The Military-Industrial Complex is Ruining the Economy

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Offline Satyagraha

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The Military-Industrial Complex is Ruining the Economy
« on: January 10, 2010, 08:31:34 PM »
The Military-Industrial Complex is Ruining the Economy
Washington's Blog
January 10, 2010
http://www.infowars.com/the-military-industrial-compex-is-ruining-the-economy/


Everyone knows that the too big to fails
and their dishonest and footsy-playing regulators and politicians
are largely responsible for trashing the economy.


But the military-industrial complex shares much of the blame.

Nobel prize winning economist Joseph Stiglitz says that the Iraq war will cost $3-5 trillion dollars.

Sure, experts say that the Iraq war has increased the threat of terrorism. See this, this, this, this, this, this and this. And we launched the Iraq war based on the false linkage of Saddam and 9/11, and knowingly false claims that Saddam had WMDs. And top British officials, former CIA director George Tenet, former Treasury Secretary Paul O’Neill and many others say that the Iraq war was planned before 9/11. But this essay is about dollars and cents.

America is also spending a pretty penny in Afghanistan. The U.S. admits there are only a small handful of Al Qaeda in Afghanistan. As ABC notes:

    U.S. intelligence officials have concluded there are only about 100 al Qaeda fighters in the entire country.

    With 100,000 troops in Afghanistan at an estimated yearly cost of $30 billion, it means that for every one al Qaeda fighter, the U.S. will commit 1,000 troops and $300 million a year.

Sure, the government apparently planned the Afghanistan war before 9/11 (see this and this). And the Taliban offered to turn over Bin Laden (see this and this). And we could have easily killed Bin Laden in 2001 and again in 2007, but chose not to, even though that would have saved the U.S. hundreds of billions of dollars in costs in prosecuting the Afghanistan war. But this essay is about dollars and cents.

Increasing the Debt Burden of a Nation Sinking In Debt

All of the spending on unnecessary wars adds up.

The U.S. is adding trillions to its debt burden to finance its multiple wars in Iraq, Afghanistan, Yemen, etc.

Two top American economists – Carmen Reinhart and Kenneth Rogoff – show that the more indebted a country is, with a government debt/GDP ratio of 0.9, and external debt/GDP of 0.6 being critical thresholds, the more GDP growth drops materially.

Specifically, Reinhart and Rogoff write:

    The relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more. We find that the threshold for public debt is similar in advanced and emerging economies…

Indeed, it should be obvious to anyone who looks at the issue that deficits do matter.[/list]
(http://www.washingtonsblog.com/2009/11/deficits-and-massive-debt-overhangs-do.html)

A PhD economist told me:

    War always causes recession. Well, if it is a very short war, then it may stimulate the economy in the short-run. But if there is not a quick victory and it drags on, then wars always put the nation waging war into a recession and hurt its economy.

You know about America’s unemployment problem. You may have even heard that the U.S. may very well have suffered a permanent destruction of jobs.

But did you know that the defense employment sector is booming?

As I pointed out in August, public sector spending – and mainly defense spending – has accounted for virtually all of the new job creation in the past 10 years:

    The U.S. has largely been financing job creation for ten years. Specifically, as the chief economist for BusinessWeek, Michael Mandel, points out, public spending has accounted for virtually all new job creation in the past 1o years:

Private sector job growth was almost non-existent over the past ten years. Take a look at this horrifying chart:


Between May 1999 and May 2009, employment in the private sector sector only rose by 1.1%, by far the lowest 10-year increase in the post-depression period.

It’s impossible to overstate how bad this is. Basically speaking, the private sector job machine has almost completely stalled over the past ten years. Take a look at this chart:



Over the past 10 years, the private sector has generated roughly 1.1 million additional jobs, or about 100K per year. The public sector created about 2.4 million jobs.

But even that gives the private sector too much credit. Remember that the private sector includes health care, social assistance, and education, all areas which receive a lot of government support.

Most of the industries which had positive job growth over the past ten years were in the HealthEdGov sector. In fact, financial job growth was nearly nonexistent once we take out the health insurers.

Let me finish with a final chart.



Without a decade of growing government support from rising health and education spending and soaring budget deficits, the labor market would have been flat on its back. [120]

Raw Story argues that the U.S. is building a largely military economy:

The use of the military-industrial complex as a quick, if dubious, way of jump-starting the economy is nothing new, but what is amazing is the divergence between the military economy and the civilian economy, as shown by this New York Times chart:


http://www.nytimes.com/imagepages/2009/07/31/business/20090801_CHARTS_GRAPHIC.html

In the past nine years, non-industrial production in the US has declined by some 19 percent. It took about four years for manufacturing to return to levels seen before the 2001 recession — and all those gains were wiped out in the current recession.

