Guest Post: The Military-Industrial Complex 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.

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.

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…

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.

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:

Indeed, historians tell us that torture has been used throughout historynot 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 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.


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.

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About George Washington

George Washington is the head writer at Washington’s Blog. A busy professional and former adjunct professor, George’s insatiable curiousity causes him to write on a wide variety of topics, including economics, finance, the environment and politics. For further details, ask Keith Alexander…


  1. bob goodwin

    I would love less government spending, especially on wars. However it seems your argument is flawed as military spending as a proportion of spending as a percentage of GDP in exactly the same shape as all the other graphs you show which show is going in the wrong direction. Government overspending has been real and awful, but not for the reason you state.

  2. TC

    Back when the securitization market was functioning it was my understanding an increasing supply of Treasuries was needed for dynamic hedging of an infinitely expanding supply of credit securities. So, you might say war served a financial purpose. Likewise, one has to wonder if a sizable military presence in Asia has been the fuller substance of the United States’ “strong dollar” policy, if you catch my drift. As such, one is left to ponder the degree to which shadowy puppeteers fear the ghost of Kaiser Wilhelm II.

  3. PhdEconomist?

    What’s with this “PhD Economist” guy/gal you often refer to? Is that supposed to be a mark of distinction? Forget PhD … these days you can quote a Nobel-laureate economist pretty much to back up any point you want to make, on whichever side you are on. For stimulus? Yes. Against stimulus? Yes again. For tax cuts? Yes. For tax increases? Yes.

    1. DownSouth

      Bob Morris,

      Excellent point. Empires work until they don’t work. Who knows why they stops working–scholars and historians have put forth more than 100 theories as to why the Roman Empire stopped working.

      But the fact is that they do at some point stop working.

  4. K Ackermann

    If you want a perfect example of the wrongness of everything…

    This story is about a bored idiot on a plane who turned in a comment card about how miserable it would be if the plane crashed into Gilligan’s island without Ginger and Mary Ann being there.

    The pilot turns the plane around. Fine (not really, but fine).

    Then the military scrambles two F-15 fighters to escort the plane back home. How effin’ stupid is that? What could the fighters possibly do? Shoot an unruly passenger with a Hellfire missile?

    Is there even a single possible thing a fighter plane can do to prevent that passenger from filling out another comment card?

  5. Huh?

    Military dispatched then rules of engagement go into effect. If the target plane does not follow commands then shooting down 300 passengers and crew is preferable to losing a plane and say 500 people on the ground or maybe a nuke generating plant.

    Of course a plane doesn’t respond for 90 minutes to various agencies and a company’s direct line plus overflies its destination and no fighter jets were scrambled but a flight attendant uses the intercom to query the pilots about arrival time causing plane to makes a u-turn. Go figure.

    On the ground, bigwigs to busy playing golf to be bothered.

    Whomever thought the presidency was a full time job was mistaken.

  6. kevin de bruxelles

    Before we talk about shrinking the military / industrial complex of the United States; it might be a good idea to pose the question as to WHY the US spends so much on military and WHY it launched the recent wars in the Middle East.

    Now of course the real answer is not to fight terrorism. Terrorism is one of the many natural human reactions to overwhelming power and it will only grow as US hegemony grows. No, the reason is that with the collapse of the Soviet Union the United States has been presented with the incredible opportunity of becoming the first truly global sovereign in the Hobbesian sense. The idea is that for the first time in human history, one nation has the opportunity to pull the entire world out of its warlike state of nature and to finally make an international commonwealth dominated by the global sovereign: the elite of the United States. The US already controls a huge portion of the world through the co-opting, manipulation, and outright collaboration of other country’s elites, enforcing this control by means of garrisoning a huge network of overseas bases. And on the high seas the US Navy has already been acting as the Hobbesian sovereign for many years by keeping shipping lanes open. While it is not necessary to have indirect control over every country in the world to be sovereign, in the Middle East at the beginning of the 21st century, American dominance in the this region was felt to be insufficient, especially considering the quantity and importance of energy resources located there, and thus the invasions of first Afghanistan and then Iraq were launched to help cement US power in the region. The pacification of these trouble spots will push the unified US political elite to the brink of accomplishing the wild unachieved dreams of Alexander the Great, Caesar, Napoleon, and Hitler: that of true global hegemony. Believe me there will be no voluntary turning back from this quest any time soon by the unified US political elite.

