a greater value or claim.
I do agree with you that at the end of the day the military member is “just doing their job”. I understand you don’t agree with it being a “sacrifice” because we are compensated comparable to the private sector and often the “sacrifice” is forced upon the individuals. However, I contend that all employment requires sacrifice. All employment has cost and benefits. The cost is the sacrifice (time away from home, living on top ramen while receiving an education to get a higher paying job, doing an undesirable duty..ect) and your compensation is the benefits. I do believe the average military person makes more sacrifice’s than does their average civilian counterparts. We are in turn compensated fairly by the American Taxpayer for that sacrifice. I agree that often the “sacrifice” may be forced upon the individual. Again this is the same for the private sector. A person in the private sector may be forced to complete undesirable duties or find themselves without a job. The military member has that same choice. The only difference is that private sector employees won’t have a piece of paperwork that they have to show to future employers that says “Dishonorable”. They won’t find themselves in jail or unable to get a job at McDonalds if they refuse to do their duties. The freedoms and sovereign rights that we give up in the military is a generous sacrifice and we are fairly compensated (equally generous if you will) for that sacrifice.
I definitely agree that the military should eliminate the current retirement plan and instead provide additional annual compensation. However, I do not believe it would rid us of our dead weight that is waiting around for the retirement package. I hear plenty of complaining from civilians about the dead weight in other large organizations (often people who have been there 20 plus years). I am sure that same dead weight is often sitting around drawing the company match in their 401K if they so choose.
Despite the fact that I agree the pension plans should be eliminated I don’t agree that our retirement plan is outrageous. For example my wife makes considerably less than I do. She invests 8% of her income into to her 401k. The 8% she invests is matched 100% by her employer. Her investment plus the match is about $500 per month. Lets assume that she never received another raise (which is unrealistic) and continued to invest at the same rate for 25 years at a 10% return (slightly less than the current long term average of her holdings). If she were to invest in this manner there would be a total of $663,416.70 in the 401K at 25 years.
Comparably using your own calculations she would fall between the E-7 and E-8. However, she currently makes considerably less money than a E-7/E-8. I understand my wife has a good employer that is generous in the match combined with good products within her 401k. However, nothing is preventing other Americans from seeking out a good employer with similar benefits. My wife only has HS education and had only a few years of work experience prior to working at her current employer.
Admittedly the fact that my retirement plan has little risk (aside from the collapse of our entire system) could be considered lavish compared to a civilian retirement plan. My wife definitely can’t count on her average annual return being 10%. Nor can she count her company always matching 8%. And there is always the chance that her company could go out of business.
I agree, the military is part of the American labor market. However I think your conclusion of military compensation being lavish compared to the American Labor Market was not correct. Again I persist our compensations is “fair” when compared to the American Labor Market.
I agree I used flawed logic with my argument regarding 9/11. There is no doubt America has built an empire outside of our borders. In doing so I agree it is likely difficult to establish goodwill by asserting military influence. Our country has been doing this for decades. However, when it comes to national security I think there is no easy answer. My own personal political view is that we should continue to invest in the progression of intelligence gathering. Have a trained and capable active force in every region with trained reserves at home. I think military force should only be exerted only when attacked or when sufficient intelligence makes an attack necessary.
The difficult decision is to decide when military force is necessary and how much force to exert. Without a doubt our President’s have all had to make difficult decisions. Often there is no right answer. They have all made bad decisions. All decisions are met with heavy criticism. All decisions result in a sacrifice or death somewhere. Some decision are probably criminal and made to line the pockets of the wealthy (which pisses me off). However, despite corruption and the turmoil we are currently going through, I think our country is doing pretty damn well. It saddens me that so many people are out of employment but I think every down brings opportunity. It forces us to refocus and makes us a stronger nation in the end.
