Election 2012, Time for Some Bitter Medicine

By: Dr. J. P. Hubert

US Debt is Result of Excessive Military/Security Spending

The United States is smothering under a mountain of debt. By far the largest contributor to that negative ink is the cost of maintaining a veritable global empire.[1]  Rather than a so-called Defense Department, the US has developed a “War Department” or what might better be termed a military/security (M/S) complex which when all of the related and supporting expenses are included costs at least $1.2 trillion/year. At just short of 30% of the annual US budget, this sum represents the largest category by percent of total federal spending, exceeding the costs of Medicare and Social Security respectively.

US Military/Security Spending is Irrational

Moreover, US yearly defense spending alone exceeds the total of the next 17 largest military budgets in the world. By any reasonable metric, this degree of military spending is excessive. When American national security including intelligence spending are added to direct military spending the total surpasses the military/security budgets of all the developed nations on Earth combined. Such an outlay is completely irrational even if the main goal of the United States is to remain the pre-eminent global superpower.

Attempting to continue this degree of M/S spending can only result in total economic collapse of the United States, an outcome which is clearly incompatible with the desire to remain the supreme global hegemonic force. It is clear from a consideration of the mathematics involved that no amount of austerity with regard to Medicare, Medicaid or other entitlement programs + markedly increasing taxes[2] on the wealthy, and or elimination of corporate (welfare) tax subsidies will come close to reducing our national debt and budget deficit problems without a drastic reduction in M/S spending.[3]

Excessive M/S Spending Makes US Less Competitive Globally

It is crucial to recognize that money spent on the military/security complex is lost forever to the national economy in the aggregate. While individuals and corporations may benefit greatly as a result of M/S spending, the vast majority of Americans are poorer for it since money spent in this way is unavailable for improvements in infrastructure, education, transportation, technology, research and development etc., things that other nations with much lower expenses in M/S are able to surpass us in.

The question which begs to be asked then is why does this insanity continue? If doing so can only lead to economic collapse, why do we not change it? Surely it must be obvious to those in power that the status quo cannot continue. Does the corporate/governmental complex or conglomerate not realize that our current course will sooner rather than later end in default? Of course they do. But they can afford literally not to care.

Multinational Corporations Eschew Nation States

The reason is that the ruling elite, the new Plutocrats have become true global citizens who need no national boundaries, citizenship or localized base of operations. It matters little to them whether they live in the United States or somewhere else. Their companies are multi or inter-national, perhaps better termed supra-national and their markets are global. They roam the Earth in search of the cheapest labor forces possible while availing themselves of “free-markets” a euphemism for the privilege of not being charged a tax or tariff for selling their products to consumers many of whom lost their jobs to the slave labor the multinational corporations avail themselves of.[4]

These companies find the geographical locations which advertise the cheapest labor and the lowest corporate taxes where they manufacture their products and sell them worldwide; demanding unfettered that is, unregulated markets. They literally demand not to be penalized for assembling their goods utilizing immoral and (in the US) illegal labor practices.

Free-Trade is Rigged (Unjust) Trade

These so-called free-trader’s or marketeers are advocates of unfair or unjust trade in which they alone benefit while the vast majority of those to whom they sell their goods lose their jobs, experience a reduced standard of living and become unable to take advantage of the lower prices that allegedly occur as a result of off-shoring of production and out-sourcing of labor—the original argument utilized to justify the practice. It is a total sham, a rigged game which benefits only the select few Plutocrats who now control the United States and much of the West. What this really means is that the American Empire exists to make this unjust and immoral arrangement more palatable (whether through persuasion or threat of armed aggression) to those who would otherwise object.

Excessive Military/Security Spending Benefits Plutocracy[5]

Thus, we do not alter our insane M/S budget because it insures that our ruling Plutocrats will be able to continue for a bit longer solidifying their incredible wealth. When the United States finally implodes, they will simply move elsewhere with their foreign factories, work forces and non-US markets intact. By then, their business in Brazil, China, India, and elsewhere will have matured to the point that they will be able to survive nicely without those which once existed in America.

