GOP Debt Crisis is Now the Greatest Threat to the American Republic

Tomgram: Chalmers Johnson Explains Why the Debt Crisis Is Now the Greatest

Threat to the

American Republic

By Tom Engelhardt

Created Jan 23 2008 - 9:26am

- from TomDispatch [1]

Within the next month, the Pentagon will submit its 2009 budget to Congress

and it's a fair bet [2] that it will be even larger than the staggering 2008

one. Like the Army and the Marines, the Pentagon itself is overstretched and

under strain -- and like the two services, which are expected to add [3]

92,000 new troops over the next five years (at an estimated cost of $1.2

billion [4] per 10,000), the Pentagon's response is never to cut back, but

always to expand, always to demand more.

After all, there are those disastrous Afghan and Iraqi wars still eating

taxpayer dollars as if there were no tomorrow. Then there's what enthusiasts

like to call "the next war" to think about, which means all those big-ticket

weapons, all those jets, ships, and armored vehicles for the future. And

don't forget the still-popular, Rumsfeld-style "netcentric warfare" systems

(robots [5], drones [6], communications satellites [7], and the like), not

to speak of the killer space toys being developed; and then there's all that

ruined equipment out of Iraq and Afghanistan to be massively replaced -- and

all those ruined human beings to take care of.

You'll get the gist of this from a recent editorial in the trade magazine

Aviation Week & Space Technology [8]:

"The fact Washington must face is that nearly five years of war have left

U.S. forces worse off than they have been in a generation, yes, since

Vietnam, and restoring them will take budget-building unlike any in the

past."

Even on the rare occasion when -- as in the case of Boeing's C-17 cargo

plane -- the Pentagon decides to cancel a project, there's Congress to

remember. Contracts and subcontracts for weapons systems, carefully doled

out to as many states as possible, mean jobs, and so Congress often balks

[9] at such cuts. (Fifty-five House members recently warned the Pentagon of

a "strong negative response" if funding for the C-17 is excised from the

2009 budget.) All in all, it adds up to a defense menu for a glutton.

Already, Secretary of Defense Robert Gates has said that 2009 funding [10]

is "largely locked into place." The giant military-industrial combines --

Lockheed Martin, Northrop Grumman, Boeing, Raytheon -- have been watching

their stocks rise in otherwise treacherous times. They are hopeful. As

Ronald Sugar, Northrop CEO, put it [11]: "A great global power like the

United States needs a great navy and a great navy needs an adequate number

of ships, and they have to be modern and capable" -- and guess which company

is the Navy's largest shipbuilder?

There should be nothing surprising in all this, especially for those of us

who have read Chalmers Johnson's Nemesis, The Last Days of the American

Republic [12], the final volume of his Blowback Trilogy. Published in 2007,

it is already a classic on what imperial overstretch means for the rest of

us. The paperback of Nemesis is officially out today, just as global stock

markets tumble. It is simply a must-read (and if you've already read it,

then get a copy for a friend). In the meantime, hunker in for Johnson's

latest magisterial account of how the mightiest guns the Pentagon can muster

threaten to sink our own country. (For those interested, click here [13] to

view a clip from a new film, "Chalmers Johnson on American Hegemony," in

Cinema Libre Studios' [14] Speaking Freely series in which he discusses

military Keynesianism and imperial bankruptcy.)

-- Tom

Going Bankrupt: Why the Debt Crisis Is Now the Greatest Threat to the

American Republic

By Chalmers Johnson

The military adventurers of the Bush administration have much in common with

the corporate leaders of the defunct energy company Enron. Both groups of

men thought that they were the "smartest guys in the room," the title of

Alex Gibney's prize-winning film [15] on what went wrong at Enron. The

neoconservatives in the White House and the Pentagon outsmarted themselves.

They failed even to address the problem of how to finance their schemes of

imperialist wars and global domination.

As a result, going into 2008, the United States finds itself in the

anomalous position of being unable to pay for its own elevated living

standards or its wasteful, overly large military establishment. Its

government no longer even attempts to reduce the ruinous expenses of

maintaining huge standing armies, replacing the equipment that seven years

of wars have destroyed or worn out [16], or preparing for a war [17] in

outer space [18] against unknown adversaries. Instead, the Bush

administration puts off these costs for future generations to pay -- or

repudiate. This utter fiscal irresponsibility has been disguised through

many manipulative financial schemes (such as causing poorer countries to

lend us unprecedented sums of money), but the time of reckoning is fast

approaching.

There are three broad aspects to our debt crisis. First, in the current

fiscal year (2008) we are spending insane amounts of money on "defense"

projects that bear no relationship to the national security of the United

States. Simultaneously, we are keeping the income tax burdens on the richest

segments of the American population at strikingly low levels.

Second, we continue to believe that we can compensate for the accelerating

erosion of our manufacturing base and our loss of jobs to foreign countries

through massive military expenditures -- so-called "military Keynesianism,"

which I discuss in detail in my book Nemesis: The Last Days of the American

Republic [19]. By military Keynesianism, I mean the mistaken belief that

public policies focused on frequent wars, huge expenditures on weapons and

munitions, and large standing armies can indefinitely sustain a wealthy

capitalist economy. The opposite is actually true.

Third, in our devotion to militarism (despite our limited resources), we are

failing to invest in our social infrastructure and other requirements for

the long-term health of our country. These are what economists call

"opportunity costs," things not done because we spent our money on something

else. Our public education system has deteriorated alarmingly. We have

failed to provide health care to all our citizens and neglected our

responsibilities as the world's number one polluter. Most important, we have

lost our competitiveness as a manufacturer for civilian needs -- an

infinitely more efficient use of scarce resources than arms manufacturing.

Let me discuss each of these.

The Current Fiscal Disaster

It is virtually impossible to overstate the profligacy of what our

government spends on the military. The Department of Defense's planned

expenditures for fiscal year 2008 are larger than all other nations'

military budgets combined. The supplementary budget to pay for the current

wars in Iraq and Afghanistan, not part of the official defense budget, is

itself larger than the combined military budgets of Russia and China.

Defense-related spending for fiscal 2008 will exceed $1 trillion for the

first time in history. The United States has become the largest single

salesman of arms and munitions to other nations on Earth. Leaving out of

account President Bush's two on-going wars, defense spending has doubled

since the mid-1990s. The defense budget for fiscal 2008 is the largest since

World War II.

Before we try to break down and analyze this gargantuan sum, there is one

important caveat. Figures on defense spending are notoriously unreliable.

The numbers released by the Congressional Reference Service and the

Congressional Budget Office do not agree with each other. Robert Higgs,

senior fellow for political economy at the Independent Institute, says [20]:

"A well-founded rule of thumb is to take the Pentagon's (always well

publicized) basic budget total and double it." Even a cursory reading of

newspaper articles about the Department of Defense will turn up major

differences in statistics about its expenses. Some 30-40% of the defense

budget is "black," meaning that these sections contain hidden expenditures

for classified projects. There is no possible way to know what they include

or whether their total amounts are accurate.

There are many reasons for this budgetary sleight-of-hand -- including a

desire for secrecy on the part of the president, the secretary of defense,

and the military-industrial complex -- but the chief one is that members of

Congress, who profit enormously from defense jobs and pork-barrel projects

in their districts, have a political interest in supporting the Department

of Defense. In 1996, in an attempt to bring accounting standards within the

executive branch somewhat closer to those of the civilian economy, Congress

passed the Federal Financial Management Improvement Act. It required all

federal agencies to hire outside auditors to review their books and release

the results to the public. Neither the Department of Defense, nor the

Department of Homeland Security has ever complied. Congress has complained,

but not penalized either department for ignoring the law. The result is that

all numbers released by the Pentagon should be regarded as suspect.

In discussing the fiscal 2008 defense budget, as released to the press on

February 7, 2007, I have been guided by two experienced and reliable

analysts: William D. Hartung [21] of the New America Foundation's Arms and

Security Initiative and Fred Kaplan [22], defense correspondent for

Slate.org. They agree that the Department of Defense requested $481.4

billion for salaries, operations (except in Iraq and Afghanistan), and

equipment. They also agree on a figure of $141.7 billion for the

"supplemental" budget to fight the "global war on terrorism" -- that is, the

two on-going wars that the general public may think are actually covered by

the basic Pentagon budget. The Department of Defense also asked for an extra

$93.4 billion to pay for hitherto unmentioned war costs in the remainder of

2007 and, most creatively, an additional "allowance" (a new term in defense

budget documents) of $50 billion to be charged to fiscal year 2009. This

comes to a total spending request by the Department of Defense of $766.5

billion.

But there is much more. In an attempt to disguise the true size of the

American military empire, the government has long hidden major

military-related expenditures in departments other than Defense. For

example, $23.4 billion for the Department of Energy goes toward [23]

developing and maintaining nuclear warheads; and $25.3 billion in the

Department of State budget is spent on foreign military assistance

(primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the

United Arab Republic, Egypt, and Pakistan). Another $1.03 billion outside

the official Department of Defense budget is now needed [24] for recruitment

and reenlistment incentives for the overstretched U.S. military itself, up

from a mere $174 million in 2003, the year the war in Iraq began. The

Department of Veterans Affairs currently gets at least $75.7 billion, 50% of

which goes for the long-term care of the grievously injured among the at

least 28,870 soldiers [25] so far wounded in Iraq and another 1,708 in

Afghanistan. The amount is universally derided as inadequate [26]. Another

$46.4 billion goes to the Department of Homeland Security.

