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Ship Of Fools_Is there intelligent life in Washington, DC? Not a speck

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Feb 12, 2009, 6:04:27 AM2/12/09
Ship Of Fools_Is there intelligent life in Washington, DC? Not a speck
of it.
By Paul Craig Roberts
The US economy is imploding, and Obama is being led by his government of
neconservatives and Israeli agents into a quagmire in Afghanistan that
will bring the US into confrontation with Russia, and possibly China,
American's largest creditor.
The January payroll job figures reveal that last month 20,000 Americans
lost their jobs every day.
In addition, December's job losses were revised up by 53,000 jobs from
524,000 to 577,000. The revision brings the two-month job loss to
1,175,000. If this keeps up, Obama's promised three million new jobs
will be wiped out by job losses.
Statistician John Williams ( reports that this huge
number is an understatement. Williams notes that built-in biases in
seasonal adjustment factors caused a 118,000 understatement of January
job losses, bringing the actual January job loss to 716,000 jobs.  
The payroll survey counts the number of jobs, not the number of employed
as some people have more than one job. The Household Survey counts the
number of people who have jobs. The Household Survey shows that 832,000
people lost their jobs in January and 806,000 in December, for a two
month reduction of Americans with jobs of 1,638,000.   The
unemployment rate reported in the US media is a fabrication. Williams
reports that "during the Clinton Administration, 'discouraged workers'
those who had given up looking for a job because there were no jobs to
be had--were redefined so as to be counted only if they had been
'discouraged' for less than a year. This time qualification defined away
the bulk of the discouraged workers. Adding them back into the total
unemployed, actual unemployment, [according to the unemployment rate
methodology used in 1980] rose to 18% in January, from 17.5% in
In other words, without all the manipulations of the data from a
government that lies to us every time it opens its mouth, the US
unemployment rate is already at depression levels.   How could it be
otherwise given the enormous job loss from offshored jobs. It is
impossible for a country to create jobs when its corporations are moving
production for the American consumer market offshore. When they move the
production offshore, they shift US GDP to other countries. The US trade
deficit over the past decade has reduced US GDP by $1.5 trillion
dollars. That is a lot of jobs.  
I have been reporting for years that American university graduates have
had to take jobs as waitresses and bartenders. As over-indebted American
consumers lose their jobs, they will visit restaurants and bars less
frequently. Consequently, Americans with university degrees will not
even have jobs waiting on tables and mixing drinks.   US policymakers
have ignored the fact that consumer demand in the 21st century has been
driven, not by increases in real income, but by increased consumer
indebtedness. This fact makes it pointless to try to stimulate the
economy by bailing out banks so that they can lend more to consumers.
The American consumers have no more capacity to borrow.   With the
decline in the values of their principal assets--their homes--with the
destruction of half of their pension assets, and with joblessness facing
them, Americans cannot and will not spend.   Why bail out GM and
Citibank when the firms are moving as many operations offshore as they
possibly can?   Much of US infrastructure is in poor shape and needs
renewing. However, infrastructure jobs do not produce goods and services
that can be sold abroad. The massive commitment to infrastructure does
nothing to help the US reduce its massive trade deficit, the financing
of which is becoming a major problem. Moreover, when the infrastructure
projects are completed, so are the jobs.
At best, assuming Mexicans do not get most of the construction jobs, all
Obama's stimulus program can do is to reduce the number of unemployed
Unless US corporations can be required to use American labor to produce
the goods and services that they sell in American markets, there is no
hope for the US economy. No one in the Obama administration has the wits
to address this problem. Thus, the economy will continue to implode.  
Adding to the brewing disaster, Obama has been deceived by his military
and neoconservative advisers into expanding the war in Afghanistan, a
large mountainous country. Obama intends to use the draw-down of US
soldiers in Iraq to send 30,000 more American troops to Afghanistan.
This would bring the US forces to 60,000--600,000 fewer than US Marine
Corps and US Army counterinsurgency guidelines define as the minimum
number of soldiers necessary to bring success in Afghanistan--and less
than half as many as the army that was unable to occupy Iraq. The
Iranians had to bail out the Bush regime by restraining its Shi'ite
allies and encouraging them to use the ballot box to attain power and
push out the Americans. In Iraq the US troops only had to fight a small
Sunni insurgency drawn from a minority of the population. Even so, the
US "prevailed" by putting the insurgents on the US payroll and paying
them not to fight. The withdrawal agreement was dictated by the
Shi'ites. It was not what the Bush regime wanted.   One would think
that the experience with the "cakewalk" in Iraq would make the US
hesitant to attempt to occupy Afghanistan, an undertaking that would
require the US to occupy parts of Pakistan. The US was hard pressed to
maintain 150,000 troops in Iraq. Where is Obama going to get another
half million soldiers to add to the 150,000 to pacify Afghanistan?
