Time is running out for America

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" Zepp " <zepp

Tue, 27 Sep 2005 21:57:08 -0700

[Zepps_News] Time is running out for America

 

 

 

 

 

http://www.counterpunch.org/roberts09262005.html

 

September 26, 2005

 

 

Iraq War Winners: Al-Qaeda, Iran and Military Contractors

 

America is Running Out of Time

 

By PAUL CRAIG ROBERTS

 

George W. Bush will go down in history as the president who fiddled

while America lost its superpower status.

 

Bush used deceit and hysteria to lead America into a war that is

bleeding the US economically, militarily, and diplomatically. The war is

being fought with hundreds of billions of dollars borrowed from

foreigners. The war is bleeding the military of troops and commitments.

The war has ended the US claim to moral leadership and exposed the US as

a reckless and aggressive power.

 

Focused on a concocted " war on terrorism, " the Bush administration

diverted money from the New Orleans levees to Iraq, with the consequence

that the US now has a $100 billion rebuild bill on top of the war bill.

 

The US is so short of troops that neoconservatives are advocating the

use of foreign mercenaries paid with US citizenship.

 

US efforts to isolate Iran have been blocked by Russia and China,

nuclear powers that Bush cannot bully.

 

The Iraqi war has three beneficiaries: (1) al Qaeda, (2) Iran and (3) US

war industries and Bush-Cheney cronies who receive no-bid contracts.

 

Everyone else is a loser.

 

The war has bestowed on al Qaeda recruits, prestige, and a training

ground.

 

The war has allied Iran with Iraq's Shi'ite majority.

 

The war has brought soaring profits to the military industries and the

firms with reconstruction contracts at the expense of 20,000 US military

casualties and tens of thousands of Iraqi civilian casualties.

 

The Republican Party is a loser, because its hidebound support for the

war is isolating the party from public opinion.

 

The Democratic Party is a loser, because its cowardly acquiescence in a

war that is opposed by the majority of its members is making the party

irrelevant.

 

The latest polls show that a majority of Americans believe the US cannot

win against the Iraq insurgency. The majority support withdrawal and the

redirection of war spending to rebuilding New Orleans. Despite the

clarity of the public's wishes, the Republican Party continues to

support the unpopular war.

 

With the exceptions of Reps. Cynthia McKinney and John Conyers,

Democrats fled the scene of the Sept. 24 antiwar rally in Washington DC.

The cynical Democrats are apparently owned by the same interest groups

that own the Republicans and are refusing the mantle of majority party

that the electorate is offering to the party that will end the war.

 

The Bush administration is churning out red ink in excess of $1 trillion

annually. The federal budget deficit is approaching $500 billion. The US

trade deficit is approaching $700 billion.

 

The budget deficit is being financed by foreigners, primarily Asians

who now hold enough US government debt to exercise power over US

interest rates and the value of the dollar whenever they decide to use

the power that Bush has placed in their hands.

 

The trade deficit is being financed by turning over the ownership of US

assets and future income streams to foreigners, making Americans forever

poorer from the loss of accumulated wealth.

 

For the time being, China is willing to accumulate US assets as a way

of taking over our consumer markets, attracting US manufacturing

industry with cheap labor subsidized by artificial currency values, and

gaining our technology. China's strategy is to over-value the US dollar

in order to encourage the transfer of US economic capabilities to China.

China's strategy gives artificial value to the dollar and keeps US

interest rates at an artificial low.

 

The values of US stocks, bonds, and real estate depend on the support

that Asians' economic strategies provide the dollar and US interest

rates. As Asia achieves its goal of preeminence in manufacturing,

innovation, and product development, the strategy will change. Once

China completes its acquisition of US capabilities, it will no longer

have a reason to support the dollar.

 

When the dollar goes, it will affect costs, profits, interest rates and

living standards in dramatic ways. Costs and interest rates will soar,

and profits, living standards, equity values, bond prices and real

estate will plummet.

 

These unpleasant events await only Asia's decision to curtail its

support for US red ink. That will happen when this support no longer

serves Asia's interest.

 

When Asia pulls the plug on the dollar, the US government will find

that monetary and fiscal policy are powerless to offset the consequences.

 

Compared to US budget and trade deficits, terrorists are a minor

concern. The greatest danger that the US faces is the dollar's loss of

reserve currency role. This would be an impoverishing event, one from

which the US would not recover.

 

An intelligent government sincerely concerned with homeland security

would find a way to halt the global labor arbitrage that is stripping

the American economy of high value-added jobs and manufacturing

capability, thereby causing the US trade deficit to explode. The loss of

tax base that results when US companies outsource jobs and relocate

production abroad makes it ever more difficult to balance a budget

strained by war, natural disasters, and demographic impact on Social

Security and Medicare.

 

Global labor arbitrage is rapidly dismantling the ladders of upward

mobility and thereby endangering American political stability. This

threat is far greater than any Osama bin Laden can mount.

 

Time is running out for Republicans and Democrats to escape from the

distraction of a pointless war and to focus on the real threats that

endanger the United States of America.

 

Paul Craig Roberts has held a number of academic appointments and has

contributed to numerous scholarly publications. He served as Assistant

Secretary of the Treasury in the Reagan administration. His graduate

economics education was at the University of Virginia, the University of

California at Berkeley, and Oxford University. He is coauthor of The

Tyranny of Good Intentions. He can be reached at:

paulcraigroberts

 

 

 

--

 

 

 

If you're poor and steal during a national crisis, you're a looter.

If you're rich and steal during a national crisis, you're a Republican.

 

Not dead, in jail, or a slave? Thank a liberal!

Pay your taxes so the rich don't have to.

 

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