By contrast, military manufacturing is now 123 percent greater than it was in 2000 — it has more than doubled while the rest of the manufacturing sector has been shrinking…

It’s important to note the trajectory — the military economy is nearly three times as large, proportionally to the rest of the economy, as it was at the beginning of the Bush administration. And it is the only manufacturing sector showing any growth. Extrapolate that trend, and what do you get?

The change in leadership in Washington does not appear to be abating that trend…[121]

So most of the job creation has been by the public sector. But because the job creation has been financed with loans from China and private banks, trillions in unnecessary interest charges have been incurred by the U.S.

So we’re running up our debt (which will eventually decrease economic growth), but the only jobs we’re creating are military and other public sector jobs.

PhD economist Dean Baker points out that America’s massive military spending on unnecessary and unpopular wars lowers economic growth and increases unemployment:

    Defense spending means that the government is pulling away resources from the uses determined by the market and instead using them to buy weapons and supplies and to pay for soldiers and other military personnel. In standard economic models, defense spending is a direct drain on the economy, reducing efficiency, slowing growth and costing jobs.

    A few years ago, the Center for Economic and Policy Research commissioned Global Insight, one of the leading economic modeling firms, to project the impact of a sustained increase in defense spending equal to 1.0 percentage point of GDP. This was roughly equal to the cost of the Iraq War.

    Global Insight’s model projected that after 20 years the economy would be about 0.6 percentage points smaller as a result of the additional defense spending. Slower growth would imply a loss of almost 700,000 jobs compared to a situation in which defense spending had not been increased. Construction and manufacturing were especially big job losers in the projections, losing 210,000 and 90,000 jobs, respectively.

    The scenario we asked Global Insight (
recognized as the most consistently accurate forecasting company in the world**) to model turned out to have vastly underestimated the increase in defense spending associated with current policy. In the most recent quarter, defense spending was equal to 5.6 percent of GDP. By comparison, before the September 11th attacks, the Congressional Budget Office projected that defense spending in 2009 would be equal to just 2.4 percent of GDP. Our post-September 11th build-up was equal to 3.2 percentage points of GDP compared to the pre-attack baseline. This means that the Global Insight projections of job loss are far too low… [/list]
** http://www.ihsglobalinsight.com/accolades

The projected job loss from this increase in defense spending would be close to 2 million. In other words, the standard economic models that project job loss from efforts to stem global warming also project that the increase in defense spending since 2000 will cost the economy close to 2 million jobs in the long run.[/list]

The Political Economy Research Institute at the University of Massachusetts, Amherst has also shown that non-military spending creates more jobs than military spending.

So we’re running up our debt – which will eventually decrease economic growth – and creating many fewer jobs than if we spent the money on non-military purposes.

But the War on Terror is Urgent for Our National Security, Isn’t It?

For those who still think that the Iraq and Afghanistan wars are necessary to fight terrorism, remember that a leading advisor to the U.S. military – the very hawkish and pro-war Rand Corporation – released a study in 2008 called “How Terrorist Groups End: Lessons for Countering al Qa’ida“.

The report confirms that the war on terror is actually weakening national security. As a press release about the study states:

    “Terrorists should be perceived and described as criminals, not holy warriors, and our analysis suggests that there is no battlefield solution to terrorism.”

Former U.S. National Security Adviser Zbigniew Brzezinski told the Senate that the war on terror is “a mythical historical narrative”. And Newsweek has now admitted that the war on terror is wholly unnecessary.

In fact, starting right after 9/11 — at the latest — the goal has always been to create “regime change” and instability in Iraq, Iran, Syria, Libya, Sudan, Somalia and Lebanon; the goal was never really to destroy Al Qaeda. As American reporter Gareth Porter writes in Asia Times:

    Three weeks after the September 11, 2001, terror attacks, former US defense secretary Donald Rumsfeld established an official military objective of not only removing the Saddam Hussein regime by force but overturning the regime in Iran, as well as in Syria and four other countries in the Middle East, according to a document quoted extensively in then-under secretary of defense for policy Douglas Feith’s recently published account of the Iraq war decisions. Feith’s account further indicates that this aggressive aim of remaking the map of the Middle East by military force and the threat of force was supported explicitly by the country’s top military leaders.

