World, Dump US Debt! You’ve Got Nothing to Lose but the Chains
Pentagon's record $700bn budget is entirely funded by debt
As Russia steadily slashes its military spending and announces cuts will continue for the next five years through 2022, the US is going in the other direction and shoveling ever more fantastic sums of money into the military and parasite defense corporations. (Around half of Pentagon budget now goes to contractors.)
Got $1.6 Billion to start Wall on Southern Border, rest will be forthcoming. Most importantly, got $700 Billion to rebuild our Military, $716 Billion next year…most ever. Had to waste money on Dem giveaways in order to take care of military pay increase and new equipment.
— Donald J. Trump (@realDonaldTrump) March 22, 2018
The $1.3 trillion discretionary spending comes on top of projected $2.8 trillion mandatory spending by the US Federal Government mainly on health and unemployment that is not up to the Congress.
White House projections optimistically predicts its requested budget would result in a budget deficit of $440 billion. Congress predicts $563 billion.
Both numbers are fantasy. The US federal government already produced a $666 billion deficit in fiscal 2017. There is no way even more spending in 2018 will result in a smaller deficit.
In every of the first three months of the fiscal 2018 the monthly deficit exceeded its 2017 counterpart. The full 2018 deficit is going to exceed $666 billion.
A survey of “primary dealers”, privileged banks and brokers that can buy US bonds directly from the Fed, has them expecting a 2018 deficit of $750 billion rising to $965 billion the next year. One government spending watchdog projects a deficit of $833 billion.
In other words, US 2018 deficit is likely going to be larger than all but 15 national economies in the world. In 2018 the US will suck up as much purchasing power from its creditors (and add dollars to its debt) as is the entire gross domestic product of Netherlands or Turkey.
The deficit is also (just barely) larger than its fantastically bloated military budget. If the US was forced to run a balanced budget, and wanted to keep every other budget item untouched it actually wouldn’t have a single dollar for the military.
Ironically the US keeps expanding its fantastic “defense” budget which only brings it closer to its financial funeral.
Meanwhile its vassals equally ironically keep funding its deficit and therefore military, and thus foolishly sustain imperial domination over themselves.
The most ironic position is China’s. Clearly marked by the US as a rival and a threat whose rise is to be arrested and contained, it nonetheless helps finance US deficits that finance the US military.
At the same time the US is selling debt it can only ever make good on if it can sell even more debt down the line (or if it “repays” it in devalued paper). When it can no longer do that it will have to give up on fantastic military budgets, or first pay for them with inflation and the economic impoverishment that entails and then give up. (Or cut entitlements but that’s even more difficult than slashing defense spending.)
Ironically the might of the most powerful empire the world has ever seen now rests on the goodwill, generosity (and ignorance) of those held down or threatened by it.
*Though the total military-related spending is actually closer to $900 billion.