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"More Empires Have Fallen Because Of Reckless Finances Than Invasion"
While Eric Margolis' entire comment in the Toronto Sun is a must-read, the following two quotes really hit the nail on the head:
More empires have fallen because of reckless finances than invasion...
If
Obama really were serious about restoring America’s economic health, he
would demand military spending be slashed, quickly end the Iraq and
Afghan wars and break up the nation’s giant Frankenbanks.
Margolis is right.
As I have repeatedly shown, war is bad for the economy. According to a Nobel prize-winning economist, the head of JP Morgan and others, the Iraq war and the war on terror in general were huge factors in destroying our economy.
America is a dying empire, destroying the last of its resources to fight unnecessary wars.
Instead of rebuilding our economy so that we can once again be a strong
nation, we are wasting trillions fighting those unnecessary wars, thus guaranteeing that we do not have the economic resources to defend ourselves in the future from real threats.
Don't believe me?
Well, our military and intelligence leaders say that the economic crisis is now the biggest threat to America's national security.
And as leading economic historian Niall Ferguson recently wrote in Newsweek:
Call
the United States what you like—superpower, hegemon, or empire—but its
ability to manage its finances is closely tied to its ability to remain
the predominant global military power...This is how empires
decline. It begins with a debt explosion. It ends with an inexorable
reduction in the resources available for the Army, Navy, and Air
Force...If the United States doesn't come up soon with a
credible plan to restore the federal budget to balance over the next
five to 10 years, the danger is very real that a debt crisis could lead
to a major weakening of American power.
The precedents are
certainly there. Habsburg Spain defaulted on all or part of its debt 14
times between 1557 and 1696 and also succumbed to inflation due to a
surfeit of New World silver. Prerevolutionary France was spending 62
percent of royal revenue on debt service by 1788. The Ottoman Empire
went the same way: interest payments and amortization rose from 15
percent of the budget in 1860 to 50 percent in 1875. And don't forget
the last great English-speaking empire. By the interwar years, interest
payments were consuming 44 percent of the British budget, making it
intensely difficult to rearm in the face of a new German threat.
Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
And William R. Hawkins (formerly an economics
professor at Appalachian State University, the University of North
Carolina-Asheville, and Radford University) fills in some details on the fall of the Hapsburg empire:
Spain The Hapsburgs went into decline in the 17th The demands of empire required a strong and growing Spanish imports were double exports and the precious Yet, Historians Where there were jobs and prosperity, there Today,
was the first global Superpower...With Spain as its political base, and
gold and silver flowing in from its American colonies, the Hapsburg
dynasty became the dominant power in Europe. It controlled rich parts
of Italy through Naples and Milan, and Central Europe from the
Netherlands through the Holy Roman Empire to Austria. In the 16th
century it added the far distant Philippine islands to its empire. The
Hapsburgs held off the Ottoman Turks, whose resurgent wave of Islamic
conquest in the 16th century swept across the Balkans and nearly
captured Vienna.
century, and while any such momentous event has many causes, for our
purposes the focus will be on the economic collapse of Spain, which not
only sapped the empire of strength but served to build up the power of
its rivals.
economy, but Spain did not keep up with the economic expansion that was
taking place in other parts of Europe. Madrid’s financial base fell out
from under its empire. Spain could continue to consume in the short
term because of the flow of precious metals from American mines, but it
could not produce the goods it needed at home, which in the long-run
proved fatal to its standing as a Great Power and as an advanced
society.
metals became scarce within weeks of the arrival of the American
treasure fleets as the money flowed to Spain's many creditors. What
industry there was, along with banking and shipping, was in the hands
of foreign owners. As a modern historian, Jaime Vicens Vives, has
concluded, “This was one of the fundamental causes of the Spanish
economy's profound decline in the seventeenth century, maritime trade
had fallen into the hands of foreigners.” This, plus the “opening of
the internal market to foreign goods,” produced a “fatal result.”
Spain's exports were at the same time under heavy pressure by
competitors in third country markets. A nation that cannot control its
domestic market will seldom be able to sustain itself in foreign
markets, which are inherently less accessible and more unstable.
