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America's Top Military Chief: Debt is Main Threat to U.S. National Security ... Pentagon Must Cut Spending
In February 2009, the head of U.S. intelligence - Dennis Blair - said
that the global financial crisis was the largest threat to America's
national security. All of America's intelligence agencies apparently agreed.
The same month, the chairman of the Joint Chiefs of Staff - Admiral Mullen - also agreed.
Now, Mullen is focusing on a specific economic threat. Specifically, Mullen is focusing on the debt:
The
national debt is the single biggest threat to national security,
according to Adm. Mike Mullen, chairman of the Joint Chiefs of Staff.
Tax payers will be paying around $600 billion in interest on the
national debt by 2012, the chairman told students and local leaders in
Detroit.
“That’s one year’s worth of defense budget,” he said, adding that the Pentagon needs to cut back on spending.
But
at least war is good for the economy, right? At least spending on
defense will help the economy recover and climb out of this pit of debt.
no?
Actually, no.
Nobel-prize winning economist
Joseph Stiglitz has said that war can be very bad for the economy.
For example, in 2003, Stiglitz wrote:
War
is widely thought to be linked to economic good times. The second
world war is often said to have brought the world out of depression, and
war has since enhanced its reputation as a spur to economic growth.
Some even suggest that capitalism needs wars, that without them,
recession would always lurk on the horizon.Today, we know that
this is nonsense. The 1990s boom showed that peace is economically far
better than war. The Gulf war of 1991 demonstrated that wars can
actually be bad for an economy.
Stiglitz has said that this decade's Iraq war has been very bad for the economy. See this, this and this.
And as the New Republic noted last year:
Conservative Harvard economist Robert Barro has argued that increased military spending during WWII actually depressed other parts of the economy.
Also from the right, Robert Higgs has done good work showing that military spending wasn't the primary source of the recovery and that GDP growth during WWII has been "greatly exaggerated."
And from the left, Larry Summers and Brad Delong argued
back in 1988 that "five-sixths of the decline in output relative to
the trend that occurred during the Depression had been made up before
1942."
As I noted in January:
All of the spending on unnecessary wars adds up.
The U.S. is adding trillions to its debt burden to finance its multiple wars in Iraq, Afghanistan, Yemen, etc.
Two
top American economists - Carmen Reinhart and Kenneth Rogoff - show
that the more indebted a country is, with a government debt/GDP ratio of
0.9, and external debt/GDP of 0.6 being critical thresholds, the more
GDP growth drops materially.Specifically, Reinhart and Rogoff write:
The
relationship between government debt and real GDP growth is weak for
debt/GDP ratios below a threshold of 90 percent of GDP. Above 90
percent, median growth rates fall by one percent, and average growth
falls considerably more. We find that the threshold for public debt is
similar in advanced and emerging economies...Indeed, it should be obvious to anyone who looks at the issue that deficits do matter.
A PhD economist told me:
War always
causes recession. Well, if it is a very short war, then it may
stimulate the economy in the short-run. But if there is not a quick
victory and it drags on, then wars always put the nation waging war into
a recession and hurt its economy.You know about America's unemployment problem. You may have even heard that the U.S. may very well have suffered a permanent destruction of jobs.
But did you know that the defense employment sector is booming?
As I pointed out
in August, public sector spending - and mainly defense spending - has
accounted for virtually all of the new job creation in the past 10
years:
The U.S. has largely been financing job creation for
ten years. Specifically, as the chief economist for BusinessWeek,
Michael Mandel, points out, public spending has accounted for virtually
all new job creation in the past 10 years:
Private sector job growth was almost non-existent over the past ten years. Take a look at this horrifying chart:
Between
May 1999 and May 2009, employment in the private sector sector only
rose by 1.1%, by far the lowest 10-year increase in the post-depression
period.
It’s impossible to overstate how bad this is. Basically
speaking, the private sector job machine has almost completely stalled
over the past ten years. Take a look at this chart:
Over
the past 10 years, the private sector has generated roughly 1.1
million additional jobs, or about 100K per year. The public sector
created about 2.4 million jobs.
But even that gives the private
sector too much credit. Remember that the private sector includes
health care, social assistance, and education, all areas which receive a
lot of government support.***
Most
of the industries which had positive job growth over the past ten
years were in the HealthEdGov sector. In fact, financial job growth was
nearly nonexistent once we take out the health insurers.
