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Will Trump Boycott Grocery Stores for Their Unfair Trade? – Article by Edward Hudgins

Will Trump Boycott Grocery Stores for Their Unfair Trade? – Article by Edward Hudgins

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The New Renaissance HatEdward Hudgins
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Donald Trump’s stump thump against Mexico is that it runs a $58 billion annual trade surplus with the United States. Trump somehow thinks this leaves America the poorer.

He claims that it is out of that money, presumably sitting in some giant vault in Tijuana, that Mexico will pay for the border fence he wants to build to keep immigrants from entering the United States illegally. Trump’s pronouncements only demonstrate how he keeps facts and reason from entering his thoughts and, how he would keep Americans from making their own free choices in a free market.

International free trade is win-win
Trump’s very language reveals a glaring error concerning trade. Mexico and America do not trade. Mexicans and Americans do. Mexicans have $58 billion more in cash (pieces of paper with George Washington’s picture on them or the equivalent credits on bank ledgers) and Americans have $58 billion more in goods (electrical equipment, Trump-themed apparel).

And Trump doesn’t bother to ask, what are those Mexicans supposed to do with those pieces of paper? If they don’t spend them in America, they’ve got nothing but useless paper. So the Mexican trade surplus also means that Mexicans are investing an equivalent amount in America, helping the U.S. economy grow.

Further, the fundamental nature of trade between individuals is a win-win situation. Someone who buys an orange Donald hat for $20 to show his support for the former host of “The Apprentice” values the hat more than the twenty. And the manufacturer in Mexico who has a warehouse full of said head gear prefers the $20.

If The Donald slaps a 30% tariff on all goods coming from Mexico, maybe his starry-eyed supporters would shell out $26, the higher cost of the hat. But a poor mother with five kids seeing the price of a pair of shoes jump from $20 to $26 might be hard-pressed to afford the extra $30 she’d need to cover the feet of all her five little ones. But Trump doesn’t care. He wants to get rid of that pesky trade imbalance and what better way than to discourage that mom from buying Mexican-made shoes for her family! On the other hand, maybe he will notice when Mexican investors pull out of his latest golf resort or skyscraper projects, because his policies have destroyed their profits.

Trump’s grocery store trade deficit
If Trump is so against trade deficits, he should have a serious problem in his own household. Trump no doubt runs a huge trade deficit with his grocery store. He gives them piles of money when he buys food—no doubt top-priced cuisine—but the store never buys anything from him. Maybe he should boycott it. Maybe we should all boycott our local grocery stores lest we be victims of a trade deficit. Maybe if elected president, Trump will slap a 30 percent “grocery tariff” on everything that those stores try to sell to us poor, exploited schleps until those stores start purchasing stuff from us.

Trumps versus liberty
Trump poses as a friend of the people, but he wants to use government to prohibit the Americans from purchasing goods from whomever they wish—including Mexicans. The Donald presumes to know better what individual Americans should buy with their own money and at what price than they do. He’s determined to drive up the prices for Americans buying from Mexicans to teach those Mexicans a lesson. So what if American consumers and businesspeople are collateral damage.

Trump’s policies would only add more instability to an already unstable world. Ayn Rand explained that “The essence of capitalism’s foreign policy is free trade—i.e., the abolition of trade barriers… the opening of the world’s trade routes to free international exchange and competition among the private citizens of all countries dealing directly with one another. During the nineteenth century, it was free trade that liberated the world, undercutting and wrecking the remnants of feudalism and the statist tyranny of absolute monarchies.”

When governments take away the liberty of individuals to pursue their self-interest by trading freely with other individuals—a win-win situation—they set the stage for conflicts and even wars between countries. Trump’s proposed trade war is really a war on the American people.

Dr. Edward Hudgins directs advocacy and is a senior scholar for The Atlas Society, the center for Objectivism in Washington, D.C.

Copyright The Atlas Society. For more information, please visit www.atlassociety.org.

