As we sit here bandying about how the republicans are decimating union and people’s rights, how we should or should not support the current administration, hurl righteous brick-bats at the left and evangelical right and other amusing activities – we seem to forget one of the biggest reasons we are at each others throats these days. That the policies of the last 50 years or so have set this situation up to a tea. Paul Craig Roberts, whose column I just finished, reminds us of what has transpired to insure the decimation of this country and why our social safety nets are at risk.
The American Empire is failing. A number of its puppet rulers are being overthrown by popular protests, and the almighty dollar will not even buy one Swiss franc, one Canadian dollar, or one Australian dollar. Despite the sovereign debt problem that threatens EU members Greece, Ireland, Spain, and Portugal, it requires $1.38 dollars to buy one euro, a new currency that was issued at parity with the US dollar.
The US dollar’s value is likely to fall further in terms of other currencies, because nothing is being done about the US budget and trade deficits. Obama’s budget, if passed, doesn’t reduce the deficit over the next ten years by enough to cover the projected deficit in the FY 2012 budget.
Indeed, the deficits are likely to be substantially larger than forecast. The military/security complex, about which President Eisenhower warned Americans a half century ago, is more powerful than ever and shows no inclination to halt the wars for US hegemony.
Yes I know, it has become a cliche’ as of late. But it is true and is the one thing that we lose sight of far too easily. We continue to piss away trillions of dollars on wars that serve no purpose what so ever except to line the pockets of the already rich industrialists. WWII showed the American industrial and financial sector that there is money to be had in Washington and you did not have to dig very hard or deep to get a good portion of it. Korea was the first test case for this and the Cold War and Vietnam the application.
Justification for obscene military expenditures was just a USSR and Communism speech away and the frame job fit them like a glove. Communists were going to take ALL YOUR MONEY, PROPERTY AND FIRST BORN MALE CHILD. At the same time US Industry was making out like bandits in a town with no law enforcement. Taking anything that was not nailed down in those countries who were friendly to US but not their citizens or the USSR. And the tyrannical corrupt leaders of these states were supported without question as long as they were no communist. A Free Market Capitalist’s wet dream to be sure.
But the game changed and is change even now. The USSR collapsed in on itself, Vietnam came to an end and the rest of the world recovered from WWII. So we began hemorrhaging jobs and money and the military and it’s Corporate symbiont kept growing and wanting their government handouts to continue. So other “whipping boys” needed to be put front and center and a handful of Islamic extremists happily obliged. Giving these people another reason to con the public into funding two back to back wars. The last of which has no end insight. And at 20% of the GDP, they are the main reason this country is going broke. But neither party or those on the right or left want to say NO. Enough is Enough.
The cost of these wars is enormous. The US media, being good servants for the government, only reports the out-of-pocket or current cost of the wars, which is only about one-third of the real cost. The current cost leaves out the cost of life-long care for the wounded and maimed, the cost of life-long military pensions of those who fought in the wars, the replacement costs of the destroyed equipment, the opportunity cost of the resources wasted in war, and other costs. The true cost of America’s illegal Iraq invasion, which was based entirely on lies, fabrications and deceptions, is at least $3,000 billion according to economist Joseph Stiglitz and budget expert Linda Bilmes.
The same for the Afghan war, which is ongoing. If the Afghan war lasts as long as the Pentagon says it needs to, the cost will be a multiple of the cost of the Iraq war.
There is not enough non-military discretionary spending in the budget to cover the cost of the wars even if every dollar is cut. As long as the $1,200 billion ($1.2 trillion) annual budget for the military/security complex is off limits, nothing can be done about the U.S. budget deficit except to renege on obligations to the elderly, confiscate private assets, or print enough money to inflate away all debts.
Couple that with the shipping out of the manufacturing and support and even some of the design of supposedly American made products, and you drop the government’s income as well.
The other great contribution to the US deficit is the offshoring of production for US markets. This practice has enriched corporate management, large shareholders, and Wall Street, but it has eroded the tax base, and thereby tax collections, of local, state, and federal government, halted the growth of real income for everyone but the rich, and disrupted the lives of those Americans whose jobs were sent abroad. When short-term and long-term discouraged workers are added to the U.3 measure of unemployment, the U.S. has an unemployment rate of 22%. A country with more than one-fourth of its work force unemployed has a shrunken tax base and feeble consumer purchasing power.
To put it bluntly, the $3 trillion cost of the Iraq war, as computed by Joseph Stiglitz and Linda Bilmes, is 20% of the size of the U.S. economy in 2010. In other words, the Iraq war alone cost Americans one-fifth of the year’s gross domestic product. Instead of investing the resources, which would have produced income and jobs growth and solvency for state and local governments, the US government wasted the equivalent of 20% of the production of the economy in 2010 in blowing up infrastructure and people in foreign lands. The US government spent a huge sum of money committing war crimes, while millions of Americans were thrown out of their jobs and foreclosed out of their homes.
So now we have and economy in shambles and two political parties that see no problem with gutting social programs to fund these military mis-adventures.
Republicans regard Social Security as an “unfunded liability,” that is, a giveaway that is interfering with our war-making ability.
Alas, Social Security is an unfunded liability, because all the money working people put into it was stolen by Republicans and Democrats in order to pay for wars and bailouts for mega-rich bankers like Goldman Sachs.
What I am about to tell you might come as a shock, but it is the absolute truth, which you can verify for yourself by going online to the government’s annual OASDI and HI reports. According to the official 2010 Social Security reports, between 1984 and 2009 the American people contributed $2 trillion, that is $2,000 billion, more to Social Security and Medicare in payroll taxes than was paid out in benefits.
What happened to the surplus $2,000 billion, or $2,000,000,000,000.
The government spent it.
That’s right. No matter what the economists tell you, it was spent on the military industrial complex. Spent to support a symbiont creature that should have been gassed long ago.
A government that runs a deficit too large to finance by borrowing will print money as long as it can. When the printing press begins to push up inflation and push down the exchange value of the dollar, the government will be tempted to reduce its debt by reneging on entitlements or by confiscating private assets such as pension funds. When it has confiscated private assets and reneged on public obligations, nothing is left but the printing press.
We owe the end-time situation that we face to open-ended wars and to an unregulated financial system concentrated in a few hands that produces financial crises by leveraging debt to irresponsible levels.
The government of the United States does not represent the American people. It represents the oligarchs. The way campaign finance and elections are structured, the American people cannot take back their government by voting. A once proud and free people have been reduced to serfdom.
That pretty much sums it up. And the left and right remain nearly mute about this sacred leech.