Let me finish with a final chart.
Without
a decade of growing government support from rising health and
education spending and soaring budget deficits, the labor market would
have been flat on its back.
Indeed, Robert Reich lamented this month:
America’s biggest — and only major — jobs program is the U.S. military.
Back to my January essay:
Raw Story argues that the U.S. is building a largely military economy:
The
use of the military-industrial complex as a quick, if dubious, way of
jump-starting the economy is nothing new, but what is amazing is the
divergence between the military economy and the civilian economy, as
shown by this New York Times chart.
In
the past nine years, non-industrial production in the US has declined
by some 19 percent. It took about four years for manufacturing to
return to levels seen before the 2001 recession -- and all those gains
were wiped out in the current recession.
By contrast, military
manufacturing is now 123 percent greater than it was in 2000 -- it has
more than doubled while the rest of the manufacturing sector has been
shrinking...It's important to note the trajectory -- the military
economy is nearly three times as large, proportionally to the rest of
the economy, as it was at the beginning of the Bush administration. And
it is the only manufacturing sector showing any growth. Extrapolate
that trend, and what do you get?The change in leadership in Washington does not appear to be abating that trend...[121]
So
most of the job creation has been by the public sector. But because
the job creation has been financed with loans from China and private
banks, trillions in unnecessary interest charges have been incurred by
the U.S.And this shows military versus non-military durable goods
shipments:
[Click here to view full image.]
So
we're running up our debt (which will eventually decrease economic
growth), but the only jobs we're creating are military and other public
sector jobs.PhD economist Dean Baker points out that America's massive military spending on unnecessary and unpopular wars lowers economic growth and increases unemployment:
Defense
spending means that the government is pulling away resources from the
uses determined by the market and instead using them to buy weapons and
supplies and to pay for soldiers and other military personnel. In
standard economic models, defense spending is a direct drain on the
economy, reducing efficiency, slowing growth and costing jobs.A
few years ago, the Center for Economic and Policy Research
commissioned Global Insight, one of the leading economic modeling
firms, to project the impact of a sustained increase in defense
spending equal to 1.0 percentage point of GDP. This was roughly equal
to the cost of the Iraq War.Global Insight’s model projected
that after 20 years the economy would be about 0.6 percentage points
smaller as a result of the additional defense spending. Slower growth
would imply a loss of almost 700,000 jobs compared to a situation in
which defense spending had not been increased. Construction and
manufacturing were especially big job losers in the projections, losing
210,000 and 90,000 jobs, respectively.The scenario we asked Global Insight [recognized as the most consistently accurate
forecasting company in the world] to model turned out to have vastly
underestimated the increase in defense spending associated with current
policy. In the most recent quarter, defense spending was equal to 5.6
percent of GDP. By comparison, before the September 11th attacks, the
Congressional Budget Office projected that defense spending in 2009
would be equal to just 2.4 percent of GDP. Our post-September 11th
build-up was equal to 3.2 percentage points of GDP compared to the
pre-attack baseline. This means that the Global Insight projections of
job loss are far too low...The projected job loss from this increase in defense spending would be close to 2 million.
In other words, the standard economic models that project job loss
from efforts to stem global warming also project that the increase in
defense spending since 2000 will cost the economy close to 2 million
jobs in the long run.The Political Economy Research Institute at the University of Massachusetts, Amherst has also shown that non-military spending creates more jobs than military spending.
So
we're running up our debt - which will eventually decrease economic
growth - and creating many fewer jobs than if we spent the money on
non-military purposes.
As I wrote last month:
It
is ironic that America's huge military spending is what made us an
empire ... but our huge military is what is bankrupting us ... thus
destroying our status as an empire.
Even Admiral Mullen seems to agree:
The Pentagon needs to cut back on spending.
“We’re going to have to do that if it’s going to survive at all,” Mullen said, “and do it in a way that is predictable.”
Indeed, Mullen said:
For industry and adequate defense funding to survive ... the two must work together. Otherwise, he added, “this
wave of debt” will carry over from year to year, and eventually, the
defense budget will be cut just to facilitate the debt.
Secretary of Defense Robert Gates agrees as well. As David Ignatius wrote in the Washington Post in May:
After
a decade of war and financial crisis, America has run up debts that
pose a national security problem, not just an economic one.