Britain serves as a case in point when a nation decides to dismantle its empire in a controlled fashion rather than allow it to completely implode. On the other hand imperial Rome demonstrates what happens when instead of ending its Militarism and gross over-reach, an empire continues with the status quo until it falls. It would be much better if we could emulate Great Britain rather than ancient Rome.

Quick Summary:

1) Multinational Corporations are not limited to nation states, they are not interested in or for the most part affected by patriotic sentiments, geographical locations, fixed work forces, local customs, traditions or politics.

2) Multinational Corporations are larger than ever and now control the 6 largest industries in the United States including; Energy, Banking/Wall Street, Health Care/Pharmaceutical, Agriculture, Military/Security, Media/Entertainment.

3) Multinational Corporations now control the American political process including the Legislative and Executive branches due in part to the Citizens United case decided recently by the USSC in favor of unlimited corporate political donations without the need to provide complete transparency of contributions.

4) Because of number 1-3 above, the American constitutional representative democratic republic brought into being in 1789 has been replaced by a kind of Plutocracy which unites the largest multinational corporations and the government. It exists for the benefit of the very few at the expense of the many. It could legitimately be termed a Fascist state.

Recommendations:


1) Reduce Defense/Security Spending by >50%.

2) End Clandestine Operations portion of CIA, DIA, and NSA etc. and return the CIA to its original purpose of providing only intelligence information gathering to be used by President and Cabinet. President Kennedy wanted to do this and in part was killed for it.

3) Immediately end all US wars including occupations of Iraq, Afghanistan, drone attacks in Pakistan and support of NATO in Libya and any other similar activities which do not represent legitimate defensive response to unjust offensive attacks by nation states. Handle foreign based terrorism as a police action and end the intellectually/factually baseless global war on terror. All of these will make the risk of serious terrorist attack on the United States much less likely. Eliminate the Department of Homeland Security as it will be unnecessary once we end the foreign wars and begin treating the Palestinians fairly.

4) Raise income taxes for those American's with an annual income of >$250K and place at least a 50% tax on all individual earned and unearned income exceeding $5 million dollars per annum.

5) End all unfair trade agreements which allow the goods manufactured by multinational corporations assembled by slave laborers to be imported to the US without punitive tariffs. Decrease the power of large corporations and increase necessary regulation of key banking, energy companies. End "to big to fail banks."

6) End the Federal Reserve and begin the practice of printing US legal tender directly thus avoiding the paying of interest to a private entity. Consider returning to a precious mineral based currency such as the gold standard eliminated by President Nixon.

7) End corporate welfare for well-established industries such as those based upon fossil fuels. Federally subsidize the creation of an alternative energy industry in the United States through use of natural gas and wind power as suggested by T. Boone Pickens.

8) Create a National Health Care System which guarantees affordable care to all Americans. End the health care monopoly that the private insurance industry currently enjoys. Strongly consider a single payer system in which monies are payed to actual providers of care not to needless "middlemen" and eliminate wasteful and unnecessary medico-legally related defensive medical practices through reform of medical malpractice laws.

9) Link Israeli foreign aid to their observing the internationally recognized 1967 boundaries as outlined by the UN. Insist that Israel ends its occupation of Arab Palestinian Land. This has the added effect of lessening the likelihood that the USA will be subjected to foreign terrorist attacks.

10) Replace anyone in Congress and the White House who does not accept the above. Strongly consider a third party Independent Ticket challenge to President Obama and the Republican nominee.

NOTES:

[1] At last count we have over 900 foreign military bases of various sizes that require ongoing support.
[2] A tax increase back to Clinton administration era levels for those Americans with an annual income >250K would help as would a special tax for multimillionaires and billionaires of >50% on all annual income exceeding $5 million including capital gains. It would not however, alone or in combination with cuts to Medicare and Social Security be sufficient to eliminate future budget deficits or end the national debt completely by a time certain e.g. 2030.
[3] The ridiculously small amount recommended by Defense Secretary Robert Gates of roughly $40 billion is ludicrous and fails to address the main issue which is that the US can no longer afford a global empire.
[4] While in isolation this behavior might see economically wise, it is morally repugnant and violates the first two principle of the Natural Moral Law; Do good/avoid evil and treat your neighbor fairly.
[5] In this context I mean a Regime controlled by the super-rich, a fascist amalgam of powerful corporations and government. In 20th century Germany it was termed National Socialism. This would be a variant.