    Since there has never been a true global sovereign before so it is hard to judge the economic relationship between ruler and ruled with the ascension of the US to such a position. The closest would be that that of a King and his subjects. The subjects are expected to maintain the King is such a position that he is able to carry out his work as sovereign. The King himself is not expected to labour in the fields or factories to pay his own way. And so it is becoming with the United States, under the pretence of “borrowing”, the rest of the world is throwing tribute at the US in order to support its role as global hegemon. This is why the US political elite is not worried about jobs fleeing to China. This just ties the corrupt Chinese elite into a deeper into a dependency on the US markets, forcing them to exchange for more and more tribute and thus submit to US hegemony. And don’t let the recent economic troubles in the US fool you. These say much more about the internal power relationship between rulers and ruled in the US itself. The US political elite is feeling confident enough to take much more of the pie for themselves on the domestic front. And why not, it’s not like the great mass of over-consuming Americans are doing much more than staying passive in order to earn their keep. If push comes to shove and teh economic problems get worse, the US will insist on more and more tribute on the international front as well.

    But a concentration of power attracts resistance just as mass attracts gravity. The resistance will be both external or internal. So far the US political elite have cleverly used one manifestation of this external resistance, terrorism, as the justification for further power grabs and to counteract any rise of internal resistance. Just as Alexander had to cover his lust for conquest in Persia with stories of revenge for past Persian insults; the US justifies further global sovereignty by the natural resistance to such power, manifested in terrorism among other ways. This is not intended to morally justify Islamic terrorism; given the chance Islam would eagerly move to impose its will over the entire globe as well. But as with Alexander it will most likely be internal resistance to US hegemony that will finally bring the empire down. But that could be many decades down the road. Because with the loss of global sovereignty will force the US back into the international state of nature. In other words, it will have to become productively employed again, like a former King, stripped of his power, who has to face the shock of going back to ploughing the fields again in order to eat. The US economy is moving further and further away from being able to compete as an actual economy, and when the day comes that the US stops being the ruler of nations and loses its power there will be an ugly period of adjustment as the US slowly relearns to become a productive nation again as an equal among many.

    These are some of the issues that should be kept in mind when calling into question the US military industrial complex.

    1. DownSouth

      kevin de bruxelles,

      Great comment and I agree with everything except a couple of points.

      First, if we take a look at Spanish, Dutch and English imperial history, I don’t see anything new or novel about the hubris and pretensions of “the elite of the United States,” the quest for world hegemony. I could find similar examples from Spanish or Dutch history, but here’s an example of the mind-numbing stupidity, as seen in the rearview mirror, of the British elite, written in 1851 in reference to the opening of the Crystal Palace Exposition held in London:

      We are capable of doing anything.

      –Queen Victoria, as she confided in her diary, from James Morris, Heaven’s Command

      Second, I don’t see the American empire as being in ascendency. While the American neocon may indeed be mind-numbingly stupid enough to believe it is, it has been in decline ever since the Vietnam War. The neocons read a significance into the fall of the Soviet Union that just isn’t there.

      1. kevin de bruxelles

        Thanks DownSouth. I know it looks like the US is in decline but I would say that is just the impact of the transition the US is going through from one of many countries to the sovereign over all countries. Economic production is no longer required; the US is judged by how well it rules the world now. If we look at the massive expansion of US military bases during the last decade, we see there are very few places on earth that are not under US hegemony. Iran and North Korea are the major countries that are totally outside of the US sphere of influence while to a lesser extent Russia, Syria, and Cuba are still independent of the US.

        If we look at the three empires you mentioned the obvious difference is that they all coexisted and competed with each other along with among others the Ottoman and Russian empires. Never before has a country so totally dominated the world, albeit indirectly, like the United States is right now. I would imagine that during this decade Iran, North Korea, and Cuba will fall into the US sphere.

        Where there is certainly decline is among the people in the United States. That is because since the US no longer competes with other nations, the masses are not really needed. Only a small percentage of the general population are needed for imperial duty since the US has gone towards a professional military along with mercenaries, while the rest represent reserve labour and consumers of the rest of the world’s excess production. I think the decline of the US is also purposefully exaggerated to help hide the true nature of the empire and to help reduce the resulting counteractions to concentrations of power. This is the first time one nation has dominated so much of the world so I think it is difficult to place this into a historical context. One sure sign of relative decline will be the rise of a block of nations competing in the military arena. So far I don’t see this happening but if it did the most likely nucleus would be Russia; which is exactly why neoconservatives are so hostile to Russia. Another sure sign would be the loss of the dollar as the reserve currency.