***
One
of the strongest voices arguing for fiscal responsibility as a
national security issue has been Defense Secretary Bob Gates. He gave a landmark speech in Kansas on May 8, invoking President Dwight Eisenhower's warnings about the dangers of an imbalanced military-industrial state.
"Eisenhower was wary of seeing his beloved republic turn into a
muscle-bound, garrison state -- militarily strong, but economically
stagnant and strategically insolvent," Gates said. He warned that
America was in a "parlous fiscal condition" and that the "gusher" of
military spending that followed Sept. 11, 2001, must be capped. "We
can't have a strong military if we have a weak economy," Gates told
reporters who covered the Kansas speech.
On Thursday the
defense secretary reiterated his pitch that Congress must stop
shoveling money at the military, telling Pentagon reporters: "The
defense budget process should no longer be characterized by 'business
as usual' within this building -- or outside of it."
”
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if you take a look at the historic financing of war you mightconclude that we have entered a new epic, securitization and derivative
finance through use of fiat sovereign currency manipulation. shadowy
and bullet proof? beyond dehumanizing, fully android. .....
conclusion: mankind has accomplished the full expression of the worst
possible attributes he is capable of, assertion of his fear and will, and the
paradigm that gave him his power. or maybe it is just too hot today?
.
but isn't debt the source of our money? so why should a general
complain about "money"? so he might have to take his directives
from bejing. what is the difference? it is just globalization at work.
i'm sure china has some form of constitution to keep things
orderly.
.
http://maxkeiser.com/.
August 29th, 2010 by stacyherbert
Respond
Stacy Summary: Note that many of the Koch Party members rallying around Glenn Beck this weekend will support an increase in military spend and occupations. As a leading neo-conservative, Rupert Murdoch will be pushing for as many wars as possible.
Alas, when your only working tool is an army, the whole world comes to be thought of as a potential battlefied... the only true military threat to our long-term security is the empirical one we have and could never afford. Back to defending the nation for all enemies foreign and domestic boys, with emphasis on defending.
What's the most effective weapon against debts that you can never repay? Kill your creditors and mug the weak for everything they've got. WWW3 - coming to a theatre near you.
US and China have no need for a war together. What China really needs is clean water and more resources and these are plentiful in very sparsely populated areas north of them.
China already has more men of arms bearing age than Russia has citizens.
Russia's new eastern border at the Urals, coming soon to a world map near you. 'Soon' on a geopolitically strategic timescale, so anything from 20 to 50 years.
Tomorrow's Chinese newspeak:
"Siberia has always been a part of China."
We are DROWNING in a sea of our own BS, and will not realize it until it is far too late I am afraid. Just my 2c.
+3c ... Let's make it a nickel.
Robert Reich says:
"America’s biggest — and only major — jobs program is the U.S. military."
Snork. Duh! It's about the only thing left that the PTB haven't offshored yet. What is the point of a jobs program when the promised jobs at the end of the rainbow disappear before you even get there?
A president has little room to maneuver in terms of foreign policy. It is a case of real politik, the dossier he receives comes from the previous administration from the previous administration, etc. Geopolitical situations do not sprout like mushrooms after a rain, they brew and simmer for years and are determined both historically and as George Friedman at Stratfor maintains, geographically.
Pain is waiting in the wings because the bills will come due, but this is and will likely be deferred as long as possible. If you are a consumer and you can't consume, your raison d'etre is at an end and unhappiness becomes your lot. But what if you did not define yourself as a consumer (and I think that with the pervasiveness of media in society, it is nearly impossible not to .... I want my MTV)? Not only not define, what if you became something different?
Maybe we should be thinking of ways to give things up that does not by definition make one unhappy. Move away from a zero sum game where life is tabulated by open interest .... I can tell you categorically that life itself is not a zero sum game.
One example that comes to mind was presented by George Bataille, a post war (II) French writer who was intrigued by the notion of "potlach". Potlach was the ritual destruction of wealth practiced by certain North American indiginous peoples (whether the anthropology behind this is correct or not is not the point). For Bataille, using energy for no material outcome demonstrates that life is not zero sum. Ritual destruction is liberating and shows that the accumulation of stuff in a utilitarian manner is what is really fruitless. Life is better, more honest, with less. Ritual destruction simulates a way of facing death and social bonds become stronger ( I'm also aware that some of this was co-opted by facism in the 30s, but here it is a thought, not a program or ideology).