A Militarized Economy Cannot Balance the Budget

Editor's NOTE:

John Perkins is correct that the military budget of the United States is out of control. Attempts to balance the federal budget and to significantly reduce the national debt are bound to fail if the US National Security State is not markedly reduced. At least 250 billion dollars/year could be cut from the "defense" (read War) budget if we ended the foreign wars and began obeying international and US federal law.

--Dr. J. P. Hubert


By John Perkins

"Disarmament, with mutual honor and confidence, is a continuing imperative. Together we must learn how to compose differences, not with arms, but with intellect and decent purpose.”

--Eisenhower, 1961 Military Industrial Speech


April 08, 2011 "Information Clearing House" -- While we send our love and support to those so horribly impacted by the earthquake and tsunami, we must not allow this shock to divert us from the tsunami headed our way. Our business and political leaders will try to use this terrible catastrophe as a diversion to hoodwink us into budgetary reductions that will fatten their wallets and leave us and our children devastated.

It does not matter on what side of the political fence you sit during the current budget debates. The fact is that if our leaders are not willing to take into account our over-dependence on a militarized economy and change it, we will never balance the budget. Our progeny will face an endless struggle to clean up the debris.

Each year the Department of Defense’s tidal wave grows more menacing. We witness countless billions allocated for weapons research and development; nuclear warheads; and the secret and often illegal activities of the CIA, NSA, FBI, Homeland Security, and other “intelligence” agencies. We watch countries that are caught up in natural disasters and political upheavals and see how this “crisis elixir” attracts and profits predatory capitalists. Turmoil in foreign lands encourages U.S. hawks to party on at their military orgies. They stagger out to launch campaigns into new areas of conflict.

And they have the gall to do this under the guise of promoting democracy.
It is time for us to tell them that they are exposed, that we comprehend that what they are really doing is reaping huge profits and making other nations their financial servants for generations to come. Meanwhile, at home, we face severe cutbacks in social services, transportation, health care, the environmental and educational sectors, and other civil services.

Now is the time for us – you and me – to let our leaders know that we are no longer duped by their rhetoric. We understand they cannot bring our financial house to order without significant reductions in military spending. This includes calling our troops back from the Middle East and Afghanistan.

In 1961, President Eisenhower said, “As we peer into society's future, we -- you and I, and our government -- must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.” There is a very sad irony in those words. We need to let those who have followed Ike’s footsteps to the halls of power in Washington know that we understand the relevance of those words to today’s economic and military crises.

The United States accounts for almost 50 percent of the world’s total military spending; yet our share of the world’s GDP is less than 25 percent. This official budget does not take into account the money that is secretly allocated in the “black” budgets of the Pentagon, CIA, and other clandestine operations.

We must all ask ourselves:

How can a nation that prides itself on government “of, for, and by the people,” justify hiding these black budget allocations from taxpayer scrutiny? How can a nation continue to prosper by ignoring its own long-term demise at the hands of a militarized economy?

If we truly want a real democracy to survive for generations to come, then we must demand extensive military reductions. We must demand a peaceful and sustainable path for our country and for the world at large. We must bring our soldiers home. We must protect ourselves from the tsunami that is building on Wall Street and in the halls of Washington DC.

A Banana Republic By 2012?

Change for the Worse

By Paul Craig Roberts

March 02, 2009 "Information Clearing House" -- -President Obama has presented the most irresponsible budget in US history. His fiscal year 2010 budget projects federal spending of $3.5 trillion and a federal deficit of $1.75 trillion. In other words, 50 percent of the government’s budget consists of red ink.

