Ayman al-Zawahiri, the Al-Qaeda leader, has called on followers to commit attacks inside the US to "bleed America economically", in a speech marking the anniversary of the 9/11 strikes.
In an audio message released yesterday, Zawahiri laid out a plan of attack, saying he wanted a "few of the brothers" to commit small-scale strikes to trigger big spending by Washington on security, while awaiting the opportunity for a major onsalught later.
"We should bleed America economically by provoking it to continue in its massive expenditure on its security, for the weak point of America is its economy, which has already begun to stagger due to the military and security expenditure," he said.Good thing for our country this is not the way it works operating under a system of state currency; and in reality the strength of our economy throughout the last decade is in no small part due to the increase in leading $NFA injections in the form of increased fiscal spending on national security projects.
Hopefully our U.S. national security apparatus is smart enough not to fall for this type of balderdash propaganda whether it comes from these foreign bloodthirsty terrorists or our domestic fiscal morons, and continues to ask for what is truly needed for our security.
29 comments:
Seriously, are you suggesting that blood & treasurer spent on Iraq war did not bleed America economically?
Huh? How so? The constraint is availability of real resources and inflation. The US doesn't seem to be lacking real resources and inflation has been low historically both during the Iraq conflict and in the aftermath.
It might be argued that the deficits resulting from the conflict drove up the cost of building materials and provided funding for the run-up in housing leading to the crisis, but that seems to be at most a minor contributive factor.
Defense spending procurement for the Iraq war may have had a price tag and may have contributed NFA to the economy but it didn't produce anything of value that could be consumed by the public in a way that advances the living standards of working people. The military industrial complex consumes real resources, advanced technology and skilled labor power that could be much better spent on domestic infrastructure, education, hospitals R&D and private capital investment. And don't try to say that that 4,488 Americans killed in Iraq and 32,222 wounded does not represent a loss of real resources.
Now the US may intervene in Syria which in my view could be a precursor to WWIII, not unlike the Spanish civil war was a prelude to WWII.
Yes, it did represent a huge loss of real resources but not enough to affect the economy to any perceptible degree. It was the financial crisis that took the economy down and threatened deflation.
Military spending in the US, even when not directly related to conflict, is a huge contributor to the US economy and the US could not continue on the present path without replacing through other means like domestic public investment. But the military is so pervasive, having tentacles in almost all congressional districts, that it would be difficult to replace it without destroying some areas economically. It's designed to be a permanent feature of US economic life and therefore endless conflict becomes a policy objective in justifying it. Which what Ike warned the country about when leaving office.
Well Tom, I dont see how we can say "deficits resulting from the conflict drove up the prices" as "deficits" are ex post records of savings desires.... and this is a bit teleological I think...
What I saw as it was happening in real time, is that DoD went in to building materials inventories and wiped them out.... a sheet of plywood that you can get today for $13 went up to like $50 as the reconstruction contractors spared no expense...
They also wiped out the drywall...
Maybe it was just around here (mid Atlantic near the Norfolk Base?)
But an architect friend of mine who we were thinking about doing something together at the time, came in one day and said forget it plywood was up to like $50 and drywall was like $18 so we gave it up... he called the yard and they said the Iraq reconstruction contractors came in with blank cheques and wiped everybody out of inventory...
So again for me it has to come back to the leading $NFA flows (not "the deficit"), and what prices the govt either pays for things and/or what price they allow the banks to lend against things...
in the Iraq re-construction period, they actually pitted these two authorities against one another with the DoD increasing its bid for materials while at the same time letting the banks/GSEs increase their conforming limits to match the increasing DoD bids... rinse and repeat...
Till eventually the whole thing just like 'blew up' when the leading $NFA flows flatlined while at the same time system liabilities and associated policy interest rates matched up and became too much to service so defaults/liquidations naturally followed...
This was not how WW2 was 'financed' at that time... Eccles docments how that war was operated fiscally... we did a better job back then to avoid such chaos...
So I basically disagree with B Black on the "control fraud" type of causation... not that some/many frauds were not committed along the way I'm sure....
rsp,
Matt, it was not the deficit per se, but rather how the war spending was bid. Government bid up prices of construction materials during the lead up to the housing boom, raising construction costs.
Ed,
I dont think that was this terrorist's point...
