War and Debt

[georgephillip]

What happens when a domestic class war meets a global oil war?

Michael Hudson, former Wall Street economist and current professor at UMKC,:

"To begin with the most obvious question: If governments run up their debt in the process of carrying out programs that Congress already approved, why would Congress have yet another option to stop the government from following through on these authorized expenditures, by refusing to raise the debt ceiling?

"The answer is obvious when one looks at why this fail-safe check was introduced in almost every country of the world. Throughout modern history, war has been the major cause of a rising national debt.

"Most governments operate in fiscal balance during peacetime, financing their spending and investment by levying taxes and charging user fees. War emergencies push this balance into deficit – sometimes for defensive wars, sometimes for aggression...

"Here was precisely the situation for which the debt ceiling rule was introduced in 1917.

"President Wilson had taken the United States into the Great War, breaking his election campaign promise not to do so. Isolationists in the United States sought to limit America’s commitment, by imposing Congressional oversight and approval of raising the debt ceiling.

"This safeguard obviously was intended to be used against unscheduled spending that occurred without Congressional approval.

"The present rise in U.S. Treasury debt results from two forms of warfare.

"First is the overtly military Oil War in the Near East, from Iraq to Afghanistan (Pipelinistan) to oil-rich Libya. These adventures will end up costing between $3 and $5 trillion.

"Second and even more expensive is the more covert yet more costly economic war of Wall Street against the rest of the economy, demanding that losses by banks and financial institutions be passed onto the government balance sheet ('taxpayers').

"The bailouts and 'free lunch' for Wall Street – by no coincidence, Congress’s number one political campaign contributor – cost $13 trillion."

Maybe it's time to impose a War Tax on the richest 1% of Americans?

CounterPunch: Tells the Facts, Names the Names

 

[eflatminor]

While I agreed that "Throughout modern history, war has been the major cause of a rising national debt.", that's not entirely the case in America. In the last 30 years, the accumulation of debt has been spurred as much by Medicare and Medicade as military interventionism.

The problem is that politicians don't have to pay for anything anymore, be it wars or social programs. The end is the same - crippling debt. End the Fed, restore sound money, and politicians would have actually pay for their wars and programs, which means we'd end up with less of both...and that's a good thing.

Taxing anyone at any rate is not going to cover the $14.6 trillion of debt we have, nor the additional $7 trillion we expect to add in the next decade (best case scenario). End the Fed and shrink the size of government dramatically and we might have a chance. Otherwise, the future will face superinflation...the only way such debt has ever been resolved. Unfortunately, when people have to use a wheel barrow full of cash to buy bread, war inevitable follows.

 

[flacaltenn]

"First is the overtly military Oil War in the Near East, from Iraq to Afghanistan (Pipelinistan) to oil-rich Libya. These adventures will end up costing between $3 and $5 trillion.

The left is so FOS on this.. Firstly, Piplinistan is about a NATURAL GAS pipeline which would supply ZERO energy to the USA -- Not oil.. But evidently -- there is MASSIVE ignorance on the left as to the diff between nat gas and oil. That pipeline was proposed because Clinton sold Nat Gas Power plants to India/Pakistan and PROMISED them a supply route. It goes to THEM -- not us --- so they don't have to burn Cowdung.. More importantly -- instability in that country will likely mean it will NEVER GET BUILT.

Secondly -- we have scored almost NO additional oil benefit from Iraq and/or Libya. If the left thinks that EMBARGOING Iraqi Oil for 12 years really hurt primarily the US -- they are wrong. And even putting that Iraqi oil back on the market gave us almost no relief in the world market.

It is SO old and tired -- and BOTH parties have continued the same bullshit foreign policy. And yet the mindless WHINING continues. It's obnoxious...

 

[zzzz]

Yeah Iraq was not about oil, it was not about WMD's, it was about Saddam trying to kill Bush's daddy and payback. That was the sole reason we went to war and anyone who thinks differently has their head in the sand.

 

[Truthmatters]

Follow the money..

It sure as hell was about money.


Pallets and pallets of 100 dollar bills just disapearing.

 

[flacaltenn]

Yeah Iraq was not about oil, it was not about WMD's, it was about Saddam trying to kill Bush's daddy and payback. That was the sole reason we went to war and anyone who thinks differently has their head in the sand.

Could it be about FAILED policy of containment and 12 years of locking down the Iraqi economy and BOMBING them daily? ------ NO. Don't bring up the facts.. Just spin your childish crap endlessly.. Could it be because the UN was corruptly pocketing "oil for food" monies and dealing with Sadam in spite of the embargo? --- NO --- It's all about Bush..