A Conversation with My Neighbor “Sam” – Article by Mark Brandly

A Conversation with My Neighbor “Sam” – Article by Mark Brandly

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The New Renaissance HatMark Brandly
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Lately, I’ve wondered how my neighbor, Sam, affords to buy so much stuff. He appears to have an unlimited budget. When I asked him about this, Sam asked, “Do you think I’m spending too much?”

“That depends,” I said, “How much money do you make?”

“I take home $100,000 a year.”

That surprised me. I would guess that he’s spending more than that. But I tried to be encouraging, “That sounds like plenty of income. With a little planning, you should be able to budget your spending and be financially stable.”

“But my finances are a mess,” Sam replied. “I spend more than I take home. Last year I had to borrow $12,000 just to cover my spending.”

“Well maybe things will be better this year,” I said, hoping that Sam’s spending issues was a one year problem.

“No,” Sam replied. “Actually, in the first three months of this year, I’ve already spent $19,000 more than I’ve made. It looks like my budget deficit this year will be much worse than it was last year.”

Now I was starting to worry. “Have you been borrowing money to cover your spending for a long time?”

“Oh yes. I have a lot of debt. Part of the problem is that I owe myself $150,000.”

I wondered if Sam misspoke, “Wait, wait, wait, you owe yourself $150,000? Why do you think that you’re in debt to yourself?”

“Well you see, over the years I promised myself that I was going to use my paychecks to pay for a fund for my children’s education, but instead of spending $150,000 on colleges, I spent the money on other expenses. So I figure that I owe myself this money so that I can pay for my children’s college tuitions.”

Obviously Sam doesn’t understand the definition of the word “debt.”

I tried to be polite in my response: “That doesn’t make any sense. It’s true that you’ve made some horrible decisions regarding your spending, but it’s ridiculous to claim that you owe yourself money. A debt occurs when one person owes another person money. Just because you changed your mind about how to spend your paychecks doesn’t mean that you’ve borrowed money from yourself.

“So the first thing you need to do is to think clearly about the amount of debt you have. You don’t owe yourself any money. Now, forgetting about this ridiculous notion of self-debt, how much do you owe?”

“Alright, I think I see your point. Let’s just talk about the rest of my debt. I owe various banks about $420,000. This debt is more than four times my take-home income.”

Sam often lies about his income and spending issues, but he always understates his budget problem. If he’s lying now, then I can be sure that the problem is even greater than he says. I wanted more information.

“That a pretty high debt to income ratio. But that might be somewhat manageable, although unwise, if you’ve borrowed that money at low interest rates.”

“I have some good news and some bad news,” Sam said. “Interest rates are low. In fact, in the last fourteen years, my debt has more than quadrupled, but my interest payments have increased less than 50 percent. That’s because interest rates have collapsed during that time. Isn’t that good news?”

“I suppose, but do you know that interest rates are going to increase over the next several years?”

“Yes, that’s the bad news. In the past year, I only paid $7,000 of interest, but within ten years my debt will increase over 50 percent, and possibly much more, and with higher interest rates I expect to be paying at least four to five times that much in interest annually.”

“That’s a huge problem. So to be able to make your loan payments, I assume that you’ve taken out some long-term loans.”

“No, no, no. In order to take advantage of the low interest rates, most of my borrowing is short term. I rollover my loans quickly. In the past year my principal payments on these loans totaled $207,000.”

“Let me get this straight. Your loan payments, including principal and interest, are well over twice your take home pay?”

“Yes, I take home a little over $8,000 per month and my loan payments are over $17,000 per month. But it’s no problem. In the past year I borrowed $223,000 to cover everything.”

Shocked, I said “How can you say borrowing more than twice your income is not a problem?”

“I simply borrow all the money I need to make all of my loan payments. I never pay any of the loans down. I’ve been doing this for years, ever since I started spending more than I make.”