        Feith’s book, War and Decision, released last month, provides excerpts of the paper Rumsfeld sent to President George W Bush on September 30, 2001,
calling for the administration to focus not on taking down Osama bin Laden’s al-Qaeda network but on the aim of establishing “new regimes” in a series of states…

    ***

    General Wesley Clark, who commanded the North Atlantic Treaty Organization bombing campaign in the Kosovo war, recalls in his 2003 book Winning Modern Wars being told by a friend in the Pentagon in November 2001 that the list of states that Rumsfeld and deputy secretary of defense Paul Wolfowitz wanted to take down included Iraq, Iran, Syria, Libya, Sudan and Somalia [and Lebanon].

    ***

    When this writer asked Feith . . . which of the six regimes on the Clark list were included in the Rumsfeld paper, he replied, “All of them.”

    ***

    The Defense Department guidance document made it clear that US military aims in regard to those states would go well beyond any ties to terrorism. The document said the Defense Department would also seek to isolate and weaken those states and to “disrupt, damage or destroy” their military capacities – not necessarily limited to weapons of mass destruction (WMD)…

    Rumsfeld’s paper was given to the White House only two weeks after Bush had approved a US military operation in Afghanistan directed against bin Laden and the Taliban regime. Despite that decision, Rumsfeld’s proposal called explicitly for postponing indefinitely US airstrikes and the use of ground forces in support of the anti-Taliban Northern Alliance in order to try to catch bin Laden.

    Instead, the Rumsfeld paper argued that the US should target states that had supported anti-Israel forces such as Hezbollah and Hamas.

    ***

    After the bombing of two US embassies in East Africa [in 1988] by al-Qaeda operatives, State Department counter-terrorism official Michael Sheehan proposed supporting the anti-Taliban Northern Alliance in Afghanistan against bin Laden’s sponsor, the Taliban regime. However, senior US military leaders “refused to consider it”, according to a 2004 account by Richard H Shultz, Junior, a military specialist at Tufts University.

    A senior officer on the Joint Staff told State Department counter-terrorism director Sheehan
he had heard terrorist strikes characterized more than once by colleagues as a
“small price to pay for being a superpower”.


If you still believe that the war on terror is necessary, please read this.

Torture is Bad for the Economy

For those who still think torture is a necessary evil, you might be interested to learn that top experts in interrogation say that, actually:

Torture doesn’t work in providing information which will keep us safe

Torture actually reduces our national security and creates new terrorists

Most of those tortured were innocent

Indeed, historians tell us that torture has been used throughout history – not to gain information – but as a form of intimidation, to terrorize people into obedience. In other words, at its core, torture is a form of terrorism.

Moreover, the type of torture used by the U.S. in the last 10 years is of a special type. Senator Levin revealed that the the U.S. used torture techniques aimed at extracting false confessions.

McClatchy subsequently filled in some of the details:

    Former senior U.S. intelligence official familiar with the interrogation issue said that Cheney and former Defense Secretary Donald H. Rumsfeld demanded that the interrogators find evidence of al Qaida-Iraq collaboration…

    For most of 2002 and into 2003, Cheney and Rumsfeld, especially, were also demanding proof of the links between al Qaida and Iraq that (former Iraqi exile leader Ahmed) Chalabi and others had told them were there.”

    It was during this period that CIA interrogators waterboarded two alleged top al Qaida detainees repeatedly — Abu Zubaydah at least 83 times in August 2002 and Khalid Sheik Muhammed 183 times in March 2003 — according to a newly released Justice Department document…

    When people kept coming up empty, they were told by Cheney’s and Rumsfeld’s people to push harder,” he continued.”Cheney’s and Rumsfeld’s people were told repeatedly, by CIA . . . and by others, that there wasn’t any reliable intelligence that pointed to operational ties between bin Laden and Saddam . . .

    A former U.S. Army psychiatrist, Maj. Charles Burney, told Army investigators in 2006 that interrogators at the Guantanamo Bay, Cuba, detention facility were under “pressure” to produce evidence of ties between al Qaida and Iraq.

    “While we were there a large part of the time we were focused on trying to establish a link between al Qaida and Iraq and we were not successful in establishing a link between al Qaida and Iraq,” Burney told staff of the Army Inspector General. “The more frustrated people got in not being able to establish that link . . . there was more and more pressure to resort to measures that might produce more immediate results.”