Could it be because Europe was going behind our backs during containment and HOLDING JOBS FAIRS in Baghdad.. --- NO --- "it was payback"..

Moron... It's time to grow a brain cell..

 

[georgephillip]

While I agreed that "Throughout modern history, war has been the major cause of a rising national debt.", that's not entirely the case in America. In the last 30 years, the accumulation of debt has been spurred as much by Medicare and Medicade as military interventionism.

The problem is that politicians don't have to pay for anything anymore, be it wars or social programs. The end is the same - crippling debt. End the Fed, restore sound money, and politicians would have actually pay for their wars and programs, which means we'd end up with less of both...and that's a good thing.

Taxing anyone at any rate is not going to cover the $14.6 trillion of debt we have, nor the additional $7 trillion we expect to add in the next decade (best case scenario). End the Fed and shrink the size of government dramatically and we might have a chance. Otherwise, the future will face superinflation...the only way such debt has ever been resolved. Unfortunately, when people have to use a wheel barrow full of cash to buy bread, war inevitable follows.

"It seems remarkable that Obama’s major focus on the debt ceiling is to warn that Social Security funding must be cut back, along with that of Medicare and other social programs. He went to far as to say that despite the fact that FICA wage set-asides have been invested in Treasury securities for over half a century, the government might not send out checks this week.

"A radical double standard is at work for democracies. Wall Street investors certainly had no such worry.

"In fact, interest rates on long-term Treasury bonds actually have gone down over the past month, and especially over the last week.

"So institutional debt holders obviously expected to get paid.

"Only the Social Security savers were to be stiffed – or was Obama simply trying to threaten them, so as to depict himself as a hero coming in to save their Social Security by negotiating a Grand Bargain?

Taxing Wall Street might be a good start.
Why shouldn't those who profit most from War and Debt pay the costs?

CounterPunch: Tells the Facts, Names the Names

 

[eflatminor]

While I agreed that "Throughout modern history, war has been the major cause of a rising national debt.", that's not entirely the case in America. In the last 30 years, the accumulation of debt has been spurred as much by Medicare and Medicade as military interventionism.

The problem is that politicians don't have to pay for anything anymore, be it wars or social programs. The end is the same - crippling debt. End the Fed, restore sound money, and politicians would have actually pay for their wars and programs, which means we'd end up with less of both...and that's a good thing.

Taxing anyone at any rate is not going to cover the $14.6 trillion of debt we have, nor the additional $7 trillion we expect to add in the next decade (best case scenario). End the Fed and shrink the size of government dramatically and we might have a chance. Otherwise, the future will face superinflation...the only way such debt has ever been resolved. Unfortunately, when people have to use a wheel barrow full of cash to buy bread, war inevitable follows.

"It seems remarkable that Obama’s major focus on the debt ceiling is to warn that Social Security funding must be cut back, along with that of Medicare and other social programs. He went to far as to say that despite the fact that FICA wage set-asides have been invested in Treasury securities for over half a century, the government might not send out checks this week.

"A radical double standard is at work for democracies. Wall Street investors certainly had no such worry.

"In fact, interest rates on long-term Treasury bonds actually have gone down over the past month, and especially over the last week.

"So institutional debt holders obviously expected to get paid.

"Only the Social Security savers were to be stiffed – or was Obama simply trying to threaten them, so as to depict himself as a hero coming in to save their Social Security by negotiating a Grand Bargain?

Taxing Wall Street might be a good start.
Why shouldn't those who profit most from War and Debt pay the costs?

CounterPunch: Tells the Facts, Names the Names

What's your point? That government should not have bail out Wall Street? Couldn't agree more.

You cannot tax Wall Street or any other business or individual enough to overcome our debt. I'm all for less loopholes and a fairer tax system but you cannot overcome our level of debt by ANY taxation. We collect about 15 to 20% of GDP regardless of the tax rates. That's nowhere near enough to pay this debt. Fundamental change in the scope of government is required unless you're fine with the children of the future facing super inflation.

Now, you want for wars and social programs to actually be paid for? Great, I'm on board. You will have to end the Fed for that to happen.

 

[georgephillip]

"First is the overtly military Oil War in the Near East, from Iraq to Afghanistan (Pipelinistan) to oil-rich Libya. These adventures will end up costing between $3 and $5 trillion.

The left is so FOS on this.. Firstly, Piplinistan is about a NATURAL GAS pipeline which would supply ZERO energy to the USA -- Not oil.. But evidently -- there is MASSIVE ignorance on the left as to the diff between nat gas and oil. That pipeline was proposed because Clinton sold Nat Gas Power plants to India/Pakistan and PROMISED them a supply route. It goes to THEM -- not us --- so they don't have to burn Cowdung.. More importantly -- instability in that country will likely mean it will NEVER GET BUILT.