Missing as well from this compilation is $1.9 billion to the Department of

Justice for the paramilitary activities of the FBI; $38.5 billion to the

Department of the Treasury for the Military Retirement Fund; $7.6 billion

for the military-related activities of the National Aeronautics and Space

Administration; and well over $200 billion in interest for past

debt-financed defense outlays. This brings U.S. spending for its military

establishment during the current fiscal year (2008), conservatively

calculated, to at least $1.1 trillion.

Military Keynesianism

Such expenditures are not only morally obscene, they are fiscally

unsustainable. Many neoconservatives and poorly informed patriotic Americans

believe that, even though our defense budget is huge, we can afford it

because we are the richest country on Earth. Unfortunately, that statement

is no longer true. The world's richest political entity, according to the

CIA's "World Factbook," [27] is the European Union. The EU's 2006 GDP (gross

domestic product -- all goods and services produced domestically) was

estimated to be slightly larger than that of the U.S. However, China's 2006

GDP was only slightly smaller than that of the U.S., and Japan was the

world's fourth richest nation.

A more telling comparison that reveals just how much worse we're doing can

be found among the "current accounts" of various nations. The current

account measures the net trade surplus or deficit of a country plus

cross-border payments of interest, royalties, dividends, capital gains,

foreign aid, and other income. For example, in order for Japan to

manufacture anything, it must import all required raw materials. Even after

this incredible expense is met, it still has an $88 billion per year trade

surplus with the United States and enjoys the world's second highest current

account balance. (China is number one.) The United States, by contrast, is

number 163 [28] -- dead last on the list, worse than countries like

Australia and the United Kingdom that also have large trade deficits. Its

2006 current account deficit was $811.5 billion; second worst was Spain at

$106.4 billion. This is what is unsustainable.

It's not just that our tastes for foreign goods, including imported oil,

vastly exceed our ability to pay for them. We are financing them through

massive borrowing. On November 7, 2007, the U.S. Treasury announced that the

national debt had breached $9 trillion for the first time ever. This was

just five weeks after Congress raised the so-called debt ceiling to $9.815

trillion. If you begin in 1789, at the moment the Constitution became the

supreme law of the land, the debt accumulated by the federal government did

not top $1 trillion until 1981. When George Bush became president in January

2001, it stood at approximately $5.7 trillion. Since then, it has increased

by 45%. This huge debt can be largely explained by our defense expenditures

in comparison with the rest of the world.

The world's top 10 military spenders and the approximate amounts each

country currently budgets for its military establishment are:

1. United States (FY08 budget), $623 billion

2. China (2004), $65 billion

3. Russia, $50 billion

4. France (2005), $45 billion

5. Japan (2007), $41.75 billion

6. Germany (2003), $35.1 billion

7. Italy (2003), $28.2 billion

8. South Korea (2003), $21.1 billion

9. India (2005 est.), $19 billion

10. Saudi Arabia (2005 est.), $18 billion

World total military expenditures (2004 est.), $1,100 billion

World total (minus the United States), $500 billion

Our excessive military expenditures did not occur over just a few short

years or simply because of the Bush administration's policies. They have

been going on for a very long time in accordance with a superficially

plausible ideology and have now become entrenched in our democratic

political system where they are starting to wreak havoc. This ideology I

call "military Keynesianism" -- the determination to maintain a permanent

war economy and to treat military output as an ordinary economic product,

even though it makes no contribution to either production or consumption.

This ideology goes back to the first years of the Cold War. During the late

1940s, the U.S. was haunted by economic anxieties. The Great Depression of

the 1930s had been overcome only by the war production boom of World War II.

With peace and demobilization, there was a pervasive fear that the

Depression would return. During 1949, alarmed by the Soviet Union's

detonation of an atomic bomb, the looming communist victory in the Chinese

civil war, a domestic recession, and the lowering of the Iron Curtain around

the USSR's European satellites, the U.S. sought to draft basic strategy for

the emerging cold war. The result was the militaristic National Security

Council Report 68 [29] (NSC-68) drafted under the supervision of Paul Nitze,

then head of the Policy Planning Staff in the State Department. Dated April

14, 1950, and signed by President Harry S. Truman on September 30, 1950, it

laid out the basic public economic policies that the United States pursues

to the present day.

In its conclusions, NSC-68 asserted [30]: "One of the most significant

lessons of our World War II experience was that the American economy, when

it operates at a level approaching full efficiency, can provide enormous

resources for purposes other than civilian consumption while simultaneously

providing a high standard of living."

With this understanding, American strategists began to build up a massive

munitions industry, both to counter the military might of the Soviet Union

(which they consistently overstated) and also to maintain full employment as

well as ward off a possible return of the Depression. The result was that,

under Pentagon leadership, entire new industries were created to manufacture

large aircraft, nuclear-powered submarines, nuclear warheads,

intercontinental ballistic missiles, and surveillance and communications

satellites. This led to what President Eisenhower warned against in his

farewell address of February 6, 1961: "The conjunction of an immense

military establishment and a large arms industry is new in the American

experience" -- that is, the military-industrial complex.

By 1990, the value of the weapons, equipment, and factories devoted to the

Department of Defense was 83% of the value of all plants and equipment in

American manufacturing. From 1947 to 1990, the combined U.S. military

budgets amounted to [31] $8.7 trillion. Even though the Soviet Union no

longer exists, U.S. reliance on military Keynesianism has, if anything,

ratcheted up, thanks to the massive vested interests that have become

entrenched around the military establishment. Over time, a commitment to

both guns and butter has proven an unstable configuration. Military

industries crowd out the civilian economy and lead to severe economic

weaknesses. Devotion to military Keynesianism is, in fact, a form of slow

economic suicide.

On May 1, 2007, the Center for Economic and Policy Research of Washington,

D.C., released a study prepared by the global forecasting company Global

Insight on the long-term economic impact of increased military spending.

Guided by economist Dean Baker, this research showed that, after an initial

demand stimulus, by about the sixth year the effect of increased military

spending turns negative. Needless to say, the U.S. economy has had to cope

with growing defense spending for more than 60 years. He found that, after

10 years of higher defense spending, there would be 464,000 fewer jobs than

in a baseline scenario that involved lower defense spending.

Baker concluded [32]:

"It is often believed that wars and military spending increases are good

for the economy. In fact, most economic models show that military spending

diverts resources from productive uses, such as consumption and investment,

and ultimately slows economic growth and reduces employment."

These are only some of the many deleterious effects of military

Keynesianism.

Hollowing Out the American Economy

It was believed that the U.S. could afford both a massive military

establishment and a high standard of living, and that it needed both to

maintain full employment. But it did not work out that way. By the 1960s, it

was becoming apparent that turning over the nation's largest manufacturing

enterprises to the Department of Defense and producing goods without any

investment or consumption value was starting to crowd out civilian economic

activities. The historian Thomas E. Woods, Jr., observes [33] that, during

the 1950s and 1960s, between one-third and two-thirds of all American

research talent was siphoned off into the military sector. It is, of course,

impossible to know what innovations never appeared as a result of this

diversion of resources and brainpower into the service of the military, but

it was during the 1960s that we first began to notice Japan was outpacing us

in the design and quality of a range of consumer goods, including household

electronics and automobiles.

Nuclear weapons furnish a striking illustration of these anomalies. Between

the 1940s and 1996, the United States spent at least $5.8 trillion on the

development, testing, and construction of nuclear bombs [34]. By 1967, the

peak year of its nuclear stockpile, the United States possessed some 32,500

deliverable atomic and hydrogen bombs, none of which, thankfully, was ever

used. They perfectly illustrate the Keynesian principle that the government

can provide make-work jobs to keep people employed. Nuclear weapons were not

just America's secret weapon, but also its secret economic weapon. As of

2006, we still had 9,960 of them. There is today no sane use for them, while

the trillions spent on them could have been used to solve the problems of

social security and health care, quality education and access to higher

education for all, not to speak of the retention of highly skilled jobs

within the American economy.

The pioneer in analyzing what has been lost as a result of military

Keynesianism was the late Seymour Melman (1917-2004), a professor of

industrial engineering and operations research at Columbia University. His

1970 book, Pentagon Capitalism: The Political Economy of War, was a

prescient analysis of the unintended consequences of the American

preoccupation with its armed forces and their weaponry since the onset of

the Cold War. Melman wrote (pp. 2-3):

"From 1946 to 1969, the United States government spent over $1,000 billion

on the military, more than half of this under the Kennedy and Johnson

administrations -- the period during which the [Pentagon-dominated] state

management was established as a formal institution. This sum of staggering

size (try to visualize a billion of something) does not express the cost of

the military establishment to the nation as a whole. The true cost is

measured by what has been foregone, by the accumulated deterioration in many

facets of life by the inability to alleviate human wretchedness of long

duration."

In an important exegesis on Melman's relevance to the current American

economic situation, Thomas Woods writes [35]:

"According to the U.S. Department of Defense, during the four decades from

1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital

resources. In 1985, the Department of Commerce estimated the value of the

nation's plant and equipment, and infrastructure, at just over $7.29

trillion. In other words, the amount spent over that period could have

doubled the American capital stock or modernized and replaced its existing

stock."