    “I think it’s obvious that the administration was scrambling then to try to find a connection, a link (between al Qaida and Iraq),”
[Senator] Levin said in a conference call with reporters. “They made out links where they didn’t exist.”

Levin recalled Cheney’s assertions that a senior Iraqi intelligence officer had met Mohammad Atta, the leader of the 9/11 hijackers, in the Czech Republic capital of Prague just months before the attacks on the World Trade Center and the Pentagon.

The FBI and CIA found that no such meeting occurred.

In other words, top Bush administration officials not only knowingly lied about a non-existent connection between Al Qaida and Iraq, but they pushed and insisted that interrogators use special torture methods aimed at extracting false confessions to attempt to create such a false linkage. See also this and this.

Paul Krugman eloquently summarized the truth about the type of torture used:

    Let’s say this slowly: the Bush administration wanted to use 9/11 as a pretext to invade Iraq, even though Iraq had nothing to do with 9/11. So it tortured people to make them confess to the nonexistent link.

    There’s a word for this: it’s evil.

But since this essay in on dollars and cents, the important point is that terrorism is bad for the economy.

Specifically, a study by Harvard and NBER points out:

    From an economic standpoint, terrorism has been described to have four main effects (see, e.g., US Congress, Joint Economic Committee, 2002). First, the capital stock (human and physical) of a country is reduced as a result of terrorist attacks. Second, the terrorist threat induces higher levels of uncertainty. Third, terrorism promotes increases in counter-terrorism expenditures, drawing resources from productive sectors for use in security. Fourth, terrorism is known to affect negatively specific industries such as tourism.

The Harvard/NBER concludes:

    In accordance with the predictions of the model, higher levels of terrorist risks are associated with lower levels of net foreign direct investment positions, even after controlling for other types of country risks. On average, a standard deviation increase in the terrorist risk is associated with a fall in the net foreign direct investment position of about 5 percent of GDP.

So the more unnecessary wars American launches, the more innocent civilians we kill, and the more people we torture, the less foreign investment in America, the more destruction to our capital stock, the higher the level of uncertainty, the more counter-terrorism expenditures and the less expenditures in more productive sectors, and the greater the hit to tourism and some other industries.

Moreover:

    Terrorism has contributed to a decline in the global economy (for example, European Commission, 2001).

So military adventurism and torture, which increase terrorism, hurt the world economy. And see this.

For the foregoing reasons, the military-industrial complex is ruining the economy.

Research-related Links:

   1. Bernanke Acknowledges Crumbling Economy
   2. Military-Industrial Complex Set To Make A Killing From Body Scanners
   3. Bush: Killing Iraqis Good for the U.S. Economy
   4. Military Industrial Complex 2.0
   5. Bad economy is good for military recruiting
   6. John Cusack on Military-Industrial Complex: ‘The gig is up’
   7. Engines of Recovery Flame Out as Economy Seeks Obama-Fed Rescue
   8. Economy Slows to Near Crawl
   9. Faber Predicts War to Distract from Bad Economy
  10. Long List of Economists Warn Against Federal Debt Spending
  11. Worst is yet to come for economy
  12. Massive Government Spending Boosts US Economy, But Few Signs Private Sector Can Sustain
[/list]
And  the King shall answer and say unto them, Verily I say unto you, 
Inasmuch as ye have done it unto one of the least of these my brethren,  ye have done it unto me.

Matthew 25:40

Offline Freebird100

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Re: The Military-Industrial Complex is Ruining the Economy
« Reply #1 on: January 10, 2010, 08:45:16 PM »
Don`t dare question the war on terror.You might be accused of being a member of
Al Qaeda.

It`s sickening how these wars forever get a free pass while they help destroy the U.S.

http://www.youtube.com/watch?v=cpPABLW6F_A
"The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first."

Thomas Jefferson

Offline Monkeypox

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Re: The Military-Industrial Complex is Ruining the Economy
« Reply #2 on: January 10, 2010, 09:12:50 PM »
Nah, as far as they're concerned, the economy is doing great.
War Is Peace - Freedom Is Slavery - Ignorance Is Strength


"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty."

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Anti_Illuminati

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Re: The Military-Industrial Complex is Ruining the Economy
« Reply #3 on: January 12, 2010, 10:00:13 AM »
CyberMaryland seeks federal jobs from cybersecurity push

January 12, 2010 - 5:24am
http://www.federalnewsradio.com/?nid=35&sid=1861211

By Max Cacas
Reporter
FederalNewsRadio

(Gaithersburg, Md.) - The State of Maryland has announced plans to be "front and center" among states when it comes to developing the tools of cybersecurity, and create new, high-tech jobs in the process. One of the top Federal agencies leading national cybersecurity efforts played host to yesterday's "CyberMaryland" summit meeting.

