Did I miss the obvious explosion in rape statistics? Do you have a secret data stash somewhere? Are you sure that everybody being "deliberately obtuse" isn't just looking at the world as it is rather than as you imagine it is?
Hint: When the results of a thought experiment conflict with the results of an actual experiment, the actual experiment wins.
As a back-of-the-envelope sanity check, access to porn over the past 30 years has skyrocketed in the US. I mean, you used to have to go to seedy porn stores to get it and now anybody with an Internet connection can literally get more porn that they could every possibly consume, tailored to practically any niche they want. If it was positively correlated with sexual assault, it seems like we should be seeing it in the numbers by now.
So where's the data? It's not like this is an abstract thought experiment.
At my last company, we had scores in a bunch of areas (the typical "communications" "technical skills" etc.) and during the training on the web-based tool I noticed that it produced a final floating point average of those scores at the bottom.
Me: "So are those numbers just useful for us as managers to discuss where the employee is relative to everybody else, or are they used for something?"
HR: "No, your ranking and your salary are based on that number."
Me: "How are the different categories weighted? Does it depend on job description?"
HR: "No, it's the average of the scores in all of the sections."
Me: [choking back the urge to ask "What are the units on that number?"]
Of course, this is the same company that still had us fill out performance appraisals two months after they announced that they were closing our office, that there would be no salary adjustments and that we would all be out the door in six months. I didn't bother asking, "What's my incentive to do anything that might piss off the disgruntled guy who I'm depending on to finish up the transition work I need to get my bonus?" Big smiley faces for everybody that time around.
That's definitely better than the "every department cuts a fixed percentage of their workforce" nonsense that a lot of companies do. I've always thought that the best way to go would be to do a ranking and cut the bottom X% and give the top Y% cash bonuses in the very same swoop. Layoffs have a way of shaking people up, and your best people can easily find another job if they decide they don't like to live with uncertainty.
Give them a pat on the back and a bonus offer the same day you're laying people off so they know that they're not at risk, and make the bonus vest over a few months to keep them around long enough to see that things are OK. You're saving recurring salary and HR costs on X% of your workforce, so the cash is there for a one-time payout.
My rule for inkjets is similar. Unless you're a pro-grade graphics type doing pro-grade graphics stuff on a pro-grade inkjet printer, you probably bought a machine with one design intent: Turning full / working ink cartridges into empty / dead ink cartridges. Any printing the machine does during that process is purely coincidental. Don't do it. You'll only encourage them to make more.
Of course we are talking about people without insurance already and the law specifically puts congress and it's staffers into that category so including them is more then appropriate.
OK, so we're moving them into an entirely different category of worker by grand fiat. I suppose the fact that hey get paid better than the average McDonald's worker is also "special treatment" and not just part of their normal compensation package for their skill sets. Somebody should pass a law cutting them to minimum wage so they really feel the pinch. Forget paying market wages for marketable skills, we have a point to make. In fact, let's test our welfare system by cutting their pay to $0. Surely that's not a stupid idea that will backfire as soon as it hits market realities.
You have people who can't afford it, or do not incur medical costs and do not purchase insurance, and you have some who might be mooching off the rest of us by making us bear their medical cost.
If you're walking around without insurance secure in the knowledge that you'll be treated in case of catastrophe, you're basically stealing catastrophic coverage from the rest of us. We pay more so you can do that. The fact that you never use it is a side issue. Risk has a price, and insulation from risk has a value. If everybody behaves that way, the system collapses.
Well, here is a constructive alternative, instead of forcing everyone to get insurance, how about forcing people who don't pay their medical bills to get insurance.
How, exactly, would that work mathematically? What you're describing is known as adverse selection. Again, if everybody behaves this way, the system collapses.
Insurance is pretty simple. Most people pay in more than they ever take out so that a small subset of people can take out way more than they put in. The only way it works is if the ratio of payers to redeemers is high enough. You can't create a system where everybody opts out of being a payer and then jumps into being a redeemer when they need it, even if you penalize them some small amount.
Every single citizen in the US who did not have insurance had their market wage reduced by the requirement by law to spend part of those wages or have them removed by the federal government.
Ah, so we're talking about people who don't have insurance already. OK. So that's a little different. Congressional staffers had insurance as part of their pay and then lost it, and the Republicans fought for the Vitter Amendment which prevents the OPM from making up that cut in dollars like it would in the regular market for people who have insurance as part of their pay package. They're creating a perverse situation that doesn't actually exist in the private markets which specifically screws the staffers.
