Posted on 10/14/2008 6:10:11 AM PDT by K-oneTexas
Liquidating the Empire
"Liquidate labor, liquidate stocks, liquidate the farmers."
So Treasury Secretary Andrew Mellon advised Herbert Hoover in the Great Crash of '29.
Hoover did. And the nation liquidated him -- and the Republicans.
In the Crash of 2008, 40 percent of stock value has vanished, almost $9 trillion. Some $5 trillion in real estate value has disappeared. A recession looms with sweeping layoffs, unemployment compensation surging, and social welfare benefits soaring.
America's first trillion-dollar deficit is at hand.
In Fiscal Year 2008 the deficit was $438 billion.
With tax revenue sinking, we will add to this year's deficit the $200 to $300 billion needed to wipe the rotten paper off the books of Fannie and Freddie, the $700 billion (plus the $100 billion in add-ons and pork) for the Wall Street bailout, the $85 billion to bail out AIG, and $37 billion more now needed, the $25 billion for GM, Chrysler and Ford, and the hundreds of billions Hank Paulson will need to buy corporate paper and bail out banks to stop the panic.
As Americans save nothing, where are the feds going to get the money? Is the Fed going to print it and destroy the dollar and credit rating of the United States? Because the nations whose vaults are full of dollars and U.S. debt -- China, Japan, Saudi Arabia, the Gulf Arabs -- are reluctant to lend us more. Sovereign wealth funds that plunged billions into U.S. banks have already been burned.
Uncle Sam's VISA card is about to be stamped "Canceled."
The budget is going to have to go under the knife. But what gets cut?
Social Security and Medicare are surely exempt. Seniors have already taken a huge hit in their 401(k)s. And as the Democrats are crafting another $150 billion stimulus package for the working poor and middle class, Medicaid and food stamps are untouchable. Interest on the debt cannot be cut. It is going up. Will a Democratic Congress slash unemployment benefits, welfare, education, student loans, veterans benefits -- in a recession?
No way. Yet, that is almost the entire U.S. budget -- except for defense, the wars in Afghanistan and Iraq, and foreign aid. And this is where the axe will eventually fall.
It is the American Empire that is going to be liquidated.
Retrenchment has begun with Bush's backing away from confrontations with Axis-of-Evil charter members Iran and North Korea over their nuclear programs, and will likely continue with a negotiated peace in Afghanistan. Gen. Petraeus and Secretary Gates are already talking "reconciliation" with the Taliban.
We no longer live in Eisenhower or Reagan's America. Even the post-Cold War world of George H. W. Bush, where America was a global hegemon, is history. In both relative and real terms, the U.S.A. is a diminished power.
Where Ike spent 9 percent of GDP on defense, Reagan 6 percent, we spend 4 percent. Yet we have two wars bleeding us and many more nations to defend, with commitments in the Baltic, Eastern Europe, and the Balkans we did not have in the Cold War. As U.S. weapons systems are many times more expensive today, we have fewer strategic aircraft and Navy ships than Ike or Reagan commanded. Our active-duty Army and Marine Corps consist of 700,000 troops, 15 percent women, and a far higher percentage of them support rather than combat troops.
With so few legions, we cannot police the world, and we cannot afford more. Yet, we have a host of newly hostile nations we did not have in 1989.
U.S. interests in Latin America are being challenged not only by Cuba, but Venezuela, Bolivia, Ecuador, Nicaragua and Honduras. Brazil, Argentina and Chile go their own way. Russia is reasserting hegemony in the Caucasus, testing new ICBMs, running bomber probes up to U.S. air space. China, growing at 10 percent as we head into recession, is bristling over U.S. military sales to Taiwan. Iran remains defiant. Pakistan is rife with anti-Americanism and al-Qaida sentiment.
The American Empire has become a vast extravagance.
With U.S. markets crashing and wealth vanishing, what are we doing with 750 bases and troops in over 100 countries?
With a recession of unknown depth and duration looming, why keep borrowing billions from rich Arabs to defend rich Europeans, or billions from China and Japan to hand out in Millennium Challenge Grants to Tanzania and Burkina Faso?