“Okay. Most of your borrowing goes to cover your increasingly large principal and interest payments. And as interest rates rise, interest payments will become a bigger percentage of your spending. When that happens, your total debt will increase faster than your income. What is your plan, say in the next ten years, to correct this situation?”

“Well I don’t have a plan for correcting anything, because I don’t see how I can cut my spending.”

“What if the banks stop loaning you money to make your payments on your loans? What happens then?”

“I guess I’m assuming that won’t happen.”

Sam’s Budget Situation in Real Numbers
If one of our neighbors budgeted in this manner, we would obviously conclude that the guy is crazy. No such plan could work. Eventually lenders would refuse to fund Sam’s spending.

However, Sam’s situation looks a lot like the federal government budget plan. Take a look at some recent federal budget information and some Congressional Budget Office projections:

  • In FY (fiscal year) 2015, the feds had a budget deficit, counting only debt held by the public, of $339 billion, which is about 10 percent of their tax revenues of $3,248 billion. The deficit has been declining the last few years, but that is now changing.
  • In fact, in the first three months of FY 2016, according to the Treasury Department, federal debt held by the public increased $548 billion. Admittedly, some of this debt was due to the fact that the feds were cooking the books in FY 2015 when they hit the debt ceiling limit. Nonetheless, the first quarter 2016 deficit is already 60 percent larger than the overall 2015 deficit.
  • The federal government claims to owe itself over $5 trillion (they call it intragovernmental debt here). This $5 trillion represents tax revenues that were earmarked for specific spending programs, such as Social Security, but were spent on other programs. Since the feds collected taxes to pay for Social Security, but spent the money on something else, they conclude that they owe it to themselves to collect those tax revenues again. That’s the essence of intragovernmental debt. We should not count this as debt. Give the Treasury Department credit for ignoring this type of “debt” in their Daily Treasury Statements and in their end of the year debt reports.
  • As of September 30, 2015, the feds had $13.1 trillion of debt owed to the public. FY 2015 tax revenues totaled $3.248 trillion. So just like Sam the government has a 4-to-1 debt-to-tax-revenue ratio.
  • In the past fourteen years, from September 30, 2001 (the start of George Bush’s first budget) to September 30, 2015 (the end of Barack Obama’s sixth budget), debt owed to the public increased from $3,339.3 billion to $13,123.8 billion. That’s an increase of 293 percent.
  • According to the Daily Treasury Statements, in the past fourteen years, interest on treasury securities increased from $162.5 billion in fiscal year 2001 to $233.1 billion in fiscal year 2015. That’s a 44 percent increase during the same period when federal debt owed to the public almost quadrupled.
  • In FY 2015, again according to the Daily Treasury Statements, the feds borrowed $7,251.4 billion (see the Public Debt Cash Issues for September 30, 2015), an average of almost $20 billion per day. They spent $6,740.3 billion of this borrowing rolling over their debt. So, Federal principal and interest payments are more than double federal tax revenues.
  • According to the Congressional Budget Office’s baseline projections, debt held by the public in 2025 should exceed $21 trillion and during that time interest rates are expected to increase. Interest rates have been kept artificially low for years. If interest rates return to a more normal level, say to the rates they were paying when George Bush took office fifteen years ago, then interest payments in 2025 will exceed $1.2 trillion. That’s over a 400 percent increase compared to the FY 2015 interest payments. I should note here that the baseline budget projections are optimistic. We should expect the debt situation in 2025 to be significantly worse than these projections.

The federal government’s debt has exploded under the Bush and Obama administrations. Low interest payments due to the low interest rates have masked their budget problems. As interest rates and the spending gap on entitlement programs such as Social Security both increase, the budget problem will compound.

The federal government’s plan is to borrow all of the money they need to pay all of their principal and interest payments and to also pay for the budget deficits in their spending programs. The question we should ask is: what’s going to happen when the world’s lenders refuse to bankroll DC’s spending schemes?