People who don't have insurance fall into two categories. Either they can't afford it, in which case the exchanges should be a major boon to them, or they're mooching off the rest of us by making us bear their medical cost risks for them, and I don't have a lot of patience for whining over them having to pay into the system. Cry me a river.
The law specifically said they had to go onto the exchanges. Any rational person not believing that there is one set of rules for the subjects of the crown and another for the crown's court would understand this to mean they had to participate in the exchanges just like the millions of other people who fall under the law.
Nobody was keeping them off the exchanges. They were going to the exchanges. They're still going to the exchanges. The only question was whether the government would behave like a normal employer and pay the cash savings over to the employees so they could spend it on the exchanges or whether they'd take an arbitrary pay cut the likes of which doesn't happen to the rest of us if our employer drops coverage.
If you take a few deep breaths and calm down, maybe you'll see it more clearly. You seem pretty amped up on hate for congressional staffers. They didn't have a "special exemption" before the Grassley amendment. They just had employer health care like most of us do. They weren't getting special treatment before the Vitter amendment. The only problem comes from the fact that Congress is calling this a "subsidy" which is illegal, instead of what it really is: being paid their negotiated wage.
Second,what republican has ever said staffers couldn't get a raise?
David Vitter. But only in the sense that it can't be called a "subsidy." And it's not really a raise, but a "not cut." This whole thing is a weird parsing of the word "subsidy" versus "raise" versus "cut." The basic market outcome was broken by the Grassley amendment and the Vitter amendment was an attempt to keep it broken.
They'll eventually have to pass something entirely different to give the money back in a way that doesn't look like a "subsidy", but the Republicans are making a hard stand on it as though there's a meaningful principle at stake, probably because the voters are confused and really think that extra money is being shoveled into the pockets of staffers, and hating on those guys is playing really well in the media right now. "Here's the money we just took away from you" isn't a subsidy by any reasonable definition.
I don't see that as a terrible thing. Some claim the staffers have too much power and influence in government and constant changing of them would negate that so the representation of the people takes priority.
That's fine. If your position is that we're better off with an across the board pay cut of between $5,000 and $11,000 for congressional staffers who aren't exactly making bank, that's a perfectly valid place to be. But it doesn't have anything to do with "special treatment" for anybody.
With the proviso that magicing huge amounts of money out of nowhere is not a valid way of entering into this.
You didn't answer the question why? What, exactly, is wrong with changing the amount of money in the economy? Is the current amount exactly the right amount for the circumstances? Is it a moral objection? Superstitious? The appropriate money supply for an economy is kind of a big piece of 20th century economic thought, so the assertion "never change it, ever" seems like it should have some fairly solid theoretical grounding.
Fiat currencies do not work, they all fail given enough time.
I always love this line of reasoning. "Every fiat currency in history has failed. Except for the ones that haven't. Therefore, all of the currencies that haven't failed will eventually fail." I suppose it's trivially true that everything we build will fail sometime before the heat death of the universe.
Dollar is not accepted everywhere anymore, not since it shed 40% of value in one year and people realized that dollar is not more stable for preserving wealth than their local currency.
Which currency did the dollar depreciate 40% against? Over what timeframe?
[insert face palm here] Borrowing more money does not help your credit.
Which helps your credit less?
A) Borrowing money.
B) Saying that you are not going to repay your creditors.
I'm pretty sure the answer is (B).
The last time the US's credit was downgraded, it was because they did another huge round of borrowing.
Holy crap, did you read S&P statement on the reason for the downgrade? They explicitly wrote that threatening not to raise the debt ceiling was the reason for the downgrade.
I'm wondering what it would take for an enterprising team with a large amount of capital to risk to induce a flash crash for fun and profit on a lower volume asset that's known to be populated by HFT bots. These things are ultimately just control systems, so it should be possible with the right set of inputs to "smack it with a hammer" and cause instability and then profit from the brief swing while the system re-settles.
The main problem would probably be that characterizing the system by feeding in streams of orders would cost a huge amount of money, and anything you learn about the system would only last until the HFT logic is updated.
