This video is from Dec. 27, 2010 but it is a useful perspective on military spending and how it impacts U.S. deficit, how it gets coutries to fund our deficit and how that is ending. His final point about who will fund the deficit is prescient in light of the actions in Wisconsin and other states in recent months as well as the budget debate in Washington, DC.
KZ
The Real News Network (TRNN):
Michael Hudson – World Tired of Paying Bill for US Military (Global Focus series)
http://www.youtube.com/watch?v=Lyz_ouWXkIo (NEWSLANC EDITOR: This video helps to understand the economics of the American foreign military spending and also how government domestic spending propelled the US economy in the past.)
“So it was the Viet Nam war that forced the dollar off gold, and ended its role as a monetary standard as good as gold…..
Because the dollar [now] is being used to so much to fund the military deficit…. we [Brazil, Russia, India and China] have been financing through our Treasury bond purchases the military spending that is responsible for the US federal deficit, for our encirclement….
You need a mixed economy in order to get rich. But if in the process of fighting labor, you say “Oh it’s socialism! They have government!” then you are not going to have government able to help industry as well as able to help labor, and the economy is going to shrink. So you have a kind of junk economics that is in the mind of policy makers today, that by cutting way government they prevent the infrastructure from essentially enabling this economy to lower its costs!….
[Democracies] can not afford fighting with real bullets. In Viet Nam, every solider in Viet Nam used one ton of copper per year…. There is not enough copper to produce the bullets. You do not have a draft anymore…… So the American war in the Middle East is basically an air war. You can bomb people, but you can not occupy them. You can’t fight them… You can not have an army that actually fights! It’s an eating army, or bribing army, or a military industrial complex without the ability to fight a war!…
It’s been foreigners who have been financing the budget deficit. Now that foreigners are essentially saying we do not want anymore dollars, we are not going to fund your deficit. All of a sudden, they think who is going to fund the deficit, if not foreign central banks? The answer is American labor. The American middle class, and working families are going to fund it. Not the military.”
