Bush's Con Jobs: Will the US Need an IMF Bail Out?
- From: steward237@xxxxxxx
- Date: 10 Jan 2006 22:28:01 -0800
By PAUL CRAIG ROBERTS*
*Paul Craig Roberts has held a number of academic appointments and has
contributed to numerous scholarly publications. He served as Assistant
Secretary of the Treasury in the Reagan administration. His graduate
economics education was at the University of Virginia, the University
of California at Berkeley, and Oxford University. He is coauthor of The
Tyranny of Good Intentions. He can be reached at:
paulcraigroberts@xxxxxxxxx
-------------------------------------------------------------------------------------------
President George W. Bush has destroyed America's economy along with
America's reputation as a truthful, compassionate, peace-loving nation
that values civil liberties and human rights.
Nobel prize-winning economist Joseph Stiglitz and Harvard University
budget expert Linda Bilmes have calculated the cost to Americans of
Bush's Iraq war to be between one and two trillion dollars. This figure
is 5 to 10 times higher than the $200 billion that Bush's economic
adviser, Larry Lindsey, estimated. Lindsey was fired by Bush, because
Lindsey's estimate was three times higher than the $70 billion figure
that the Bush administration used to mislead Congress and the American
voters about the burden of the war. You can't work in the Bush
administration unless you are willing to lie for dub-ya.
Americans need to ask themselves if the White House is in competent
hands when a $70 billion war becomes a $2 trillion war. Bush sold his
war by understating its cost by a factor of 28.57. Any financial
officer any where in the world whose project was 2,857 percent over
budget would instantly be fired for utter incompetence.
Bush's war cost almost 30 times more than he said it would because the
moronic neoconservatives that he stupidly appointed to policy positions
told him the invasion would be a cakewalk. Neocons promised minimal US
casualties. Iraq already has cost 2,200 dead Americans and 16,000
seriously wounded--and Bush's war is not over yet. The cost of lifetime
care and disability payments for the thousands of US troops who have
suffered brain and spinal damage was not part of the unrealistic rosy
picture that Bush painted.
Dr. Stiglitz's $2 trillion estimate is OK as far as it goes. But it
doesn't go far enough. My own estimate is a multiple of Stiglitz's.
Stiglitz correctly includes the cost of lifetime care of the wounded,
the economic value of destroyed and lost lives, and the opportunity
cost of the resources diverted to war destruction. What he leaves out
is the war's diversion of the nation's attention away from the ongoing
erosion of the US economy. War and the accompanying domestic police
state have filled the attention span of Americans and their government.
Meanwhile, the US economy has been rapidly deteriorating into third
world status.
In 2005 for the first time on record consumer, business, and government
spending exceeded the total income of the country. Net national savings
actually fell.
America can consume more than it produces only if foreigners supply the
difference. China recently announced that it intends to diversify its
foreign exchange holdings away from the US dollar. If this is not
merely a threat in order to extort even more concessions from Bush,
Americans' ability to consume will be brought up short by a fall in the
dollar's value as China ceases to be a sponge that is absorbing an
excessive outpouring of dollars. Oil producing countries might follow
China's lead.
Now that Americans are dependent on imports for their clothing,
manufactured goods, and even high technology products, a decline in the
dollar's value will make all these products much more expensive.
American living standards, which have been treading water, will sink.
A decline in living standards is an enormous cost and will make
existing debt burdens unbearable. Stiglitz did not include this cost in
his estimate.
Even more serious is the war's diversion of attention from the
disappearance of middle class jobs for university graduates. The
ladders of upward mobility are being rapidly dismantled by offshore
production for US markets, job outsourcing and importation of foreign
professionals on work visas. In almost every US corporation, US
employees are being dismissed and replaced by foreigners who work for
lower pay. Even American public school teachers and hospital nurses are
being replaced by foreigners imported on work visas.
The American Dream has become a nightmare for college graduates who
cannot find meaningful work.
This fact is made abundantly clear from the payroll jobs data over the
past five years. December's numbers, released on January 6, show the
same pattern that I have reported each month for years. Under pressure
from offshore outsourcing, the US economy only creates low productivity
jobs in low-pay domestic services.
Only a paltry number of private sector jobs were created--94,000. Of
these 94,000 jobs, 35,800 or 38% are for waitresses and bartenders.
Health care and social assistance account for 28% of the new jobs and
temporary workers account for 10%. These three categories of low tech,
nontradable domestic services account for 76% of the new jobs. This is
the jobs pattern of a poor third world economy that consumes more than
it produces.
America's so-called first world superpower economy was only able to
create in December a measly 12,000 jobs in goods producing industries,
of which 77% are accounted for by wood products and fabricated metal
products--the furniture and roofing metal of the housing boom that has
now come to an end. US employment declined in machinery, electronic
instruments, and motor vehicles and parts.
2,600 jobs were created in computer systems design and related
services, depressing news for the several hundred thousand unemployed
American computer and software engineers.
When manufacturing leaves a country, engineering, R&D, and innovation
rapidly follow. Now that outsourcing has killed employment
opportunities for US citizens and even General Motors and Ford are
failing, US economic growth depends on how much longer the rest of the
world will absorb our debt and finance our consumption.
How much longer will it be before "the world's only remaining
superpower" is universally acknowledged as a debt-ridden, hollowed-out
economy desperately in need of IMF bailout?
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Paul Craig Roberts has held a number of academic appointments and has
contributed to numerous scholarly publications. He served as Assistant
Secretary of the Treasury in the Reagan administration. His graduate
economics education was at the University of Virginia, the University
of California at Berkeley, and Oxford University. He is coauthor of The
Tyranny of Good Intentions. He can be reached at:
paulcraigroberts@xxxxxxxxx
.
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