> Tom Dispatch > posted 2008-01-22 15:27:36 > > Tomgram: Chalmers Johnson, How to Sink America > > http://www.tomdispatch.com/post/print/174884/Tomgram%253A%2520%2520Chalmers%2520Johnson%252C%2520How%2520to%2520Sink%2520America > > Within the next month, the Pentagon will submit its 2009 budget to > Congress and it's a fair bet that it will be even larger than the staggering > 2008 one. Like the Army and the Marines, the Pentagon itself is > overstretched and under strain -- and like the two services, which are > expected to add 92,000 new troops over the next five years (at an estimated > cost of $1.2 billion per 10,000), the Pentagon's response is never to cut > back, but always to expand, always to demand more. > > After all, there are those disastrous Afghan and Iraqi wars still > eating taxpayer dollars as if there were no tomorrow. Then there's what > enthusiasts like to call "the next war" to think about, which means all > those big-ticket weapons, all those jets, ships, and armored vehicles for > the future. And don't forget the still-popular, Rumsfeld-style "netcentric > warfare" systems (robots, drones, communications satellites, and the like), > not to speak of the killer space toys being developed; and then there's all > that ruined equipment out of Iraq and Afghanistan to be massively replaced > -- and all those ruined human beings to take care of. > > You'll get the gist of this from a recent editorial in the trade > magazine Aviation Week & Space Technology: > > "The fact Washington must face is that nearly five years of war have > left U.S. forces worse off than they have been in a generation, yes, since > Vietnam, and restoring them will take budget-building unlike any in the > past." > > Even on the rare occasion when -- as in the case of Boeing's C-17 > cargo plane -- the Pentagon decides to cancel a project, there's Congress to > remember. Contracts and subcontracts for weapons systems, carefully doled > out to as many states as possible, mean jobs, and so Congress often balks at > such cuts. (Fifty-five House members recently warned the Pentagon of a > "strong negative response" if funding for the C-17 is excised from the 2009 > budget.) All in all, it adds up to a defense menu for a glutton. > > Already, Secretary of Defense Robert Gates has said that 2009 > funding is "largely locked into place." The giant military-industrial > combines -- Lockheed Martin, Northrop Grumman, Boeing, Raytheon -- have been > watching their stocks rise in otherwise treacherous times. They are hopeful. > As Ronald Sugar, Northrop CEO, put it: "A great global power like the United > States needs a great navy and a great navy needs an adequate number of > ships, and they have to be modern and capable" -- and guess which company is > the Navy's largest shipbuilder? > > There should be nothing surprising in all this, especially for those > of us who have read Chalmers Johnson's Nemesis, The Last Days of the > American Republic, the final volume of his Blowback Trilogy. Published in > 2007, it is already a classic on what imperial overstretch means for the > rest of us. The paperback of Nemesis is officially out today, just as global > stock markets tumble. It is simply a must-read (and if you've already read > it, then get a copy for a friend). In the meantime, hunker in for Johnson's > latest magisterial account of how the mightiest guns the Pentagon can muster > threaten to sink our own country. (For those interested, click here to view > a clip from a new film, "Chalmers Johnson on American Hegemony," in Cinema > Libre Studios' Speaking Freely series in which he discusses military > Keynesianism and imperial bankruptcy.) Tom > > Going Bankrupt > Why the Debt Crisis Is Now the Greatest Threat to the American > Republic > By Chalmers Johnson > > The military adventurers of the 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 > neoconservatives 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. > > As a result, going into 2008, the United States finds itself in the > anomalous position of being unable to pay for its own elevated living > standards or its wasteful, overly large military establishment. Its > government no longer even attempts to reduce the ruinous expenses of > maintaining huge standing armies, replacing the equipment that seven years > of wars have destroyed or worn out, or preparing for a war in outer space > against unknown adversaries. 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. > > The Current Fiscal Disaster > > It is virtually impossible to overstate the profligacy of what our > government spends on the military. The Department of Defense's planned > expenditures for fiscal year 2008 are larger than all other nations' > military budgets combined. The supplementary budget to pay for the current > wars in Iraq and Afghanistan, not part of the official defense budget, is > itself larger than the combined military budgets of Russia and China. > Defense-related spending for fiscal 2008 will exceed $1 trillion for the > first time in history. The United States has become the largest single > salesman of arms and munitions to other nations on Earth. Leaving out of > account President Bush's two on-going wars, defense spending has doubled > since the mid-1990s. The defense budget for fiscal 2008 is the largest since > World War II. > > Before we try to break down and analyze this gargantuan sum, there > is one important caveat. Figures on defense spending are notoriously > unreliable. The numbers released by the Congressional Reference Service and > the Congressional Budget Office do not agree with each other. Robert Higgs, > senior fellow for political economy