This is the point I always make. There have always been useless lumps who happen to be close to the action who make money off of the spreads. There are just more of them now, and they're fighting really fast over micropennies. If we're going to complain, I'd like to see evidence that the total profit these guys are making is going up relative to the size of the market. Sure, if they're giving the average trader a huge haircut, that's not a good thing, but market efficiencies being what they are, I suspect that the total amount of skim hasn't changed all that much since the early days.
The only real problem I can think of is that we've replaced that useless lump who has no real skills with mathetmaticians and engineers who could be doing something more useful elsewhere. It's probably not a great use of those resources, but it's pretty small scale.
It's just a very weird way of looking at bonds in a trust fund. If you had a private pension plan full of US government bonds, it would be fully funded and you'd be happy. But move the same pension plan with the same rules and the same payment schedule to the government ledger and suddenly it's a ponzi scheme and we "owe money to ourselves" or some such nonsense. It's a bizarre analysis. It's like saying, "I bought these Ford bonds to retire on, and Ford went and borrowed the money from my retirement kitty and spent it in on stuff! Where's my cash??" Macro is clearly more complicated than people think.
Who said the Treasury would have the authority? That's Congress' job; constitutionally they have the power of the purse. They're the "elected representatives" in this representative republic (for what it's worth).
Sure, Congress could do that, but they didn't. That's the whole problem. There are no rules about who gets stiffed when the government runs out of money except for a vague statement in the Constitution that the government won't stiff its creditors. So the Treasury is in a difficult spot. Congress has said, "You legally must spend this money that we haven't given you, and don't borrow to make up the difference." They're not tooled up to pick and choose who gets paid (Why would they be? The Feds aren't supposed to default on any payments!), and even if they were, there's no clear authority or guidance on how to do it. Whatever they did was going to piss somebody off and probably be technically illegal that they'd lose in court over it.
If Congress could pass some legislation cutting certain types of spending, that would be just fine and you wouldn't hear us howling. In fact, that would be them doing their job. But they didn't do that. They just dumped an impossibly big turd into the punch bowl and walked away, expecting Treasury to make everything work out. That's either an indication of terrifying levels of irresponsibility or a woeful misunderstanding of how the financial system works.
Sounds like an awesome plan. Give the Treasury the authority to decide what is "less-than-essential" and the infrastructure to do fine-grained control on who gets a check and the crisis is indeed solved. I just suspect that you won't always agree with the Treasury about what's essential.
I like your idea of pulling support for government backed loans. "He defaulted, so you're on the hook." "Well, I'm not paying, but this isn't to be considered a default." The markets love it when borrowers do stuff like that.
The DotCom boom brought in a surplus in Social Security revenue and instead of putting that in the SS trust fund as legally required, they went and "borrowed" it for the usual overspending that has now become baseline. If you or I took money from a trust and used it for another purpose not stated in the trust we'd be in jail.
The better way of putting that would be that instead of sitting on cash, the SS Trust Fund bought US government bonds which will be paid back to them just like all of the other bonds as long as we don't let the Republicans have their way. The surplus was accrued by design because the trustees were well aware of the fact that Baby Boomers will get old. As long as we don't do something stupid like default on our debt, Social Security is just like any other pension plan that holds US bonds.
I love it when people say things like, "Let me reassure you, this might only cause a global financial panic. It's not like full scale nuclear war or anything." And this is something we did to ourselves that was entirely optional because a noisy minority is really upset that they didn't get their way on a lukewarm public/private health insurance program. Holy shit.
The market prices in expected inflation when setting the interest rate. Inflation has been low and will likely stay low for some time, so I'm really not sure what you're worrying about. It's not like the proposal is to drive inflation to 15% and see what happens. We're operating below typical inflation levels right now.
So your goal here is to raise interest rates during a slow recovery from a recession? By artificially creating a credit crisis? Please lay out your model for how that will be good for us.
Some less-than-quadrillion dollar coins would probably work, though, given that the Fed is running below its inflation target. It would have prevented a cashflow crisis and, if controlled, bumped inflation up into a region a little closer to what theory tells us it should be. Win win. Just kind of kooky behavior.
People like to point to the broken window fallacy in these cases, but cutting government spending too fast is a real problem. The economy doesn't adjust instantly to these types of changes. We could certainly cut the military by a huge percentage and be OK, but you'd have to do it slowly. Why? The same reason it would be bad if the Feds sold off all of the gold at Fort Knox in one day. The market can't absorb the new resources fast enough at the current prices, so prices crash and cause all manner of secondary and tertiary effects.