You stated “The whole point is this: the military does not ‘create’ anything. When a soldier collects $100 in income, but pays $30 in taxes, how much did the soldier really create? The way I see it, the soldier consumes $70 of resources that could have been used elsewhere in the economy, in addition to his own use of time (opportunity cost). Granted, he does ‘create’ some demand for goods and services by buying GI Joes with his $70. But, this is still small when compared to the $70 that he consumes.” Now if you are suggesting that the government should lower taxes while in turn cutting the defense budget I may partially agree with you (though I don’t believe we need massive cuts in military personnel…… though I do agree some spending could be curtailed or applied more effectively even within the military). I know there are programs that this tax money could be used to improve the life of other individuals. But how could the government spend the money in a manner that would be any better for the economy as a whole? Most programs consume the tax money in the same way as a GI so I can’t see any added benefit to the economy as a whole.
I understand fair is what the market pays. My point is if your employer compensates you fairly according to the market would you consider that lavish? Of course not. On the same token, for the reasons I have explained, I consider military members to be fairly compensated rather than “lavishly” compensated. I think some military members may complain because they honestly have no clue that their compensation is actually fair. However, I don’t think they are naturally “ungrateful” anymore than any other human being.
I understand you are salaried (I am too). When I grew up my father had the choice to be salaried or hourly. He always took the salaried route. It was more predictable and generally paid more than the hourly route even if you consider that he didn’t get paid for overtime.
Mr. Haas you are a talented writer and I enjoyed reading your article. I hope things are going well for you during these tough times.
Daniel
Daniel,
Thank you for reading and I’ve enjoyed debating with you as well! I am really glad that you read my other articles too. From your comments, it sounded like you enjoyed them.
Most importantly, I’m glad my ideas have caused you to think. I think the US will be much better off it we challenge our assumptions more than we currently do.
So many people (including some family) have gotten angry at me for writing this article. I’m indifferent to the issue, but I just want others to be consistent. I just don’t see how people can claim ‘fiscal conservatism’ in one breath, but support DoD’s budget/entitlements in the other. Or complain about military pay (or retirement) when it is better than 90% of people in the private sector.
Just a couple quick clarifying points, since I think we ought to call a truce, and agree to disagree on the compensation issue.
1) If you change the discount rate on your wife’s 401K calculation to 3% (vice 10%), it will significantly decrease the value of her retirement. I used 3% to show how much money veterans receive in retirement. Thus, the values in the table I created are the low end, not the high end of retirement pay. (I will email you the spreadsheet if you want to play with discount rates.)
Just last week, a retired Colonel complained to me: “I couldn’t believe how much money the government takes out for taxes!” I just responded, “Welcome to the real world.” The kicker is a Colonel receives about $60K per year in retirement- risk free!
2) I agree there is also a lot of ‘dead weight’ in the private sector too. However, it’s much easier to fire these people, and there are not as many ‘legacy costs’ as there are with the military.
3) If the defense budget is cut, the amount of taxes collected should also be cut. Government is a horribly inefficient allocator of capital. Case in point: TARP funds are preventing insolvent banks from failing. How is that efficient?
4) From your comments on the article “Is this THE Bottom”. Dollar cost averaging is the best method for a passive investor. Obviously, with concentration there is more risk for a potential higher payoff, but the individual must be vigilant over their investments. Most people are not vigilant in good times or bad.
The best thing is to look for the highest return per unit of risk (or greatest Sharpe ratio). Personally, I’m all for concentrated positions, since I’ve got 30+ years until retirement.
Again, thank you for reading and your introspection.
Best,
James
I’m retired with %50 disability for sleep apnea. I’m digging the extra cash and have absolutely no shame whatsoever. I live outside D.C. and I see where the taxes I paid while I was a civilian, a military member, and now a retiree go to. The inner city piss-holes that are filled with people who have never given a crap about this country is where you should be focusing your anger. The never ending American teat that drains in NYC alone would keep us all snorers in nasal strips for life.