Secondly -- we have scored almost NO additional oil benefit from Iraq and/or Libya. If the left thinks that EMBARGOING Iraqi Oil for 12 years really hurt primarily the US -- they are wrong. And even putting that Iraqi oil back on the market gave us almost no relief in the world market.

It is SO old and tired -- and BOTH parties have continued the same bullshit foreign policy. And yet the mindless WHINING continues. It's obnoxious...

Why would any sentient being think the only source for corporate profits in Afghanistan or Iraq comes from the sales of natural gas or oil? How many billion$ have war contractors earned so far from killing thousands of women and children?

Embargoing Iraqi oil didn't help kill 500,000 US children.
Who got hurt from that?

Both parties serve the same obnoxious 1% of Americans.
Why aren't they WHINING?

 

[georgephillip]

Yeah Iraq was not about oil, it was not about WMD's, it was about Saddam trying to kill Bush's daddy and payback. That was the sole reason we went to war and anyone who thinks differently has their head in the sand.

There's also an aspect that doesn't get much air-time in the US and that's the oil/currency war.

Saddam may have made his last mistake when he tried to sell his oil in a currency other than US dollars. Libya made a similar overture just before NATO bombs started falling, and the Rebels took time out early in the Libyan conflict to create their own central bank.

Apparently the New World Order requires one global central bank, possibly with its own currencies.

The Real But Unspoken Reasons For The Iraq War

 

[georgephillip]

Follow the money..

It sure as hell was about money.


Pallets and pallets of 100 dollar bills just disapearing.

Pilfered pallets of $100s and blood-stained billion$ for defense contractors go a long way in explaining why Dubya and Dick, draft dodgers both, invaded Iraq(with other people's children), but there also control over oil and preserving the world's reserve currency to consider.

Here's a view from The Guardian:

John Chapman: The real reasons Bush went to war | World news | The Guardian

 

[georgephillip]

Yeah Iraq was not about oil, it was not about WMD's, it was about Saddam trying to kill Bush's daddy and payback. That was the sole reason we went to war and anyone who thinks differently has their head in the sand.

Could it be about FAILED policy of containment and 12 years of locking down the Iraqi economy and BOMBING them daily? ------ NO. Don't bring up the facts.. Just spin your childish crap endlessly.. Could it be because the UN was corruptly pocketing "oil for food" monies and dealing with Sadam in spite of the embargo? --- NO --- It's all about Bush..

Could it be because Europe was going behind our backs during containment and HOLDING JOBS FAIRS in Baghdad.. --- NO --- "it was payback"..

Moron... It's time to grow a brain cell..

Could it be Iraq is a country at the center of a region with a quarter of global oil production in 2003? Did the US Department of Energy's 2002 forecast that imports will cover 70% of US domestic demand by 2025 influence Bush's and Blair's invasion? A US military presence in Iraq would seem like a good insurance policy against "extremists" in Iran or Saudi Arabia.

Maybe Dick Cheney said it best?

"Overseeing Iraqi oil supplies, and maybe soon supplies from other Gulf countries, would enable the US to use oil as power.

"In 1990, the then oil man, Dick Cheney, wrote that: 'Whoever controls the flow of Persian Gulf oil has a stranglehold not only on our economy but also on the other countries of the world as well.'"

John Chapman: The real reasons Bush went to war | World news | The Guardian

 

[georgephillip]

While I agreed that "Throughout modern history, war has been the major cause of a rising national debt.", that's not entirely the case in America. In the last 30 years, the accumulation of debt has been spurred as much by Medicare and Medicade as military interventionism.

The problem is that politicians don't have to pay for anything anymore, be it wars or social programs. The end is the same - crippling debt. End the Fed, restore sound money, and politicians would have actually pay for their wars and programs, which means we'd end up with less of both...and that's a good thing.

Taxing anyone at any rate is not going to cover the $14.6 trillion of debt we have, nor the additional $7 trillion we expect to add in the next decade (best case scenario). End the Fed and shrink the size of government dramatically and we might have a chance. Otherwise, the future will face superinflation...the only way such debt has ever been resolved. Unfortunately, when people have to use a wheel barrow full of cash to buy bread, war inevitable follows.

"It seems remarkable that Obama’s major focus on the debt ceiling is to warn that Social Security funding must be cut back, along with that of Medicare and other social programs. He went to far as to say that despite the fact that FICA wage set-asides have been invested in Treasury securities for over half a century, the government might not send out checks this week.