        1. DownSouth

          Interesting thoughts, and I certainly wouldn’t venture a counterargument with any great conviction or stridency.

          However, I would like to cite this by Reinhold Niebuhr:

          All through history one may observe the tendency of power to destroy its very raison d’être. It is suffered because it achieves internal unity, and creates external defenses for the nation. But it grows to such proportions that it destroys the social peace of the state by the animosities which its exactions arouse, and it enervates the sentiment of patriotism by robbing the common man of the basic privileges which might bind him to his nation. The words attributed by Plutarch to Tiberius Gracchus reveal the hollowness of the pretensions which the powerful classes enlist their slaves in the defense of their dominions: “The wild beasts in Italy had at least their lairs, dens and caves whereto they might retreat; whereas the men who fought and died for that land had nothing in it save air and light, but were forced to wander to and fro with their wives and children, without resting place or house wherein they might lodge… The poor folk go to war, to fight and to die for the delights, riches and superfluities of others.” In the long run these pretensions are revealed and the sentiment of patriotism is throttled in the breasts of the disinherited. The privileged groups who are outraged by the want of patriotism among modern proletarians could learn the cause of proletarian internationalism by a little study of history. “It is absurd,” says Diodorus Siculus, speaking of Egypt, “to entrust the defense of a country to people who own nothing in it,” a reflection which has applicability to other ages and other nations than his own. Russian communists of pure water pour their scorn upon European socialists, among whom patriotism outweighed class loyalty in the World War. But there is a very simple explanation for the nationalism of European socialists. They were not as completely, or at least not as obviously, disinherited as their Russian comrades.
          –Reinhold Niebuhr, Moran Man & Immoral Society

          And I’d also like to cite this by Hannah Arendt, who I believe would argue you conflate the use of violence with power:

          And as for actual warfare, we have seen in Vietnam how an enormous superiority in the means of violence can become helpless if confronted with an ill-equipped but well-organized opponent who is much more powerful.
          –Hannah Arendt, Crises of the Republic

          But you are absolutely right, if the American people don’t manage to recapture control of their government, it is they who will end up losing big time. But hasn’t putting a limit on kingly imperial whims and pretensions been advanced as one of the great advantages of democracy?

          Anyway, back to Arendt:

          Rule by sheer violence comes into play where power is being lost; it is precisely the shrinking of power of the Russian government, internally and externally, that became manifest in its “solution” of the Czechoslovak problem—just as it was the shrinking power of European imperialism that became manifest in the alternative between decolonization and massacre. To substitute violence for power can bring victory, but the price is very high; for it is not only paid by the vanquished, it is also paid by the victor in terms of his own power. This is especially true when the victor happens to enjoy domestically the blessings of constitutional government. Henry Steele Commager is entirely right: “If we subvert world order and destroy world peace we must inevitably subvert and destroy our own political institutions first.” The much-feared boomerang of the “government of subject races” (Lord Cromer) on the home government during the imperialist era meant that rule by violence in faraway lands would end by affecting the government of England, that the last “subject race” would be the English themselves.

          1. Doug Terpstra

            Great stuff again, DownSouth, provocative and enriching. Thanks. Must be something good in Mexican water. Anywhere near Tequila, Jalisco?

        2. DownSouth

          I also believe that your point of view would be more sustainable if military technology could be advanced to the point where humans could be eliminated from the act of waging war. Quoting Arendt again:

          Violence, we must remember, does not depend on numbers or opinions, but on implements, and the implements of violence, as I mentioned before, like all other tools, increase and multiply human strength. Those who oppose violence with mere power will soon find that they are confronted not by men but by men’s artifacts, whose inhumanity and destructive effectiveness increase in proportion to the distance separating the opponents.
          –Hannah Arendt, Crises of the Republic

          But I believe we are a long way from eliminating soldiers from the war-making process, as these military experts I think would agree:

          • If a man’s trust is in a robot that will go around the earth of its own volition and utterly destroy even the largest cities on impact, he is still pitiable vulnerable to the enemy who appears on his doorstep, equipped and willing to cut his throat with a penknife, or beat him to death with a cobblestone. It is well to remember two things: no weapon is absolute, and the second of even greater import—no weapon, whose potential is once recognized of any degree of value, ever becomes obsolete.
          –J.M. Cameron