I would say that Tyler Durden was formed in a similar sort of crucible, having just caught some Fight Club the other night ...
And here's a pretty good summation of this very point:
http://www.countercurrents.org/harrington270810.htm
It gets a bit discouraging to watch/listen to otherwise seemingly intelligent people completely miss this point! But... if everyone else is distracted by party politics stuff, then that allows me more room to get on getting on down the road to the future: nothing like getting to the market before everyone else! Hey! Look! A distraction! (suckers!)
That nothing has changed at the Pentagon since the most liberal, anti war President in memory has occupied the White House should come as no surprise. Congress appropriates the budget and saddles the Pentagon with weapons systems and procurement directives the Pentagon neither wants nor needs but benefit the Congressional district from which the directive came. Government spending is directly related to the political goals of the party in power. Need a few more votes? No problem. What does your district or state need? Can't pass a bill without the support of a few members of the minority party? No problem. What can I do for your district or state that will get you to break party discipline? Every Congressman wants to cut spending, but not in their state.
“… since the most liberal, anti war President in memory has occupied the White…”
Wake up little dude. Obama (Barry Soetoro) is a CIA creation, just a puppet. He hasn’t rescinded any of the draconian measures initiated under Bush the Younger. His admin has expanded the Central Asian confrontation. He is merely an actor. It’s all theater. The US is manipulated and administrated and by the NGOs such as the Council on Foreign Relations, the Ford Foundation et cetera. The real decisions for ‘Little Barry’ are made by the Round Table Groups such as the Committee of 300 who 'direct the show' just as they have done under previous administrations.
With all the conspirators pulling the strings of government, it must scare the shit out of you that the secret can be so well kept. Don't go to sleep tonight. We know where you are.
If we omit conspiracy crap then Obumba has....
1. Not stopped any wars Bush started - is that what liberals wanted?
2. Voted for bailing out banks and continued Bush policy there - is that what liberals wanted?
3. No single-payer option in healthcare - is that what lefties wanted?
4. Not decreased bloated Pentagon spending which, to a large extent, filters into pockets of corporations who can sell 400$/gal gas to troops - is that what lefties wanted?
5. Not rescinded any of crap like Patriot act instituted by Bush.
I can go on and on about this. But you, please stop listening to Fox news. They are just as truthful as the other stations. All of them need a figurehead whom people can hate (Bush for left, Obama for right), so that country can be looted while people argue about Pepsi or Coke-type differences.
+1 I agree, "Hope & Change" we can believe in....ROFLMAO
I would say crying my ass off instead of laughing because it is so unbelievably f...ing sad when a good and (formerly) productive country is destroyed by IDIOTS
Gold Stars.
Precise Vision of Reality.
Diversions, Men!
Keep their Attention Elsewhere whilst the Looting Continues.
Quickly Now, for the Coffers Empty!
Let them Heatedly Argue of Illusory Polemics!
Disgusted maybe but not frightened. There are many sources to draw from to increase one’s understanding. You might begin with Daniel Estulin’s Club Bilderberg. Or, you might wish to continue as you have - in an induced political fantasy. Some prefer the matrix.
I'll bet you devoured this book as well: The Protocols of the Learned Elders of Zion
I’m somewhat familiar with it and will try to read it this week. I wouldn’t comment until I have read it.
For your entertainment -
http://www.youtube.com/watch?v=BbnpN07J_zg
http://www.youtube.com/watch?v=-6TXcQpgC9Q
I’d say give some attention to this Aaron Russo interview from several years ago-
http://www.youtube.com/watch?v=7nD7dbkkBIA
"most liberal, anti war President in memory"
What are you like 20 years old? Eisenhower, Kennedy, Johnson and even Nixon were all far more "liberal" than this corporate clown. Eisenhower used to enforce a 90% marginal tax rate. Kennedy was the original tax and spend liberal, Johnson initiated the Great Society program and signed the civil rights laws, Nixon instituted the EPA the clean water and air acts and enacted wage and price controls to temporarily contain inflation. Are you really that stupid to call obama a "liberal" or are you just a know nothing punk 20 something?
The marginal tax rate under Eisenhower was a joke. No one paid it because of liberal (sic) deductions and tax shelters. Kennedy cut taxes and accelerated the arms race. Johnson charged $100,000 for an audience and made Trickie Dickie look like a piker who, incidentally, while certainly liberal, failed to pass a health care bill. Obama has passed the largest social welfare bill in the history of man. That he seems like a corporate stooge is testament to his inexperience and naivety. People do see what they want to see. Others see through the bullshit. Now go back to your Frank Rich.