So what resources does the military industrial complex consume? Prime labor-age literate men, engineers, oil, raw manufacutring materials and factory equipment and personnel. It would be great if we could free those resources up to do something useful, but you also don't want to see what an overnight glut in all of those markets does to the economy as a whole. I'd be totally up for a 10-20 year plan to eliminate most of our military spending. Cutting it by causing, say, a debt limit crisis and dumping all of those resources into markets that aren't ready to handle them? Not so much.
In the short term, there is a potential for deflation; where the currency is worthless, AND hard money such as gold lose buying power, because the entire economy is grinding towards a halt -------- You can't use gold to buy and sell things, if you don't have partners to trade with, because they've all ceased economic activity.
Most economists would call what you just described "inflation" plus "stagnation" not deflation. Stagflation, if you want to use the popular term from the 70s. By most definitions, deflation would involve prices (as denominated in at least one form of currency) dropping.
Slashdot Mirror
Did I miss the obvious explosion in rape statistics? Do you have a secret data stash somewhere? Are you sure that everybody being "deliberately obtuse" isn't just looking at the world as it is rather than as you imagine it is?
Hint: When the results of a thought experiment conflict with the results of an actual experiment, the actual experiment wins.
As a back-of-the-envelope sanity check, access to porn over the past 30 years has skyrocketed in the US. I mean, you used to have to go to seedy porn stores to get it and now anybody with an Internet connection can literally get more porn that they could every possibly consume, tailored to practically any niche they want. If it was positively correlated with sexual assault, it seems like we should be seeing it in the numbers by now.
So where's the data? It's not like this is an abstract thought experiment.
At my last company, we had scores in a bunch of areas (the typical "communications" "technical skills" etc.) and during the training on the web-based tool I noticed that it produced a final floating point average of those scores at the bottom.
Me: "So are those numbers just useful for us as managers to discuss where the employee is relative to everybody else, or are they used for something?"
HR: "No, your ranking and your salary are based on that number."
Me: "How are the different categories weighted? Does it depend on job description?"
HR: "No, it's the average of the scores in all of the sections."
Me: [choking back the urge to ask "What are the units on that number?"]
Of course, this is the same company that still had us fill out performance appraisals two months after they announced that they were closing our office, that there would be no salary adjustments and that we would all be out the door in six months. I didn't bother asking, "What's my incentive to do anything that might piss off the disgruntled guy who I'm depending on to finish up the transition work I need to get my bonus?" Big smiley faces for everybody that time around.
That's definitely better than the "every department cuts a fixed percentage of their workforce" nonsense that a lot of companies do. I've always thought that the best way to go would be to do a ranking and cut the bottom X% and give the top Y% cash bonuses in the very same swoop. Layoffs have a way of shaking people up, and your best people can easily find another job if they decide they don't like to live with uncertainty.
Give them a pat on the back and a bonus offer the same day you're laying people off so they know that they're not at risk, and make the bonus vest over a few months to keep them around long enough to see that things are OK. You're saving recurring salary and HR costs on X% of your workforce, so the cash is there for a one-time payout.
My rule for inkjets is similar. Unless you're a pro-grade graphics type doing pro-grade graphics stuff on a pro-grade inkjet printer, you probably bought a machine with one design intent: Turning full / working ink cartridges into empty / dead ink cartridges. Any printing the machine does during that process is purely coincidental. Don't do it. You'll only encourage them to make more.
OK, so we're moving them into an entirely different category of worker by grand fiat. I suppose the fact that hey get paid better than the average McDonald's worker is also "special treatment" and not just part of their normal compensation package for their skill sets. Somebody should pass a law cutting them to minimum wage so they really feel the pinch. Forget paying market wages for marketable skills, we have a point to make. In fact, let's test our welfare system by cutting their pay to $0. Surely that's not a stupid idea that will backfire as soon as it hits market realities.
If you're walking around without insurance secure in the knowledge that you'll be treated in case of catastrophe, you're basically stealing catastrophic coverage from the rest of us. We pay more so you can do that. The fact that you never use it is a side issue. Risk has a price, and insulation from risk has a value. If everybody behaves that way, the system collapses.
How, exactly, would that work mathematically? What you're describing is known as adverse selection. Again, if everybody behaves this way, the system collapses.
Insurance is pretty simple. Most people pay in more than they ever take out so that a small subset of people can take out way more than they put in. The only way it works is if the ratio of payers to redeemers is high enough. You can't create a system where everybody opts out of being a payer and then jumps into being a redeemer when they need it, even if you penalize them some small amount.