The fact that we did not modernize or replace our capital assets is one of

the main reasons why, by the turn of the twenty-first century, our

manufacturing base had all but evaporated [36]. Machine tools -- an industry

on which Melman was an authority -- are a particularly important symptom. In

November 1968, a five-year inventory disclosed (p. 186) "that 64 percent of

the metalworking machine tools used in U.S. industry were ten years old or

older. The age of this industrial equipment (drills, lathes, etc.) marks the

United States' machine tool stock as the oldest among all major industrial

nations, and it marks the continuation of a deterioration process that began

with the end of the Second World War. This deterioration at the base of the

industrial system certifies to the continuous debilitating and depleting

effect that the military use of capital and research and development talent

has had on American industry."

Nothing has been done in the period since 1968 to reverse these trends and

it shows today in our massive imports of equipment -- from medical machines

like proton accelerators [37] for radiological therapy (made primarily in

Belgium, Germany, and Japan) to cars and trucks.

Our short tenure as the world's "lone superpower" has come to an end. As

Harvard economics professor Benjamin Friedman has written [38]:

"Again and again it has always been the world's leading lending country

that has been the premier country in terms of political influence,

diplomatic influence, and cultural influence. It's no accident that we took

over the role from the British at the same time that we took over. the job

of being the world's leading lending country. Today we are no longer the

world's leading lending country. In fact we are now the world's biggest

debtor country, and we are continuing to wield influence on the basis of

military prowess alone."

Some of the damage done can never be rectified. There are, however, some

steps that this country urgently needs to take. These include reversing

Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our

global empire of over 800 military bases, cutting from the defense budget

all projects that bear no relationship to the national security of the

United States, and ceasing to use the defense budget as a Keynesian jobs

program. If we do these things we have a chance of squeaking by. If we

don't, we face probable national insolvency and a long depression.

Chalmers Johnson is the author of Nemesis: The Last Days of the American

Republic [39], just published in paperback. It is the final volume of his

Blowback Trilogy, which also includes Blowback [40] (2000) and The Sorrows

of Empire [41] (2004).

[Note: For those interested, click here [42] to view a clip from a new film,

"Chalmers Johnson on American Hegemony," in Cinema Libre Studios' [43]

Speaking Freely series in which he discusses "military Keynesianism" and

imperial bankruptcy. For sources on global military spending, please see:

(1) Global Security Organization, "World Wide Military Expenditures" [44] as

well as Glenn Greenwald, "The bipartisan consensus on U.S. military

spending" [45]; (2) Stockholm International Peace Research Institute,

"Report: China biggest Asian military spender." [46]]

--

NOTICE: This post contains copyrighted material the use of which has not

always been authorized by the copyright owner. I am making such material

available to advance understanding of

political, human rights, democracy, scientific, and social justice issues. I

believe this constitutes a 'fair use' of such copyrighted material as

provided for in section 107 of the US Copyright

Law. In accordance with Title 17 U.S.C. Section 107

"A little patience and we shall see the reign of witches pass over, their

spells dissolve, and the people recovering their true sight, restore their

government to its true principles. It is true that in the meantime we are

suffering deeply in spirit,

and incurring the horrors of a war and long oppressions of enormous public

debt. But if the game runs sometimes against us at home we must have

patience till luck turns, and then we shall have an opportunity of winning

back the principles we have lost, for this is a game where principles are at

stake."

-Thomas Jefferson

"Gandalf Grey" <valinor20@gmail.com> wrote in message

news:4798d197$1$14099$9a6e19ea@news.newshosting.com...

> Tomgram: Chalmers Johnson Explains Why the Debt Crisis Is Now the Greatest

> Threat to the

> American Republic

agreed, the greedy banks, actively fueling the real estate speculation of

the past few years, are highly responsible for this problem.

>

> By Tom Engelhardt

>

> Created Jan 23 2008 - 9:26am

>

>

> - from TomDispatch [1]

>

> Within the next month, the Pentagon will submit its 2009 budget to

> Congress

> and it's a fair bet [2] that it will be even larger than the staggering

> 2008

> one. Like the Army and the Marines, the Pentagon itself is overstretched

> and

> under strain -- and like the two services, which are expected to add [3]

> 92,000 new troops over the next five years (at an estimated cost of $1.2

> billion [4] per 10,000), the Pentagon's response is never to cut back, but

> always to expand, always to demand more.

>

> After all, there are those disastrous Afghan and Iraqi wars still eating

> taxpayer dollars as if there were no tomorrow. Then there's what

> enthusiasts

> like to call "the next war" to think about, which means all those

> big-ticket

> weapons, all those jets, ships, and armored vehicles for the future. And

> don't forget the still-popular, Rumsfeld-style "netcentric warfare"

> systems

> (robots [5], drones [6], communications satellites [7], and the like), not

> to speak of the killer space toys being developed; and then there's all

> that

> ruined equipment out of Iraq and Afghanistan to be massively replaced --

> and

> all those ruined human beings to take care of.

>

> You'll get the gist of this from a recent editorial in the trade magazine

> Aviation Week & Space Technology [8]:

>

> "The fact Washington must face is that nearly five years of war have left

> U.S. forces worse off than they have been in a generation, yes, since

> Vietnam, and restoring them will take budget-building unlike any in the

> past."

>

> Even on the rare occasion when -- as in the case of Boeing's C-17 cargo

> plane -- the Pentagon decides to cancel a project, there's Congress to

> remember. Contracts and subcontracts for weapons systems, carefully doled

> out to as many states as possible, mean jobs, and so Congress often balks

> [9] at such cuts. (Fifty-five House members recently warned the Pentagon

> of

> a "strong negative response" if funding for the C-17 is excised from the

> 2009 budget.) All in all, it adds up to a defense menu for a glutton.

>

> Already, Secretary of Defense Robert Gates has said that 2009 funding [10]

> is "largely locked into place." The giant military-industrial combines --

> Lockheed Martin, Northrop Grumman, Boeing, Raytheon -- have been watching

> their stocks rise in otherwise treacherous times. They are hopeful. As

> Ronald Sugar, Northrop CEO, put it [11]: "A great global power like the

> United States needs a great navy and a great navy needs an adequate number

> of ships, and they have to be modern and capable" -- and guess which

> company

> is the Navy's largest shipbuilder?

>

> There should be nothing surprising in all this, especially for those of us

> who have read Chalmers Johnson's Nemesis, The Last Days of the American

> Republic [12], the final volume of his Blowback Trilogy. Published in

> 2007,

> it is already a classic on what imperial overstretch means for the rest of

> us. The paperback of Nemesis is officially out today, just as global stock

> markets tumble. It is simply a must-read (and if you've already read it,

> then get a copy for a friend). In the meantime, hunker in for Johnson's

> latest magisterial account of how the mightiest guns the Pentagon can

> muster

> threaten to sink our own country. (For those interested, click here [13]

> to

> view a clip from a new film, "Chalmers Johnson on American Hegemony," in

> Cinema Libre Studios' [14] Speaking Freely series in which he discusses

> military Keynesianism and imperial bankruptcy.)

>

> -- Tom

>

>

>

> Going Bankrupt: Why the Debt Crisis Is Now the Greatest Threat to the

> American Republic

>

> By Chalmers Johnson

>

> The military adventurers of the Bush administration have much in common

> with

> the corporate leaders of the defunct energy company Enron. Both groups of

> men thought that they were the "smartest guys in the room," the title of

> Alex Gibney's prize-winning film [15] on what went wrong at Enron. The

> neoconservatives in the White House and the Pentagon outsmarted

> themselves.

> They failed even to address the problem of how to finance their schemes of

> imperialist wars and global domination.

>

> As a result, going into 2008, the United States finds itself in the

> anomalous position of being unable to pay for its own elevated living

> standards or its wasteful, overly large military establishment. Its

> government no longer even attempts to reduce the ruinous expenses of

> maintaining huge standing armies, replacing the equipment that seven years

> of wars have destroyed or worn out [16], or preparing for a war [17] in

> outer space [18] against unknown adversaries. Instead, the Bush

> administration puts off these costs for future generations to pay -- or

> repudiate. This utter fiscal irresponsibility has been disguised through

> many manipulative financial schemes (such as causing poorer countries to

> lend us unprecedented sums of money), but the time of reckoning is fast

> approaching.

>

> There are three broad aspects to our debt crisis. First, in the current

> fiscal year (2008) we are spending insane amounts of money on "defense"

> projects that bear no relationship to the national security of the United

> States. Simultaneously, we are keeping the income tax burdens on the

> richest

> segments of the American population at strikingly low levels.

>

> Second, we continue to believe that we can compensate for the accelerating

> erosion of our manufacturing base and our loss of jobs to foreign

> countries

> through massive military expenditures -- so-called "military

> Keynesianism,"

> which I discuss in detail in my book Nemesis: The Last Days of the

> American

> Republic [19]. By military Keynesianism, I mean the mistaken belief that

> public policies focused on frequent wars, huge expenditures on weapons and

> munitions, and large standing armies can indefinitely sustain a wealthy

> capitalist economy. The opposite is actually true.