at the Independent Institute, says: "A > well-founded rule of thumb is to take the Pentagon's (always well > publicized) basic budget total and double it." Even a cursory reading of > newspaper articles about the Department of Defense will turn up major > differences in statistics about its expenses. Some 30-40% of the defense > budget is "black," meaning that these sections contain hidden expenditures > for classified projects. There is no possible way to know what they include > or whether their total amounts are accurate. > > There are many reasons for this budgetary sleight-of-hand -- > including a desire for secrecy on the part of the president, the secretary > of defense, and the military-industrial complex -- but the chief one is that > members of Congress, who profit enormously from defense jobs and pork-barrel > projects in their districts, have a political interest in supporting the > Department of Defense. In 1996, in an attempt to bring accounting standards > within the executive branch somewhat closer to those of the civilian > economy, Congress passed the Federal Financial Management Improvement Act. > It required all federal agencies to hire outside auditors to review their > books and release the results to the public. Neither the Department of > Defense, nor the Department of Homeland Security has ever complied. Congress > has complained, but not penalized either department for ignoring the law. > The result is that all numbers released by the Pentagon should be regarded > as suspect. > > In discussing the fiscal 2008 defense budget, as released to the > press on February 7, 2007, I have been guided by two experienced and > reliable analysts: William D. Hartung of the New America Foundation's Arms > and Security Initiative and Fred Kaplan, defense correspondent for > Slate.org. They agree that the Department of Defense requested $481.4 > billion for salaries, operations (except in Iraq and Afghanistan), and > equipment. They also agree on a figure of $141.7 billion for the > "supplemental" budget to fight the "global war on terrorism" -- that is, the > two on-going wars that the general public may think are actually covered by > the basic Pentagon budget. The Department of Defense also asked for an extra > $93.4 billion to pay for hitherto unmentioned war costs in the remainder of > 2007 and, most creatively, an additional "allowance" (a new term in defense > budget documents) of $50 billion to be charged to fiscal year 2009. This > comes to a total spending request by the Department of Defense of $766.5 > billion. > > But there is much more. In an attempt to disguise the true size of > the American military empire, the government has long hidden major > military-related expenditures in departments other than Defense. For > example, $23.4 billion for the Department of Energy goes toward developing > and maintaining nuclear warheads; and $25.3 billion in the Department of > State budget is spent on foreign military assistance (primarily for Israel, > Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic, Egypt, > and Pakistan). Another $1.03 billion outside the official Department of > Defense budget is now needed for recruitment and reenlistment incentives for > the overstretched U.S. military itself, up from a mere $174 million in > 2003, the year the war in Iraq began. The Department of Veterans Affairs > currently gets at least $75.7 billion, 50% of which goes for the long-term > care of the grievously injured among the at least 28,870 soldiers so far > wounded in Iraq and another 1,708 in Afghanistan. The amount is universally > derided as inadequate. Another $46.4 billion goes to the Department of > Homeland Security. > > Missing as well from this compilation is $1.9 billion to the > Department of Justice for the paramilitary activities of the FBI; $38.5 > billion to the Department of the Treasury for the Military Retirement Fund; > $7.6 billion for the military-related activities of the National Aeronautics > and Space Administration; and well over $200 billion in interest for past > debt-financed defense outlays. This brings U.S. spending for its military > establishment during the current fiscal year (2008), conservatively > calculated, to at least $1.1 trillion. > > Military Keynesianism > > Such expenditures are not only morally obscene, they are fiscally > unsustainable. Many neoconservatives and poorly informed patriotic Americans > believe that, even though our defense budget is huge, we can afford it > because we are the richest country on Earth. Unfortunately, that statement > is no longer true. The world's richest political entity, according to the > CIA's "World Factbook," is the European Union. The EU's 2006 GDP (gross > domestic product -- all goods and services produced domestically) was > estimated to be slightly larger than that of the U.S. However, China's > 2006 GDP was only slightly smaller than that of the U.S., and Japan was > the world's fourth richest nation. > > A more telling comparison that reveals just how much worse we're > doing can be found among the "current accounts" of various nations. The > current account measures the net trade surplus or deficit of a country plus > cross-border payments of interest, royalties, dividends, capital gains, > foreign aid, and other income. For example, in order for Japan to > manufacture anything, it must import all required raw materials. Even after > this incredible expense is met, it still has an $88 billion per year trade > surplus with the United States and enjoys the world's second highest current > account balance. (China is number one.) The United States, by contrast, is > number 163 -- dead last on the list, worse than countries like Australia and > the United Kingdom that also have large trade deficits. Its 2006 current > account deficit was $811.5 billion; second worst was Spain at $106.4 > billion. This is what is unsustainable. > > It's not just that our tastes for foreign goods, including imported > oil, vastly exceed our ability to pay for them. We are financing them > through massive borrowing. On November 7, 2007, the U.S. 