And Americans are angry that sub-prime borrowers took mortgages they couldn’t afford.

The bald fact is that the US government is going to have to borrow--or print--half of the money it intends to spend in Obama’s first budget. This fact has fallen through the cracks as New York Times headlines proclaim “A Bold Plan Sweeps Away Reagan Ideas.” It certainly does sweep away Reagan ideas. No Reagan budget ever presumed that the federal government could borrow half of its annual expenditures. Indeed, Obama’s budget deficit for 2010 alone exceeds the totality of “Reagan Deficits” for Reagan’s two terms of office.

As presidential budgets are marketing devices rather than financial statements, they are imbued with optimistic assumptions. Obama’s budget is based on optimistic assumptions about the extent of decline in GDP. A more realistic projection of GDP decline would reveal that Obama’s budget is the first since World War II in which more than half of the government’s expenditures must be financed by red ink. I suspect that the red ink component of the FY 2010 budget will surpass World War II budgets.

To whom can the US government turn for $1.75 trillion for FY 2010, on top of $1.2 trillion for FY 2009?

Not to taxpayers. Obama’s net tax increase comes to $170 billion over 10 years, or $17 billion a year, a drop in the bucket. A supply-side economist could have told him that not even these paltry revenues will be realized.

Not to private savers. Americans are over their heads in debts.

Not to foreigners. Thanks to Clinton/Bush financial deregulation and Wall Street and bankster greed, the rest of the world is in financial turmoil and hasn’t $1.75 trillion in savings to lend. Possibly, the stock market will collapse further, and whatever remaining wealth Americans have will flow into “safe” US Treasuries.

The only other alternative is the printing press. Printing press finance would destroy the dollar as reserve currency and ignite high inflation. The US would be unable to pay for its imports, and Americans whose incomes do not rise with the rate of inflation would be plowed under.

This prospect is not a “war on terror” scare tactic like “anthrax,” “weapons of mass destruction,” “al Qaeda connections,” and “Iranian nukes.”

The economic catastrophe that the US faces is very real. But there is no awareness of this reality in Obama’s budget. The crux of Obamanomics is the assumption that the economy can run forever on consumer loans, if we can just get the banks to lend, and the federal government can run forever on loans from China, Japan,and Saudi Arabia.

Obama is requesting $130 billion for wars in Iraq and Afghanistan during 2010 plus a $75 billion supplemental request for the wars during 2009. This $205 billion is on top of $534 billion for the Pentagon in 2010, for total military spending of $739 billion.

The Chinese government’s budget shows China’s military spending at $59 billion in 2008. (The Pentagon claims Chinese military spending is between $97 billion and $139 billion.) Russia’s military spending in 2009 is projected to be about $50 billion.

In the midst of the greatest economic crisis in US history when trillions of dollars are being added to US national debt, Obama’s budget spends more on two pointless wars than the total military spending of China and Russia combined. Obama’s wars serve only the profits of the military/security complex and the promotion rate of military officers. The longer the wars continue, the larger the number of officers who can retire at higher ranks, thus further swelling future annual deficits and the national debt.

Moreover, as is becoming apparent, the Bush/Obama war in Afghanistan cannot be fought without fighting a war in Pakistan.

As if this isn’t enough war, Obama parrots Dick Cheney’s charge, totally unsupported by any evidence, that Iran is making nuclear weapons. The chances are high that the new White House Moron will have us at war in Afghanistan, Pakistan, Iran, and Iraq. As Obama’s wars expand, the $205 billion for war in Iraq and Afghanistan will become $400 billion annually and then $600 billion annually.

Obama’s “troop withdrawal” from Iraq has proved to be just another con job. Obama has announced that the withdrawal doesn’t include the 50,000 US soldiers who will remain in Iraq indefinitely--like the US troops that have been kept in Japan and Germany for 64 years and in Korea since the early 1950s,

Meanwhile Medicare is on the ropes. The latest Medicare trustees report says that Medicare’s funds for hospital payments will be exhausted in 10 years. To make ends meet, Obama proposes cutting payments to Medicare providers.