>

> Third, in our devotion to militarism (despite our limited resources), we

> are

> failing to invest in our social infrastructure and other requirements for

> the long-term health of our country. These are what economists call

> "opportunity costs," things not done because we spent our money on

> something

> else. Our public education system has deteriorated alarmingly. We have

> failed to provide health care to all our citizens and neglected our

> responsibilities as the world's number one polluter. Most important, we

> have

> lost our competitiveness as a manufacturer for civilian needs -- an

> infinitely more efficient use of scarce resources than arms manufacturing.

> Let me discuss each of these.

>

> The Current Fiscal Disaster

>

> It is virtually impossible to overstate the profligacy of what our

> government spends on the military. The Department of Defense's planned

> expenditures for fiscal year 2008 are larger than all other nations'

> military budgets combined. The supplementary budget to pay for the current

> wars in Iraq and Afghanistan, not part of the official defense budget, is

> itself larger than the combined military budgets of Russia and China.

> Defense-related spending for fiscal 2008 will exceed $1 trillion for the

> first time in history. The United States has become the largest single

> salesman of arms and munitions to other nations on Earth. Leaving out of

> account President Bush's two on-going wars, defense spending has doubled

> since the mid-1990s. The defense budget for fiscal 2008 is the largest

> since

> World War II.

>

> Before we try to break down and analyze this gargantuan sum, there is one

> important caveat. Figures on defense spending are notoriously unreliable.

> The numbers released by the Congressional Reference Service and the

> Congressional Budget Office do not agree with each other. Robert Higgs,

> senior fellow for political economy at the Independent Institute, says

> [20]:

> "A well-founded rule of thumb is to take the Pentagon's (always well

> publicized) basic budget total and double it." Even a cursory reading of

> newspaper articles about the Department of Defense will turn up major

> differences in statistics about its expenses. Some 30-40% of the defense

> budget is "black," meaning that these sections contain hidden expenditures

> for classified projects. There is no possible way to know what they

> include

> or whether their total amounts are accurate.

>

> There are many reasons for this budgetary sleight-of-hand -- including a

> desire for secrecy on the part of the president, the secretary of defense,

> and the military-industrial complex -- but the chief one is that members

> of

> Congress, who profit enormously from defense jobs and pork-barrel projects

> in their districts, have a political interest in supporting the Department

> of Defense. In 1996, in an attempt to bring accounting standards within

> the

> executive branch somewhat closer to those of the civilian economy,

> Congress

> passed the Federal Financial Management Improvement Act. It required all

> federal agencies to hire outside auditors to review their books and

> release

> the results to the public. Neither the Department of Defense, nor the

> Department of Homeland Security has ever complied. Congress has

> complained,

> but not penalized either department for ignoring the law. The result is

> that

> all numbers released by the Pentagon should be regarded as suspect.

>

> In discussing the fiscal 2008 defense budget, as released to the press on

> February 7, 2007, I have been guided by two experienced and reliable

> analysts: William D. Hartung [21] of the New America Foundation's Arms and

> Security Initiative and Fred Kaplan [22], defense correspondent for

> Slate.org. They agree that the Department of Defense requested $481.4

> billion for salaries, operations (except in Iraq and Afghanistan), and

> equipment. They also agree on a figure of $141.7 billion for the

> "supplemental" budget to fight the "global war on terrorism" -- that is,

> the

> two on-going wars that the general public may think are actually covered

> by

> the basic Pentagon budget. The Department of Defense also asked for an

> extra

> $93.4 billion to pay for hitherto unmentioned war costs in the remainder

> of

> 2007 and, most creatively, an additional "allowance" (a new term in

> defense

> budget documents) of $50 billion to be charged to fiscal year 2009. This

> comes to a total spending request by the Department of Defense of $766.5

> billion.

>

> But there is much more. In an attempt to disguise the true size of the

> American military empire, the government has long hidden major

> military-related expenditures in departments other than Defense. For

> example, $23.4 billion for the Department of Energy goes toward [23]

> developing and maintaining nuclear warheads; and $25.3 billion in the

> Department of State budget is spent on foreign military assistance

> (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the

> United Arab Republic, Egypt, and Pakistan). Another $1.03 billion outside

> the official Department of Defense budget is now needed [24] for

> recruitment

> and reenlistment incentives for the overstretched U.S. military itself, up

> from a mere $174 million in 2003, the year the war in Iraq began. The

> Department of Veterans Affairs currently gets at least $75.7 billion, 50%

> of

> which goes for the long-term care of the grievously injured among the at

> least 28,870 soldiers [25] so far wounded in Iraq and another 1,708 in

> Afghanistan. The amount is universally derided as inadequate [26]. Another

> $46.4 billion goes to the Department of Homeland Security.

>

> Missing as well from this compilation is $1.9 billion to the Department of

> Justice for the paramilitary activities of the FBI; $38.5 billion to the

> Department of the Treasury for the Military Retirement Fund; $7.6 billion

> for the military-related activities of the National Aeronautics and Space

> Administration; and well over $200 billion in interest for past

> debt-financed defense outlays. This brings U.S. spending for its military

> establishment during the current fiscal year (2008), conservatively

> calculated, to at least $1.1 trillion.

>

> Military Keynesianism

>

> Such expenditures are not only morally obscene, they are fiscally

> unsustainable. Many neoconservatives and poorly informed patriotic

> Americans

> believe that, even though our defense budget is huge, we can afford it

> because we are the richest country on Earth. Unfortunately, that statement

> is no longer true. The world's richest political entity, according to the

> CIA's "World Factbook," [27] is the European Union. The EU's 2006 GDP

> (gross

> domestic product -- all goods and services produced domestically) was

> estimated to be slightly larger than that of the U.S. However, China's

> 2006

> GDP was only slightly smaller than that of the U.S., and Japan was the

> world's fourth richest nation.

>

> A more telling comparison that reveals just how much worse we're doing can

> be found among the "current accounts" of various nations. The current

> account measures the net trade surplus or deficit of a country plus

> cross-border payments of interest, royalties, dividends, capital gains,

> foreign aid, and other income. For example, in order for Japan to

> manufacture anything, it must import all required raw materials. Even

> after

> this incredible expense is met, it still has an $88 billion per year trade

> surplus with the United States and enjoys the world's second highest

> current

> account balance. (China is number one.) The United States, by contrast, is

> number 163 [28] -- dead last on the list, worse than countries like

> Australia and the United Kingdom that also have large trade deficits. Its

> 2006 current account deficit was $811.5 billion; second worst was Spain at

> $106.4 billion. This is what is unsustainable.

>

> It's not just that our tastes for foreign goods, including imported oil,

> vastly exceed our ability to pay for them. We are financing them through

> massive borrowing. On November 7, 2007, the U.S. Treasury announced that

> the

> national debt had breached $9 trillion for the first time ever. This was

> just five weeks after Congress raised the so-called debt ceiling to $9.815

> trillion. If you begin in 1789, at the moment the Constitution became the

> supreme law of the land, the debt accumulated by the federal government

> did

> not top $1 trillion until 1981. When George Bush became president in

> January

> 2001, it stood at approximately $5.7 trillion. Since then, it has

> increased

> by 45%. This huge debt can be largely explained by our defense

> expenditures

> in comparison with the rest of the world.

>

> The world's top 10 military spenders and the approximate amounts each

> country currently budgets for its military establishment are:

>

> 1. United States (FY08 budget), $623 billion

> 2. China (2004), $65 billion

> 3. Russia, $50 billion

> 4. France (2005), $45 billion

> 5. Japan (2007), $41.75 billion

> 6. Germany (2003), $35.1 billion

> 7. Italy (2003), $28.2 billion

> 8. South Korea (2003), $21.1 billion

> 9. India (2005 est.), $19 billion

> 10. Saudi Arabia (2005 est.), $18 billion

>

> World total military expenditures (2004 est.), $1,100 billion

> World total (minus the United States), $500 billion

>

> Our excessive military expenditures did not occur over just a few short

> years or simply because of the Bush administration's policies. They have

> been going on for a very long time in accordance with a superficially

> plausible ideology and have now become entrenched in our democratic

> political system where they are starting to wreak havoc. This ideology I

> call "military Keynesianism" -- the determination to maintain a permanent

> war economy and to treat military output as an ordinary economic product,

> even though it makes no contribution to either production or consumption.

>

> This ideology goes back to the first years of the Cold War. During the

> late

> 1940s, the U.S. was haunted by economic anxieties. The Great Depression of

> the 1930s had been overcome only by the war production boom of World War

> II.

> With peace and demobilization, there was a pervasive fear that the

> Depression would return. During 1949, alarmed by the Soviet Union's

> detonation of an atomic bomb, the looming communist victory in the Chinese

> civil war, a domestic recession, and the lowering of the Iron Curtain

> around

> the USSR's European satellites, the U.S. sought to draft basic strategy

> for

> the emerging cold war. The result was the militaristic National Security

> Council Report 68 [29] (NSC-68) drafted under the supervision of Paul

> Nitze,

> then head of the Policy Planning Staff in the State Department. Dated

> April

> 14, 1950, and signed by President Harry S. Truman on September 30, 1950,

> it

> laid out the basic public economic policies that the United States pursues

> to the present day.

>

> In its conclusions, NSC-68 asserted [30]: "One of the most significant

> lessons of our World War II experience was that the American economy, when

> it operates at a level approaching full efficiency, can provide enormous

> resources for purposes other than civilian consumption while

> simultaneously

> providing a high standard of living."

