- Tent cities springing up all over America are filling
with the homeless unemployed from the worst economy since the 1930s. While
Americans live in tents, the Obama government has embarked on a $1 billion
crash program to build a mega-embassy in Islamabad, Pakistan, to rival
the one the Bush government built in Baghdad, Iraq.
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- Hard times have now afflicted Americans for so long that
even the extension of unemployment benefits from 6 months to 18 months
for 24 high unemployment states, and to 46 - 72 weeks in other states,
is beginning to run out. By Christmas 1.5 million Americans will have exhausted
unemployment benefits while unem- ployment rolls continue to rise.
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- Amidst this worsening economic crisis, the House of Representatives
just passed a $636 billion "defense" bill.
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- Who is the United States defending against? Americans
have no enemies except those that the US government goes out of its way
to create by bombing and invading countries that comprise no threat whatsoever
to the US and by encircling others--Russia for example-- with threatening
military bases.
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- America's wars are contrived affairs to serve the money
laundering machine: from the taxpayers and money borrowed from foreign
creditors to the armaments industry to the political contributions that
ensure $636 billion "defense" bills.
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- President George W. Bush gave us wars in Iraq and Afghanistan
that are entirely based on lies and misrepresentations. But Obama has
done Bush one better. Obama has started a war in Pakistan with no explanation
whatsoever.
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- If the armaments industry and the neoconservative brownshirts
have their way, the US will also be at war with Iran, Russia, Sudan and
North Korea.
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- Meanwhile, America continues to be overrun, as it has
been for decades, not by armed foreign enemies but by illegal immigrants
across America's porous and undefended borders.
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- It is more proof of the Orwellian time in which we live
that $636 billion appropriated for wars of aggression is called a "defense
bill."
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- Who is going to pay for all of this? When foreign countries
have spent their trade surpluses and have no more dollars to recycle into
the purchase of Treasury bonds, when US banks have used up their "bailout"
money by purchasing Treasury bonds, and when the Federal Reserve cannot
print any more money to keep the government going without pushing up inflation
and interest rates, the taxpayer will be all that is left.
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- Already Obama's two top economic advisors, Treasury Secretary
Timothy Geithner and director of the National Economic Council Larry Summers,
are floating the prospect of a middle class tax increase. Will Obama be
maneuvered away from his promise just as Bush Sr. was?
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- Will Americans see the disconnect between their interests
and the interests of "their" government? In the small town of
Vassalboro, Maine, a few topless waitress jobs in a coffee house drew 150
applicants. Women in this small town are so desperate for jobs that they
are reduced to undressing for their neighbors' amusement.
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- Meanwhile, the Obama government is going to straighten
out Afghanistan and Pakistan and build marble palaces to awe the locals
half way around the world.
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- The US government keeps hyping "recovery" the
way Bush hyped "terrorist threat" and "weapons of mass destruction."
The recovery is no more real than the threats. Indeed, it is possible
that the economic collapse has hardly begun. Let's look at what might
await us here at home while the US government pursues hegemony abroad.
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- The real estate crisis is not over. More home foreclosures
await as unemployment rises and unemployment benefits are exhausted. The
commercial real estate crisis is yet to hit. More bailouts are coming,
and they will have to be financed by more debt or money creation. If there
are not sufficient purchasers for the Treasury bonds, the Federal Reserve
will have to purchase them by creating checking accounts for the Treasury,
that is, by debt monetization or the printing of money.
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- More debt and money creation will put more pressure on
the US dollar's exchange value. At some point import prices, which include
offshored goods and services of US corporations, will rise, adding to the
inflation fueled by domestic money creation. The Federal Reserve will
be unable to hold down interest rates by buying bonds.
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- No part of US economic policy addresses the systemic
crisis in American incomes. For most Americans real income ceased to grow
some years ago. Americans have substituted second jobs and debt accumu-
lation for the missing growth in real wages. With most households maxed
out on debt and jobs disap- pearing, these substitutes for real income
growth no longer exist.
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- The Bush-Obama economic policy actually worsens the systemic
crisis that the US dollar faces as reserve currency. The fact that there
might be no alternative to the dollar as reserve currency does not guarantee
that the dollar will continue in this role. Countries might find it less
risky to settle trade transactions in their own currencies.
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- How does an economy based heavily on consumer spending
recover when so many high-value-added jobs, and the GDP and payroll tax
revenues associated with them, have been moved offshore and when consumers
have no more assets to leverage in order to increase their spending?
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- How does the US pay for its imports if the dollar is
no longer used as reserve currency?
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- These are the unanswered questions.
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-
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- Paul Craig Roberts, a former Assistant Secretary of the
US Treasury and former associate editor of the Wall Street Journal, has
held numerous academic appointments. He has been reporting shocking cases
of prosecutorial abuse for two decades. A new edition of his book, The
Tyranny of Good Intentions, co-authored with Lawrence Stratton, a documented
account of how Americans lost the protection of law, was published by Random
House in March, 2008.
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