+1000
People see what they want to see unfortunately. The reality escapes in the process.
and of course no discussion of entitlement spending cuts - oh no that won't help national security only unilateral disarmament will - only that will ensure our safety LOL
Claiming that cutting military spending is disarmament is utterly stupid. Getting out of Iraq, Afganistan, Yemen, Japan...etc which would cut military spending is not a disarmament. Besides, if we have nukes no country will dare to attack us.
Admiral Mullen referring to the 600 billion per year debt service - “That’s one year’s worth of defense budget,” he said, adding that the Pentagon needs to cut back on spending.”
If I recall correctly it’s benefits to veterans, medical care, pensions, et cetera that account for approximately half of the defense budget. Not a very politically palatable area to axe.
The $600 Bn figure cited by Admiral Mullen is direct DOD spending. If one adds in Veterans which are under HSS and nuclear weapons production and maintenance which are under DOE then total "defense" spending is in excess of $1 Tr a year.
The DOE should be shut down. DOE has not fulfilled its mandate by any stretch of the imagination.
Shows how savvy a General is. He acts as if Debt is some kind of living organism capable of breathing, eating and shitting.
Name the names General, name the people who signed the bills to go deeper into borrowing from China and Japan, from the american people without their consent.
Debt is no more reponsible for our demise than steel is for homicide by handgun.
Humanoids, corrupt to their core, including Ted Kennedy, Bobby
Byrd, Mitch McConnell, and the rest of the senior members of strategic committees like Ways and Means are the cause of our financial tsunami.
Stop letting these real people hide behind entities. Name them, for Krissakes!
Thanks for all your work on the BP spill. As a person on the front line I'm seeing a lot of water warnings in my immediate area and on the west coast in general.
The warning are usually categorized as "High Bacteria" warnings in and around as such:
http://www.google.com/#hl=en&source=hp&q=%22High+Bacteria%22+florida&aq=...
Curious to say the least, but I do not think they are related to sewer run off.
--IdrinkCorexit
Of interest:
http://lunaticoutpost.com/Topic-Gulf-Blue-Plague-Part-II-Corexit-Bacteri...
And so what else is new? Also it is not so much war that drags down an economy (provided one doesn't lose said war) it's the cessation of the war that is the larger economic problem. But wars are famously expensive so whenever one starts one the second problem is always in play. We are just stuck like leaderless pigs. Obama is such a douche. He actually had a chance to change the trajectory (the wars being only a part) and totally blew it. If the consequences were not so serious it would almost be comical. What idiot gives large sums to banker without an agreement on what you get in return? Now he's claiming that he is dissapointed in how the banks responded after he gave them the dough. Quite frankly I dont believe anyone is that STUPID. Nobody gives money to a banker without an agreement on what you get in return. He's just trying in vein to cover his inveterately corrupt behind.
TheBamster didn't 'blow' anything. He did precisely what he was hired to do.
Yes- he’s just obeying his teleprompter... executing his programming.
No kidding?! But what is far more dangerous and closer in time than all the debt, ss/budget black hole etc is all the algorithmic trading!
THE 2012 HAL 9000 WAR IS COMING!
We need to quit dinking around in the Middle East and get ready for the big one - China.
Raise military spending, but stop sending our troops into unwinnable situations.
We need a presence in the Middle East so we have oil to grow food, but a base or two would do it, let the crazy muslims kill themselves.
The real battle will be with China over territory and resources, especially oil.
And...isn't that what nukes are for? Didn't we nuke Japan so our boys didn't have to die? Yeah, like that.
The banks and politicians are bankrupting us, not military spending.
Another chart (half way down the page).
Compare entitlement spending contribution to the deficit with the Iraq War's contribution.
Physical war is merely a subset of economic war. It can be profitable when you destroy the entire infrastructure, and much of the population of your competitors, whether by physical means or economic ones. Prime examples abound (WWII, and the ME, as you note).
And economic war is heavily influenced (and too often controlled by) the Bankers.
Recognize war for what it is, and then you have a chance at stopping it. And possibly saving those you know who may die from it.
err...you call China 'winnable'
Reality gets junked, go figure. unjunked..