Spanish leaders were deluded by a sense of false prosperity. This is
testified by the statement of a prominent official, Alfonso Nunez de
Castro in 1675: “Let London manufacture those fine fabrics of hers to
her heart's content; let Holland her chambrays; Florence her cloth; the
Indies their beaver and vicuna; Milan her brocade, Italy and Flanders
their linens...so long as our capital can enjoy them; the only thing it
proves is that all nations train their journeymen for Madrid, and that
Madrid is the queen of Parliaments, for all the world serves her and
she serves nobody.” A few years later, the Madrid government was
bankrupt. The Spanish nobleman had foolishly elevated consumption, a
use for wealth, above production, the creation of wealth.
have traced the flow of Spanish gold and silver across the markets of
Europe. Those who “served” Spain by establishing industries to
manufacture goods for the Spanish market gained the money. Spain’s
rivals, France, Holland (which started a successful revolt in 1568) and
England, prospered by their trade surpluses, and reinvested the money
to expand their own capabilities. Another modern expert on Hapsburg
history, Henry Kamen, has cited contemporary sources who referred to
17th century Spain as “the Indies for the foreigner.” The military
empire of the Hapsburgs became the economic colony of other powers, or,
to use a current phrase, Spain was the “engine of growth” for the rest
of the continent.
was also rapid population growth, and rising tax revenue. Rival powers
were able to field and finance military forces that could defeat the
once superior Spanish forces both on land and at sea. The irony of this
is that Spain was ruled by a warrior aristocracy tempered by centuries
of constant warfare against Islamic hordes and Christian heretics.
These nobles looked down on merchants and manufacturers and disparaged
their mundane professions only to find that without a strong domestic
business class they could not afford the fleets and armies that guarded
the empire they had built.
the American “empire” is also trying to consume more than it produces.
The U.S. trade deficit is nearing Spain’s nadir of imports being double
exports. Both government spending and private consumption are financed
heavily by debt. Washington is printing money, the modern equivalent of
digging gold out of the ground, rather than earning the means to pay
its bills. And the political and military elites are apparently
indifferent to the fate of domestic business and industry. Americans must learn ... from the Spanish experience ... and take corrective action while they still can.
As for the need to break up the "Frankenbanks", see this.
The question is not if the US can repay it's debt( it can't) but if it can continually roll over it's debt( I say no problem-the Fed expands liquidity and this finds it way back into treasuries).
I'm not too worried.
Viva la dollar!
"But the only thing that's going to kill $100 trillion in unfunded entitlements for SS and Medicare"
Don't be silly-no one expects that entitlements will reach that level. SS/Medicare will be rationed and means tested in the future.
There is talk of raising the retirement and Medicare elgibility age to 70. Of course there won't be any jobs for people past 55 but that's another story.
Cost for WWII peaked in 2005. Budget numbers vastly understate the cost of war.
The other day I was at the Met museum at the Valequez show
( begged a five buck admission on grounds of proverty)
I asked some people: "What happed to Spain? Global power backed in gold/silver...how did they decline?" I was actually trying to find a answer to this very question and gave up. Thank you. Greatly appreciated.
Sadly the US will go the same way.
...and CBO says $1.3 - 1.8 trillion out to FY2019 depending on situation on the ground. http://fas.org/sgp/crs/natsec/RL33110.pdf - agreed that's Sep 09 but even $5 trillion pales in comparison to SS, Medicare and, now, FM & FM.
"If Obama really were serious about restoring America’s economic health, he would demand military spending be slashed, quickly end the Iraq and Afghan wars and break up the nation’s giant Frankenbanks."
But, that would require he understand something other than writing autobiographies.
Bulldust - cost of US efforts in Iraq and Afghanistan since 2001 remains under $1 trillion. Compare and contrast against social security, Medicare.
Nobel prize winning economist Joseph Stiglitz says that the Iraq war ALONE will cost $3-5 trillion dollars.
Social Security, Medicare, Medicaid, & Military spending are destroying the US. However I dare to ask which one of the four are mentioned in the constitution. I bet you will not find the first three anywhere in there.
Half of all money spent on defense in the world is spent by the US. Did all that money stop 9/11 or find bin laden? What was the sense of Viet Nam? Our military is used by this government to protect the interests of bankers and corporations. Anyone who thinks our military protects the American people is naive or stupid. I am shocked to find someone actually writing about this. All the financial problems in this country and no one even mentions the black hole we call a defense/war dept. People need to wake up and see what we as a nation have become because of our apathy and indifference to our government. A government of the people, for the people and by the people has been sold out for profits, bonuses and power.
"All the financial problems in this country and no one even mentions the black hole we call a defense/war dept."
Probably because it's nearly as big of a black hole as Medicare and Social Security. There's no question we could do ourselves a lot of good fiscally and on the diplomatic front by shutting down 90% of our overseas bases. But the only thing that's going to kill $100 trillion in unfunded entitlements for SS and Medicare is other nations telling us to get bent on purchasing our debt, or reaching a point where we can no longer pay the interest on what we presently owe. We'll probably need both to really plunge the stake in both those glorified ponzi schemes.
What is happening is very simple.
Since the severing of the gold link in 1971 and "capital" could be printed at will, hard work and real productivity fell out of fashion...the best minds in the nation (the entire western world really) were redirected towards asset flipping & stripping and financial speculation...why work for a living and trying to be ingenious if you can drink from the infinite money tap?? This mentality took over at every level of society, from the Wall Street banker to the janitor flipping condos.
