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$20-Trillion War Costs Bankrupting US

Written by The Daily Bell

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Secret China war plan: trillions in U.S. debt ... Yes, Americans love war. Yes, wars cost money. And pile on debt, new taxes ... Back in the ‘40s, WWII consumed 57% of our GDP. Today, war eats up about half America's budget. We're sinking under Iraq war debt. Nobel economist Joseph Stiglitz estimates Iraq at $3 trillion, with $2 trillion for future costs, like VA medical. The Afghan war, maybe another $3 trillion. Plus endless terrorist threats. Future wars are "planned" years, even decades in advance, strategies based on Pentagon-Rand war games. America talks peace. But deep inside our collective brain is a dark monster: We're little kids who love playing war. – Paul B. Farrell/MarketWatch

US_Fire_PowerDominant Social Theme: Out of control spending must be examined and admitted so that the task of protecting the Homeland can be updated and maintained.

Free-Market Analysis: Paul Farrell, a columnist for MarketWatch (see above), reports what has been presented here as well: Perhaps 50 percent or more of America's annual, governmental spending is war-and intel-related. Add up related veterans' benefits, foreign and domestic bases, corollary and direct spending and the total closes in on US$1.5 trillion (not the US$700 billion that is often presented as the cost).

The wars in Afghanistan and Iraq (continuing) have cost, therefore, an unfathomable US$6 trillion. If overall military spending amounts to some US$1.5 trillion then during the decade that America has waged its latest serial wars, its putative leadership has spent approximately US$20 trillion on waging war or preparing for it. Add in another US$20 trillion or so that some pundits have estimated that the US in particular has printed "out of thin air" to reliquify its ruined dollar reserve economic system and the total arrived at is US$40 trillion. This sum then, still rising, represents resources that are basically commandeered by the so-called public sector to support the nation's (and the West's) solvency and superior firepower.

The full amount, little reported in the American press, shows clearly how the public's perception of the US as a "capitalist" or free-market economy departs from reality. America's elites – Anglosphere elites really – have commandeered the wealth of a nation; this massive resource base (and its leveraging) is apparently needed to fulfill the elite agenda of ever-closer global governance. Nation-building is expensive; shaping a new global order even moreso. The elite banking families and those corporate entities clustered around them prefer not to use their own resources. The standard method of operation (which provides access to almost unlimited wealth) is called mercantilism.

It is a kind of pincer strategy that has reshaped the globe over decades and even centuries. This pincer can be seen at work in the modern day in, say, Afghanistan. Here huge amounts of aid and Western knowhow help Afghans build a 21st century society. A central bank has been set up; a parliamentary democracy has been installed. A great deal of time and energy has been spent liberating women from Taliban religious ideology and concomitant illiteracy. Hospitals and social service networks have been installed and United Nation and other aid workers have flooded the country to help educate Afghans, generally, about modern ways. Farmers are even being weaned away from the poppy toward wheat and other such crops.

At the same time, a tremendous amount of military power has been focused on Afghanistan. Everything about these numbers is big. Over 50 NATO countries have sent troops and other military resources; an Afghan fighting force of some 500,000 soldiers and 300,000 military and civilian police is being trained; America alone has deployed some 130,000 troops, with all the commensurate, additional supply forces. A single drone strike – and there are dozens every month, often killing women and children – costs an apparent US$1 million.

This is the pincer of power. Afghan society is modernized on the one hand, while its non-Western elites are defeated militarily on the other. It is nation-building; and it has served the Anglosphere well for centuries. The elites that runs Britain (and America) used the formula to conquer one-fourth of the earth's surface in the 1800s – as Bell interviewee Richard Maybury recently pointed out.

It is an expensive endeavor. And Farrell's point, well stated, is that the military side of the equation (arguably the more expensive one to operate) is running out of resources. After nearly a century of uncontrollable spending – one that bankrupted first Britain and now America – the Anglo-American war machine is facing ruin. The mathematics become untenable.

What to do? The first step to salvaging the meme is to admit the need for overhaul. Of course, Farrell's presentation is more than that; he argues that something in the American psyche demands war and its resultant carnage. This is the article's weakest part, in our view. Farrell's points are most credible as regards the unsustainability of modern military spending and the Anglosphere intention to identify a new threat. China, he writes, is rapidly emerging as the Western world's number one nemesis. "Is this how WWIII starts?" he asks, "between an aging America that loves war, won't surrender without a fight, and the world's rapidly emerging superpower, predicted to have a population one billion larger than America's by 2050."

Farrell presents the creation of China's first "stealth fighter" airplane as evidence of his argument, along with China's fixation on Taiwan. He then marshals facts that describe a frightening China indeed: "An economy [eventually of] 40% of the world's GDP, dwarfing America's GDP predicted to fall to just 14% ... China's the emerging new superpower, a crafty enemy laughing as we waste our economic resources."

Always there are enemies abroad and at home that need confronting. The dastardly "Hun" – and fascism – served well prior in the first half of the 20th century. The USSR – and communism – worked well in the second half. Past fascism and communism, there is the war on terror. As we've noted on numerous occasions, the war on terror has not gone well. The critical mass necessary to create a believable bogeyman is simply not there; and for this reason, China may seem a tempting alternative.

Yet we tend to disagree with the idea that China can be built up into a kind of 21st century USSR, complete with an additional Cold War, etc. For thousands of years, this is a culture that has attempted to protect itself from "barbarians at the gate," going so far as to build a Great Wall to keep others out. China and its leaders have traditionally looked inward not outward.

The society as a whole is simply not expansionist, or not in the way the USSR seemed to be during its heyday. Additionally, China is engaged commercially on enormous variety of levels with the West. The Soviet Union never had the kind of engagement that China has today. Finally, it is very likely that China will soon face a critical recession due to its leaders inability to control price inflation. Domestic economic troubles, therefore, may make it even harder to portray China as an implacable military machine.

America's domestic and international obligations are, astoundingly, in the area of US$200 trillion. At the highest levels, the power elite itself may have it in mind to inflict such ruin on the West that global governance becomes inevitable. Out of chaos, order, etc. Within this context, we think it more likely that the elite intends to continue to expand its commitment to a war on terror. This will inevitably feature fundamentalist Islam rather than a resurgent Red Scare.

Conclusion: We agree generally with the mechanism that Farrell identifies but not with the particular iteration. It is an important distinction. For those who wish to invest abroad, such analysis is not an academic consideration but one that has ramifications for everything from the price of oil to the availability of foodstuffs and commodities. It is of course possible that Western elites shall decide to build up two existential threats at once, but that is not its usual operative perspective in our view. One enemy at a time seems the preferred messaging. Thus, if we had to choose, we would identify militant Islam not communism.

Source: The Daily Bell

© Copyright 2008 - 2011 Appenzeller Business Press AG (ARBP). All Rights Reserved. The Daily Bell is an informative compendium of independent economic views and analysis, which is published by ARBP

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