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United States Joint Forces Command Warns that Huge U.S. Debt Might Lead to Military Impotence, Default or Revolution
As I have repeatedly pointed out, the American military and intelligence leaders say that debt is the main national security threat to the U.S.
As I noted in February 2009 and again last December,
a number of high-level officials and experts are warning of financial
crisis-induced violence ... even in developed countries such as the
U.S.
And as I pointed out in February of this year, the U.S. runs the risk of going the way of the Habsburg, British or French empires:
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
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.The Hapsburgs went into decline in the 17th
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.The demands of empire required a strong and growing
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.Spanish imports were double exports and the
precious 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.Yet,
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.Historians
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.Where there were jobs and prosperity, there
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.Today,
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.
The United States Joint Forces Command - which oversees
military operations in the North Atlantic geographic area and supports
the other commanders-in-chief in their geographic regions around the
world - is now echoing all of these themes.
As World Net Daily reported Thursday:
The Joint Operating Environment 2010 report,
or JOE 2010, released March 15 by the United States Joint Forces
Command, or USJFCOM, warned that "even the most optimistic economic
projections suggest that the U.S. will add $9 trillion to the [national]
debt over the next decade, outstripping even the most optimistic
predictions for economic growth upon which the federal government relies
for increased tax revenue."
The USJFCOM expressed concerns that the burgeoning U.S. national debt represented a threat to U.S. national security.
"Rising
debt and deficit financing of government operations will require
ever-larger portions of government outlays for interest payments to
service the debt," the JOE 2010 cautioned. "Indeed, if current trends
continue, the U.S. will be transferring approximately 7 percent of its
total economic output abroad simply to service its foreign debt."
To underscore its concern, the USJFCOM cited an alarming litany of historic examples, including the following:
- Habsburg
Spain defaulted on its debt 14 times in 150 years and was staggered by
high inflation until its overseas empire collapsed;- Bourbon
France became so beset by debt due to its many wars and extravagances
that by 1788 the contributing social stresses resulted in its overthrow
by revolution;- Interest ate up 44 percent of the British
government budget during the interwar years 1919-1930, inhibiting its
ability to rearm against Germany."Unless current trends
are reversed, the U.S. will face similar challenges, anticipating an
ever-growing percentage of the U.S. government budget going to pay
interest on the money borrowed to finance our deficit spending," the
JOE 2010 concluded.
Of course, debt is not the only threat to empire ... or the only indicator of a nation's economic malaise. In that regard, the crash in Italy in the 1340s and the hyperinflation in Hungary in 1946 are instructive.
- advertisements -
Hear! Hear! Nothing could be finer than to see the US military downsized and sitting comfortably in their war colleges discussing the "possibility" of combat. Nothing would be better than American youth giving the one finger salute to the government and choosing to work at producing real wealth.
If the corporations want to expand their markets and protect their investments, let them pay for it and send their children to die.
The best thing that could happen to the US would be our overwhelming defeat on a foreign battlefield. One trillion a year spent for the express benefit of corporations, hundreds of dead Americans every year, thousands of Americans with permanent physical and mental challenges, expanding interest on the debt as we cannot pay for it out of pocket, for what?
It is time for Americans to stand for America. Megacorporations do not provide the majority of jobs in America, they do not provide innovation in products and ideas, they do rape third world developing countries, they do burden us with debt while collecting the interest, they do minimize their taxes by using tax havens and off shore accounts for repricing.
We need a self defense force only. Only. Only. On our shores. Only. Only. Paid for in current dollars. Only. Only.
The wealthy have no country, they only have opportunities. They will sacrifice America on the alter of wealth, they are draining our blood and then they will move to the next victim. They do require our participation, out labor, our wealth, our production and our good will. Will you continue to bleed yourself dry?
We need a self defense force only. Only. Only. On our shores. Only. Only. Paid for in current dollars. Only. Only.
First time posting, so here goes. One of the main reasons we've gone imperial (and half-assed at that) is to secure oil supplies, due in part to the US securing the Sea Lines of Communications (SLOC). IIRC, when oil hit $147 a barrel, manufacturers started shifting production (presumably low-margin stuff) back to North America from China and the Far East due to the shipping costs going up. Wasn't there also something posted here awhile back about the shipping companies deliberately slowing their ships down on their routes, to the point that some manufacturers have started bringing production back due to the hit in lead time for their parts/products?
Would love to pull the troops and the carrier battle groups back, but we'd better be prepared domestically to restart the manufacturing base, and for that we need domestic energy sources. Mabye some sort of "grand bargain" in the political realm, curtailing our military's offensive reach in exchange for support on energy and environmental regulation? Could imagine the wailing and gnashing of teeth from assorted groups (the MIC, rabid environmentalists, bleeding-heart do-gooders, internationalists of all stripes, banksters, etc.), not to mention the effects on the global economy. China in particular probably wouldn't like it, as it hits them in the exports (cheep walmart crap) and imports (oil!).
At least if we (the US) did this voluntarily with enough notice ahead of time, we'd stand a better chance of coming out better for it. Otherwise, we'll get the same effects involuntarily when we can't borrow or print any more to maintain the military in its present form, and they "go domestic" to contain the unrest.....
Time fror what?
A military junta ?
There are no Lions left on the Joint Chiefs just pencil pushers.
i love it that they didn't notice anything amiss when the reagan, bush 1 and bush 2 admins were running up enormous deficits in an expansion, carrying out the infamous policy of grover norquist to circumscribe government's powers through debt, shrinking whatever parts might be useful to the lower classes, until it was small enough to drown in a bathtub. not that clinton was or obama has been particularly useful to the lower classes.
Nice that Clinton gets all the credit for Newt Gingrich's hard work...
But in all seriousness, lets not forget that even the Clinton (Gingrich) surpluses were supported by unprecedented credit expansion in the private economy, and the unsustainable rise in tax revenue supported by that credit expansion.
If we have two parties I fail to see how they're any different when it comes to fiscal policy.
In another moment of hubris, Clinton declared recessions a thing of the past, that was reality based and helpful...LOL.
Yeah that Rubinomics thingy worked out swell...for him & Wall Street..we got stuck with the bill.
So here we are...contemplating the taxpayer subsidation of windmills/solar panels/mass transit or how far we have to live from our place of work in order to make it viable to work. Good Lord.
Same central planning crap...different year.
Agree with some or all or none if you will...but the bottom line remains the same;
"The glib New Democrats who chirped in the 1990s about the wonders of the new economy were dead wrong. If ever a school of political economy has been discredited by events, it is Clinton-era neoliberalism. And yet the Obama administration's economic team is made up of recycled Clintonites, the very people who misunderstood the actual trends in the U.S. and global economy for the past 20 years.
An acknowledgement of their mistakes would be in order. But they would first have to recognize that they were indeed wrong about the central issues of our time."
http://www.salon.com/news/opinion/feature/2010/01/04/new_economy
Agree.
This is a big yawn. The military obeys its political masters. No sign of that changing.
College kids are all spooked by the word "military". Adults, no so much.
Just take "don't ask don't tell". Military is reviled on campuses for discrimination against gays. Barriers are put on recruitment.
At the same time, members of Congress are invited to speak, are lionized, even given honorary degrees. But ask yourself...who put "don't ask don't tell" into law? And who is just obeying orders?
GG, i missed you. So many regulars are gone or lurking.