I have just read over all of the debates on this page. I am a female disabled OEF/OIF veteran. We as veterans have to fight for everything the civillians naturally get with there cushion jobs. How many civillians jobs require you to work 365 days a year? How many civillians have wear body armor just to be able to go to the bathroom? When i was in kuwait at the range it was 140 degrees. Civillians have it easy. I have PTSD and am still fighting with the veterans administration for compensation. Some of the veterans that come back from war, don’t get the chance to retire and are put out of the military. I believe that the american people need to wake up and realize that if it wasn’t for the men and women that risk there lives everyday we wouldn’t be free. I was in the army for three years. I was stationed in germany and my kids were back in florida. Oh and not all of us get all federal holidays off. It depends on your unit and what your mos is when you go into the service. I also, believe that if an illegal alien or any immigrants that want to be a citizen in this country should be given a weapon and sent to war with the rest of the americans. Our country is in disaster and everyone is bashing the military thats pathetic. The media has no clue how bad it is in the war zones and are protected when they are over there. I hate the fact that I am unable to work, because of several things that happened to me while in the army and being in iraq and kuwait. A lot of the vietnam veterans have to wait years before they get any benefits. Not all of us are lucky enough to make it a career and retire from the military.
I have worked as a veterans service officer for many years now and I absolutely LOVE helping those vets missing body parts, bound to wheelchairs and undergoing treatment for Diabetes, Prostate cancer etc. I am likewise HONORED to assist their grieving widows.
Conversely, I absolutely DESPISE helping those whom I have come to KNOW are patent frauds, whom have become sly in the tactics and techniques to GAME the VA disability system.
Sadly, my office cohorts and I all concur that the majority of our clients, are involved in SOME degree of scamming, whether it be blatant falsehood or exaggeration.
This is a system that rewards a “helpless” mindset, squelches ambition, integrity and personal honor. It is what it is.
I am thankful to have my chosen position,…and as long as there is disability fraud, I will maintain job security, though I desperately wish that the VA would reform it’s out of control methodology.
If you’d seen and heard the things we had, you’d humbly concede the point that all too many vets at present time, bear a shameless sense of entitlement that would make the SELFLESS warriors of General Washington’s force of patriots at Valley Forge, hang their heads in disgust at what has become of bravery and independence.
Sadly, the majority (but not all) of our veterans have long ago forgotten what it meant when John F. Kennedy stated: “Ask NOT what your country can do for YOU!”
Sorry if this offends anyone, but this is the case.
i hate pencil pushers they have no idea what work is you say basic pay we get alot of money and benefits plus we pay taxes on it what the little pay we get payed he never says nothing about working all night and then having section duty the next day then you have to work all day again then stand watch at night then maybe get another 2 hours sleep till you have to get up at 6 am then go to work again all day then they might have emergency again that day so you have to work till midnight working with the duty section for that night even thou you should have got off at 4pm so you only got like 2 hours sleep in 3 or 4 days and this goes on for months and we eat out of bag lunches 60% of the time becouse we cant leave where we are at working to get the job done and stress he has no idea! Stupid paper pusher!!!! having to be on security teams on the ship if you are dead asleep and then you have to be at the armary and get your gun and bullet proof vest within 3 minutes and you were just in delta sleep and your underwear less than 3 minutes ago! now you are at 150% stress and running around looking to kill someone! who is this paper pusher think he is saying people are abusing the system! and we have to take a order to die at any second if we are told becouse we have honor and really believe in the constitution and against collectivism so your kids and ather peoples kids can be free! i have known alot special forces guys of guys dont have a scratch on them from the military but there brain is burned out they cant even hold another job becouse they were worked like slaves and never got enough sleep in the military so they have damaged brains but having 30 days of leave a year helps? I had over 74 days leave on the books and still could not take leave becouse we had to many critical jobs to get done to support ather troops in the military to do there job and for you to be safe at home you paper pushing loser you have no idea i have earned ever cent of my money !!!!!!!!