>

> With this understanding, American strategists began to build up a massive

> munitions industry, both to counter the military might of the Soviet Union

> (which they consistently overstated) and also to maintain full employment

> as

> well as ward off a possible return of the Depression. The result was that,

> under Pentagon leadership, entire new industries were created to

> manufacture

> large aircraft, nuclear-powered submarines, nuclear warheads,

> intercontinental ballistic missiles, and surveillance and communications

> satellites. This led to what President Eisenhower warned against in his

> farewell address of February 6, 1961: "The conjunction of an immense

> military establishment and a large arms industry is new in the American

> experience" -- that is, the military-industrial complex.

>

> By 1990, the value of the weapons, equipment, and factories devoted to the

> Department of Defense was 83% of the value of all plants and equipment in

> American manufacturing. From 1947 to 1990, the combined U.S. military

> budgets amounted to [31] $8.7 trillion. Even though the Soviet Union no

> longer exists, U.S. reliance on military Keynesianism has, if anything,

> ratcheted up, thanks to the massive vested interests that have become

> entrenched around the military establishment. Over time, a commitment to

> both guns and butter has proven an unstable configuration. Military

> industries crowd out the civilian economy and lead to severe economic

> weaknesses. Devotion to military Keynesianism is, in fact, a form of slow

> economic suicide.

>

> On May 1, 2007, the Center for Economic and Policy Research of Washington,

> D.C., released a study prepared by the global forecasting company Global

> Insight on the long-term economic impact of increased military spending.

> Guided by economist Dean Baker, this research showed that, after an

> initial

> demand stimulus, by about the sixth year the effect of increased military

> spending turns negative. Needless to say, the U.S. economy has had to cope

> with growing defense spending for more than 60 years. He found that, after

> 10 years of higher defense spending, there would be 464,000 fewer jobs

> than

> in a baseline scenario that involved lower defense spending.

>

> Baker concluded [32]:

>

> "It is often believed that wars and military spending increases are good

> for the economy. In fact, most economic models show that military spending

> diverts resources from productive uses, such as consumption and

> investment,

> and ultimately slows economic growth and reduces employment."

>

> These are only some of the many deleterious effects of military

> Keynesianism.

>

> Hollowing Out the American Economy

>

> It was believed that the U.S. could afford both a massive military

> establishment and a high standard of living, and that it needed both to

> maintain full employment. But it did not work out that way. By the 1960s,

> it

> was becoming apparent that turning over the nation's largest manufacturing

> enterprises to the Department of Defense and producing goods without any

> investment or consumption value was starting to crowd out civilian

> economic

> activities. The historian Thomas E. Woods, Jr., observes [33] that, during

> the 1950s and 1960s, between one-third and two-thirds of all American

> research talent was siphoned off into the military sector. It is, of

> course,

> impossible to know what innovations never appeared as a result of this

> diversion of resources and brainpower into the service of the military,

> but

> it was during the 1960s that we first began to notice Japan was outpacing

> us

> in the design and quality of a range of consumer goods, including

> household

> electronics and automobiles.

>

> Nuclear weapons furnish a striking illustration of these anomalies.

> Between

> the 1940s and 1996, the United States spent at least $5.8 trillion on the

> development, testing, and construction of nuclear bombs [34]. By 1967, the

> peak year of its nuclear stockpile, the United States possessed some

> 32,500

> deliverable atomic and hydrogen bombs, none of which, thankfully, was ever

> used. They perfectly illustrate the Keynesian principle that the

> government

> can provide make-work jobs to keep people employed. Nuclear weapons were

> not

> just America's secret weapon, but also its secret economic weapon. As of

> 2006, we still had 9,960 of them. There is today no sane use for them,

> while

> the trillions spent on them could have been used to solve the problems of

> social security and health care, quality education and access to higher

> education for all, not to speak of the retention of highly skilled jobs

> within the American economy.

>

> The pioneer in analyzing what has been lost as a result of military

> Keynesianism was the late Seymour Melman (1917-2004), a professor of

> industrial engineering and operations research at Columbia University. His

> 1970 book, Pentagon Capitalism: The Political Economy of War, was a

> prescient analysis of the unintended consequences of the American

> preoccupation with its armed forces and their weaponry since the onset of

> the Cold War. Melman wrote (pp. 2-3):

>

> "From 1946 to 1969, the United States government spent over $1,000

> billion

> on the military, more than half of this under the Kennedy and Johnson

> administrations -- the period during which the [Pentagon-dominated] state

> management was established as a formal institution. This sum of staggering

> size (try to visualize a billion of something) does not express the cost

> of

> the military establishment to the nation as a whole. The true cost is

> measured by what has been foregone, by the accumulated deterioration in

> many

> facets of life by the inability to alleviate human wretchedness of long

> duration."

>

> In an important exegesis on Melman's relevance to the current American

> economic situation, Thomas Woods writes [35]:

>

> "According to the U.S. Department of Defense, during the four decades

> from

> 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital

> resources. In 1985, the Department of Commerce estimated the value of the

> nation's plant and equipment, and infrastructure, at just over $7.29

> trillion. In other words, the amount spent over that period could have

> doubled the American capital stock or modernized and replaced its existing

> stock."

>

> The fact that we did not modernize or replace our capital assets is one of

> the main reasons why, by the turn of the twenty-first century, our

> manufacturing base had all but evaporated [36]. Machine tools -- an

> industry

> on which Melman was an authority -- are a particularly important symptom.

> In

> November 1968, a five-year inventory disclosed (p. 186) "that 64 percent

> of

> the metalworking machine tools used in U.S. industry were ten years old or

> older. The age of this industrial equipment (drills, lathes, etc.) marks

> the

> United States' machine tool stock as the oldest among all major industrial

> nations, and it marks the continuation of a deterioration process that

> began

> with the end of the Second World War. This deterioration at the base of

> the

> industrial system certifies to the continuous debilitating and depleting

> effect that the military use of capital and research and development

> talent

> has had on American industry."

>

> Nothing has been done in the period since 1968 to reverse these trends and

> it shows today in our massive imports of equipment -- from medical

> machines

> like proton accelerators [37] for radiological therapy (made primarily in

> Belgium, Germany, and Japan) to cars and trucks.

>

> Our short tenure as the world's "lone superpower" has come to an end. As

> Harvard economics professor Benjamin Friedman has written [38]:

>

> "Again and again it has always been the world's leading lending country

> that has been the premier country in terms of political influence,

> diplomatic influence, and cultural influence. It's no accident that we

> took

> over the role from the British at the same time that we took over. the job

> of being the world's leading lending country. Today we are no longer the

> world's leading lending country. In fact we are now the world's biggest

> debtor country, and we are continuing to wield influence on the basis of

> military prowess alone."

>

> Some of the damage done can never be rectified. There are, however, some

> steps that this country urgently needs to take. These include reversing

> Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our

> global empire of over 800 military bases, cutting from the defense budget

> all projects that bear no relationship to the national security of the

> United States, and ceasing to use the defense budget as a Keynesian jobs

> program. If we do these things we have a chance of squeaking by. If we

> don't, we face probable national insolvency and a long depression.

>

> Chalmers Johnson is the author of Nemesis: The Last Days of the American

> Republic [39], just published in paperback. It is the final volume of his

> Blowback Trilogy, which also includes Blowback [40] (2000) and The Sorrows

> of Empire [41] (2004).

>

> [Note: For those interested, click here [42] to view a clip from a new

> film,

> "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' [43]

> Speaking Freely series in which he discusses "military Keynesianism" and

> imperial bankruptcy. For sources on global military spending, please see:

> (1) Global Security Organization, "World Wide Military Expenditures" [44]

> as

> well as Glenn Greenwald, "The bipartisan consensus on U.S. military

> spending" [45]; (2) Stockholm International Peace Research Institute,

> "Report: China biggest Asian military spender." [46]]

>

>

> --

> NOTICE: This post contains copyrighted material the use of which has not

> always been authorized by the copyright owner. I am making such material

> available to advance understanding of

> political, human rights, democracy, scientific, and social justice issues.

> I

> believe this constitutes a 'fair use' of such copyrighted material as

> provided for in section 107 of the US Copyright

> Law. In accordance with Title 17 U.S.C. Section 107

>

> "A little patience and we shall see the reign of witches pass over, their

> spells dissolve, and the people recovering their true sight, restore their

> government to its true principles. It is true that in the meantime we are

> suffering deeply in spirit,

> and incurring the horrors of a war and long oppressions of enormous public

> debt. But if the game runs sometimes against us at home we must have

> patience till luck turns, and then we shall have an opportunity of winning

> back the principles we have lost, for this is a game where principles are

> at

> stake."

> -Thomas Jefferson

>

>

>

Prince Albert's In The Can wrote:

> "Gandalf Grey" <valinor20@gmail.com> wrote in message

> news:4798d197$1$14099$9a6e19ea@news.newshosting.com...

>> Tomgram: Chalmers Johnson Explains Why the Debt Crisis Is Now the Greatest

>> Threat to the

>> American Republic

>

> agreed, the greedy banks, actively fueling the real estate speculation of

> the past few years, are highly responsible for this problem.

I suppose you think that this minor little problem has nothing at all to

do with it as well :

http://www.brillig.com/debt_clock/

Nobody ever said Americans were smart, at least not in the last 50 years

or so.