How could a Private Equity firm or an Hedge Fund control assets worth several times over their capital during the gold standard?? It was simply not possible, that level of leverage was not even imaginable.
The tech revolution (PC and related software in the '80s and internet in the '90s) and the Asian sweatshops, easy "low hanging fruits" real productivity boosters just bought us a bit more time before dealing with reality.
More empirez have died from the lack of GOLD BITCHEZ than from anything else...
Wait... the U.S. has more gold than anybody else in the world?
They could get out of debt by selling all the gold to chumbawumba, who would then use his defaulted credit cards as a big bird flip to the powers in the world.
There's a moment in every Empire's decline when Hubris meets Nemesis.
This is that moment.
Hogwash. BS Inc. is right. It isn't the military spending that is killing this economy. It's out of control entitlement spending. The foundation for the banking crisis was just another variation of entitlement spending gone amuck. Everyone was entitled to own a home. Let's make it so. Boom!
Everywhere you look we are hemmorrhaging cash.
Granted, entitlements are the big bleeder, but
this baby has bleeders everywhere.....
I hate to be the one to say it... but its too late
More yammering from HuffPo boy... Military spending is one of the only legitimate expenses of the FedGov. Why not shut down the department of Education? Kill off Fannie and Freddie and Sally? Sell GM? End Medicare and Social Security? Yawn... lets get real.
I'd rather take care of our sick and feed the homeless than... what is it we're doing in Iraq again exactly?
The same people that complain about Nancy Pelosi spending 2 million dollars traveling are the same people who are quiet about 2 trillion in war spending.
The war spending is only a million times more.
I agree that entitlements are out of control, but lets start with the obvious inefficiencies (IE WAR) before cutting things that actually have some benefit to Americans.
Did you just say digging gold out of the ground? But what if the gold bars are covered in Tungsten? Why, that means that gold could go to 6000 by this summer!
Forget stocks, bonds, etfs, mutual funds... get some canned hams and GOLD bitchez! Also, stockpile water, build a bomb shelter, and stick your head between your legs and kiss your ass goodbye.
GOLD bitchez!!! And canned hamz bitchez!!! Only the physical though, none of that etf paper voodoo crap for this permabear.
Master [Baits]
But not so masterful. You're doing the gold bitches thingy wrong, too. Chumba defined the rules before:
GOLD BITCHES!!!
--------
GW. Nice link at the end. Unexpectedy good.
Lol at Master Baits.
I guess I could be baiting the gold bitchez crowd except that they turned tail and ran after gold fell off.
Poor hurt anuses.
We didn't turn tail and run, we have all been down
this road before....A year and a half last time..
The reason you don't hear from us anymore is because
the subject has been beat to death and is now quite boring..
In fact, I shouldn't have even wasted my fuckin time responding...
Last time: Nothing new under the sun, its all in the history books..No need to guess at what happens now...
its all happened before...
GOLD BITCHES!!!
I know when I have conviction about something, that is when I stop posting and only come back on as anonymous.
Besides, generally everyone in here owns physical – so we are not overtly interested or concerned with the fake paper pricing. Even then, the paper price would have to drop way the heck down from here to mean anything to those of us who bought years ago. Not sure why your thinking 1077 is somehow “down” – a year ago those like you were questioning if it would have any staying power over 1000...
It corrected back UP to 1077, after breaking support at 1080. It's merely retesting previous support levels at resistance.
It's not finished declining. You'll see tomorrow, most likely.
Always been anonymous Master Bates.
I applied for ZH citizenship, months ago,
but must not have met minimum requirements!
The only way to prosper when the Empire withdraws is to become a barbarian lord.
That would be my investment.
the wars were needed to save the dollar as currency reserve (oil priced in dollars forces this in many indirect ways)
so if Iran really does price their oil in gold soon, then we'll be working with Israel to make up some reason to nuke Iran
Correction. Citi group was in trouble long before Pandit came on board. BoFA was actually doing ok before they saddled themselves with Countrywide & Merrill. Thain was always a nitwit and will remain a nitwit.
war is bad for the economy? what have you been smoking.
Actually, if Obama were serious, he'd reform entitlements. By reform, I mean do away with the entire concept. You aren't "entitled" to anything in this life. It's bad philosophy which leads to bad policy.
U B rite on BS.
Big Ears
Long Snouts
Short Statures
Pale Faces
Long tales
This describes societies 'monster' that is always left in ambiguity by referring to them as such things as "International Bankers", "The Global Elitist's", "The military Industrial Complex" and my all time favorite, "Off-shore Bankers."
But these are just titles for the "small people" who ruin everything they touch because they are evil. Always have been, always will be.
If we're going to racially profile at airports (which we should), lets also racially profile in the banking industry.
Aw, little man angry cuz devious Jews steal his money. Poor little man.
