This link is to a recent document published by the U.S. Joint Forces Command titled: 'Joint Operating Environment 2010'. This year USJFC has included a section on "Economics". Here are some choice excerpts:
“The dollar’s “extraordinary privilege” as the primary unit of international trade allows the U.S. to borrow at relatively low rates of interest. However, the emerging scale of U.S. Government borrowing creates uncertainty about both our ability to repay the ever growing debt and the future value of the dollar. Moreover, “any sudden stop in lending…would drive the dollar down, push inflation and interest rates up, and perhaps bring on a hard landing for the United States…”
“if current trends continue, the U.S. will be transferring approximately seven percent of its total economic output abroad simply to service its foreign debt.”
“Interest payments, when combined with the growth of Social Security and health care, will crowd out spending for everything else the government does, including National Defense.”
“Habsburg Spain defaulted on its debt … its overseas empire collapsed. Bourbon France became so beset by debt due to … its overthrow by revolution. Interest ate up 44% of the British Government budget …..inhibiting its ability to rearm against a resurgent Germany. Unless current trends are reversed, the U.S. will face similar challenges…..going to pay interest on the money borrowed to finance our deficit spending.”
It appears that the USJFC did not come to these conclusions on their own. The report cites many references to mainstream organizations and authors. Among them are: Peterson-Pew Commission (key word here being 'Peterson'!), Heritage Foundation, 'The Old' Paul Krugman, Niall Furguson, World Bank and others.
I have to this point taken some solace in the fact that our Military had never shown any evidence of overt acceptance of these dangerous beliefs. I will try to provide a more detailed review and some counterpoints to some of the report over the next few weeks.
The stakes in this intellectual 'war' between the mainstream and modern monetary theories are being raised.
5 comments:
Nobody brings up Japan and how it never experienced any of this ?
Toyota, Sony, Whale eaters, etc
they've been doing pretty good compared to all this ...
Mike,
First, the military should stay out of economics.
Second, I like what the current Paul Krugman has to say about such concerns. We really would benefit from the extra monetary stimulus that came with a Chinese dumping of dollar assets. Since the Fed is waking up now, only to make things worse, bring it on.
Of course, it won't happen, as it would mean massive losses for China and a less favorable trade balance. Why aren't these things mentioned more often?
In fact, last I checked, China was increasing their intake of US government assets, along with many other countries of the world.
These people don't even seem to bother to check into what is actually going on.
Oh, and I love the popular interpretation of the Chinese, German, Indian, Russian, and South Korean warnings about dollar weakness. Does it occur to any influential talking heads that these all happen to be countries that have trade surpluses with us? These people don't want us to start buying fewer of their goods and services. At least, I think that's a possibility.
Mike S.
It may not be that the military is getting into economics, this issue is being pushed onto them:
Here is a link to a speech given at the US Naval Academy in 2007 by David Walker then with GAO, now with Peterson Institute.
I sense a concerted effort to push this dogma on the miltary leadership. I am more concerned and outraged about this than I ever was due to these recent revelations linking the mainstream "debt" view and the military.
Our Country's bravest may be denied the tools they need to get the job done with the least risk to their lives and safety. I'm really pissed off about this.
We've already covered how deficit terrorists have deprived US GI's of healthcare.
WAR == "DEBT"
Hopefully the deficit terrorism will hit the military themselves and they will explicate and expound how the war did not enrich them and how it was a lie.
Then we can get back to spending and creating assets here on USA soil and get back to real Americana like building rail, hospitals, military bases ( rather than consolidating them with Rumsfeld ), air craft carriers, and have the best of the best on earth.
China has two classes - the rich and the poor. They are not the USA. India has 10 classes, the rich and the other 9.
We are not comparing apples to apples;.
Interesting post, Matt.
Eight years ago I had the privilege of being invited to attend the National Security Seminar at the Army War College in Carlisle, PA. Each year some select members of the public are allowed to spend a week with the military's best and brightest (students must hold the rank of at least a Lieutenant Colonel to attend the college) at their campus to discuss matters of national security.
I was asked to speak and contribute in the area of economics and I talked about exactly this...that there would come a time when economic factors (specifically, debt, deficits, etc) would come into play in the military's decision making and long-term strategy.
Well, I was way before my time back then, but as you can see, we have arrived.
These false beliefs and paradigms are now seeping over into a dangerous area; to where they are affecting national security strategy and the general worldview that drives that.
It's bad.
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