          • For the wealthy nation, the probability of loss exceeds the possibility of gain and dictates its role as the defender. The unburdened opponent, enjoying the prospect of gain for comparatively insignificant loss, retains the initiative.
          –J.M. Cameron

          • The highly sophisticated industrial economy of the advanced nations of the world, the degree of urbanization of their demographic distribution, and the high standard of living, make them very sensitive to weapons of mass annihilation and area destruction. On the other hand, the underdeveloped areas of the world display a hardening of conflict when faced with such weapons and resort to guerilla warfare, where man is superior to machine…
          –S.T. Das

          –All quotes from “Military Air Power: The CADRE Digest of Air Power Opinions and Thoughts,” compiled by Lt. Col. Charles M. Westenhoff, USAF, Airpower Research Institute, Air University Press, Maxwell Air Force Base, October 1990

        3. Vinny G.

          Very interesting points. Thank you for sharing.

          However, I am not sure most of the US foreign bases have much muscle, as some are made up of less than 50 people. Additionally, the US pays heftily to the host nations to have those bases there. It’s usually all about money, and as the US goes broke, and the US dollar becomes worthless, I’d imagine fewer and fewer nations will be impressed with this country military as well.

          I spend a lot of time in Eastern Europe. A few years ago that area was a bastion of pro-Americanism. However, since this crisis started, people there look upon the US with pity and contempt. The hegemony you discuss is largely psychological, and the US has already lost that aspect.


  7. Cynthia

    But what I find horrifying about this monstrous parasite which is referred to as “HealthEdGov” — this thing which is eating us out of house and home — is that it fails to include all of the numerous financial jobs that are now sucking all the juice out of the Federal Tit — thanks to our trillion dollar (and still counting) bank bailout. But what I find even more horrifying about this is that despite pumping trillions upon trillions of federal dollars into our healthcare, education and anything classified as “government” (which mostly amounts to our military) — the health of our citizens is looking more and more third world-ish each day; our kids are still at the bottom of the ladder in terms of math and science; and, last but not least, our armed forces with their high-priced weaponry still can’t muster up the strength to put a dent in terrorist networks, operating on a mere shoestring budget, from Baghdad to Islamabad!

    1. Cullpepper

      Woah! Can we add “parasitic banking system that gobbles trillions in tax-payer bailouts” to that list?

      At least education keep the kids off the streets.

  8. craazyman

    The Wrongness of Everything

    I was walking at rush hour through the tunnel that connects Times Square with Port Authority and there in the crowd was a man standing alone.

    He was a black man, well dressed in casual clothes and he spoke out in a slow and strong baritone voice, to no one in particular, like an actor in a spotlight on a stage. He kept repeating, over and over, one line.

    He said, “There will be no end to war, human beings are insane. . . . There will be no end to war, human beings are insane.”

    No one paid him any attention at all. I stood there at a modest distance and watched him for about a minute, as the crowd brushed past us both. His movements were poised and graceful and he seemed full of composure and purpose. He may well have been a psychotic, in reality, or maybe he was an actor, practicing, like a street musician. And then I moved on too and heard his line fade into the noise of the tunnel.

    How strange it is, that everyone knows that. But no one can do anything about it.

    1. DownSouth


      I’m not sure I agree with that sentiment.

      In fact, Peter Turchin, who has spent a lifetime studying the issue of war and society, asserts that eternal war is not inevitable. Here’s how he concludes his essay “Warfare and the Evolution of Social Complexity: A Multilevel-Selection Approach:”

      Our ability to form huge cooperative societies has a dark side. Large-scale sociality and large-scale warfare are intimately connected; they coevolved as a dynamical complex during the last ten thousands years. This does not mean that the humanity is forever doomed to lethal conflict. Warfare is not in our “genes,” and evolutionary history is not destiny. However, current attempts to find other bases for cooperation at the scale of the whole humanity (such as the United Nations) have, so far, proved inadequate to stop the wars. It is imperative that we have a clear understanding of why war occurs in order to be able to evolve beyond it. Multilevel selection, as I hope this paper shows, provides a fruitful theoretical framework for working towards such an understanding.

      Of course no progress on this front will be possible as long as large numbers of people buy into evolutionary theory and the genetic determinism evangelized by New Atheists like Richard Dawkins and Ayn Rand. For them it’s all “red in tooth and claw” and “greed is good”.