The biggest fuck-ups in the banking industry were Pandit, Lewis and Thain. Not a Jew among them. If they, in their fucking up, were bested by Jews, that's the way the game is played.
Nice.
But even the jews are concerned about the world turning even more ani-them because of the likes of goldman sucks, madoff, geithner,orszag,bernanke,summers,greenspan,rubin,
friedman,fuld,frank, soros, madoff,gensler and the outsized control, influence and domination of the jews at every key financial nexus in the world.
It's one thing to fuck up, it's quite another to be fucked.
That's fine and those people have done a lot of damage and should be condemned on that basis, not on anything else.
Want to get ahead in the world of finance? Work.
This all seems obvious to me today though it didn't even two years ago. Countries like Costa Rica are proof that an army isn't even needed for defensive purposes. Once you stop being a threat to others, it would appear that even despots (and there have been plenty in Costa Rica's bordering nations over the years) seem to leave you around. I'm not saying that Costa Rica's model would work for the US, but I am saying that it has worked for Costa Rica for over 50 years now in a very unsettled corner of the globe. The US has no similar comparable threat. What we do have is the Military-Industrial Complex Eisenhower warned about in his farewell speech to the nation. That is what our military adventurism is all about....corporate profits. Make no mistake about it. If a Republican war hero understood that 50 years ago, why can't people get it today?
It's been the same game in town for the past 800 years...
Nothing's changed, except the style of clothes we wear and the sophistication of the toys we drive.
History never repeats, but it often rhymes. - The Twain.
Do your homework
Costa Rica did not need an army because it had an iron clad defence agreement with the United States....the moment one of its neighbours laid a finger on that country it had to face the Marines...Costa Rica is, militarly, a vassal state of the US.
The Costa Ricans I know tell me the east coast is being overrun by drug operations from South America
The rabbit hole goes just a little bit deeper. The Mexican cartels are going for full vertical integration where they can. Only partnerships with the Far East (nobody but no one can produce meth as inexpensively as those Asian Boyz - tell your local tweaker he's smoking melamine!) but they are taking over SA operations.
http://tomdiaz.files.wordpress.com/2009/08/drug-traffic-routes-and-carte...
Too bad most Americans only speak one language: Who dat! Who dat!
They'll know how bad it is when a family member is kidnapped. But it will be too late for them:
http://www.npr.org/news/graphics/2009/mar/mexico_cartel/index.html
What is the idea in this paper? I cant follow.
I take one point which I find solid: the US debt capability is connected to the US military global hegemony.
Then it should follow that Iraq and Afghanistan wars are what is causing the 'decline' of the US empire (or any military empire by the way)?
Hogwash. The US is one track it cant change. Iraq and Afghanistan are necessary wars from a US point of view. They cant be avoided.
When you fund an army, you have to use it. If you invest in an asset which you dont use, you already are growing relatively poorer. The US cant slash on the military and wont slash on the military.
Currently, social programs are helping the US to capture an increased share of the wealth produced globally thanks to the Earth's resources. That is the only utility for the social programs. As soon as the Earth's resources are falling downhillside slope, social programs are going to be slashed. But not the military. The military budget will remain.
Spain suffered from the same thing as the US today, which is not what is reported here.
Spain suffered from accumulating more and more wealth on its territory. The consequence is that the price to live on the Spanish territory increased both absolutely and relatively. This led an ever increasing segment of Spain population to be unable to afford living on Spanish territory. Hence very often, the false remedy of trying to break wealth (through debasement of currency for example) to keep allowing locals to live where they were born and diminish the migratory pressure from the outside with people who could not afford to buy what they produce as it was for the most of it consumed in Spain (so going to Spain was the way to get a share in the consumption)
This has never missed. Internally (within a nation), externally (one nation relatively to others), accumulating wealth is what brought empires to their knees.
I agree the U.S.'s path can't be changed. It was too late in the game for the U.S. to ween itself off of its oil addiction even before Iraq was invaded. The U.S. as an empire is tied to oil, which is now in permanent decline. Fete de complete
Total party!!!
or
Fait accomplis?
Empires like ours do not end “with an inexorable reduction in the resources available for the Army, Navy, and Air Force...” They end with a large military defeat.
The US has been high jacked by the military/industrial/Congressional/financial complex Eisenhower warned about. Our ‘professional’ military has failed to prevail in all 3 major conflicts [Korea, Vietnam, Iraq & Afghanistan] the US has been involved in since the glory days of WW 2.
The purpose of modern warfare is not necessarily in taking over another's land, but instead, taking over their institutions. In most cases, this can be achieved more effectively by keeping the same players in place, only substituting their play/rule books.
It wasn't the military per se that failed, it was the failed policies of the politicos: By prohibiting military people from doing military things (kill people and break things), "failure" was guaranteed. The resources were there (the "means"), but not the will.
Actually, the British empire ended with a large military victory.
Is that you Larouche?