Tuesday, July 12, 2011
The IMPERIAL SUICIDE of America
By Bill Bonner
Now, what we see is the whole kit-and- kaboodle of life in the US giving way to desperation, delusion and an irresistible impulse to commit imperial suicide. The economy turns sour. The military becomes malignant. Households are corrupt, bankrupt and dependent. Even the churches sing their hallelujahs to Caesar now.
What's "imperial suicide?" It's what empires do. If no other empire arises to kill them...they kill themselves. China will probably eventually crush the US militarily. But that is far in the future. The US can't wait. It lets the zombies run wild.
At home, Congress debates a "debt ceiling" measure, as if it made any difference. They've raised the ceiling 93 times since they first imposed a debt ceiling 94 years ago. What are the odds that they will hold the line this time?
Zilch. Instead, they'll continue borrowing and spending until the nation goes broke. Count on it.
The US economy was a free-market success story for a hundred years...from the end of the US War Between the States to the end of the Vietnam War. It was the richest, fastest-growing, most innovative, most competitive, and most admired economy in the world. But then, in 1971, Richard Nixon replaced a more-or-less solid dollar, vaguely backed by gold, with a pure paper dollar, backed by nothing but the good intentions of government employees.
As the money went, so went the nation. Our friend and colleague Byron King opines:
The problem with the US over the last 40 or 50 years is that there's too much free money...
We raise three generations of population who are untied from the basics of monetary education - millions of minds poisoned by Economics 101 in universities across the land. "Elastic currency," courtesy of the Fed.
Media & political classes are no smarter than the dummies who walk the land, so they make policy based on "free" money from the Fed... Deficits don't matter.
Currency circulates and inflates the general price levels... People learn to live with it. Even make a virtue of it, doing things like "buy as much house as you can afford; the market will rise and you'll make money." That kind of idiocy.
There's all this excess currency sloshing around the economy, leading to people doing stupid things like drugs, too much alcohol, divorce (Cherchez les femmes), food (obesity), theft, etc...
"Wars cost much silver," wrote Sun Tzu. [Lack of money] kept a lot of nations out of a lot of trouble over the years. Not any more. Who needs silver when you can just print up bricks of paper cash and fly it over to Iraq and such.
Kind of gives a whole new meaning to the term American Exceptionalism... yep, we're exceptional. That's for sure. More prisoners in jail than anywhere else. We fight longer wars than anyone else...and don't win. We give more welfare to more idle people than anywhere else on earth...and we're proud of it.
There's so much money that we don't know how to say no. No limits. Just raise the debt ceiling...spend until you can't spend any more. Then spend some more.
Well, there are no limits until there are limits. Per Ayn Rand... "You can avoid reality. But you cannot avoid the consequences of avoiding reality."
In the space of 40 years the US lost its winning ways. Real, hourly wages stopped growing in 1973. Stock prices, in real terms, peaked out in '99...about the same time that real, per capita private sector growth came to a halt. The number of full time jobs topped out about two years later...and housing hit its peak in 2007.
Abroad, US armed forces continue to squander the most magnificent advantage that a military has ever had. The Pentagon spends 7 times as much as the next biggest spender. And it doesn't even have a worthy opponent. Where does it get the money? It borrows from the Chinese!
And what does it do with all that money? It engages in pointless, blood sucking zombie wars. Its three current engagements alone are expected to cost $4 trillion, according to the latest independent estimates - about as much as its trade deficit over the last 10 years.
Ask your neighbors. What strategic advantage does the US gain from fighting in Afghanistan, Iraq or Libya? They will have no good answer. Probably some claptrap about 'fighting terrorism' is the best they will be able to do; that's what they were told on TV.
A 94-year-old retired Army colonel came over to our house for the 4th of July festivities. A Silver Star winner in WWII, veteran of the Korean War too...we asked what he thought of the Pentagon's strategy in North Africa and the Middle East.
"I am disgusted," he replied. "Those guys just don't know what they're doing. We have no business getting involved in these things...especially in Libya. They're just traps. I have arguments about it when I go into the VA hospital. The young guys - you know, they're in their '80s - are in favor of these wars. Wave the flag. Rah rah...let's go in and do the job. Teach them a lesson... That sort of thing.
"But real war is not a football game. And nobody learns anything...except not to do it again."
Who - with the exception of a 94-year-old veteran - objects to squandering the national treasure, blood and honor on these wars? Almost no one. Why not? Because they've all drunk deeply from the intoxicating cup of imperial power. An ordinary nation fights wars to protect itself. An empire fights wars because that is what an empire does. And it continues fighting until it finally beats itself.
Why didn't Rome pull back its troops from the Rhine or Anatolia or North Africa...in order to protect its homeland from the barbarians? Why didn't Alexander retire to Macedonia, while he still had breath? Why didn't the Germans retreat to the banks of the Oder when they still had the means to resist the Soviet onslaught?
Why doesn't the US bring home its troops, cut its spending, balance its budget and protect its future? Ha...ha...you know the answer. Because the system has been taken over by zombies...people who want to see the spending continue, no matter what the cost. Zombie wars. Zombie social spending. And zombie finance.
And every time we look at it, we see more evidence. California, the West Coast Greece, is going broke. Any guess why?