Thread: Trillion-dollar business: US war spending spirals out contro

Trillion-dollar- business: US war spending spirals out of control

by Spencer Kimball
Global Research, August 3, 2011
Deutsche Welle

The heated debate over the US debt ceiling focused almost exclusively on cuts in social security and raising taxes. But a main item of government expenditure was hardly addressed at all: The rising cost of the wars.

For weeks a fierce political fight over government debt raged in Washington. Both parties agreed that a default had to be avoided and that the debt burden of the US must be addressed.

But while Republicans pushed for a steep reduction of government expenditures mainly through drastic cuts in social programs, Democrats wanted to tackle the issue mainly by increased taxes for the rich.

In their zeal to cut welfare programs and raise taxes both parties completely neglected one area of government spending that comes with a hefty sticker price: The cost of war.

Back in the winter of 2002, when the United States was still contemplating whether or not it would wage war against Saddam Hussein, President George W. Bush's key economic advisors estimated that an invasion would cost between $50 and $60 billion (35-41 billion euros).

With US troops scheduled to withdraw from Iraq by the end of 2011, the war there has cost a cumulative total of $806 billion over the past eight years, according to the non-partisan Congressional Research Service, dwarfing the Bush administration' s original projections.

Washington, however, has also spent a decade waging a counterinsurgency operation in Afghanistan and launching clandestine military strikes in Pakistan. A new study by Brown University entitled the "Costs of War" estimates that in total, when all is said and done, the United States will have spent between $3 and $4 trillion on foreign wars since the September 11, 2001 attacks.

"If you study the history of war, throughout the millennia those who have been in favor of going to war have always very substantially underestimated the costs in both blood and treasure," Linda Bilmes, coauthor of the book the "Three Trillion Dollar War," told Deutsche Welle.

"You had an administration where they were expecting a quick, cheap war."

Discount war

Lawrence Lindsey, director of the Bush administration' s National Economic Council, made an attempt to put a price tag on what regime change in Iraq would cost the United States in the autumn of 2002.

Lindsey estimated that a war in the Middle East would cost between $100 and $200 billion, or 1-2 percent of America's gross domestic product (GDP). He was subsequently let go, and the administration' s budget director, Mitchell Daniels, proposed a new figure of $50-$60 billion.

"He (Lindsey) was a very senior guy - the senior economist - so to essentially fire him over this was a substantially big move," said Bilmes, an expert on public finance with Harvard's Kennedy School of Government. "What it meant was that the group of people who were making this decision was a very closed group."

The Bush administration' s "shock-and-awe" campaign, which soundly defeated Saddam Hussein's decaying conventional military, turned into a grinding unconventional war of attrition that pitted Iraq's ethno-religious groups against each other with the US military stuck in the middle.

"They completely underestimated the entire situation," Bilmes said. "There was no plan for what might happen and what might be unleashed by invading Iraq."

So as the insurgency dragged on year after year, the costs of counterinsurgency - which were financed almost entirely through debt - began to add up.

"Three trillion dollars was the floor," Bilmes said. "It was the minimum that the war could cost."

"At this point we believe the war will cost between $4 and $6 trillion but there are many costs that can't be quantified."

Connecting the dots

The theater of the Iraq war, the Persian Gulf, is a critical supplier of world oil demand. Between 2001 and 2003, a barrel of oil cost $25 with futures markets predicting that the price would remain stable during the ensuing decade, according to Bilmes.

Political instability in Iraq, however, was one factor that caused a disruption in supply just as demand was rising due to the economic boom in India and China. By 2008, a barrel of oil - the lifeblood of the global economy - cost $140.

This quintupling of oil prices put a tremendous strain on the daily budget of the American consumer, pushing policymakers in Washington to take preventative measures to ease the burden of the war on the voter's wallet.

"The rising oil prices were one of the factors that contributed to the decision by the Federal Reserve to increase liquidity so much in the US economy," Bilmes said. "The increased liquidity was one of the factors that contributed to the housing bubble."

Human cost

In a time of limited economic resources, the price tag of the wars has become a growing focus of political attention among both the American people and their elected officials. But the human cost in terms of the dead, wounded and the long-term impact that these burdens have on communities and families remains underreported.

According to Brown University's report, approximately 225,000 people have been killed and 365,000 physically wounded in the conflicts in Iraq, Afghanistan and Pakistan since the September 11 attacks.

Neta Crawford, who authored the report's section on human costs, says that these numbers represent those people directly killed or wounded by bullets and bombs. Indirect deaths related to the disruption caused to infrastructure and health services as result of the wars are not included.

"The estimates from other conflicts are that between four and 15 times the number of people who die as a result of the bombs and bullets - the fire of war - die from these indirect effects," Crawford, a political science professor at Boston University, told Deutsche Welle. "It would not have been absurd to say instead of X number, it's four times that or 15 times that. We don't know."

