What's Draining the Economy?

by Claude Garrod and Judy Reynolds

The President and House leaders have reached an agreement on a $150 billion program to stimulate the weakening economy by giving each of us a present of about $500. Since the federal government already spends far more than it collects in taxes, they'll have to borrow the money for the stimulus and, since Americans have a savings rate of about zero, they'll have to borrow it from foreigners. An individual who, being already deeply in debt, borrowed still more money in order to buy stimulants would likely be described as an addict, but when the government does it it's called a bold economic response. Hopefully, most people won't do what I'll do with the check, which is just deposit it in the bank; rather, they'll take the money to Walmart's and buy $500 worth of stuff from China, which will certainly stimulate the Chinese economy. Our present economic problems are attributed to the popping of the housing bubble, which caused the sub-prime meltdown. But, the housing bubble was created in order to prevent a recession caused by the popping of the tech-stock bubble that preceded it. In this article I'll argue that the reason we have to depend on bubbles to keep our economy afloat is that each year we make less and less useful stuff while more and more of our economy is devoted to maintaining and expanding a global military empire. Most Americans are completely unaware of the colossal extent of that empire. According to the public record, we have over 700 military bases spread all across the globe, (not counting the 6000 bases within the United States nor an unknown number of secret bases, which might bring the total up to a thousand.) Also, according to DoD (Department of Defense) data, each base houses, on average, more than 70 buildings (barracks, airplane hangers, hospitals, etc.), thus, by 'base' we don't mean someone's back yard with a pup tent. These bases are almost everywhere. I doubt that you could find Diego Garcia on the map. It's a small island in the Indian Ocean - a British colony that the Brits were gracious enough to cleanse of all of its original inhabitants so that it could be re-colonized by the US military (a sort of colony-squared) to be used as an air and naval base. According to the Diego Garcia website (www.dg.navy/web) it's quite the comfortable place. Anyone above the rank of corporal gets a private room with kitchenette. The base sports diverse recreational and entertainment facilities. Central Texas College runs a community college on the island. It's possible that you don't know where Keflavic is either. It's an obscure town in Iceland that hosts a US naval base with about four thousand people. According to its website "The base offers a wide variety of recreational services to include bowling, swimming, gymnasium, theater, social clubs, a Wendy's restaurant, a beauty shop, a tour office, and hobby centers." Not all military people are sweating it out in Fallujah. These two bases are about average. In Iraq, we're building some dozen new permanent military bases, the largest of which, Camp Anaconda, has an area of 10 square miles and requires nine separate bus lines to shuttle people around within it.

How much is all this costing us? We'll begin with some relative numbers because the absolute numbers are so large as to be meaningless to most people. All of the other countries of the world, put together, have about 21 times the population of the US, but the US spends more on defense than all of them combined. The war industry in this country, both within the armed services and outside, is pretty much out of any political control. Military bases and industries are heavily concentrated in the districts of just those congresspeople who are supposed to regulate their budgets. A typical case is that of Senator Feinstein who was Chair of the Senate Military Appropriations Subcommittee while her husband's firms received billions of dollars in military construction contracts. (See metroactive.com/feinstein/ for details)

Let's look at the actual numbers. The DoD budget for 2008, including the supplements for the two ongoing wars and some $93 billion for other incidental war costs, comes to about $766 billion. But that doesn't include lots of other military-related costs. It doesn't include over a billion dollars in recruitment and reenlistment bonuses. It doesn't include many billions for maintaining and developing nuclear weapons, which is done by the Department of Energy. It doesn't include about $70 billion dollars to treat the wounded and mentally disturbed from the present and past wars (Department of Veteran's Affairs), nor the $38 billion for the Military Retirement Fund (Treasury Department), nor the billions spent on space weapons by NASA, and cerainly not the more than $200 billion in interest for past debt-financed military expenditures. When all this is added up, the yearly cost for this gigantic military fantasy is well over a trillion dollars and the proposed budget for next year is substantially larger. Past empires, such as those of the British and French, have collapsed when the economy of the central power could no longer sustain the financial hemorage necessary to maintain them. We are fast approaching that condition.