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 George 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. United Kingdom, $42.8 billion > 6. Japan (2007), $41.75 billion > 7. Germany (2003), $35.1 billion > 8. Italy (2003), $28.2 billion > 9. South Korea (2003), $21.1 billion > 10. India (2005 est.), $19 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. > > This ideology goes back to the first years of the Cold War. During > the late 1940s, the U.S. was haunted by economic anxieties. The Great > Depression of the 1930s had been overcome only by the war production boom of > World War II. With peace and demobilization, there was a pervasive fear that > the Depression would return. During 1949, alarmed by the Soviet Union's > detonation of an atomic bomb, the looming communist victory in the Chinese > civil war, a domestic recession, and the lowering of the Iron Curtain around > the USSR's European satellites, the U.S. sought to draft basic strategy > for the emerging cold war. The result was the militaristic National Security > Council Report 68 (NSC-68) drafted under the supervision of Paul Nitze, then > head of the Policy Planning Staff in the State Department. Dated April 14, > 1950, and signed by President Harry S. Truman on September 30, 1950, it laid > out the basic public economic policies that the United States pursues to the > present day. > > In its conclusions, NSC-68 asserted: "One of the most significant > lessons of our World War II experience was that the American economy, when > it operates at a level approaching full efficiency, can provide enormous > resources for purposes other than civilian consumption while simultaneously > providing a high standard of living." > > With this understanding, American strategists began to build up a > massive munitions industry, both to counter the military might of the Soviet > Union (which they consistently overstated) and also to maintain full > employment as well as ward off a possible return of the Depression. The > result was that, under Pentagon leadership, entire new industries were > created to manufacture large aircraft, nuclear-powered submarines, nuclear > warheads, intercontinental ballistic missiles, and surveillance and > communications satellites. This led to what President Eisenhower warned > against in his farewell address of February 6, 1961: "The conjunction of an > immense military establishment and a large arms industry is new in the > American experience" -- that is, the military-industrial complex. > > By 1990, the value of the weapons, equipment, and factories devoted > to the Department of Defense was 83% of the value of all plants and > equipment in American manufacturing. From 1947 to 1990, the combined U.S. > military budgets amounted to $8.7 trillion. Even though the Soviet Union no > longer exists, U.S. reliance on military Keynesianism has, if anything, > ratcheted up, thanks to the massive vested interests that have become > entrenched around the military establishment. Over time, a commitment to > both guns and butter has proven an unstable configuration. Military > industries crowd out the civilian economy and lead to severe economic > weaknesses. Devotion to military Keynesianism is, in fact, a form of slow > economic suicide. > > On May 1, 2007, the Center for Economic and Policy Research of > Washington, D.C., released a study prepared by the global forecasting > company Global Insight on the long-term economic impact of increased > military spending. Guided by economist Dean Baker, this research showed > that, after an initial demand stimulus, by about the sixth year the effect > of increased military spending turns negative. Needless to say, the U.S. > economy has had to cope with growing defense spending for more than 60 > years. He found that, after 10 years of higher defense spending, there would > be 464,000 fewer jobs than in a baseline scenario that involved lower > defense spending. > > Baker concluded: > > "It is often believed that wars and military spending increases are > good for the economy. In fact, most economic models show that military > spending diverts resources from productive uses, such as consumption and > investment, and ultimately slows economic growth and reduces employment." > > These are only some of the many deleterious effects of military > Keynesianism. > > Hollowing Out the American Economy > > It was believed that the U.S. could afford both a massive military > establishment and a high standard of living, and that it needed both to > maintain full employment. But it did not work out that way. By the 1960s, it > was becoming apparent that turning over the nation's largest manufacturing > enterprises to the Department of Defense and producing goods without any > investment or consumption value was starting to crowd out civilian economic > activities. The historian Thomas E. Woods, Jr., observes that, during the > 1950s and 1960s, between one-third and two-thirds of all American research > talent was siphoned off into the military sector. It is, of course, > impossible to know what innovations never appeared as a result of this > diversion of resources and brainpower into the service of the military, but > it was