National Security and Crazy Economics: The Debt Debacle: Further Reflections on Our Downfall Without Firing a Shot

Yes, Virginia there is a Santa Klaus but the bad news is that self-destruction is coming and it is called the GOP! That could be a literary answer to the “crazy economics” that I wrote about earlier on this blog. Now it has gotten to the point where we have further proof – if any was needed – that we are in the hands of those who act like they seek the destruction of our nation for narrow political gain.

We have heard from an array of top economists that we are facing a major financial disaster if America defaults on its national debt. Paul Krugman and Joseph Stiglitz, both Nobel Economics laureates, have pointed to the disastrous global consequences of a default on our debt. Even the likelihood would do long-term damage to our currency and our economy.

As I have noted, there are many dimensions to “national security” as well as military security, and our nation’s security is clearly threaten by “crazy economics.” These crazy economics are motivated by greed and not by concern for the unemployed nor for the average, struggling citizens. But it manifestly greatly degrades America’s leadership abroad.

The contemplated GOP Congressional proposals that threaten to not pay our debt unless depression type cuts are made to our nation’s vital programs will make financing that debt greatly more expensive. It will entice other nations to give up holding dollars as their reserve currencies, which will undermine our global leadership, and it will make some forego taking our bonds. It will likely contribute to a second, and possibly worse, global recession that will further destroy the industrial, technological, and scientific base of our economy, which may take decades if it is ever to fully recover. Unemployment will undoubtedly grow, which seems to be a conservative Republican goal.

With the “pro-depression” economic policies already enacted in the EU and severe budget cutting approaches already enforced in Europe, including in the UK, the knock-on effect will likely be devastating.  It will not grow us out of our financial difficulties, but we will be digging our deficit and unemployment holes deeper by the rapid lowering of our GDP. Lower taxes do not help employment; they make it worse when budgets are cut now and in the future. The wholesale laying off of public servants, teachers, and road construction workers and others in the States has once again only proved the point.

Our ability to provide resources and funding for vital global challenges will diminish, if not disappear, making these global problems far worse, hurting global security by exacerbating conflicts and poverty across the entire globe. Budget cuts will make humanitarian disasters worse through lack of resources to respond. It will affect the spread of disease and poverty when we cut foreign assistance. And it will undermine our “soft power” diplomacy to address nuclear proliferation, threats to democracy, and regional conflicts and terrorism.

Finally, mindless cuts will unnecessarily undermine American leadership just when the world needs it the most as we face multi-crises. That will be the legacy of an unneeded debt default and its consequences. What are they thinking!

We welcome all comments and views! Join the debate!

By Harry C. Blaney III.

National Security and Crazy Economics: Our Downfall Without Firing a Shot

There are many dimensions to “national security” as well as military security.  Increasingly I am feeling that we are more and more threatened by what can only be described as “crazy economics” which seem to be motivated more by greed than by intellectual honesty or sound economics.  It is certainly not motivated by a concern for the unemployed or for the average citizen’s well being. Nor is it motivated by concern for America’s leadership abroad.

I don’t mean just the normal domestic-type absurdity as in “Tea Party” economics and not even what can be described as Milton Friedman-type “supply side” failed economics. What we are dealing with is not real “economics” but rather deliberate class warfare (a term often used by the wealthy, far right to describe any effort at fairer taxes) directed at further weakening America’s vast middle class that has fallen behind the very rich for decades.  It is the “economics” that has decimated the so-called “rust belt” and engineered high unemployment and low worker wages. It is the “economics” that has shifted America’s productivity and capital from building things to pushing financial paper around to generate wealth for a very few.  Now they also want to degrade our schools and educational institutions.

Even now, especially during this economic crisis that has been initiated by the very, very rich in our society, our average citizens are experiencing an extraordinary degradation of their dignity and their political and social voice.  And not least, it has deprived them of their effective participation in a meaningful right to the value of their labor.

Whether it is the taking away of the right to bargain by civil servants in Wisconsin and other states, or punitive anti-Union laws, or efforts at “redistricting” by states to take away the effective votes of minorities like blacks, Latinos, and the poor, it has made America a truly weaker nation.

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Of the 1%, by the 1%, for the 1% by Joesph Stiglitz

Of the 1%, by the 1%, for the 1%

Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

From Vanity Fair, May, 2011
(Read the rest of the article here)

Joesph Stiglitz’s article addresses the economic imbalance across the upper 1% of Americans and the middle and lower class—you can’t fight facts about the economic inequality across our nation.  The upper 1% of Americans makes nearly 25% of the nation’s income per year and control 40% of the nation’s wealth.  On the flip side, the middle class has seen a fall in income and wealth over the past decade, and men with no college degree have seen a 12% fall in income over the past quarter century.  Stiglitz argues that an economy like America’s—one in which the wealth divide progressively worsens each year—will not do well in the long haul because of shrinking opportunity, undermining efficiency and under-investment in infrastructure, research and education.  The issue caused by a divided society is the reluctance of the wealthy to spend money on infrastructure and common goods such as public education and parks, which they could readily buy for themselves.  Stiglitz points out that the wealthy worry about a strong government attempting to balance the inequality and raise taxes on the wealthy.Explanations for the growing inequality include many aspects from globalization and the rise of cheap overseas workers, to social changes, such as the decline of unions.  Stiglitz also gives insight into the foreign policy views and actions of the wealthy, which centers round paying for wars with borrowed money, disregarding our nation’s notion of balance and restraint between national interests and national resources.  This imbalance in society and system for no opportunities is what gave rise to the unrest throughout the Middle East.  The inequality we see today, with 1% of Americans living a life of luxury while the middle and lower class fight over job opportunities and national resources, is not beneficial for a functioning society.