FacebookTwitterGoogle+RedditEmail

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@yahoo.com

 

 

 

 

 

 

CLARIFICATION

ALEXANDER COCKBURN, JEFFREY ST CLAIR, BECKY GRANT AND THE INSTITUTE FOR THE ADVANCEMENT OF JOURNALISTIC CLARITY, COUNTERPUNCH

We published an article entitled “A Saudiless Arabia” by Wayne Madsen dated October 22, 2002 (the “Article”), on the website of the Institute for the Advancement of Journalistic Clarity, CounterPunch, www.counterpunch.org (the “Website”).

Although it was not our intention, counsel for Mohammed Hussein Al Amoudi has advised us the Article suggests, or could be read as suggesting, that Mr Al Amoudi has funded, supported, or is in some way associated with, the terrorist activities of Osama bin Laden and the Al Qaeda terrorist network.

We do not have any evidence connecting Mr Al Amoudi with terrorism.

As a result of an exchange of communications with Mr Al Amoudi’s lawyers, we have removed the Article from the Website.

We are pleased to clarify the position.

August 17, 2005

 

Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal. Roberts’ How the Economy Was Lost is now available from CounterPunch in electronic format. His latest book is The Neoconservative Threat to World Order.

More articles by:
Weekend Edition
June 24, 2016
Friday - Sunday
Pepe Escobar
Goodbye to All That: Why the UK Left the EU
Michael Hudson
Revolts of the Debtors: From Socrates to Ibn Khaldun
Andrew Levine
Summer Spectaculars: Prelude to a Tea Party?
Kshama Sawant
Beyond Bernie: Still Not With Her
Mike Whitney
¡Basta Ya, Brussels! British Voters Reject EU Corporate Slavestate
Tariq Ali
Panic in the House: Brexit as Revolt Against the Political Establishment
Paul Street
Miranda, Obama, and Hamilton: an Orwellian Ménage à Trois for the Neoliberal Age
Ellen Brown
The War on Weed is Winding Down, But Will Monsanto Emerge the Winner?
Gary Leupp
Why God Created the Two-Party System
Conn Hallinan
Brexit Vote: a Very British Affair (But Spain May Rock the Continent)
Ruth Fowler
England, My England
Norman Pollack
Fissures in World Capitalism: the British Vote
Paul Bentley
Mercenary Logic: 12 Dead in Kabul
Binoy Kampmark
Parting Is Such Sweet Joy: Brexit Prevails!
Elliot Sperber
Show Me Your Papers: Supreme Court Legalizes Arbitrary Searches
Jan Oberg
The Brexit Shock: Now It’s All Up in the Air
Nauman Sadiq
Brexit: a Victory for Britain’s Working Class
Brian Cloughley
Murder by Drone: Killing Taxi Drivers in the Name of Freedom
Ramzy Baroud
How Israel Uses Water as a Weapon of War
Brad Evans – Henry Giroux
The Violence of Forgetting
Ben Debney
Homophobia and the Conservative Victim Complex
Margaret Kimberley
The Orlando Massacre and US Foreign Policy
David Rosen
Americans Work Too Long for Too Little
Murray Dobbin
Do We Really Want a War With Russia?
Kathy Kelly
What’s at Stake
Louis Yako
I Have Nothing “Newsworthy” to Report this Week
Pete Dolack
Killing Ourselves With Technology
David Krieger
The 10 Worst Acts of the Nuclear Age
Lamont Lilly
Movement for Black Lives Yields New Targets of the State
Martha Rosenberg
A Hated Industry Fights Back
Robert Fantina
Hillary, Gloria and Jill: a Brief Look at Alternatives
Chris Doyle
No Fireworks: Bicentennial Summer and the Decline of American Ideals
Michael Doliner
Beyond Dangerous: the Politics of Climate
Colin Todhunter
Modi, Monsanto, Bayer and Cargill: Doing Business or Corporate Imperialism?
Steve Church
Brexit: a Rush for the Exits!
Matthew Koehler
Mega Corporation Gobbles Up Slightly Less-Mega Corporation; Chops Jobs to Increase Profits; Blames Enviros. Film at 11.
David Green
Rape Culture, The Hunting Ground, and Amy Goodman: a Critical Perspective
Ed Kemmick
Truckin’: Pro Driver Dispenses Wisdom, Rules of the Road
Alessandro Bianchi
“China Will React if Provoked Again: You Risk the War”: Interview with Andre Vltchek
Christy Rodgers
Biophilia as Extreme Sport
Missy Comley Beattie
At Liberty
Ron Jacobs
Is Everything Permitted?
Cesar Chelala
The Sad Truth About Messi
Charles R. Larson
A Review of Mary Roach’s “Grunt”
David Yearsley
Stuck in Houston on the Cusp of the Apocalypse
FacebookTwitterGoogle+RedditEmail