Obama’s plan is to make doctors and patients pay for Medicare. One way to get National Health is to make it uneconomic for private health care to service Medicare patients. Already many doctors will not accept Medicare patients because of the low payments, endless paperwork, and risk of prosecution for “over-billing.” Looking at one recent Medicare patient medical bill, Medicare and supplemental insurance paid 29 percent of the billed amount, requiring the doctor to eat 58.5 percent of his charges and the patient to pay 12.5 percent. The doctor was paid $93.16 on a $320.89 bill. And Obama wants to reduce payments to providers?

What is Obama thinking? A country that can’t afford Medicare can’t afford National Health. Medicare provides only for the elderly, and it provides very little. A person pays the Medicare tax as long as he earns and on the totality of earnings. For the rich the Medicare tax can exceed the cost of a gold-plated private insurance policy.

Basic Medicare leaves a person unprotected. To provide better coverage, it is necessary to enroll in Medicare Part B for which the premium is $308.30 per month or $3,699.60 per year. On top of this, a person needs a privately supplied supplemental policy to complete Medicare coverage. AARP’s policy, which, after deductibles are met, covers half of drug costs, cost the “Medicare protected” elderly $ 273.50 per month or $3,282 per year. The drug prescription plan passed by Congress costs the individual yet more.

The two supplements to Medicare cost the Medicare patient $6,981.60 per year. In addition, if the Medicare patient has much retirement income besides Social Security, he pays income tax on 85% of the $3,699.60 Medicare Part B premium as it is part of taxable Social Security, which for someone in the 25% bracket is another $925 dollars.

In the late 1970s, Democratic Senator Russell Long, Chairman of the Senate Finance Committee, told me that as Social Security was collected as a tax on wages and salaries, the US government had promised never to tax the benefits. So much for any commitment that the US government makes to the American people.

A top Social Security income, net of Medicare Part B premium, is $23,220 per year. Deduct the AARP policy, and the elderly who have paid in maximum Social Security taxes, get $20,000 per year. Of course, few Social Security retirees receive the maximum payment. AARP’s Public Policy Institute reports that in 2006 the average annual Social Security benefit for a retired worker was $12,372. Such a worker would have little left after paying the Medicare Part B premium and an additional premium for a supplement.

Offshoring and “free trade” have destroyed employer-provided health coverage for millions of employees. Private health care coverage can cost as much as one-third and even one-half of a person’s earned income, and some people are not insurable. National Health seems to be in the cards--only there is no money for it. All the money is being spent in pointless wars and on bailouts of financial fraud. The Obama budget puts bankster bailouts and pointless wars ahead of the health of the American people.

National Health advocates emphasize that a single-payer system is less expensive because it eliminates layers of profits. It is also less expensive for a less promising reason. Unless there is a parallel private health care system, National Health systems limit health spending to what is provided in the government budget. Over time, health care has to compete with everything else in the budget. Every part of the budget has its partisans and special interests. It is fantasy to assume that National Health will always be well funded. Just look at the state of the National Health Service in the UK.

Obama’s plan to tax the rich is another con job. Obama’s budget defines the rich as a person with a $250,000 before tax income. This is a rotten joke. The rich are the banksters, such as Hank Paulson with his $160 million annual bonus, and heads of hedge funds with their $1,000 million annual incomes. To confuse the struggling middle class with the real rich is criminal. A person with a $250,000 income before tax does not come close to being rich. Obama’s “tax the rich” scheme will devastate the upper middle class and leave the super rich undamaged.

The only change we have from Obama and the Democrats is for the worse. Bush’s FY 2008 budget deficit was $450 billion. The FY 2009 deficit is projected at $1.2 trillion. The budget deficit in Obama’s first budget is $1.75 trillion, a fourfold increase in two years.

Obama’s projected budget deficits are an understatement. For example, Obama’s budget assumes a less steep economic decline than the economy is experiencing, and it projects that war costs will drop to $50 billion annually beginning in 2011--this despite Obama sending more troops to Afghanistan and recent congressional testimony of Lt. General David Barno, former head of US forces in Afghanistan, who said the war in Afghanistan could last until 2025.

