. January 28, 2008 SouthAmerica: One of the readers of Brazzil magazine did send me the link to these articles at Asia Times (Hong Kong) â He is an author himself and he thought that I should read these two articles published by Asia Times. Regarding the enclosed article the author ended the article by saying: âIf we do these things we have a chance of squeaking by. If we don't, we face probable national insolvency and a long depression.â ***** DISPATCHES FROM AMERICA Going bankrupt: The US's greatest threat By Chalmers Johnson Published: January 24, 2008 Asia Times â Hong Kong The military adventurers of the George W 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 on what went wrong at Enron. The neo-conservatives 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. ⦠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. 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. ⦠On November 7, 2007, the US 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 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. ⦠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. By 1967, the peak year of its nuclear stockpile, the US 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 fact that we did not modernize or replace our capital assets is one of the main reasons why, by the turn of the 21st century, our manufacturing base had all but evaporated. 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, just published in paperback. It is the final volume of his Blowback Trilogy, which also includes Blowback (2000) and The Sorrows of Empire (2004). You can read his entire article at: Source: http://www.atimes.com/atimes/Middle_East/JA24Ak04.html .
. SouthAmerica: Reply to Toc Today, George W. Bush will give his last State of the Union message to the American people and his most important message is: âafter the total collapse of the US economy the last one to leave the country please turn off the lights.â .
. January 28, 2008 SouthAmerica: Reply to Ivanovich the Bolshevik It has been a long time since you made a comment on my postings, I thought you had gone back to the Soviet Union. You said: âBasically it is nothing else than a simplistic attack on GW's personality (or lack of it) and a free ride on the rising negative sentiment against the rising US deficits and the falling dollar.â My simplistic attack on GWB and I donât mean George Washington Bridge started in 2001 and way before the United States started the war against Iraq. Regarding my free ride, as you say, on the rising negative sentiment against the rising US deficits and the falling dollar â I have been writing about that since 2001 when the US dollar was trading at US$ 0.82 equal Euro $ 1. And people like you was saying all along that I was an idiot. .
January 29. 2012 SouthAmerica: Mr. Roach is on my short list of favorite economists - we think in the same wavelength, and I agree with him most of the time Stephen Roach: Recovery? Oh, Please. We're Screwed â January 27, 2012 http://articles.businessinsider.com/2012-01-27/news/30669486_1_blodget-global-economy-japan ***** Major Recession or a New Depression? http://www.elitetrader.com/vb/showthread.php?s=&postid=1740668&highlight=Stephen+Roach#post1740668 ...January 8, 2008 SouthAmerica: Someone send me a copy of this article by Stephen Roach. Thanks. Mr. Roach is on my short list of favorite economists â I enjoy reading his articles, maybe because we are in the same wavelength, and I agree with him most of the time. Once again I agree with him, and here is a copy of his latest article: ***** Stephen Roach: Prefer China over India for investments â January 26, 2012 <iframe width="420" height="315" src="http://www.youtube.com/embed/QEYabD0yl_U" frameborder="0" allowfullscreen></iframe> .
***** You are a new member to this forum. Just a Reminder: It is worth reading the enclosed article that I wrote in November/December 2004 making an economic forecast through the end of 2008. Itâs 2008. The U.S. Has Dragged the World into a Depression http://www.elitetrader.com/vb/showthread.php?s=&threadid=124509 .