The human cost, however, does not begin and end with the individual. Every death and physical wound has carried broader social costs that have strained families and communities throughout Central Asia, the Middle East, Europe and North America.

"Every person who has died who has made money for their family means their family is poorer," Crawford said. "Every death means that you have to pay funeral expenses. Everyone who is injured or maimed, you have to keep caring for them. It is a continued burden on the families of the survivors of the dead and wounded."

The benefits

The economic and human costs of the wars have been high. But do these costs outweigh the benefits? The Taliban and Saddam Hussein were driven from power. Afghanistan and Iraq are now trying to move toward economic and democratic development in regions that have a deficit of both.

"When you evaluate the cost and benefits of any major military undertaking, the benefits are difficult to ascertain but one thing you can do is look at the costs," Bilmes said.

"One of the things we felt was that the costs were ignored at the time," she continued. "They were not only ignored, but as the (Iraq) war went on they were deliberately suppressed."

With the wars officially winding down as the US moves ahead with its respective timetables for withdrawal in Iraq and Afghanistan, history will ultimately judge whether those campaigns were a worthy investment of life and resources. The costs, however, will continue to accumulate even after the last rifle is silenced.

"We don't think about the fact that wars don't end when the fighting stops," Crawford said. "There's a long-term strain on relationships and on individuals in their bodies. The war is written into their bodies as ill health that continues after the fighting stops."


http://www.globalresearch.ca/index.php? ... &aid=25880

The Debt Crisis and the War Economy: Pentagon Purchases $23 Billion Worth Of Global Hawk Drones

Global Research, August 4, 2011

US buys most expensive drones ever

With $14 trillion in the hole and a slew of wars seemingly no one wants America to be in, what better way for the United States to spend their money by putting $23 billion into spy planes?

The US will drop billions on defense spending with the purchasing of 55 Global Hawk drone planes over the next few years. Each of the four dozen-plus spy crafts comes at a price tag of $218 million apiece — ten times the price of the largest armed attack drone.

Global Hawk drones are capable of flying twice as high as commercial aircraft and can spot insurgents up to 100 miles away. Once identified, the robotic crafts that are controlled from 24-hour command stations can then send images to intelligence centers or directly to troops.

The Global Hawk drones will replace the U-2 spy planes that the States currently deploys, which the US has relied on since the dawn of the Cold War. Sending unmanned aircrafts into warzones, while grossly expensive, comes as an attempt to limit fatalities by avoiding putting extra troops into danger. Though relying on on-board navigation, those U-2 flyers have proved effective over the last half-century, recently assisting in operations in Afghanistan

A team of 50 engineers will slave over the construction of the Global Hawk drones in a Palmdale, California warehouse.

The US Air Force will invest $12 billion towards the initiative, with the Navy offering almost as much to have their own versions of the Global Hawks.

And, in case you didn’t hear, lawmakers just spent months trying to figure out how to keep the country from defaulting. The town of Central Falls, Rhode Island (the entire town) is currently in bankruptcy court, and the most populous county in Alabama is expected to join them in the coming weeks.


http://www.globalresearch.ca/index.php? ... &aid=25894

"Beachhead for an Attack on Iran": NATO is planning a Military Campaign against Syria



Global Research, August 5, 2011

NATO plans campaign in Syria, tightens noose around Iran - Rogozin

MOSCOW: NATO is planning a military campaign against Syria to help overthrow the regime of President Bashar al-Assad with a long-reaching goal of preparing a beachhead for an attack on Iran, Russia's envoy to NATO Dmitry Rogozin said.

The UN Security Council condemned on Wednesday ongoing violence in Syria and urged the country's authorities to stop using force against peaceful protesters, while saying the current situation in the country has not yet called for NATO interference.

"[This statement] means that the planning [of the military campaign] is well underway. It could be a logical conclusion of those military and propaganda operations, which have been carried out by certain Western countries against North Africa," Rogozin said in an interview with the Izvestia newspaper published on Friday.

The Russian diplomat pointed out at the fact that the alliance is aiming to interfere only with the regimes "whose views do not coincide with those of the West."

Rogozin agreed with the opinion expressed by some experts that Syria and later Yemen could be NATO's last steps on the way to launch an attack on Iran.

"The noose around Iran is tightening. Military planning against Iran is underway. And we are certainly concerned about an escalation of a large-scale war in this huge region," Rogozin said.