The “war on terror” will never end, because the moronic US government has defined everyone who resists US hegemony as a “terrorist.” The great danger to American civil liberty is that the US government regards as terrorists American citizens who realize that the neoconservative dream of American hegemony is a fantasy. As the Obama regime has not repealed the Bush regime rule-- “you are with us or against us”--Americans who oppose hegemonic war are lumped into the “against us” category.

There seems little chance that civil liberties will be restored. Obama and his “liberal” Justice (sic) Department have sided with Bush/Cheney on every important civil liberties issue. Yet, the ACLU sees “hope” in Obama’s rhetoric!

On February 21 Yahoo News reported: “President Barack Obama's administration has sided with predecessor George W. Bush on the rights of detainees at Bagram air base in Afghanistan, saying they cannot challenge their detention in US courts. In a two-sentence court filing Friday, the US Justice Department said "the government adheres to its previously articulated position" of denying habeas corpus rights to Bagram detainees, backing a similar decision by the Bush administration.”

“Earlier this month,” Yahoo News reports, “the Obama administration backed another Bush anti-terror policy when it urged a federal court to dismiss a lawsuit accusing Boeing Company of helping fly suspects to secret CIA detention centers overseas. The Justice Department said the case should be thrown out to protect state secrets.”

Do you remember the illegal spying? The US telecom industry succumbed to Bush regime pressure and broke the law together with President Bush. The illegal act made the US telecom industry subject to lawsuits, but the Bush regime placed its co-conspirators above the law.

Now Obama has sided with the Bush regime. On February 26, therawstory.com reported: “The Obama Justice Department continues to stand behind a Bush era law meant to prevent lawsuits against telecommunications companies accused of illegally sharing private customer information with intelligence agencies. In a brief filed late Wednesday obtained by Raw Story, the Department of Justice provided its views to Chief U.S. District Judge Vaughn Walker, after the San Francisco federal judge questioned the constitutionality of the wide-sweeping law and whether it gives the U.S. Attorney General too much power in deciding whether a company is immune from lawsuits after it has shared information with federal agents.”

On February 26 antiwar.com reported that the “new CIA director (Leon Panetta) declares nothing has changed, nothing will change.” Panetta declared that the US policy of conducting war on Pakistan’s sovereign territory “would continue.” The attacks, Panetta claimed, “have been successful.” For the CIA, claims of success equal legality. Did the Bush regime ever express greater arrogance and hubris?

With Rahm Israel Emanuel, an Israeli dual citizen, in charge of the White House and Obama’s schedule, Obama will have an even less independent foreign policy in the Middle East than Bush. Somehow someone among the Obamacons managed to put forward an appointment that could challenge the Israel Lobby’s stranglehold. Charles Freeman, former US ambassador to Saudi Arabia, former top Pentagon official, and president of the Middle East Policy Council, was chosen by Admiral Denis Blair, Director of National Intelligence, to head the National Intelligence Council.

The neocons went berserk. Steve Rosen, formerly of AIPAC, currently indicted as an Israeli spy, Gabriel Schoenfeld, who wants the New York Times indicted for allegedly violating the Espionage Act for reporting the Bush regime’s illegal spying, Daniel Pipes, who sees Muslim terrorists under every bed, Michael Rubin of the warmonger American Enterprise Institute, and Frank Gaffney, possibly the goofiest person in America, damned Freeman’s appointment as “deeply troubling,” because Freeman has an open mind on the Middle East situation.

In other words, if you are not on Israel’s side, you are disqualified. (Editor's emphasis throughout)

There is no more certain indication of continuing war in the Middle East on Israel’s behalf than for Freeman’s appointment to be blocked.

Pay close attention to this one. If Obama succumbs to the Israel Lobby and nixes Blair’s appointment of Freeman, the US will have to finance interminable wars on top of trillion dollar bailouts and massive unemployment.

The US might not even make it to 2012 before it is a banana republic.