"A radical double standard is at work for democracies. Wall Street investors certainly had no such worry.

"In fact, interest rates on long-term Treasury bonds actually have gone down over the past month, and especially over the last week.

"So institutional debt holders obviously expected to get paid.

"Only the Social Security savers were to be stiffed – or was Obama simply trying to threaten them, so as to depict himself as a hero coming in to save their Social Security by negotiating a Grand Bargain?

Taxing Wall Street might be a good start.
Why shouldn't those who profit most from War and Debt pay the costs?

CounterPunch: Tells the Facts, Names the Names

What's your point? That government should not have bail out Wall Street? Couldn't agree more.

You cannot tax Wall Street or any other business or individual enough to overcome our debt. I'm all for less loopholes and a fairer tax system but you cannot overcome our level of debt by ANY taxation. We collect about 15 to 20% of GDP regardless of the tax rates. That's nowhere near enough to pay this debt. Fundamental change in the scope of government is required unless you're fine with the children of the future facing super inflation.

Now, you want for wars and social programs to actually be paid for? Great, I'm on board. You will have to end the Fed for that to happen.

If every US dollar comes from debt, what happens to the money supply if you completely eliminate our $14.6 trillion debt. Why would you think it's even necessary? Do you believe nation states are required to balance their checkbooks in the same way their citizens are?

Thanks to Bill Clinton joining forces with Wall Street Republicans and Dubya's two unpaid for wars and tax cuts for the rich, we've seen a 50 percent run-up of the national debt between 2007 and the recent raising of the debt ceiling.

You're right we can not completely wipe out our national debt at any rate of taxation, but that doesn't mean we can't save programs that benefit the working poor by taxing billionaires and corporations at the same rates they paid in the 60s.

Getting rid of the Fed sounds good to me; however, I suspect you would have to FLUSH most elected Republicans AND Democrats in DC for that to happen.

 

[NYcarbineer]

A war is a temporary extraordinary government expense above and beyond the normal peacetime expense of government.

Accordingly, it should be paid for with a temporary increase in revenues, aka taxes.

 

[eflatminor]

"It seems remarkable that Obama’s major focus on the debt ceiling is to warn that Social Security funding must be cut back, along with that of Medicare and other social programs. He went to far as to say that despite the fact that FICA wage set-asides have been invested in Treasury securities for over half a century, the government might not send out checks this week.

"A radical double standard is at work for democracies. Wall Street investors certainly had no such worry.

"In fact, interest rates on long-term Treasury bonds actually have gone down over the past month, and especially over the last week.

"So institutional debt holders obviously expected to get paid.

"Only the Social Security savers were to be stiffed – or was Obama simply trying to threaten them, so as to depict himself as a hero coming in to save their Social Security by negotiating a Grand Bargain?

Taxing Wall Street might be a good start.
Why shouldn't those who profit most from War and Debt pay the costs?

CounterPunch: Tells the Facts, Names the Names

What's your point? That government should not have bail out Wall Street? Couldn't agree more.

You cannot tax Wall Street or any other business or individual enough to overcome our debt. I'm all for less loopholes and a fairer tax system but you cannot overcome our level of debt by ANY taxation. We collect about 15 to 20% of GDP regardless of the tax rates. That's nowhere near enough to pay this debt. Fundamental change in the scope of government is required unless you're fine with the children of the future facing super inflation.

Now, you want for wars and social programs to actually be paid for? Great, I'm on board. You will have to end the Fed for that to happen.

If every US dollar comes from debt, what happens to the money supply if you completely eliminate our $14.6 trillion debt. Why would you think it's even necessary? Do you believe nation states are required to balance their checkbooks in the same way their citizens are?

Thanks to Bill Clinton joining forces with Wall Street Republicans and Dubya's two unpaid for wars and tax cuts for the rich, we've seen a 50 percent run-up of the national debt between 2007 and the recent raising of the debt ceiling.

You're right we can not completely wipe out our national debt at any rate of taxation, but that doesn't mean we can't save programs that benefit the working poor by taxing billionaires and corporations at the same rates they paid in the 60s.

Getting rid of the Fed sounds good to me; however, I suspect you would have to FLUSH most elected Republicans AND Democrats in DC for that to happen.

If you're referring to the money supply in terms of the Fed's ability to manipulate it in setting interest rates, I would say that the market would determine the price of money. Think of it this way: Nearly everyone agrees that price controls are bad, they don't work. Why would you want price controls on money?

If you're referring to the actual amount of dollars out there, that's the job of Congress I believe. They seeded that power to the Fed, as they're very prone to do, long ago. They can take it back.