Ah, so we're talking about people who don't have insurance already. OK. So that's a little different. Congressional staffers had insurance as part of their pay and then lost it, and the Republicans fought for the Vitter Amendment which prevents the OPM from making up that cut in dollars like it would in the regular market for people who have insurance as part of their pay package. They're creating a perverse situation that doesn't actually exist in the private markets which specifically screws the staffers.
People who don't have insurance fall into two categories. Either they can't afford it, in which case the exchanges should be a major boon to them, or they're mooching off the rest of us by making us bear their medical cost risks for them, and I don't have a lot of patience for whining over them having to pay into the system. Cry me a river.
Nobody was keeping them off the exchanges. They were going to the exchanges. They're still going to the exchanges. The only question was whether the government would behave like a normal employer and pay the cash savings over to the employees so they could spend it on the exchanges or whether they'd take an arbitrary pay cut the likes of which doesn't happen to the rest of us if our employer drops coverage.
If you take a few deep breaths and calm down, maybe you'll see it more clearly. You seem pretty amped up on hate for congressional staffers. They didn't have a "special exemption" before the Grassley amendment. They just had employer health care like most of us do. They weren't getting special treatment before the Vitter amendment. The only problem comes from the fact that Congress is calling this a "subsidy" which is illegal, instead of what it really is: being paid their negotiated wage.
David Vitter. But only in the sense that it can't be called a "subsidy." And it's not really a raise, but a "not cut." This whole thing is a weird parsing of the word "subsidy" versus "raise" versus "cut." The basic market outcome was broken by the Grassley amendment and the Vitter amendment was an attempt to keep it broken.
They'll eventually have to pass something entirely different to give the money back in a way that doesn't look like a "subsidy", but the Republicans are making a hard stand on it as though there's a meaningful principle at stake, probably because the voters are confused and really think that extra money is being shoveled into the pockets of staffers, and hating on those guys is playing really well in the media right now. "Here's the money we just took away from you" isn't a subsidy by any reasonable definition.
That's fine. If your position is that we're better off with an across the board pay cut of between $5,000 and $11,000 for congressional staffers who aren't exactly making bank, that's a perfectly valid place to be. But it doesn't have anything to do with "special treatment" for anybody.
And for the record, I'd like to see *everybody*
You didn't answer the question why? What, exactly, is wrong with changing the amount of money in the economy? Is the current amount exactly the right amount for the circumstances? Is it a moral objection? Superstitious? The appropriate money supply for an economy is kind of a big piece of 20th century economic thought, so the assertion "never change it, ever" seems like it should have some fairly solid theoretical grounding.
I always love this line of reasoning. "Every fiat currency in history has failed. Except for the ones that haven't. Therefore, all of the currencies that haven't failed will eventually fail." I suppose it's trivially true that everything we build will fail sometime before the heat death of the universe.
Which currency did the dollar depreciate 40% against? Over what timeframe?
Which helps your credit less?
A) Borrowing money.
B) Saying that you are not going to repay your creditors.
I'm pretty sure the answer is (B).
Holy crap, did you read S&P statement on the reason for the downgrade? They explicitly wrote that threatening not to raise the debt ceiling was the reason for the downgrade.
What is the "correct" level and why is it correct? That is, what criteria do you use to determine whether one interest rate is better than another?
I'm wondering what it would take for an enterprising team with a large amount of capital to risk to induce a flash crash for fun and profit on a lower volume asset that's known to be populated by HFT bots. These things are ultimately just control systems, so it should be possible with the right set of inputs to "smack it with a hammer" and cause instability and then profit from the brief swing while the system re-settles.
The main problem would probably be that characterizing the system by feeding in streams of orders would cost a huge amount of money, and anything you learn about the system would only last until the HFT logic is updated.
This is the point I always make. There have always been useless lumps who happen to be close to the action who make money off of the spreads. There are just more of them now, and they're fighting really fast over micropennies. If we're going to complain, I'd like to see evidence that the total profit these guys are making is going up relative to the size of the market. Sure, if they're giving the average trader a huge haircut, that's not a good thing, but market efficiencies being what they are, I suspect that the total amount of skim hasn't changed all that much since the early days.