during the 1960s that we first began to notice Japan was outpacing us > in the design and quality of a range of consumer goods, including household > electronics and automobiles. > > 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 United States 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 pioneer in analyzing what has been lost as a result of military > Keynesianism was the late Seymour Melman (1917-2004), a professor of > industrial engineering and operations research at Columbia University. His > 1970 book, Pentagon Capitalism: The Political Economy of War, was a > prescient analysis of the unintended consequences of the American > preoccupation with its armed forces and their weaponry since the onset of > the Cold War. Melman wrote (pp. 2-3): > > "From 1946 to 1969, the United States government spent over $1,000 > billion on the military, more than half of this under the Kennedy and > Johnson administrations -- the period during which the [Pentagon-dominated] > state management was established as a formal institution. This sum of > staggering size (try to visualize a billion of something) does not express > the cost of the military establishment to the nation as a whole. The true > cost is measured by what has been foregone, by the accumulated deterioration > in many facets of life by the inability to alleviate human wretchedness of > long duration." > > In an important exegesis on Melman's relevance to the current > American economic situation, Thomas Woods writes: > > "According to the U.S. Department of Defense, during the four > decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in > capital resources. In 1985, the Department of Commerce estimated the value > of the nation's plant and equipment, and infrastructure, at just over $7.29 > trillion. In other words, the amount spent over that period could have > doubled the American capital stock or modernized and replaced its existing > stock." > > The fact that we did not modernize or replace our capital assets is > one of the main reasons why, by the turn of the twenty-first century, our > manufacturing base had all but evaporated. Machine tools -- an industry on > which Melman was an authority -- are a particularly important symptom. In > November 1968, a five-year inventory disclosed (p. 186) "that 64 percent of > the metalworking machine tools used in U.S. industry were ten years old or > older. The age of this industrial equipment (drills, lathes, etc.) marks the > United States' machine tool stock as the oldest among all major industrial > nations, and it marks the continuation of a deterioration process that began > with the end of the Second World War. This deterioration at the base of the > industrial system certifies to the continuous debilitating and depleting > effect that the military use of capital and research and development talent > has had on American industry." > > Nothing has been done in the period since 1968 to reverse these > trends and it shows today in our massive imports of equipment -- from > medical machines like proton accelerators for radiological therapy (made > primarily in Belgium, Germany, and Japan) to cars and trucks. > > Our short tenure as the world's "lone superpower" has come to an > end. As Harvard economics professor Benjamin Friedman has written: > > "Again and again it has always been the world's leading lending > country that has been the premier country in terms of political influence, > diplomatic influence, and cultural influence. It's no accident that we took > over the role from the British at the same time that we took overÂ… the job > of being the world's leading lending country. Today we are no longer the > world's leading lending country. In fact we are now the world's biggest > debtor country, and we are continuing to wield influence on the basis of > military prowess alone." > > 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). > > [Note: For those interested, click here to view a clip from a new > film, "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' > Speaking Freely series in which he discusses "military Keynesianism" and > imperial bankruptcy. For sources on global military spending, please see: > (1) Global Security Organization, "World Wide Military Expenditures" as well > as Glenn Greenwald, "The bipartisan consensus on U.S. military spending"; > (2) Stockholm International Peace Research Institute, "Report: China biggest > Asian military spender."] > > Copyright 2008 Chalmers Johnson > > > > >
[Non-text portions of this message have been removed] --------------------------------------------------------------------------- LAAMN: Los Angeles Alternative Media Network --------------------------------------------------------------------------- Unsubscribe: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Subscribe: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Digest: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Help: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Post: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Archive1: <http://www.egroups.com/messages/laamn> --------------------------------------------------------------------------- Archive2: <http://www.mail-archive.com/[EMAIL PROTECTED]> --------------------------------------------------------------------------- Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/laamn/ <*> Your email settings: Individual Email | Traditional <*> To change settings online go to: http://groups.yahoo.com/group/laamn/join (Yahoo! ID required) <*> To change settings via email: mailto:[EMAIL PROTECTED] mailto:[EMAIL PROTECTED] <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