The new CyberMaryland report unveiled yesterday at the National Institutes for Standards and Technology in Gaithersburg is nothing less than a roadmap to making Maryland, as Governor Martin O'Malley said, the "epicenter of the nation's cybersecurity effort."

O'Malley cited the presence of federal agencies like NIST and the National Security Agency as reasons the state should excel as a leader in the field. Maryland also will be gaining the Defense Information System Agency from Arlington, Virginia next year as part of military base realignment and state officials hope Maryland will be home to a new military cyber command.

"Our federal assets are a big, big part of the reason that we're in a better position than most other states in the union to actually get our state economy back on track and lead the rest of our nation into an era of new prosperity," O'Malley said.

A report by the Maryland Department of Business and Economic Development, drafted by a 50-person industry and state advisory group, is calling for a partnership involving the federal and state governments, the private sector and academic institutions by establishing a National Center of Excellence for Cyber Security in Maryland.

The report also points out that Maryland must provide adequate training in its schools to prepare people in math and science skills to qualify them for jobs in the field.

"These are the strategies that will add up to more and better jobs while also addressing a critical security need for our nation," O'Malley said.

Maryland Congressman Dutch Ruppersberger, a Democrat whose second district encompasses much of Baltimore, including Johns Hopkins University and the Army's Aberdeen Proving Grounds, has become one of the top experts in the House of Representatives on Cybersecurity. And he explains why Maryland is perfect for CyberMaryland.

    Number one, our challenge is to have the best workforce that we can have. There's no better place for us to stand up to the cybersecurity threat than in the state of Maryland. If you look at what we have in resources: NIST, NSA is the best in the world, they are the eyes and ears of our country. You ask the military in Iraq and Afghanistan who helps them identify the bad guys, it's NSA. You have NASA right up the street. The fact that we control the world, as the most powerful country, is because we control the skies. And we have all these very smart individuals here in the state of Maryland.

The governor also announced that a 16-member board will study how to connect Maryland companies with federal opportunities. The state's Federal Facilities Advisory Board will work with the Maryland Department of Business and Economic Development to study how to link Maryland companies with federal job opportunities.

------

Associated Press Writer Brian Witte contributed to this report.

(Copyright 2010 by FederalNewsRadio.com and the Associated Press. All Rights Reserved.)

Offline chris jones

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Re: The Military-Industrial Complex is Ruining the Economy
« Reply #4 on: January 13, 2010, 02:17:36 PM »
Hi Pilikia.

Good post.

The MIC has been and from the looks of it will continue to be the regimes right arm.

As long as the wars continue they have the citizenry trapped, along with their taxes.

i remember years ago the price of a hammer was $110, a toilet seat was $160, can you imagine what they getting for their high tech and advanced weaponry, security devices, etc.$$$$$$$$$$$.

I remember Rumsfeld talking with the troops in Iraq. They asked him for more protection on the Humvees and bullet proof vests.
He responded.
You guys are soldiers,so improvise!!!!!!!!!!!! Yes things are not equal by any stretch of the imagination.
The peon in wars$, the MIC$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$.

Offline EchelonMonitor

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Re: The Military-Industrial Complex is Ruining the Economy
« Reply #5 on: January 20, 2010, 01:31:45 PM »
Thanks for that find--good analysis and references.

Offline bigron

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Re: The Military-Industrial Complex is Ruining the Economy
« Reply #6 on: January 21, 2010, 07:51:19 AM »
An Undisciplined Defense: Understanding the $2 Trillion Surge in US Defense Spending

by Carl Conetta

http://uruknet.com/index.php?p=m62381&hd=&size=1&l=e

January 20, 2010


PDA Briefing Report #20, 18 January 2010. Analyzes the unprecedented post-1998 rise in defense spending and the return to Cold War budget levels. The causes include overly ambitious US military strategy and goals; weakness of reform and transformation efforts; failure to make hard choices in acquisition; and conduct of wars ill-suited to the US military. Also examined: the surge in military construction and the expanded role of private contractors.

SEE FULL REPORT HERE :

http://www.scribd.com/doc/25500865/1001PDABR20-1

1001PDABR20[1]