> Democrats control congress

Every time we try to hike taxes on the rich the Repugliar presidunce

vetos the measure.

Bret Cahill

"Doorman" <nospam@bellsouth.net> wrote in message

news:ME5mj.72576$rc2.61449@bignews1.bellsouth.net...

> Democrats control congress

Repugs controlled it for the last 6 years and democrats control it by only

the slightest of margins. Democrats did not plunge this country into debt.

That was the GOP under George Bush.

Even idiots know that it's easy to obstruct legislation in congress with a

sizeable minority.

>

>

> > Democrats control congress

>

> Repugs controlled it for the last 6 years and democrats control it by only

> the slightest of margins. �Democrats did not plunge this country into debt.

> That was the GOP under George Bush.

>

> Even idiots know that it's easy to obstruct legislation in congress with a

> sizeable minority.

It's getting harder and harder for Repugs to spin reality.

Bret Cahill

Doorman wrote:

> Democrats control congress

>

>

And the president submits a budget. How many balanced budgets were

submitted by Bush? How many were balanced when Republicans held the

presidency and both houses?

mordacpreventor@hotmail.com wrote:

> On Jan 24, 11:27 am, "Doorman" <nos...@bellsouth.net> wrote:

>> Democrats control congress

>

> Which has nothing to do with the current crisis that was started,

> fostered and matured while the Repugs were in charge of Congress and

> the presidency, Doormat.

Don't make door jamb think, it give him migraines.

In article <W7SdneazUcl5QAXanZ2dnUVZ_j-dnZ2d@comcast.com>, Prince

Albert's In The Can <billmaher@tastelessjokes.org> wrote:

> "Gandalf Grey" <valinor20@gmail.com> wrote in message

> news:4798d197$1$14099$9a6e19ea@news.newshosting.com...

> > Tomgram: Chalmers Johnson Explains Why the Debt Crisis Is Now the Greatest

> > Threat to the

> > American Republic

>

> agreed, the greedy banks, actively fueling the real estate speculation of

> the past few years, are highly responsible for this problem.

According to the article below, the one by Johnson, and the one that

you presumably read, the problem relates to our entire economic and

political system. Banks are part of the problem, but to blame them is

vastly insufficient.

E. K.

>

> >

> > By Tom Engelhardt

> >

> > Created Jan 23 2008 - 9:26am

> >

> >

> > - from TomDispatch [1]

> >

> > Within the next month, the Pentagon will submit its 2009 budget to

> > Congress

> > and it's a fair bet [2] that it will be even larger than the staggering

> > 2008

> > one. Like the Army and the Marines, the Pentagon itself is overstretched

> > and

> > under strain -- and like the two services, which are expected to add [3]

> > 92,000 new troops over the next five years (at an estimated cost of $1.2

> > billion [4] per 10,000), the Pentagon's response is never to cut back, but

> > always to expand, always to demand more.

> >

> > After all, there are those disastrous Afghan and Iraqi wars still eating

> > taxpayer dollars as if there were no tomorrow. Then there's what

> > enthusiasts

> > like to call "the next war" to think about, which means all those

> > big-ticket

> > weapons, all those jets, ships, and armored vehicles for the future. And

> > don't forget the still-popular, Rumsfeld-style "netcentric warfare"

> > systems

> > (robots [5], drones [6], communications satellites [7], and the like), not

> > to speak of the killer space toys being developed; and then there's all

> > that

> > ruined equipment out of Iraq and Afghanistan to be massively replaced --

> > and

> > all those ruined human beings to take care of.

> >

> > You'll get the gist of this from a recent editorial in the trade magazine

> > Aviation Week & Space Technology [8]:

> >

> > "The fact Washington must face is that nearly five years of war have left

> > U.S. forces worse off than they have been in a generation, yes, since

> > Vietnam, and restoring them will take budget-building unlike any in the

> > past."

> >

> > Even on the rare occasion when -- as in the case of Boeing's C-17 cargo

> > plane -- the Pentagon decides to cancel a project, there's Congress to

> > remember. Contracts and subcontracts for weapons systems, carefully doled

> > out to as many states as possible, mean jobs, and so Congress often balks

> > [9] at such cuts. (Fifty-five House members recently warned the Pentagon

> > of

> > a "strong negative response" if funding for the C-17 is excised from the

> > 2009 budget.) All in all, it adds up to a defense menu for a glutton.

> >

> > Already, Secretary of Defense Robert Gates has said that 2009 funding [10]

> > is "largely locked into place." The giant military-industrial combines --

> > Lockheed Martin, Northrop Grumman, Boeing, Raytheon -- have been watching

> > their stocks rise in otherwise treacherous times. They are hopeful. As

> > Ronald Sugar, Northrop CEO, put it [11]: "A great global power like the

> > United States needs a great navy and a great navy needs an adequate number

> > of ships, and they have to be modern and capable" -- and guess which

> > company

> > is the Navy's largest shipbuilder?

> >

> > There should be nothing surprising in all this, especially for those of us

> > who have read Chalmers Johnson's Nemesis, The Last Days of the American

> > Republic [12], the final volume of his Blowback Trilogy. Published in

> > 2007,

> > it is already a classic on what imperial overstretch means for the rest of

> > us. The paperback of Nemesis is officially out today, just as global stock

> > markets tumble. It is simply a must-read (and if you've already read it,

> > then get a copy for a friend). In the meantime, hunker in for Johnson's

> > latest magisterial account of how the mightiest guns the Pentagon can

> > muster

> > threaten to sink our own country. (For those interested, click here [13]

> > to

> > view a clip from a new film, "Chalmers Johnson on American Hegemony," in

> > Cinema Libre Studios' [14] Speaking Freely series in which he discusses

> > military Keynesianism and imperial bankruptcy.)

> >

> > -- Tom

> >

> >

> >

> > Going Bankrupt: Why the Debt Crisis Is Now the Greatest Threat to the

> > American Republic

> >

> > By Chalmers Johnson

> >

> > The military adventurers of the Bush administration have much in common

> > with

> > the corporate leaders of the defunct energy company Enron. Both groups of

> > men thought that they were the "smartest guys in the room," the title of

> > Alex Gibney's prize-winning film [15] on what went wrong at Enron. The

> > neoconservatives in the White House and the Pentagon outsmarted

> > themselves.

> > They failed even to address the problem of how to finance their schemes of

> > imperialist wars and global domination.

> >

> > As a result, going into 2008, the United States finds itself in the

> > anomalous position of being unable to pay for its own elevated living

> > standards or its wasteful, overly large military establishment. Its

> > government no longer even attempts to reduce the ruinous expenses of

> > maintaining huge standing armies, replacing the equipment that seven years

> > of wars have destroyed or worn out [16], or preparing for a war [17] in

> > outer space [18] against unknown adversaries. Instead, the Bush

> > administration puts off these costs for future generations to pay -- or

> > repudiate. This utter fiscal irresponsibility has been disguised through

> > many manipulative financial schemes (such as causing poorer countries to

> > lend us unprecedented sums of money), but the time of reckoning is fast

> > approaching.

> >

> > There are three broad aspects to our debt crisis. First, in the current

> > fiscal year (2008) we are spending insane amounts of money on "defense"

> > projects that bear no relationship to the national security of the United

> > States. Simultaneously, we are keeping the income tax burdens on the

> > richest

> > segments of the American population at strikingly low levels.

> >

> > Second, we continue to believe that we can compensate for the accelerating

> > erosion of our manufacturing base and our loss of jobs to foreign

> > countries

> > through massive military expenditures -- so-called "military

> > Keynesianism,"

> > which I discuss in detail in my book Nemesis: The Last Days of the

> > American

> > Republic [19]. By military Keynesianism, I mean the mistaken belief that

> > public policies focused on frequent wars, huge expenditures on weapons and

> > munitions, and large standing armies can indefinitely sustain a wealthy

> > capitalist economy. The opposite is actually true.

> >

> > Third, in our devotion to militarism (despite our limited resources), we

> > are

> > failing to invest in our social infrastructure and other requirements for

> > the long-term health of our country. These are what economists call

> > "opportunity costs," things not done because we spent our money on

> > something

> > else. Our public education system has deteriorated alarmingly. We have

> > failed to provide health care to all our citizens and neglected our

> > responsibilities as the world's number one polluter. Most important, we

> > have

> > lost our competitiveness as a manufacturer for civilian needs -- an

> > infinitely more efficient use of scarce resources than arms manufacturing.

> > Let me discuss each of these.

> >

> > The Current Fiscal Disaster

> >

> > It is virtually impossible to overstate the profligacy of what our

> > government spends on the military. The Department of Defense's planned

> > expenditures for fiscal year 2008 are larger than all other nations'

> > military budgets combined. The supplementary budget to pay for the current

> > wars in Iraq and Afghanistan, not part of the official defense budget, is

> > itself larger than the combined military budgets of Russia and China.

> > Defense-related spending for fiscal 2008 will exceed $1 trillion for the

> > first time in history. The United States has become the largest single

> > salesman of arms and munitions to other nations on Earth. Leaving out of

> > account President Bush's two on-going wars, defense spending has doubled

> > since the mid-1990s. The defense budget for fiscal 2008 is the largest

> > since

> > World War II.