Having learned the Libyan lesson, Russia "will continue to oppose a forcible resolution of the situation in Syria," he said, adding that the consequences of a large-scale conflict in North Africa would be devastating for the whole world.

http://www.globalresearch.ca/index.php? ... &aid=25902

"Blanket of Darkness" over Tripoli. NATO Targets Electricity Generation. Launches Psychological Attacks

Global Research report from Libya
by Mahdi Darius Nazemroaya
Global Research, August 7, 2011

TRIPOLI, Global Research. August 7, 2011 - The NATO bombardment of Libya continues relentlessly. More than 6,600 aerial bombings have been conducted against Libya. NATO is also coordinating terrorist attacks conducted by “rebels forcesâ€

Military Superpower and "Money Printer In Chief ": America Loses AAA Credit Rating....

by Washington's Blog
Global Research, August 6, 2011
Washington's Blog

We Americans have always thought we were different.

We thought we could launch unnecessary, imperial wars worldwide ...

While we slashed taxes for the wealthy and big corporations
While we threw trillions at our big banks
We thought that somehow we could get away with spending like a drunken sailor, while not doing anything to stabilize our economy (which in turn deepened our debt even further).

We were wrong. See this, http://www.washingtonsblog.com/2011/04/ ... ok-to.html
this, http://www.washingtonsblog.com/2011/07/ ... s-and.html
and this. http://www.nakedcapitalism.com/2011/08/ ... aters.html

America Loses AAA Credit Rating

Today, one of the big 3 rating agencies - Standard & Poor's - downgraded America's credit from AAA to AA+ ... http://news.yahoo.com/p-reconsidering-u ... 07261.html and put the U.S. on negative outlook for a potential further downgrade in 12 to 18 months.

S&P has been warning this might happen for years.
http://www.reuters.com/article/2008/09/ ... 6920080917

As Reuters reported in 2008:

The $85 billion bailout of AIG on Tuesday by the U.S. Federal Reserve "has weakened the fiscal profile of the United States," S&P's John Chambers told Reuters in an interview.

"Lack of a pro-active stance could have resulted in further financial stress and put pressure on the U.S. triple-A rating," Chambers said. "There's no God-given gift of a 'AAA' rating, and the U.S. has to earn it like everyone else."

And as I noted the same year: http://www.washingtonsblog.com/2008/11/ ... ating.html

A September 18 article in Bloomberg raised the possibility of a credit downgrade for the U.S.: http://www.bloomberg.com/apps/news?pid= ... RPsaQU9ybY

America's credit "profile is now weaker because contingent risks have become actual risks to the U.S. government,'' said John Chambers, managing director of sovereign ratings at Standard & Poor's in New York.

In fact, Standard & Poor's raised a possible downgrade of U.S. credit back in April. An article in Marketwatch explained: http://www.marketwatch.com/news/story/g ... MidSection

The performance of government-sponsored enterprises like Fannie Mae could have a direct impact on the national economy and more importantly, the credit standing of the U.S., Standard & Poor's said Monday.

Fannie and Freddie, which enjoy implicit government guarantees, could cause the U.S. to lose its sterling triple-A rating if the government were forced to come to their rescue, the ratings agency said in a report.

"Even though...credit damage from GSEs is unlikely, the greater risk to the U.S. lies with them than with broker-dealers," S&P noted.

The demise of Bear Stearns Cos. - and the Federal Reserve's extraordinary efforts to alleviate strains at broker dealers - has captured the attention of market participants who feared that the financial system would seize up last month.

S&P, however, noted that while this credit crunch has caused financial markets to swoon, it hasn't threatened the standing of the nation's credit quality upon which U.S. Treasurys and the debt priced off this government debt depend.

But should a protracted recession cause Fannie and Freddie to buckle, S&P said, the U.S. rating would be in danger.

Of course, Fannie and Freddie did buckle, and the government was forced to take them over. Indeed, even after the takeover, Fannie just announced a $29 billion dollars loss. http://www.cnbc.com/id/27647296 In many other ways, the health of the U.S. economy is much worse than it was in April, and the U.S. is spending literally trillions of dollars it doesn't have on corporate bailouts.

A 2005 article in Lew Rockwell http://www.lewrockwell.com/englund/englund18.html called "Should the US Government’s Sovereign Credit Rating be Downgraded to Junk?" provides some details of how credit rating agencies assign credit ratings to countries:

When examined objectively, one could make the case that Uncle Sam’s sovereign credit rating should be downgraded ....

The article then analyzes the U.S. economy using 8 traditional credit-rating factors, and concludes that the U.S. has performed abysmally in all 8: Having gone through all eight variables, it should be obvious that both Moody’s and Standard & Poor’s have grossly overrated America’s sovereign debt – it doesn’t merit the top grade of AAA. In variables such as default history, inflation, external balance, external debt, and economic development, the U.S. should rate significantly lower than does Japan – and should rate worse in many variables as compared to a developing country such as Botswana.

So why hasn't America's credit rating been downgraded?

Well, a report by Moody's in September states:
"In superficially similar circumstances, the ratings of Japan and some Scandinavian countries were downgraded in the 1990s.