He is asserting that we can "run out of money" if they step up a lot of small 'hit and runs' and we then have to use fiscal to counter this...and this is FALSE...
rsp,
Correct Tom imo... "its about price not quantity..." rsp,
"But the military is so pervasive, having tentacles in almost all congressional districts, that it would be difficult to replace it without destroying some areas economically. It's designed to be a permanent feature of US economic life and therefore endless conflict becomes a policy objective in justifying it. Which what Ike warned the country about when leaving office"
Tom - I'm not talking about eliminating military spending. Military spending is essential to defend the nation and while resources consumed to build an air craft carrier represent an overhead cost to society, it is a necessary overhead cost up to the point where it starts becoming excessive. Then it becomes a drag on the economy which diminishes the ability of working people to consume. Why does the US defense budget have to be more than twice the amount spent by the next 11 largest military budgets of foreign nations, most of whom are our allies?
This is the biggest problem I have with fiat currency because it can provide too much policy space for our policy makers to get us entangled in stupid wars that serve absolutely no public purpose for the average American.
Ed, I don't by that by limiting policy space, it would result in a reduction of military spending and the winding down of the American empire. It would just end the welfare state and convert it to the warfare state, since empires run on guns not butter. There is no way that America is going to pull back from empire once having achieved global dominance. That's just a dream. It never happens. It's just a question of how long a nation can remain king of the mountain. No one stays on top forever.
Ed,
I think they just have to be careful if the DoD starts to buy finished goods and services that are also "consumer goods" like they did after the main hostilities in Iraq, they started to buy housing materials for transport to the Iraq theatre, they had to be reeeeeally careful about how they did that but imo Rumsfeld ran roughshod right over that... should have hired some good economists to advise him imo...
rsp,
"There is no way that America is going to pull back from empire once having achieved global dominance. That's just a dream."
Tom - If you are correct, then as a nation we are truly fucked and MMT will not be able to prevent our demise.
"I think they just have to be careful if the DoD starts to buy finished goods and services that are also "consumer goods" like they did after the main hostilities in Iraq"
Matt - For God's sake think about what you are saying! What if our policy makers in their wisdom gave the DoD a blank check to build 100 aircraft carriers and 1,000 B1 stealth bombers and 100K Abrams tanks? There would be nothing left for everyday people to consume. It would be like North Korea where people are starving.
Ed,
I'm trying to keep the hypos reasonable... for what they are currently doing (I dunno DoD budget of 750B ish?) all they have to do is be careful at the intersection of what the govt vs the non-govt requires for provision... shouldnt be that hard thats what we have economists for...
rsp,
Tom - If you are correct, then as a nation we are truly fucked and MMT will not be able to prevent our demise.
Unless the American people stand up and demand change, it's not going to happen, and I suspect that when the choice is put to them a great many Americans will say that they prefer maintaining US global hegemony at all costs.
Russia and China are well aware of this and ramping up production of advanced arms, realizing that the endgame is who can control space. China has already demonstrated some time ago that it can destroy satellites, which was a game-changer. We are just at the beginning of this ramp up.
"The military industrial complex consumes real resources, advanced technology and skilled labor power that could be much better spent on domestic infrastructure, education, hospitals R&D and private capital investment. And don't try to say that that 4,488 Americans killed in Iraq and 32,222 wounded does not represent a loss of real resources."
Agreed.
In an ideal world there would be no need for a military, but given that a military is needed in reality, a properly-sized military is a good investment of resources. However a bloated military-industrial complex and endless conflicts are clearly not.
"deficits" are ex post records of savings desires"
I think it's a but more complicated than that. Deficits can exceed full employment savings and thereby result in inflation, which could be described as unwanted excess nominal savings.
What if our policy makers in their wisdom gave the DoD a blank check to build 100 aircraft carriers and 1,000 B1 stealth bombers and 100K Abrams tanks?
Not going to be conventional weapons but surveillance equipment, supercomputers for cyberwar, lasers, drones, space weapons, missiles, and other high tech weaponry that doesn't require human combatants.The US and West really cannot compete with China wrt to personnel in fielding an army.
It's also going be economic warfare to dominate knowledge, tech, and resources. Brazil just registered a compliant against US economic espionage, for instance.
I expect to see a considerable anti-US and anti-West coalition building among the emerging nations as they gain economic clout. Much of the rest of the century will be devoted to taking down the US and West from it's 19th ad 20th century perch due to previous imperialism, colonialism based on economic and technological superiority. That's now leveling out and the US and West are going to have to compete much more seriously on a increasing level playing field.