One answer is the rapidly growing massive US unemployment. Americans
will sign up to go kill abroad rather than be homeless and hungry at
But this solves only half of the problem. Where does the money come from
to support an army in the field of 650,000, an army 4.3 times larger
than US forces in Iraq, a war that has cost us $3 trillion in
out-of-pocket and already incurred future costs. This money would have
to be raised in addition to the $3 trillion US budget deficit that is
the result of Bush's financial sector bailout, Obama's stimulus package,
and the rapidly failing economy. When economies tank, as the American
one is doing, tax revenues collapse. The millions of unemployed
Americans are not paying Social Security, Medicare, and income taxes.
The stores and businesses that are closing are not paying federal and
state income taxes. Consumers with no money or credit to spend are not
paying sales taxes.
The Washington Morons, and morons they are, have given no thought as to
how they are going to finance a fiscal year 2009 budget deficit of some
two to three trillion dollars.
The practically nonexistent US saving rate cannot finance it.   The
trade surpluses of our trading partners, such as China, Japan, and Saudi
Arabia, cannot finance it.
The US government really has only two possibilities for financing its
budget deficit. One is a second collapse in the stock market, which
would drive the surviving investors with what they have left into "safe"
US Treasury bonds. The other is for the Federal Reserve to monetize the
Treasury debt.
Monetizing the debt means that when no one is willing or able to
purchase the Treasury's bonds, the Federal Reserve buys them by creating
bank deposits for the Treasury's account.   In other words, the Fed
"prints money" with which to buy the Treasury's bonds.
Once this happens, the US dollar will cease to be the reserve currency.
In addition, China, Japan and Saudi Arabia, countries that hold enormous
quantities of US Treasury debt in addition to other US dollar assets,
will sell, hoping to get out before others.
The US dollar will become worthless, the currency of a banana republic.
The US will not be able to pay for its imports, a serious problem for a
country dependent on imports for its energy, manufactured goods, and
advanced technology products.
Obama's Keynesian advisers have learned with a vengeance Milton
Friedman's lesson that the Great Depression resulted from the Federal
Reserve permitting a contraction of the supply of money and credit. In
the Great Depression good debts were destroyed by monetary contraction.
Today bad debts are being preserved by the expansion of money and
credit, and the US Treasury is jeopardizing its credit standing and the
dollar's reserve currency status with enormous quarterly bond auctions
as far as the eye can see.
Meanwhile, the Russians, overflowing with energy and mineral resources,
and not in debt, have learned that the US government is not to be
trusted. Russia has watched Reagan's successors attempt to turn former
constituent parts of the Soviet Union into US puppet states with US
military bases. The US is trying to ring Russia with missiles that
neutralize Russia's strategic deterrent.
Putin has caught on to "comrade wolf." He has succeeded in having the
president of Kyrgyzstan, a former part of the Soviet Union, evict the US
from its military base. This base is essential to America's ability to
supply its soldiers in Afghanistan.
To stop America's meddling in Russia's sphere of influence, the Russian
government has created a collective security treaty organization
comprised of Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, and
Tajikistan. Uzbekistan is a partial participant.   In other words,
Russia has organized central Asia against US penetration.
To whose agenda is President Obama being hitched? Writing in the English
language version of the Swiss newspaper, Zeit-Fragen, Stephen J.
Sniegoski reports that leading figures of the neocon conspiracy--Richard
Perle, Max Boot, David Brooks, and Mona Charen--are ecstatic over
Obama's appointments. They don't see any difference between Obama and
Not only are Obama's appointments moving him into an expanded war in
Afghanistan, but the powerful Israel Lobby is pushing Obama toward a war
with Iran.
The unreality in which he US government operates is beyond belief. A
bankrupt government that cannot pay its bills without printing money is
rushing headlong into wars in Afghanistan, Pakistan, and Iran. According
to the Center for Strategic and Budgetary Analysis, the cost to the US
taxpayers of sending a single soldier to fight in Afghanistan or Iraq is
$775,000 per year!
The world has never seen such total mindlessness. Napoleon's and
Hitler's march into Russia were rational acts compared to the mindless
idiocy of the United States government.
Obama's war in Afghanistan is the Mad Hatter's Tea Party. After seven
years of conflict, there is still no defined mission or endgame scenario
for US forces in Afghanistan. When asked about the mission, a US
military official told NBC News, "Frankly, we don't have one."
reports: "they're working on it."   Speaking to House Democrats on
February 5, President Obama admitted that the US government does not
know what its mission is in Afghanistan and that to avoid "mission creep
without clear parameters," the US "needs a clear mission."
How would you like to be sent to a war, the point of which no one knows,
including the commander-in-chief who sent you to kill or be killed? How,
fellow taxpayers, do you like paying the enormous cost of sending
soldiers on an undefined mission while the economy collapses?

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