What, just the pair...?!
The U.S. EMPIRE had probably reached its sell-by date by January 2000, writes Bill Bonner in his Diary of a Rogue Economist.
Bad money, bad policies, and the Deep State had already sent the empire into a decline.
Then, two disastrous decisions sealed the deal.
The first was George W.Bush's misbegotten War on Terror. Now in its nineteenth year, the bill has reached $6 trillion so far, with still no plausible victory in sight. As many as 1 million people have died...and Iraq is in shambles...
Now, the ingrates want to kick us out.
But our President is standing up for American interests. He says he won't leave until the Iraqis pay for the military bases we leave behind. If and when we go, we will also leave Iraqis bankrupt, with hundreds of thousands of ruined shops, houses and factories...a civil war...and millions of unexploded bombs and IEDs throughout the country.
"Thanks a lot," they will say, as they wave goodbye with the stumps of what were their right arms.
But another casualty is never mentioned. Endless, pointless wars damage aggressors as well as their victims.
The latter show the mutilations and scars of war. But the former corrode from the inside out...
In a prosperous, civil society, win-win-deals between consenting adults add to the wealth of the country. People say please and thank you, happy to exchange favors with one another.
And the government – with its naked, win-lose power – is held in check by culture, constitutions, checks and balances...and most important, by a scarcity of resources. It may want to conquer the world; but it lacks the wherewithal.
A war society is a different matter. It is win-lose all the way...and claims almost unlimited resources for the war effort.
People come to believe that they can only win by making someone else lose. They celebrate the cult of the "warrior." Their soldiers are protecting them, they believe. They say special prayers in church for the "fighting men and women...and their families." Airlines provide early boarding for soldiers in uniform. And no member of Congress dares to oppose military spending...because "we have to support our troops."
And then, as more resources are dragooned into the war effort, less remains for the win-win economy. People get poorer. But they don't blame themselves. They blame the enemy!
Finally, the sword that they live by goes limp. Their billion-Dollar battleships are sunk by swarms of cheap missiles. Their state-of-the-art fighter planes are grounded by computer bugs. The troops come home in disgrace and shame, and ditch their uniforms as fast as possible.
But here, we are just guessing about the future. We are only about 20 years into the decline of the Empire...this is only the beginning of the end, in other words, with a long way to go.
And today, we take up the other most bone-headed, society-destroying mistake of the 21st century.
We're talking about money. When the money goes, everything goes. You can quote us on that.
In the panic of the crisis of '08-'09, for example, Ben Bernanke, the Federal Reserve, Congress, leading economists, Republicans, Democrats – and almost everyone else – lost his mind.
Bernanke stood before Congress on Thursday, September 18, 2008, and told the clowns the most preposterous thing: "If we don't do this," he said, "we may not have an economy on Monday." And nobody laughed.
With Bernanke's urging and guidance, the feds had the "courage to act"...like morons. They went to the pumps...adding trillions of new money into the economy over the following ten years. And while, today, America's money world seems in decent shape on the outside, on the inside it is rotting.
Stocks are at all-time highs, but only because of front-running by speculators and buy-backs by corporate insiders. Real, pre-tax earnings growth is falling.
Unemployment is near all-time lows, but only because people are forced to take low-paying "gigs" in the service economy. Real, "bread-winner" jobs continue to disappear.
GDP growth is still positive, but only because the Fed lends money below the rate of consumer price inflation. Worldwide, central banks lowered rates some 90 times last year. And now – using its Repo Madness program – the Fed is pumping even faster than it did during the crisis of '08-'09.
Meanwhile, the US government is headed for the biggest default in world history. For 20 years it has added debt twice as fast as GDP.
How long can you keep that up? That's what we're going to find out. Because, now, with 11,000 baby boomers retiring every day...and the armed wing of the Deep State insisting on more and more money...there's no way to stop it.
And here again, you can blame traditional conservatives.
Typically, Liberals (in the American sense of the word) believe in Big Government. They want it to cure the world's ills – as they see them – by force. They may or may not trust the free market to create wealth; but they damned sure don't want it to decide where the money goes. They'll do that themselves.
They'll tell you where you can smoke, too. And what you can put in your body. And what you have to do with your trash...and what kind of deal you can make with an employee. And so on...and so on...And the cost? Don't worry about it. "There's always money available," as Elizabeth Warren remarked recently.
Traditionally, you could count on conservatives to say "no." They knew there were limits. They were suspicious of the Liberals' motives (what they were really after was power)...and skeptical about their programs (war on poverty...war on drugs...war on terror...taxes...regulations – none of them would work, conservatives grumbled). They opposed budget-busting foreign wars...and domestic boondoggles alike.
But in a world of free money, conservatism no longer makes sense. Why worry about wasting money...when you can print more? Why worry about balancing the budget when deficits can be financed for practically nothing, apparently forever? And besides, doesn't government spending stimulate the economy?
Over a nearly 50-year period since the fake money was introduced in 1971, the old conservatives disappeared, died, or became new conservatives – who joined the Liberals as supporters of Big, World-Improving Government.
So, in 2008, when the financial crisis hit hard, and the feds turned on the stimulus taps, who was there to stop them?