This will result in a race to the bottom for US workers that will adversely affect the American and Western economies, which depend a prosperous middle class. But that depends on imperialism and colonialism. America and the West will sink, other than the top tier, while the rest of the world rises. I call it "The Great Leveling."
"deficits" are ex post records of savings desires"
I think it's a but more complicated than that. Deficits can exceed full employment savings and thereby result in inflation, which could be described as unwanted excess nominal savings.
Well, of course, deficits are more than that, but that is how they show up in the accounting. As Matt has pointed out the most significant aspect of deficit is as top-line spending as a flow. True the flow is to saving at the macro level, but it's all that happens in between that makes the difference. The how and where of the flow is economically determinative.
"This is the biggest problem I have with fiat currency because it can provide too much policy space for our policy makers to get us entangled in stupid wars that serve absolutely no public purpose for the average American."
I think its a fallacy to assume that some sort of fixed-exchange rate / commodity convertibility monetary regime really limits policy makers. You just have to look at the past to see that whenever these things get in the way of national aims, they just get dropped.
"that is how they show up in the accounting"
right but at some point beyond 'full employment savings' the deficit is just adding savings that aren't 'desired', in the sense that they just result in a sustained reduction in value of the currency (inflation). At that point I don't think it makes sense to describe the deficit as an 'ex-post record of savings desires'. Rather its an addition to savings beyond savings desires.
then again you could argue that some would desire the additional nominal savings, even if they result in no overall increase in real wealth, purely for the fact that they change the distribution of wealth.. so I guess it depends on how you define it.
I don't like aggregating subjective states like preference, expectations, desires, etc., which are not observable and are only observable based on data that reveals these putative states. Better to just refer to the data without imputing subjectivity, which is a morass descriptively.
I want to say 'good point' but this seems like a contradiction:
"which are not observable and are only observable based on data that reveals these putative states"
Not observable and only observable based on data that reveals them?
Criteria need to be intersubjective and the subjective states of others are not directly observable, only indirectly. We infer the subjective (psychological) states of others through their appearance and behavior.
Al-Qaeda chief calls for attacks on US in 9/11 speech to followers
http://www.telegraph.co.uk/news/worldnews/al-qaeda/10306755/Al-Qaeda-chief-calls-for-attacks-on-US-in-911-speech-to-followers.html
* * * * * * * * * * * * * * * * * * * * * *
New Jersey shore boardwalk businesses destroyed by fire
https://www.bitly.com/shorten/
http://www.washingtonpost.com/national/fire-rages-along-nj-boardwalk-damaged-by-sandy-blaze-apparently-started-in-ice-cream-shop/2013/09/12/064881d6-1bea-11e3-80ac-96205cacb45a_story.html
Maybe there's a connection?
Ed,
As we speak we had a situation here in my area (Annapolis) this afternoon with an unattended package that the bomb squad blew up as precaution...
Whole area blocked off this was the second one this week...
And I thought a while ago that they need to look into that NJ fire as you say above...
Seems like high alert right now...
rsp,
Pikers! How can they possible hope to outdo Rubin, Greenspan, Summers & Obama in US Middle Class blood letting?
These guys are just beginners in the hood.
The more sophisticated the criminals, the less physical violence they leave in their wake. Just ask the FBI.
When you think about it, the Arab Spring uprising and protracted turmoil in the Middle East has really been a product of Federal Reserve policy.
August 26, 2010 -- Jackson Hole Wyoming Fed confab, Bernanke hints that QE2 was in the pipeline.
Nov 11, 2010 Fed begins QE2
January 2011 -- Food riots break out in Algeria over the soaring cost of food as flour, cooking oil and sugar double in price.
Unrest spills over into Tunnisia resulting fall of government President Zine El Abidine Ben Ali
Turmoil spreads to Libya and Egypt disrupting oil production sending oil prices 20% higher. Egyptian revolution topples Mubarak government.
March, 2011 Bernanke testifies before Congress that Fed QE policy did not unleash the inflation that was ramping up at the time and instead blamed rising prices on disruption in the oil market due to fighting in Libya.
The unrest spread to Syria which has been in civil war for more than two years.
Talk about weapons of mass destruction! Look at all the governments that were toppled without the US having to fire a shot.... well with the exception of Libya that is. The Fed should be part of the Department of Defense or Pentagon.
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