Should the country balance it's books? When not in times of national emergency, as in foreign military invasion/attack, absolutely! It is immoral to burden those yet to be born with our inability to live within our means. I can quote lots of economists or Jefferson, Franklin and Washington if you like, but the idea is not extreme.

That said, the people will tend to accept moderate dept. Our debt surpassed 100% of our GDP today. Nice. We long ago surpassed anything close to moderate.

Keep the handful of fiscally sane Congressmen and Senators but for the rest, flush 'em in the primaries. Flush 'em all.

 

[whitehall]

Leave it to radcal lefties to find a left wing professor to carry their socialist water. In this case it's a Kansas professor named Michael Hudson who thinks the US Dollar is an evil influence on the world economy. How do we cure that problem? Elect a socialsit president who's policies will sink the US dollar for good.

 

[georgephillip]

Do you see any connection between War and Debt?

Ask Adam Smith unless you think he's to the left of Wall Street Barry.

"In Europe, parliamentary checks on government spending were designed to prevent ambitious rulers from waging war. This was Adam Smith’s great argument against public debts, and his urging that wars be financed on a pay-as-you-go basis.

"He wrote that if people felt the economic impact of war immediately – rather than postponing it by borrowing – they would be less likely to support military adventurism."

CounterPunch: Tells the Facts, Names the Names

 

[eflatminor]

Do you see any connection between War and Debt?

Ask Adam Smith unless you think he's to the left of Wall Street Barry.

"In Europe, parliamentary checks on government spending were designed to prevent ambitious rulers from waging war. This was Adam Smith’s great argument against public debts, and his urging that wars be financed on a pay-as-you-go basis.

"He wrote that if people felt the economic impact of war immediately – rather than postponing it by borrowing – they would be less likely to support military adventurism."

CounterPunch: Tells the Facts, Names the Names

As a anti-interventionist and fiscal conservative, I absolutely see a connection between war and debt. We haven't paid for our wars (or policing the planet) for a long time. But war is not the only problem, in fact it falls second behind Medicare/Medicade when it comes to debt. I believe in reducing our military footprint every bit as much as I do ending the great society experiment. Both have failed and proven themselves fiscally unsustainable...again.

 

[georgephillip]

Do you see any connection between War and Debt?

Ask Adam Smith unless you think he's to the left of Wall Street Barry.

"In Europe, parliamentary checks on government spending were designed to prevent ambitious rulers from waging war. This was Adam Smith’s great argument against public debts, and his urging that wars be financed on a pay-as-you-go basis.

"He wrote that if people felt the economic impact of war immediately – rather than postponing it by borrowing – they would be less likely to support military adventurism."

CounterPunch: Tells the Facts, Names the Names

As a anti-interventionist and fiscal conservative, I absolutely see a connection between war and debt. We haven't paid for our wars (or policing the planet) for a long time. But war is not the only problem, in fact it falls second behind Medicare/Medicade when it comes to debt. I believe in reducing our military footprint every bit as much as I do ending the great society experiment. Both have failed and proven themselves fiscally unsustainable...again.

Military conversion offers a WPA-II approach to our economic dependence on industry geared around "national defense", imho. Responsibility for such a public works program would fall to the Army Corps of Engineers again with an assist from Navy Seabees.

"Funding:

"With the winding down of wars in Iraq and Afghanistan, a portion of Congressional appropriations to both the DoD and the State Department would be shifted to underwrite WPA-II expenses that previously were dedicated to foreign infrastructure and economic aid. This would include salaries of all DoD participants, including payroll for deployed military.

"The State Department would shift funds from most of its foreign-aid programs and much of the $3 billion presently earmarked for the Baghdad Embassy security forces.

"In addition, USAID would turn over its Congressional appropriations to the WPA-II and rely in future upon financial support from US businesses and industry and/or the US Chamber of Commerce to continue its global activities.

"Remaining expenses would be covered by departments served by WPA-II operations. Among them would be the departments of Interior, Agriculture, Energy, Health and Human Services, Transportation, the Environmental Protection Agency and the Trade and Development Agency..."

Put 15 Million Back to Work Fixing $2.2 Trillion in Infrastructure: the Works Progress Administration | Truthout

I don't think Medicare and Medicaid create the same problem when it comes to our national debt since the former is offset by FICA withholdings. Until we reform our for-profit health delivery system, medical expenses will continue to bankrupt Americans, individually and collectively.

Maybe Capitalism has outlived its usefulness?

 

[eflatminor]

Maybe Capitalism has outlived its usefulness?

Now you're talking like a Marxist. Pass.