For reasons that take their roots into the large size and wealth of the economy and, ultimately, the US military power, the US government faces very little liquidity risk — its debt remains a safe heaven. There is a large market for even a significant increase in debt issuance."

So Japan and Scandinavia have wimpy militaries, so they got downgraded, but the U.S. has lots of bombs, so we don't? In any event, American cannot remain a hyperpower if it is broke.

Any way you look at it, America's credit rating will be downgraded. Its just a question of when.

Other Rating Agencies Also Downgrade U.S. Debt

Another American government-endorsed rating agency - Egan-Jones - downgraded U.S. credit last month. http://www.washingtonsblog.com/2011/07/ ... ating.html

And large German http://www.zerohedge.com/article/german ... nds-aaa-aa

and Chinese rating agencies have also downgraded U.S. credit. http://www.cnn.com/2011/BUSINESS/08/02/ ... 1&iref=NS1

Moody's Playing Games

While Moody's hasn't yet downgraded U.S. debt, it has gone to extraordinary lengths to play games to keep the AAA label. As I pointed out in 2009:

Instead of downgrading the sovereign credit ratings of the U.S. and the UK, Moody's is instead playing games.

Remember, Moody's is one of the credit rating agencies which "sold their soul to the devil for revenue'', http://georgewashington2.blogspot.com/2 ... e-but.html fraudulently inflating the ratings of failing corporations.

Moody's has just created 3 subcategories of AAA sovereign debt, http://econompicdata.blogspot.com/2009/ ... t-not.html with the highest subcategory - "resistant" - being reserved for Germany, France, Canada and the four Scandinavian countries.

The U.S. and UK are placed a notch down in the "resiliant" category.

http://www.globalresearch.ca/index.php? ... &aid=25913

Pakistan TV Report Contradicts US Claim of Bin Laden’s Death

by Dr. Paul Craig Roberts
Global Research, August 6, 2011

In my recent article, “Creating Evidence Where There Is None,â€

This is what that war spending inflation might look like on a chart. This one was made by Robert Sahr. Actually it accounts for all inflation based on the Consumer Price Index. The early wars do make it stand out.

http://oregonstate.edu/cla/polisci/node/87



See the little bumps. They were early times of war when we introduce fiat money in with the real currency in circulation. When you double the supply you cut each dollars value in half.

It now appears they are at war with all of us.

The following picture should give you the basics on how the counterfeiting cuts into you Aunt Martha's savings no matter where she has the cookie jar hid with her savings in it. They creep in like vampires in the night.



See it?

We have a situation where no matter how much real money people can put together to build their countries the way they want there are those that can print up what ever it takes to get their way.

That is why when you stop them and think they are beaten they rise back up like to scary guys in the science fiction movies ready to get you again as soon as your busy with something else or naked or something.

They have an unlimited supply of money.

YOURS!!!!!

'NATO planning military attack on Iran'

Sat Aug 6, 2011 10:2AM GMT
Comments (149)


Russia's envoy to NATO Dmitry Rogozin

Russia's envoy to NATO Dmitry Rogozin says the NATO is planning a military strike against the Islamic Republic to overthrow the Iranian government.

Rogozin said in an interview with Russia's Izvestia daily newspaper published on Friday that the NATO was pursuing a long-reaching goal of preparing an attack on Iran, adding that the alliance intends to change governments whose views do not coincide with those of the West.

"The noose around Iran is tightening. Military planning against Iran is underway. And we are certainly concerned about an escalation of a large-scale war in this huge region," Rogozin added.

The Russian envoy further pointed out that Syria and later Yemen could be NATO's last steps on the way to launch an attack on Iran.

This comes as there are speculations that Israel is preparing for an attack on Iran's nuclear facilities to divert attention from Palestinian efforts to join the United Nations.

Last month, former CIA agent Robert Baer said he is almost certain that such an attack has been scheduled for September ahead of a UN vote on recognizing a Palestinian state.

AR/HRF

http://www.presstv.ir/detail/192596.html

Russia, China to stage joint naval exercise

08/06/2011 06:57 AM ET

Moscow, Aug 05, 2011 (BBC Monitoring via COMTEX) -- Russia and China on Thursday [4 August] agreed to stage joint naval exercises.

The agreement came at talks held in Moscow between Nikolai Makarov, chief of the General Staff of Russian Federal Armed Forces, and Chen Bingde, chief of the General Staff of the Chinese People's Liberation Army.

The two sides also agreed to continue reciprocal cooperation in fields of national defence and military technology.

Source: KCNA website, Pyongyang, in English 0810gmt 05 Aug 11

BBC Mon AS1 ASDel vp

BBC Monitoring. Copyright BBC.

http://www.investors.com/NewsAndAnalysi ... rcise.aspx