The only real problem I can think of is that we've replaced that useless lump who has no real skills with mathetmaticians and engineers who could be doing something more useful elsewhere. It's probably not a great use of those resources, but it's pretty small scale.
It's just a very weird way of looking at bonds in a trust fund. If you had a private pension plan full of US government bonds, it would be fully funded and you'd be happy. But move the same pension plan with the same rules and the same payment schedule to the government ledger and suddenly it's a ponzi scheme and we "owe money to ourselves" or some such nonsense. It's a bizarre analysis. It's like saying, "I bought these Ford bonds to retire on, and Ford went and borrowed the money from my retirement kitty and spent it in on stuff! Where's my cash??" Macro is clearly more complicated than people think.
Sure, Congress could do that, but they didn't. That's the whole problem. There are no rules about who gets stiffed when the government runs out of money except for a vague statement in the Constitution that the government won't stiff its creditors. So the Treasury is in a difficult spot. Congress has said, "You legally must spend this money that we haven't given you, and don't borrow to make up the difference." They're not tooled up to pick and choose who gets paid (Why would they be? The Feds aren't supposed to default on any payments!), and even if they were, there's no clear authority or guidance on how to do it. Whatever they did was going to piss somebody off and probably be technically illegal that they'd lose in court over it.
If Congress could pass some legislation cutting certain types of spending, that would be just fine and you wouldn't hear us howling. In fact, that would be them doing their job. But they didn't do that. They just dumped an impossibly big turd into the punch bowl and walked away, expecting Treasury to make everything work out. That's either an indication of terrifying levels of irresponsibility or a woeful misunderstanding of how the financial system works.
Sounds like an awesome plan. Give the Treasury the authority to decide what is "less-than-essential" and the infrastructure to do fine-grained control on who gets a check and the crisis is indeed solved. I just suspect that you won't always agree with the Treasury about what's essential.
I like your idea of pulling support for government backed loans. "He defaulted, so you're on the hook." "Well, I'm not paying, but this isn't to be considered a default." The markets love it when borrowers do stuff like that.
The better way of putting that would be that instead of sitting on cash, the SS Trust Fund bought US government bonds which will be paid back to them just like all of the other bonds as long as we don't let the Republicans have their way. The surplus was accrued by design because the trustees were well aware of the fact that Baby Boomers will get old. As long as we don't do something stupid like default on our debt, Social Security is just like any other pension plan that holds US bonds.
Yes, taking care of the elderly is a burden. Let's stop. Thus solving the problem once and for all.
I love it when people say things like, "Let me reassure you, this might only cause a global financial panic. It's not like full scale nuclear war or anything." And this is something we did to ourselves that was entirely optional because a noisy minority is really upset that they didn't get their way on a lukewarm public/private health insurance program. Holy shit.
The market prices in expected inflation when setting the interest rate. Inflation has been low and will likely stay low for some time, so I'm really not sure what you're worrying about. It's not like the proposal is to drive inflation to 15% and see what happens. We're operating below typical inflation levels right now.
So your goal here is to raise interest rates during a slow recovery from a recession? By artificially creating a credit crisis? Please lay out your model for how that will be good for us.
Some less-than-quadrillion dollar coins would probably work, though, given that the Fed is running below its inflation target. It would have prevented a cashflow crisis and, if controlled, bumped inflation up into a region a little closer to what theory tells us it should be. Win win. Just kind of kooky behavior.
People like to point to the broken window fallacy in these cases, but cutting government spending too fast is a real problem. The economy doesn't adjust instantly to these types of changes. We could certainly cut the military by a huge percentage and be OK, but you'd have to do it slowly. Why? The same reason it would be bad if the Feds sold off all of the gold at Fort Knox in one day. The market can't absorb the new resources fast enough at the current prices, so prices crash and cause all manner of secondary and tertiary effects.
So what resources does the military industrial complex consume? Prime labor-age literate men, engineers, oil, raw manufacutring materials and factory equipment and personnel. It would be great if we could free those resources up to do something useful, but you also don't want to see what an overnight glut in all of those markets does to the economy as a whole. I'd be totally up for a 10-20 year plan to eliminate most of our military spending. Cutting it by causing, say, a debt limit crisis and dumping all of those resources into markets that aren't ready to handle them? Not so much.
Most economists would call what you just described "inflation" plus "stagnation" not deflation. Stagflation, if you want to use the popular term from the 70s. By most definitions, deflation would involve prices (as denominated in at least one form of currency) dropping.