> >

> > Before we try to break down and analyze this gargantuan sum, there is one

> > important caveat. Figures on defense spending are notoriously unreliable.

> > The numbers released by the Congressional Reference Service and the

> > Congressional Budget Office do not agree with each other. Robert Higgs,

> > senior fellow for political economy at the Independent Institute, says

> > [20]:

> > "A well-founded rule of thumb is to take the Pentagon's (always well

> > publicized) basic budget total and double it." Even a cursory reading of

> > newspaper articles about the Department of Defense will turn up major

> > differences in statistics about its expenses. Some 30-40% of the defense

> > budget is "black," meaning that these sections contain hidden expenditures

> > for classified projects. There is no possible way to know what they

> > include

> > or whether their total amounts are accurate.

> >

> > There are many reasons for this budgetary sleight-of-hand -- including a

> > desire for secrecy on the part of the president, the secretary of defense,

> > and the military-industrial complex -- but the chief one is that members

> > of

> > Congress, who profit enormously from defense jobs and pork-barrel projects

> > in their districts, have a political interest in supporting the Department

> > of Defense. In 1996, in an attempt to bring accounting standards within

> > the

> > executive branch somewhat closer to those of the civilian economy,

> > Congress

> > passed the Federal Financial Management Improvement Act. It required all

> > federal agencies to hire outside auditors to review their books and

> > release

> > the results to the public. Neither the Department of Defense, nor the

> > Department of Homeland Security has ever complied. Congress has

> > complained,

> > but not penalized either department for ignoring the law. The result is

> > that

> > all numbers released by the Pentagon should be regarded as suspect.

> >

> > In discussing the fiscal 2008 defense budget, as released to the press on

> > February 7, 2007, I have been guided by two experienced and reliable

> > analysts: William D. Hartung [21] of the New America Foundation's Arms and

> > Security Initiative and Fred Kaplan [22], defense correspondent for

> > Slate.org. They agree that the Department of Defense requested $481.4

> > billion for salaries, operations (except in Iraq and Afghanistan), and

> > equipment. They also agree on a figure of $141.7 billion for the

> > "supplemental" budget to fight the "global war on terrorism" -- that is,

> > the

> > two on-going wars that the general public may think are actually covered

> > by

> > the basic Pentagon budget. The Department of Defense also asked for an

> > extra

> > $93.4 billion to pay for hitherto unmentioned war costs in the remainder

> > of

> > 2007 and, most creatively, an additional "allowance" (a new term in

> > defense

> > budget documents) of $50 billion to be charged to fiscal year 2009. This

> > comes to a total spending request by the Department of Defense of $766.5

> > billion.

> >

> > But there is much more. In an attempt to disguise the true size of the

> > American military empire, the government has long hidden major

> > military-related expenditures in departments other than Defense. For

> > example, $23.4 billion for the Department of Energy goes toward [23]

> > developing and maintaining nuclear warheads; and $25.3 billion in the

> > Department of State budget is spent on foreign military assistance

> > (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the

> > United Arab Republic, Egypt, and Pakistan). Another $1.03 billion outside

> > the official Department of Defense budget is now needed [24] for

> > recruitment

> > and reenlistment incentives for the overstretched U.S. military itself, up

> > from a mere $174 million in 2003, the year the war in Iraq began. The

> > Department of Veterans Affairs currently gets at least $75.7 billion, 50%

> > of

> > which goes for the long-term care of the grievously injured among the at

> > least 28,870 soldiers [25] so far wounded in Iraq and another 1,708 in

> > Afghanistan. The amount is universally derided as inadequate [26]. Another

> > $46.4 billion goes to the Department of Homeland Security.

> >

> > Missing as well from this compilation is $1.9 billion to the Department of

> > Justice for the paramilitary activities of the FBI; $38.5 billion to the

> > Department of the Treasury for the Military Retirement Fund; $7.6 billion

> > for the military-related activities of the National Aeronautics and Space

> > Administration; and well over $200 billion in interest for past

> > debt-financed defense outlays. This brings U.S. spending for its military

> > establishment during the current fiscal year (2008), conservatively

> > calculated, to at least $1.1 trillion.

> >

> > Military Keynesianism

> >

> > Such expenditures are not only morally obscene, they are fiscally

> > unsustainable. Many neoconservatives and poorly informed patriotic

> > Americans

> > believe that, even though our defense budget is huge, we can afford it

> > because we are the richest country on Earth. Unfortunately, that statement

> > is no longer true. The world's richest political entity, according to the

> > CIA's "World Factbook," [27] is the European Union. The EU's 2006 GDP

> > (gross

> > domestic product -- all goods and services produced domestically) was

> > estimated to be slightly larger than that of the U.S. However, China's

> > 2006

> > GDP was only slightly smaller than that of the U.S., and Japan was the

> > world's fourth richest nation.

> >

> > A more telling comparison that reveals just how much worse we're doing can

> > be found among the "current accounts" of various nations. The current

> > account measures the net trade surplus or deficit of a country plus

> > cross-border payments of interest, royalties, dividends, capital gains,

> > foreign aid, and other income. For example, in order for Japan to

> > manufacture anything, it must import all required raw materials. Even

> > after

> > this incredible expense is met, it still has an $88 billion per year trade

> > surplus with the United States and enjoys the world's second highest

> > current

> > account balance. (China is number one.) The United States, by contrast, is

> > number 163 [28] -- dead last on the list, worse than countries like

> > Australia and the United Kingdom that also have large trade deficits. Its

> > 2006 current account deficit was $811.5 billion; second worst was Spain at

> > $106.4 billion. This is what is unsustainable.

> >

> > It's not just that our tastes for foreign goods, including imported oil,

> > vastly exceed our ability to pay for them. We are financing them through

> > massive borrowing. On November 7, 2007, the U.S. Treasury announced that

> > the

> > national debt had breached $9 trillion for the first time ever. This was

> > just five weeks after Congress raised the so-called debt ceiling to $9.815

> > trillion. If you begin in 1789, at the moment the Constitution became the

> > supreme law of the land, the debt accumulated by the federal government

> > did

> > not top $1 trillion until 1981. When George Bush became president in

> > January

> > 2001, it stood at approximately $5.7 trillion. Since then, it has

> > increased

> > by 45%. This huge debt can be largely explained by our defense

> > expenditures

> > in comparison with the rest of the world.

> >

> > The world's top 10 military spenders and the approximate amounts each

> > country currently budgets for its military establishment are:

> >

> > 1. United States (FY08 budget), $623 billion

> > 2. China (2004), $65 billion

> > 3. Russia, $50 billion

> > 4. France (2005), $45 billion

> > 5. Japan (2007), $41.75 billion

> > 6. Germany (2003), $35.1 billion

> > 7. Italy (2003), $28.2 billion

> > 8. South Korea (2003), $21.1 billion

> > 9. India (2005 est.), $19 billion

> > 10. Saudi Arabia (2005 est.), $18 billion

> >

> > World total military expenditures (2004 est.), $1,100 billion

> > World total (minus the United States), $500 billion

> >

> > Our excessive military expenditures did not occur over just a few short

> > years or simply because of the Bush administration's policies. They have

> > been going on for a very long time in accordance with a superficially

> > plausible ideology and have now become entrenched in our democratic

> > political system where they are starting to wreak havoc. This ideology I

> > call "military Keynesianism" -- the determination to maintain a permanent

> > war economy and to treat military output as an ordinary economic product,

> > even though it makes no contribution to either production or consumption.

> >

> > This ideology goes back to the first years of the Cold War. During the

> > late

> > 1940s, the U.S. was haunted by economic anxieties. The Great Depression of

> > the 1930s had been overcome only by the war production boom of World War

> > II.

> > With peace and demobilization, there was a pervasive fear that the

> > Depression would return. During 1949, alarmed by the Soviet Union's

> > detonation of an atomic bomb, the looming communist victory in the Chinese

> > civil war, a domestic recession, and the lowering of the Iron Curtain

> > around

> > the USSR's European satellites, the U.S. sought to draft basic strategy

> > for

> > the emerging cold war. The result was the militaristic National Security

> > Council Report 68 [29] (NSC-68) drafted under the supervision of Paul

> > Nitze,

> > then head of the Policy Planning Staff in the State Department. Dated

> > April

> > 14, 1950, and signed by President Harry S. Truman on September 30, 1950,

> > it

> > laid out the basic public economic policies that the United States pursues

> > to the present day.

> >

> > In its conclusions, NSC-68 asserted [30]: "One of the most significant

> > lessons of our World War II experience was that the American economy, when

> > it operates at a level approaching full efficiency, can provide enormous

> > resources for purposes other than civilian consumption while

> > simultaneously

> > providing a high standard of living."

> >

> > With this understanding, American strategists began to build up a massive

> > munitions industry, both to counter the military might of the Soviet Union

> > (which they consistently overstated) and also to maintain full employment

> > as

> > well as ward off a possible return of the Depression. The result was that,

> > under Pentagon leadership, entire new industries were created to

> > manufacture

> > large aircraft, nuclear-powered submarines, nuclear warheads,

> > intercontinental ballistic missiles, and surveillance and communications

> > satellites. This led to what President Eisenhower warned against in his

> > farewell address of February 6, 1961: "The conjunction of an immense

> > military establishment and a large arms industry is new in the American

> > experience" -- that is, the military-industrial complex.

