The Defense budget is enormous due to the influence of the military-industrial complex that Eisenhower warned about. This means money is not available for things such as infrastructure, teachers, and government assistance for college, all of which have dropped just when we need them most to compete.
Corporate subsidies. The US hands out corporate welfare, which is estimated to cost $90 billion/year. About half is crop subsidies for huge corporate farms. This has not been needed for many years, and especially now with the high price of food.
Mortgage subsidies. Fannie Mae and Freddie Mac were supposed to help Americans buy their own homes, but they have displaced private firms that would do that, and the subsidy - over half of which goes to their profits, not lowering borrowing costs, is between $122 billion and $182 billion. The private firms were crowded out into subprime mortgages, with resulting harm to everyone with the damage to the economy. They weren't stopped by Congress because they spent some of their subsidy on lobbying.
Military. We spend almost half our budget on the military, acting as the World's policeman, while other countries spend money on infrastructure, education, health care and other civilian projects to improve the quality of their lives. The US military spending is almost equal to that of the entire rest of the world combined. We spend over $600 billion a year on the military, including the separate Iraq war funding. That is spending that leaves nothing - no bridges, no educated workers. We can cut that in half and still spend 4 times as much as our closest competitor, China.
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