      Hannah Arendt was fond of pointing out that mankind is capable of surprises, of doing something entirely new and unheard of. She gives the following examples:

      • Conquest, expansion, defence of vested interests, conservation of power in view of a given power equilibrium—all these well-known realities of power politics were not only actually the causes of the outbreak of most wars in history, they were also recognized as ‘necessities’, that is, as legitimate motives to invoke a decision by arms. The notion that aggression is a crime and that wars can be justified only if they ward off aggression or prevent it acquired its practical and even theoretical significance only after the First World War had demonstrated the horrible destructive potential of warfare under conditions of modern technology.

      • [And speaking of the American Revolution]: In order to rule, one (throughout history) had to be born a ruler, a free-born man in antiquity, a member of the nobility in feudal Europe, and although there were enough words in premodern political language to describe the uprising of subjects against a ruler, there was none which would describe a change so radical that the subjects became rulers themselves.
      –Hannah Arendt, On Revolution

      And Winfred E. Garrison gives us yet another example of something totally new and unexpected that evolved out of the American Revolution:

      For more than fourteen hundred years…it was a universal assumption that the stability of the social order and the safety of the state demanded the religious solidarity of all the people in one church. Every responsible thinker, every ecclesiastic, every ruler and statesman who gave the matter any attention, held it as an axiom There was no political or social philosophy which did not build upon this assumption…all, with no exceptions other than certain disreputable “subversive” heretics, believed firmly that religious solidarity in the one recognized church was essential to social and political stability.
      –Winfred E. Garrison, “Characteristics of American Organized Religion,
      Annals of the American Academy of Political and Social Science, March, 1948

      1. bio

        Was it fun to be a commoner and live in Rome at the Height of empire? Or in London at the height of British Empire? Empires eat their own…

      2. Valissa

        Thanks Downsouth for all the quotes you share here.

        With all the research I’ve been doing the past couple of years I am sadly convinced that war and violence are an inevitable aspect of the human condition in general, though of course individual humans and their societies vary in their propensities for peace or violence. What is not inevitable however, is the degree, extent and continuity of war and violence… in others words, it is possible to encourage conditions which discourage war and violence but I think that is the best we can do.

        Although I haven’t finished reading this almost 700 page tome, I highly recommend it to anyone interested in the history of war and violence in human societies… War in Human Civilization by Azar Gat. This is NOT a military history book (although the author has written such books as well) but rather a historical investigation and overview of the societal/anthropological, economic, religious and political/governmental conditions which trigger war (and to a lesser extent what makes some societies at some points in history less likely to be warlike)in the context of an tempered evolutionary analytical approach.

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    1. Dan Duncan

      Thank you, fsatrfds.

      Without a doubt, this was the very best posting in this thread. Far better than GW’s tripe.

    2. Vinny G.

      Excellent prices, my friend. Do you take American Express?

      I’d like to buy several hundred pairs of jeans from you, then declare bankruptcy and stick it to AmEx…lol


  10. kstills


    I love your blog. The economic information is usually first rate.

    However, a cursory read of this cranks ‘links’ shows that a completely biased, unsubstantiated and unbelievable amount of garbage is being used as ‘fact’.

    I expect better of you.

    1. Francois T

      “a completely biased, unsubstantiated and unbelievable amount of garbage is being used as ‘fact’.”

      Would it kill you to have the decency to give, at the very least, ONE example of the “unbelievable amount of garbage” you’re talking about?

      1. Dan Duncan

        Check George Washington’s links for yourself. The vast majority of them are self-referencing. GW is referencing GW’s own blog as sources of support for his contentions on Naked Cap.

        Then, when you do suffer through GW’s joke of a blog…what support-links does he use within his own blog?

        Links to other posts within his joke of a blog!

        [Incidentally, the best part about his blog is the comments to his riveting insights. Check out this one where GW contends that our evil US soldiers torture children.

        All of the comments are from people like “Wow Gold” and “XXMI”–each of which, it turns out, has “absolutely killer deals on World of Warcraft”.

        Here’s one straight from Boy George’s blog. It’s from a loyal reader with the moniker–“Cheap WOW Gold”:

        “It was not long cheap wow goldbefore some one knocked at wow gold for salethe house-door and called, open the door, dear children, your mother is here, and wow gold cheap has brought something back with her for each of you. But the little cheapest wow goldkids knew that it was the wolf, by the rough voice.”

        Too damn funny! GW writing a bunch of self-referencing leftist garbage about the evil American soldier torturing innocents and children…while his comment section is filled with a bunch of spam degenerates touting a video game that is one GIANT war.]

