Saturday, April 29, 2006

Any Way to Run an Empire?

The whole point of being an empire: to transfer net wealth from abroad to oneself.

G.W. Bush and the Republicans are mortgaging the empire to foreign powers.

Consider: in 1968, foreigners (primarily governments) owned 6% of the US Empire's national debt (through purchase of Treasury securities). In June 2005, the figure was 54%. When Eisenhower was president, American banks and insurance companies owned more than 40% of Treasuries; now it's 7%.

In other words, if foreign governments (esp. China, Japan, and South Korea) weren't lending money to Uncle Sam, the USE government and population couldn't spend like drunken sailors. The government would either have to raise interest rates (to attract foreign lending or American savings) or drastically cut the Federal budget (almost half of which goes to past, present, and future wars, and other military spending).

The record for increasing the national debt is held by the supposedly-parsimonious Ronald Reagan: $1.4 trillion. G.W. Bush comes in second: $1.1 trillion. Of course, Reagan took 8 years to do it, and Bush only 4.5. General George will soon be the new champion.

Of course, China et al. aren't lending from the goodness of their hearts: they want Americans to remain flush with cash to buy their cheap imports.

Anyone who has ever studied economics has to wonder and worry: what happens if the credit cards are taken away?

Well, as General George says: Let them eat Spam.


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