America needs a bottom-up review of all strategic commitments dating to a Cold War now over for 20 years.
Is it essential to keep 30,000 troops in a South Korea with twice the population and 40 times the wealth of the North? Why are McCain and Obama offering NATO memberships, i.e., war guarantees against Russia, to a Georgia run by a hothead like Mikheil Saakashvili, and a Ukraine, millions of whose people prefer their kinship to Russia to an alliance with us?
We must put "country first," says John McCain.
Right you are, Senator. Time to look out for America first.
Pat can go back under his rock and stay there, and the sooner the better.
I've seen Obama respond to this -- it is enlightening. The question: What would you cut?
The answer: I would invest in higher salaries for teachers. I would invest in roads and bridges. I would invest in people by cutting taxes for anyone who wasn't rich. I would invest in Green technology. I would invest in health care, offering expanded beenfits for all.
And millions of people are thinking this guy has the right approach. He doesn't have anything at all.
Deficits don’t matter we gonna spend, spend, spend.
Its hard to face the facts.
Thanks.
Take a look at the shift in investment policies of some of the major investment funds, like those of the public employees. Where have they chosen to redeploy their investments? Outside of the USA! The country is being bled dry! Check out California's policy, for instance....
Its denial. It needs a 10 step process.
Saw the word “empire,” guessed it was a Buchanan screed ... and I was right.
Finally an accurate prediction.
Mr, Buchanan is 100% correct. And you can change that Wall Street Journal subscription to the Farmers Almanac. You will be needing it to plant your home gardens to survive.
Got guns? You will be needing those to defend your market garden. That is the new paragigm, and it applies now to almost every facet of American life.
The wheel of history has turned.
And Obama doesn't even khow it, but John McCain does.
Buchanan has failed to mention that we no longer have the ability, as Obama wants to do, to dedicate 7% of the US annual GNP to "foreign aid." Obama now lives in a world where his " Hope & Change " has been irrevocably destroyed by the very affirmative action mortgages he and his Acorn mavins so actively touted and forced on America.
Obama and his ivy league cadre of party organizers have just become the victims of Charles Darwin's theory of Evolution, and now have become dinosaurs in the process of extinction. Their party's ciminal largesse begs accountability, but will America ever figure it out?
We shall see.
How about we liquidate . . . wait, that might be construed as a threat.
another depressing screed from pat.
eisenhower did not have technological multiplier that we have today.
Simple, nations that want our support are going to have to pay more, either for their own defense, or for us to do the job. They don’t have good options otherwise, and while they’ll whine, in the end, they’ll pay, one way, or another. That’s what Pat has wrong, fundamentally. There are a number of ways where we can cut off the free riders, without harming ourselves.
Pat's problem is that he sees everything through the lens of his 1930s-era America First heroes. And thus his "answer" to the financial crisis is the same as it is for all of his other hobby horses to pull back all of our military forces ...
The problem with that, of course, is the same one that characterized the myopic idiocy of his ideological forebears: the rest of the world is still out there, and we will be forced to deal with the bad guys one way or another.
We learned after WWII that it is better to be proactive -- we won the cold war because of it. It doesn't mean the US always acts properly, but Buchanan's basic strategy of "not acting" toward threats, has had demonstrably disastrous results.
So the problem with THIS article is the same as with most of what Pat writes: it's stupid and short-sighted.
Tell you what Larry, there are MANY things we can do here at home to help our economy, even if the current volatility (I refuse to call it a crisis, because what is being done, is people are being herded) doesn’t subside. Newt had it right - 1) cut corporate tax rates (we should actually see a rise in tax receipts) 2) cut capital gains taxes so that owners can effectively allocate their resources 3) repeal Sarb-Ox, it hasn’t done shit and costs a lot 4) repeal quite a number of useless government regulations - and they exist 5) drill and mine here, now, and so on.
“the same as with most of what Pat writes: it’s stupid and short-sighted.”
Yep. Spot on.
Yep, yep, yep, and yep.
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