        This George Washington is a total joke. How on earth he has a format in 2 respected blogs (he writes at ZH as well) is quite mystifying.

        And although this weekend’s posts from GW were true vintage GW trash…the best is when he writes about Global Warming.

        In fact, George Washington is the author of one of my all-time favorite quotes. He wrote it on Naked Cap a while back as he was opining on apocalyptic global warming.

        Allow me to share it with you:

        “Preface:I studied global warming at a top university in the early 1980’s.”

        I love that freaking quote!

        We have some economist who writes a silly little blog that’s a front for World of Warcraft spammers…

        And since he is an economist (and we all know how brilliant economists are), he of course feels qualified to write articles on ALL subjects–which includes climate science.

        But, just in case anyone out there should question his credentials, he hits us with: “Preface: I studied global warming at a top university in the early 1980’s.”

        OK, there GW. And I studied “Delusional Bloggers Who Have No Idea What They Are Talking About” at a top university as well.

        Seriously, who says such a thing?

        “I studied global warming at a top university in the 1980s”?!?!

        What does that even mean? Did you major in Global Warming, GW? [No, b/c there was certainly no Global Warming major back then.]

        Did you take a class in Global Warming, GW? [No, b/c there was no class on this subject back then, either.]

        So what are we left with?

        What we’re left with is that George Washington took some elective course on Geology and they discussed the Earth’s climate for a couple of hours.

        And here we are…25 years later with Boy George…and he uses this class discussion as proof of his qualification to write about climate science.

        Too damn funny. This guy cracks me up every time. A gift that just keeps giving.

          1. Moonbeam McSwine

            Hey now, maybe Dan’s just decompressing between fierce firefights in the Afghan highlands with his SEAL team, serving his country. Or maybe he just inked a big deal with Donald Trump’s top people, creating wealth for ordinary folks, and he wants to relax a bit! You can’t just assume he’s a pissed-off dirt-poor shit-school loser just because he started with that supercilious Mister Peepers act and now he’s working as hard as he ever worked to be all mean and sarcastic and shit. I think he’s kind of cute!

        1. Jeff65

          Dan, you expended a great deal of effort in this reply but not one sentence was devoted to addressing the substance of GW’s post. To someone who’s wise to the “attack the man not the ball” tactics, it looks like you’ve got nothing.

        2. Francois T

          Writing so many words to say so precious little. Even the electrons on my screen are begging for mercy.

  11. JohnnyJJ

    So many ways to look at this issue. on one level, the media and everything else keeps the people terrorized by the way they cover the news day to day. parinoia, fear, anger, insecurity. more security , attack more threats, less civil liberties, boogey men are everywhere!.

    point of diminishing returns & a downward spiral both come to mind.

    People need to disconnect and get control over their fears and stop spazzing out and being so reactive. tv is not your friend.

  12. Greg

    George wrote, “The military-industrial complex is ruining the economy.”

    Certain companies benefit from the $515B spent each year though. And that is the problem. With hundreds of billions of dollars at stake, our lobbying-driven political system is captured by these companies.

    I wish I had hope that we would escape from this trap, but I do not. Campaign finance reform, regulation of lobbyists, public will, each of these has been undermined or ignored by our representatives. The media happily plays along, largely passing over the military budget when criticizing deficits and debt. In Obama’s administration, there is little hope of the change we were promised.

    It appears that the only thing that will end our military spending is when it no longer is sustainable, but that means it will continue until our country is teetering on bankruptcy and little but a hollowed out shell of our former greatness remains. The path we are walking leads to a sad future for our country.

    1. DownSouth

      The Mexican writer Carlos Fuentes puts it so eloquently:

      Spain at her height could do anything. She could exhaust her treasury and forget her poor, her bankrupts, her devalued currency, her incompetent economy, her overvalued currency, her recessions and depressions, her debts both internal and foreign, her deficit spending, her negative trade balance, as long as she could keep herself at the head of the mission against the infidel, the Islamic threat and the Protestant threat. But eventually reality caught up and imposed the limits that imperial folly had so easily hurdled over.

      The Spanish writer Fernando Diaz Plaja finds a provocative parallel in this situation between Spain and the United States. Both, at the height of their influence, joined military and economic force to an obsessive belief in their own moral justification. Whether against Protestantism, in the case of Spain, or against communism, in the case of the United States, the nation overextended its power, postponed solving internal problems, and sacrificed generations. And even when the enemy ceased to be menacing, the desire to use power persisted, inebriating, addictive.


