Saturday, March 30, 2013

Up to $6 Trillion of the Long Term Deficit- Created by “WARS!”

The news released yesterday that a Harvard group has shown the U.S. “wars” in Afghanistan and Iraq (actually more unpaid for occupations) will cost taxpayers $4 trillion to $6 trillion, taking into account the medical care of wounded veterans- ought to surprise no one who’s been paying attention. The real question the citizen needs to ask is: Why are we looking to cut domestic needs to pay for a deficit that has been rung up by wars of choice??  Oh, and tax cuts at the same time!

Let me now clarify before going on to the Harvard study. After 9/11 many of us could see the enormous future deficits that would be created without the need for a crystal ball. The first indicator? The $1.7 trillion Bush tax cuts passed in 2001. Then, as we heard ‘war on terror’ screamed over and over in the wake of the 9/11 attacks, we feared the U.S. would react by over reacting. Much like an enraged rich man with enormous mansion – just stung by several wasps – who gets out a blowtorch to take down the wasp’s nest under his eaves, and burns his place down in the process.

Exaggerated? Uh,….no! Rachel Maddow, indeed, was perhaps one of the first to do the ex post facto analysis of the unreal costs of mounting a full scale war and making the point it was exactly what Osama bin Laden wanted! E.g.

According to Maddow, in her introductory remarks:

"When we think about Bin Laden we think about murder, mayhem and perverted, pseudo-theology. But Osama Bin Laden himself always thought about money. Money was always how he explained what he was doing, and what al Qaeda was up to. One month after the September 11 attacks he gave an interview to Al Jazeera in which he said, quote

'The losses on Wall Street amounted to 16 percent, and they have said this was a record loss that had never happened in the market's history in 230 years. The capital in circulation in this market amounted to $4 trillion. If we multiply 16 percent by $4 trillion to find out the losses their shares suffered, that is $640 billion. This is what they lost in one hour. The national income in the U.S. is $20 billion'

Bin Laden, in Maddow's quote (from Al Jazeera), then went on to brag about the hidden economic costs latent in the "psychological shock" after the attacks on the Twin Towers and Pentagon, and how many people weren't able to work for a week. He also mentioned layoffs in the airline and hotel industry and the impact these had on the economy.

In the further expatiation of a 2002 interview, Bin Laden didn't brag about the death toll or buildings destroyed but rather that his "great victory in the 9-11 attacks is that they cost the U.S. more than $1 trillion."

As Rachel went on to say:

For us, what looked like nihilism was to Osama Bin Laden economic and economically rational

Bin Laden's own words gave his primary purpose away at the end of his 2004 video, as played by Maddow:

"We are continuing the ploy of bleeding America to the point of bankruptcy"

Well, now we know it’s a lot more than $1 trillion!

Instead of playing into Bin Laden’s hands with a precipitous over-reaction, the saner and more rational move would have been to mount a lower order police action to take out al Qaeda in a measured fashion, but without squandering trillions. Worse, compounding the original blunder by adding another “war” (occupation) on a nation (Iraq) that had nothing to do with 9/11! Why? Because Bush Jr. had to get back at Saddam for dissing his daddy.

 In the case of the aftermath of 9/11 we, the supposed super power, elevated a gaggle of robed lunatics in al Qaeda to the same level of competing super power, since we mounted so many military resources against them and which may take years to pull out of Afghanistan! Like a big brute human stung by a hornet, we used a blow torch when a rolled up newspaper would have sufficed. It had been as if the surprise and intensity of the attacks dislodged all reason and proportion from our leaders' minds.

We played into Bin Laden’s hands like dummies, even compounding it by launching an unrelated war in 2003, and now can’t even pay the disability benefits for tens of thousands of returned vets still waiting for the VA to make good. The waiting times now are up to 894 days! If we now add another war, say with Iran or Syria, how much longer will that waiting time reach? 894 months? The way the deficit is being ramped up, don’t laugh!

Back to the Harvard study: Linda J. Bilmes, a public policy professor, wrote in the report that was released Thursday-

“As a consequence of these wartime spending choices, the United States will face constraints in funding investments in personnel and diplomacy, research and development and new military initiatives,”

The report says

"The legacy of decisions taken during the Iraq and Afghanistan wars will dominate future federal budgets for decades to come.”

Bilmes said the United States has spent almost $2 trillion already for the military campaigns in Afghanistan and Iraq. Those costs, she said, are only a fraction of the ultimate price tag. The biggest ongoing expense will be providing medical care and disability benefits to veterans of the two conflicts.

Well, we already can see that the government can barely cope, what with waiting times for VA disability benefits up to 894 days. Again, this also speaks to the problem of not providing the revenue in the first place. Instead, what did the Bush administration do? It extended tax cuts along with mounting more “wars”! Insanity, as Einstein noted, is doing the same thing over and over and expecting a different result. In this case, the Bushies didn’t learn a damned thing since the Reagan era- when tax cuts coupled with extravagant defense spending (think $400 hammers and $4,000 toilet seats for the Pentagon) also nearly drove the nation into a ditch!

And then we wonder WHY we have such a massive deficit, and have the chutzpah to even consider reducing it on the backs of seniors, the disabled and returned maimed vets? We are truly insane! Or perhaps, dishonorable and insane!

Bilmes goes on to say:

“Historically, the bill for these costs has come due many decades later. Payments to Vietnam and first Gulf War veterans are still climbing ”

This references that the peak disbursement of disability payments for American vets in the last century came decades after the conflicts ended. Spending borrowed money to pay for the wars has also made them more expensive, the study noted. The conflicts have added $2 trillion to America’s debt, representing roughly 20 percent of the debt incurred between 2001 and 2012. Add to that the deficits from the Bush tax cuts, and we’re already looking at more than a 45% fraction of our current debt created by purely insane policies.

All of which points to the fact that the nation is in prolonged decline. As documented in the book, ‘Arrogant Capital’ by Kevin Phillips, the first ominous signs of an empire in decline include: 1) military overstretch and the inability or lack of will to pay for it, and 2) the domination of the financial system by speculators and speculative capital, as well as the proliferation of financial instruments. (In the latter case, the financial industry subsumes the place of earlier manufacturing and the production of solid, practical products.)

We had our chance as a nation, but a series of wrong, reckless choices has clearly put us on the same downward path as Rome, Spain and Great Britain. Plausibly, when the history texts are finally accurately written, the turning point for the nation will be the insertion of the Bush II regime. They will then be blamed for turning the U.S. into a third world backwater....with skyscrapers.

Look at the artificial DOW rising....then think of the fact we have a crumbling infrastructure that needs $2.2 trillion merely to bring it to adequate serviceability.

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