> >

> > By 1990, the value of the weapons, equipment, and factories devoted to the

> > Department of Defense was 83% of the value of all plants and equipment in

> > American manufacturing. From 1947 to 1990, the combined U.S. military

> > budgets amounted to [31] $8.7 trillion. Even though the Soviet Union no

> > longer exists, U.S. reliance on military Keynesianism has, if anything,

> > ratcheted up, thanks to the massive vested interests that have become

> > entrenched around the military establishment. Over time, a commitment to

> > both guns and butter has proven an unstable configuration. Military

> > industries crowd out the civilian economy and lead to severe economic

> > weaknesses. Devotion to military Keynesianism is, in fact, a form of slow

> > economic suicide.

> >

> > On May 1, 2007, the Center for Economic and Policy Research of Washington,

> > D.C., released a study prepared by the global forecasting company Global

> > Insight on the long-term economic impact of increased military spending.

> > Guided by economist Dean Baker, this research showed that, after an

> > initial

> > demand stimulus, by about the sixth year the effect of increased military

> > spending turns negative. Needless to say, the U.S. economy has had to cope

> > with growing defense spending for more than 60 years. He found that, after

> > 10 years of higher defense spending, there would be 464,000 fewer jobs

> > than

> > in a baseline scenario that involved lower defense spending.

> >

> > Baker concluded [32]:

> >

> > "It is often believed that wars and military spending increases are good

> > for the economy. In fact, most economic models show that military spending

> > diverts resources from productive uses, such as consumption and

> > investment,

> > and ultimately slows economic growth and reduces employment."

> >

> > These are only some of the many deleterious effects of military

> > Keynesianism.

> >

> > Hollowing Out the American Economy

> >

> > It was believed that the U.S. could afford both a massive military

> > establishment and a high standard of living, and that it needed both to

> > maintain full employment. But it did not work out that way. By the 1960s,

> > it

> > was becoming apparent that turning over the nation's largest manufacturing

> > enterprises to the Department of Defense and producing goods without any

> > investment or consumption value was starting to crowd out civilian

> > economic

> > activities. The historian Thomas E. Woods, Jr., observes [33] that, during

> > the 1950s and 1960s, between one-third and two-thirds of all American

> > research talent was siphoned off into the military sector. It is, of

> > course,

> > impossible to know what innovations never appeared as a result of this

> > diversion of resources and brainpower into the service of the military,

> > but

> > it was during the 1960s that we first began to notice Japan was outpacing

> > us

> > in the design and quality of a range of consumer goods, including

> > household

> > electronics and automobiles.

> >

> > Nuclear weapons furnish a striking illustration of these anomalies.

> > Between

> > the 1940s and 1996, the United States spent at least $5.8 trillion on the

> > development, testing, and construction of nuclear bombs [34]. By 1967, the

> > peak year of its nuclear stockpile, the United States possessed some

> > 32,500

> > deliverable atomic and hydrogen bombs, none of which, thankfully, was ever

> > used. They perfectly illustrate the Keynesian principle that the

> > government

> > can provide make-work jobs to keep people employed. Nuclear weapons were

> > not

> > just America's secret weapon, but also its secret economic weapon. As of

> > 2006, we still had 9,960 of them. There is today no sane use for them,

> > while

> > the trillions spent on them could have been used to solve the problems of

> > social security and health care, quality education and access to higher

> > education for all, not to speak of the retention of highly skilled jobs

> > within the American economy.

> >

> > The pioneer in analyzing what has been lost as a result of military

> > Keynesianism was the late Seymour Melman (1917-2004), a professor of

> > industrial engineering and operations research at Columbia University. His

> > 1970 book, Pentagon Capitalism: The Political Economy of War, was a

> > prescient analysis of the unintended consequences of the American

> > preoccupation with its armed forces and their weaponry since the onset of

> > the Cold War. Melman wrote (pp. 2-3):

> >

> > "From 1946 to 1969, the United States government spent over $1,000

> > billion

> > on the military, more than half of this under the Kennedy and Johnson

> > administrations -- the period during which the [Pentagon-dominated] state

> > management was established as a formal institution. This sum of staggering

> > size (try to visualize a billion of something) does not express the cost

> > of

> > the military establishment to the nation as a whole. The true cost is

> > measured by what has been foregone, by the accumulated deterioration in

> > many

> > facets of life by the inability to alleviate human wretchedness of long

> > duration."

> >

> > In an important exegesis on Melman's relevance to the current American

> > economic situation, Thomas Woods writes [35]:

> >

> > "According to the U.S. Department of Defense, during the four decades

> > from

> > 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital

> > resources. In 1985, the Department of Commerce estimated the value of the

> > nation's plant and equipment, and infrastructure, at just over $7.29

> > trillion. In other words, the amount spent over that period could have

> > doubled the American capital stock or modernized and replaced its existing

> > stock."

> >

> > The fact that we did not modernize or replace our capital assets is one of

> > the main reasons why, by the turn of the twenty-first century, our

> > manufacturing base had all but evaporated [36]. Machine tools -- an

> > industry

> > on which Melman was an authority -- are a particularly important symptom.

> > In

> > November 1968, a five-year inventory disclosed (p. 186) "that 64 percent

> > of

> > the metalworking machine tools used in U.S. industry were ten years old or

> > older. The age of this industrial equipment (drills, lathes, etc.) marks

> > the

> > United States' machine tool stock as the oldest among all major industrial

> > nations, and it marks the continuation of a deterioration process that

> > began

> > with the end of the Second World War. This deterioration at the base of

> > the

> > industrial system certifies to the continuous debilitating and depleting

> > effect that the military use of capital and research and development

> > talent

> > has had on American industry."

> >

> > Nothing has been done in the period since 1968 to reverse these trends and

> > it shows today in our massive imports of equipment -- from medical

> > machines

> > like proton accelerators [37] for radiological therapy (made primarily in

> > Belgium, Germany, and Japan) to cars and trucks.

> >

> > Our short tenure as the world's "lone superpower" has come to an end. As

> > Harvard economics professor Benjamin Friedman has written [38]:

> >

> > "Again and again it has always been the world's leading lending country

> > that has been the premier country in terms of political influence,

> > diplomatic influence, and cultural influence. It's no accident that we

> > took

> > over the role from the British at the same time that we took over. the job

> > of being the world's leading lending country. Today we are no longer the

> > world's leading lending country. In fact we are now the world's biggest

> > debtor country, and we are continuing to wield influence on the basis of

> > military prowess alone."

> >

> > Some of the damage done can never be rectified. There are, however, some

> > steps that this country urgently needs to take. These include reversing

> > Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our

> > global empire of over 800 military bases, cutting from the defense budget

> > all projects that bear no relationship to the national security of the

> > United States, and ceasing to use the defense budget as a Keynesian jobs

> > program. If we do these things we have a chance of squeaking by. If we

> > don't, we face probable national insolvency and a long depression.

> >

> > Chalmers Johnson is the author of Nemesis: The Last Days of the American

> > Republic [39], just published in paperback. It is the final volume of his

> > Blowback Trilogy, which also includes Blowback [40] (2000) and The Sorrows

> > of Empire [41] (2004).

> >

> > [Note: For those interested, click here [42] to view a clip from a new

> > film,

> > "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' [43]

> > Speaking Freely series in which he discusses "military Keynesianism" and

> > imperial bankruptcy. For sources on global military spending, please see:

> > (1) Global Security Organization, "World Wide Military Expenditures" [44]

> > as

> > well as Glenn Greenwald, "The bipartisan consensus on U.S. military

> > spending" [45]; (2) Stockholm International Peace Research Institute,

> > "Report: China biggest Asian military spender." [46]]

> >

> >

> > --

> > NOTICE: This post contains copyrighted material the use of which has not

> > always been authorized by the copyright owner. I am making such material

> > available to advance understanding of

> > political, human rights, democracy, scientific, and social justice issues.

> > I

> > believe this constitutes a 'fair use' of such copyrighted material as

> > provided for in section 107 of the US Copyright

> > Law. In accordance with Title 17 U.S.C. Section 107

> >

> > "A little patience and we shall see the reign of witches pass over, their

> > spells dissolve, and the people recovering their true sight, restore their

> > government to its true principles. It is true that in the meantime we are

> > suffering deeply in spirit,

> > and incurring the horrors of a war and long oppressions of enormous public

> > debt. But if the game runs sometimes against us at home we must have

> > patience till luck turns, and then we shall have an opportunity of winning

> > back the principles we have lost, for this is a game where principles are

> > at

> > stake."

> > -Thomas Jefferson

> >

> >

> >

>

>

--

"You can fool some of the people all of the time,

and those are the ones you want to concentrate on."

-- G.W. Bush, Gridiron Club dinner, Wash., D.C. March 2001

"I even take the position that sexual orgies eliminate social tensions and

ought to be encouraged." US Supreme Court Justice Antonin Scalia, 2004

"The American Way of Life is not negotiable." Dick Cheney, 2001

"The American Way of Life is heading for extinction." Eyeball Kid, 2006

"...Money Trumps Peace..." G.W. Bush, 2007

Free humor. Whenever you want. http://www.psmueller.com

"Doorman" <nospam@bellsouth.net> wrote in message

news:ME5mj.72576$rc2.61449@bignews1.bellsouth.net...

> Democrats control congress

Then stop interfering.