Christopher Ketcham, in his essay "Trends
for Downsizing the US: The Bright Side of the
Panic of '08", notes former Central Intelligence
Agency consultant Chalmers Johnson addressing the
"folly" of "military Keynesianism", which is
defined as "devotion to militarism, weapons and
warfare as fiscal stimulus".
I bring this
up not because I, as a gun-nut, gold-bug, paranoid
lunatic have spent a fortune on weapons but yet am
still outgunned by the local police and the
US military, all thanks to the government's
capriciously arbitrary, unwritten "rule" that
citizens cannot own nuclear weapons for "home
defense", but because President George W Bush has
unveiled his new budget, which is a whopping
US$3.1 trillion, has $400 billion of deficits from
the get-go, and sports some big increases in its purchases
of
military ordnance.
Now, add in another
$600 billion or so of additional federal
"emergency appropriations" spending as we go
through the coming year, and suddenly we are
talking close to $4 trillion!
Agora
Financial's 5-Minute Forecast notes that Bush, "is
now responsible for the first $2 trillion (2002)
and $3 trillion (2009) government budgets ....
which is nothing short of incredible. It took his
predecessors 200 years to reach the first $1
trillion in 1987."
They then quote Paul
O'Neill, former Treasury Secretary of the United
States, saying in their movie, I.O.U.S.A.,
"These are not insignificant changes. These are
monumental changes."
Oddly, O'Neill says,
"When you're no longer able to service your debt,
you're finished." Well, this is true for mere
mortals like you and me, but for a government that
embraces a fiat currency and a central bank that
will multiply money at will, this is not a
problem, and it never will be; they can get all
the money the need, and all the money they want,
anytime they want! Hell, they could pay off the
national debt in one day if they wanted to! Ha ha
ha!
For me, it's all about the money and
how all of this spending will be accomplished by a
brain-dead Federal Reserve creating the money out
of thin air so that the government can borrow it,
and how all of this money will drive the national
debt up more and devalue the dollar even more,
which makes consumer prices go up, and then I have
to spend a lot more of my Valuable Mogambo Time
(VMT) answering the phone and listening to my
brothers and sisters and mom and dad and aunts and
uncles wanting to borrow some money from me
because prices are so high that they cannot afford
any food, and I tell them, "Well, sell some of
your gold that I have been yelling at you to buy
for years and years!" and they say that they
didn't buy any, but they wish they had, and then I
tell them, "Well, similarly I am not going to give
you any money, but I will wish I had! How about
that, moron?"
But the worse news is that
this "military Keynesianism", which is "a policy
embraced with equal fervor by both parties in
Congress", will not even work. Instead, he figures
that it "will speed the country to moral, fiscal
and political bankruptcy. To grasp the horror of
military Keynesianism, consider this statistic: By
1990, production for the Department of Defense
amounted to 83% of the value of all manufacturing
plants and equipment in the US. Only 17% of the US
manufacturing base actually made products not
meant to kill." Yikes! And that was 18 years ago,
during which time it has gotten worse!
If
there is one good thing that could come out of
this recession, it is that violence could subside
around the world. The way I see it, the squeaky
wheel gets the grease, and so constantly making a
fuss these days means that the United States will
come waltzing in and give everybody some money,
armaments and pretty promises if everyone agrees
to make nice, which they promise to do, which
makes the USA look good and everybody struts
around, and they are nice for about a week until
the money and armaments start running low again,
and then it will be time to escalate some violence
so that the United States will come riding in to
give them all some more money and armaments to
make nice.
But with a recession, maybe the
United States will finally be forced to say,
"Screw that!", and maybe people would stop acting
like such murderous, barbaric buttheads and get
down to the business of education and creating a
real economy ...
... Like that is going to
happen! Ha ha ha ha! Ugh.
The Mogambo Sez:
If you have not bought enough gold, silver and oil
stocks yet (and in the larger sense, does anybody
ever have enough of any of them?), then Fate has
smiled upon you, as the recent downdrafts in their
prices are a chance to "buy low", which means that
you will get a chance to "sell high" that much
sooner!
And if you don't think so, and you
do not do so, then just stick around for a while.
You are going to get a real education, and, as the
saying goes, "With a whack to remember it by"!
Richard Daughty is general
partner and COO for Smith Consultant Group,
serving the financial and medical communities, and
the editor of The Mogambo Guru economic newsletter
- an avocational exercise to heap disrespect on
those who desperately deserve
it.
Republished with permission from The Daily Reckoning.
Copyright 2008, The Daily Reckoning.
(Copyright 2008 Asia Times Online Ltd. All
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