      [So] imperial Spain under Phillip III came to resemble a nation of bankrupts, beggars, and bandits. Inflation, devaluation, and the substitution of copper for gold and silver followed, and this in the nation that had conquered Mexico and Peru.

      Spain also became the first example of an anomaly that the United States runs the risk of repeating as our own century ends: that of being a poor empire, debt-ridden, incapable of solving its internal problems while insistent on playing an imperial role overseas, but begging alms from other, surplus-wealthy nations in order to finance its expensive role as world policeman.

      –Carlos Fuentes, The Buried Mirror

    1. JTFaraday

      That’s why I’m reluctant to do Blankfein and Cheney’s Work by taking the line “deficits,” in the abstract are no problem.

      It seems to me that how you spend the money does matter and the Senate healthcare reform bill seems to suggest that the money is not going to put to work on social welfare or the main steet economy without a significant revolution in how we think.

      Rather than accepting the “deficit terrorist’s” pro/con framework, then, I believe we need to elaborate *how* we want the government to spend. I remember the stimulus debates. No one had any good ideas for how to spend the money. Bail out the states is not exactly a rousing idea.

      I also disagree that the military corporations and the banks are equivalent to “the United States.” Therefore, they can be stopped short of the total fall of the republic they would, no doubt, be willing to pursue.

  13. ModlCitizn

    This is what Ron Paul has been saying for years. Please everyone just look at his website and see what he has to say about foreign policy.

    But another question, what is to be done to stop this? Vote them out? Haha – you voted them in! What if they want your child to go to war next? Are you going to write a letter to the senator who signed the bill to do so?

    Empower yourselves, buy a rifle and learn how to use it.

  14. Swampfox

    What’s the big deal with military spending?

    Yves, I thought your MMT guy, Marshall, just said gov’t spending and deficits don’t matter? In fact, I’m quite sure he used the quite militant societies of Nazi Germany, Fascist Italy, Imperial Japan, and the USSR to show that deficits don’t matter and governments just make money when they want (check the comments of his post). Perhaps, we just need to call a spade a spade and run with the whole empire thing; get ourselves a little Lebensraum or Greater East Asia Co-Prosperity Sphere. The spending certainly doesn’t matter, right?

    Perhaps, you should have your guest posters, Marshall and George Washington, do a little debate.

  15. Jim

    The Rand report quoted by George Washington came to the conclusion that “there is no battlefield solution to Al-Qaeda.”

    The recent killings of top CIA operatives at the CIA run Camp Chapman in Khost, Afghanistan appears to support the Rand conclusion. An article in today’s Washington Post on that bombing quoted a recently retired U.S. intellignece offical complaining that “…now it’s a military tempo where you don’t have time for validating and vetting sources… all that seems to have gone by the board…the agency people are supporting the war-fighter and providing information for targeting, but the espionage part has become almost quaint.”

    And after this incident in Khost it clearly appears that Al-Qaeda is an expert in espionage. One of the individuals killed in the Khost bombing was the woman who, according to the New York Times, had headed Alec Station, the small group within the CIA charged with monitoring Al-Qaeda. The same Times article also states that this woman had “a seemingly encyclopedic knowledge of Al-Qaeda’s top leadership, and was so familiar with the different permutations of the leaders’ names that she could take fragments of intelligence and build them into a mosaic of Qaeda operations.”

    The double agent responsible for the Khost bombing that killed 8 CIA associated individuals had earlier supplied the CIA with messages, according to the Washington Post, that included “… descriptions of the results of U.S. missile attack on al-Qaeda and Taliban training camps and safe houses including details about victims and facilities that no one could know outside a small circle of intelligence analysts and the terrorists themselves.”

    Top CIA leaders in Wahington, again, according to the Post, were impressed by “irrefutable proof” that their supposed inside guy had been in the presence of al-Qaeda’leadership–with the proof including “photograph-type evidence.”

    So it appears that al-Qaeda was able to infiltrate their agent into a CIA-run base in Khost, luring our top CIA experts on Al-Qaeda into a death-trap. Instead of a meeting, in which the speculation in both the New York Times and the Washington Post, held out the hope of possibly getting at Ayman al-Zawahiri–a double agent set off a bomb which took out some of the U.S. government’s most knowledgable assets on Al-Qaeda.

  16. Vinny G.

    Excellent article, and great comments.

