War Abroad and Poverty at Home
By Paul Craig Roberts
http://www.informationclearinghouse.info/article19977.htm
23/05/08 "ICH"
-- - The US Senate has voted $165 billion to fund Bush’s wars of aggression
against Afghanistan and Iraq through next spring.
As the US is broke and deep in debt, every one of the $165 billion dollars will
have to be borrowed. American consumers are also broke and deep in debt. Their
zero saving rate means every one of the $165 billion dollars will have to be
borrowed from foreigners.
The “world’s only superpower” is so broke it can’t even finance its own wars.
Each additional dollar that the irresponsible Bush Regime has to solicit from
foreigners puts more downward pressure on the dollar’s value. During the eight
wasted and extravagant years of the Bush Regime, the once mighty US dollar has
lost about 60% of its value against the euro.
The dollar has lost even more of its value against gold and oil.
Before Bush began his wars of aggression, oil was $25 a barrel. Today it is $130
a barrel. Some of this rise may result from run-away speculation in the futures
market. However, the main cause is the eroding value of the dollar. Oil is real,
and unlike paper dollars is limited in supply. With US massive trade and budget
deficits, the outpouring of dollar obligations mounts, thus driving down the
value of the dollar.
Each time the dollar price of oil rises, the US trade deficit rises, requiring
more foreign financing of US energy use. Bush has managed to drive the US oil
import bill up from $106 billion in 2006 to approximately $500 billion 18 months
later--every dollar of which has to be financed by foreigners.
Without foreign money, the US “superpower” cannot finance its imports or its
government’s operation.
When the oil price rises, Americans, who are increasingly poor, cannot pay their
winter heating bills. Thus, the Senate’s military spending bill contains more
heating subsidies for America’s growing legion of poor people.
The rising price of energy drives up the price of producing and transporting all
goods, but American incomes are not rising except for the extremely rich.
The disappearing value of the US dollar, which pushes up oil prices and raises
the trade deficit, then pushes up heating subsidies and raises the budget
deficit.
If oil was the reason Bush invaded Iraq, the plan obviously backfired. Oil not
merely doubled or tripled in price but quintupled.
America’s political leaders either have no awareness that Bush’s wars are
destroying our country’s economic position and permanently lowering the living
standards of Americans or they do not care. McCain says he can win the war in
Iraq in five more years and in the meantime “challenge” Russia and China.
Hillary says she will “obliterate” Iran. Obama can’t make up his mind if he is
for war or against it.
The Bush Regime’s inability to pay the bills it is piling up for Americans means
that future US governments will cut promised benefits and further impoverish the
people. Over a year ago The Nation reported that the Bush Regime is shedding
veteran costs by attributing consequences of serious war wounds to “personality
disorders” in order to deny soldiers promised benefits.
Previous presidents reduced promised Social Security benefits by taxing the
benefits (a tax on a tax) and by rigging the cost of living adjustment to
understate inflation. Future presidents will have to seize private pensions in
order to make minimal Social Security payments.
Currently the desperate Bush Regime is trying to cut Medicaid health care for
the poor and disabled.
The Republican Party is willing to fund war, but sees everything else as an
extravagance. The neoconized war party is destroying the economic prospects of
American citizens. Is “war abroad and poverty at home” the Republican campaign
slogan for the November election?