    But may I now return to Dancing with the Stars? All these charts and numbers have worn me out… :)


  17. Kirk Powell

    Thank you for this article. Clear and factual. A recent response to a post I made on another website stated:

    “Stop making sense, nobody cares.”

    Apathy has gripped America. Apathy is at the heart of the problem politically in the United States. So many are benefiting from the largesse of the system that they promote the continued failed policies of the past … namely that the Federal Reserve system should remain in place.

    Our Republic has been replaced with American Idol, tonights winner is President Obama. That makes tomorrow look very bleak.

    I no longer expect or look for change, rather how can I survive and protect my own in this bizarro-world?

    1. It will only get worse. The national debt will continue to increase in off balance sheet obligations in order to ensure that the dollar doesn’t collapse.

    2. National secrecy, torture, loss of individual freedoms … will increase as we drift ever more closely to an overt slave-state.

    3. All forms of tyranny eventually are destroyed. Don’t get lost trying to predict the day it happens. Don’t be a zealot or a martyr … be prudent. Be prepared.

    The social contract of our nation has been broken by an international cartel of banks. These banks make their wealth from war and debt. More war … more debt.

    Only an idiot would advocate spending money you don’t have.
    Only a creditor [bank] wants more debt.

    No debt. No banks.

    The solution is to take the power to print the nations currency away from the privately held Federal Reserve bank. Stop price fixing the value of money with “interest rates” and foreign exchange rates.

    Until then, get ready for DOW 20,000

  18. May

    I guess the future South Africa has pretensions that facts on the ground will demolish soon enough! Yes, this country where minority will be future majority and it cannot even graduate high school in majority. Gee in which country did the former downtrodden section rise to political ascendency????

  19. Ed

    Not to worry. Some politician will promise to fix it and once again more than 50% of the voters will vote for him/her.
    Most of you know what the definition of insanity is.

  20. dave

    I thought debt was meaningless and a government can run up all the debt it wants with no consequences since governments can never default?

  21. Charles

    “They” like to claim that health care reform will “socialize” 16% of the economy. But they have no problem with defense spending taking a large chunk of the economy, or even better, they cheer leaded a government bailout of the financial services industry. What is a giveaway, without strings attached, if not socialism?

    I define the “socialism” that’s been decried recently as being equal to or less socialist than public schools, interstate highway systems, and mandatory military drafts.

  22. DellaTerious

    Okay, call me simple minded, but to me it goes like this:

    The US, before 1972, was a net exporter of oil, a commodity needed by every industrial nation on the planet.

    That resource peaked, that much is a fact. Whether you believe in peak oil production or not, oil production IN THE USA, peaked in 1971/72, otherwise there could have been no effective Arab oil embargo in the 70’s. We would’ve simply increased our production …we couldn’t .. it’s called resource restraint, something capitalism is in complete denial about.

    Carter bought the energy-independence scenario; thus the solar panels on the White house roof, and the cardigan and turning down thermostat speech, and “Moral equivalency to War”.

    Reagan ripped those solar panels off the roof, and started a military build-up, with borrowed money, while claiming he was shrinking government, to ensure that the US, now completely unable to supply its massive oil needs, could go anywhere and take it, even if by “Stealth” (the name of the technology is not a coincidence).

    This is when the US changed inexorably, shedding any remnants of being a Republic, to a full-fledged Empire. Capitalism then does what it does best, and morphed into what has since been little more than a flimsily-disguised Keynesian militarism.

    Despite all the brouhaha since that time, nothing has changed. Nothing has replaced the foreign exchange that oil brought in. If you doubt this, look to Russia. Despite the criminality of the regime, the inefficiencies and bureaucratic bungling for which the Russians are famous, their economy is, even now, soaring, and their economy’s growth far surpasses the other BRIC countries. In other words on the strength of their oil exports alone … that’s how lucrative being an oil-exporting nation is.

    Yet the US has never EVER had an adult discussion about how the loss of that revenue and power source would be replaced, even as it started producing larger and larger, less fuel efficient vehicles for drives to suburbs located further and further from where the jobs were located.

    The US economy didn’t change into a War Machine overnight, it was done slyly, but deliberately, over a generation. It now feeds on War the same way Hitler’s War Machine, on which it’s theoretical underpinnings are based, did. We simply prefer to call it “defense”.

    “The fault, dear Brutes, lies not in our Wars, but in ourselves…”. Happy motoring

Comments are closed.