Mark Brandly is a professor of economics at Ferris State University and an adjunct scholar of the Ludwig von Mises Institute.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Congress Fiddles While the Economy Burns – Article by Ron Paul

Congress Fiddles While the Economy Burns – Article by Ron Paul

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The New Renaissance HatRon Paul
September 14, 2015
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Reports that the official unemployment rate has fallen to 5.1 percent may appear to vindicate the policies of easy money, corporate bailouts, and increased federal spending. However, even the mainstream media has acknowledged that the official numbers understate the true unemployment rate. This is because the federal government’s unemployment figures do not include the 94 million Americans who have given up looking for work or who have settled for part-time employment. John Williams of Shadow Government Statistics estimates the real unemployment rate is between 23 and 24 percent.

Disappointingly, but not surprisingly, few in Washington, DC acknowledge that America’s economic future is endangered by excessive spending, borrowing, taxing, and inflating. Instead, Congress continues to waste taxpayer money on futile attempts to run the economy, run our lives, and run the world.

For example, Congress spent the majority of last week trying to void the Iranian nuclear agreement. This effort was spearheaded by those who think the US should waste trillions of dollars on another no-win Middle East war. Congressional war hawks ignore how America’s hyper-interventionist foreign policy feeds the growing rebellion against the dollar’s world reserve currency status. Of course, the main reason many are seeking an alternative to the dollar is their concern that, unless Congress stops creating — and the Federal Reserve stops monetizing — massive deficits, the US will experience a Greek-like economic crisis.

Despite the clear need to reduce federal spending, many Republicans are trying to cut a deal with the Democrats to increase spending. These alleged conservatives are willing to lift the “sequestration” limits on welfare spending if President Obama and congressional democrats support lifting the “sequestration” limits on warfare spending. Even sequestration’s minuscule, and largely phony, cuts are unbearable for the military-industrial complex and the rest of the special interests that control our federal government.

The only positive step toward addressing our economic crisis that the Senate may take this year is finally holding a roll call vote on the Audit the Fed legislation. Even if the audit legislation lacks sufficient support to overcome an expected presidential veto, just having a Senate vote will be a major step forward.

Passage of the Audit the Fed bill would finally allow the American people to know the full truth about the Fed’s operations, including its deals with foreign central banks and Wall Street firms. Revealing the full truth about the Fed will likely increase the number of Americans demanding that Congress end the Fed’s monetary monopoly. This suspicion is confirmed by the hysterical attacks on and outright lies about the audit legislation spread by the Fed and its apologists.

Every day, the American people see evidence that, despite the phony statistics and propaganda emanating from Washington, high unemployment and rising inflation plague the economy. Economic anxiety has led many Americans to support an avowed socialist’s presidential campaign. Perhaps more disturbingly, many other Americans are supporting the campaign of an authoritarian crony capitalist. If there is a major economic collapse, many more Americans — perhaps even a majority — will embrace authoritarianism. An economic crisis could also lead to mob violence and widespread civil unrest, which will be used to justify new police state measures and crackdowns on civil liberties.

Unless the people demand an end to the warfare state, the welfare state, and fiat money, our economy will continue to deteriorate until we are faced with a major crisis. This crisis can only be avoided by rejecting the warfare state, the welfare state, and fiat money. Those of us who know the truth must redouble our efforts to spread the ideas of liberty.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Debt-Ceiling Crises: Imagined and Real – Article by D. W. MacKenzie

Debt-Ceiling Crises: Imagined and Real – Article by D. W. MacKenzie

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The New Renaissance Hat
D. W. MacKenzie
October 14, 2013
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The federal government shutdown and impending debt ceiling “deadline” have led to near panic over possible default on the national debt. This imagined “default crisis” is a canard used for demagogic fearmongering. That said, the long-term federal financial issues are all too serious.

If federal officials simply continue on with their current financial plans, the U.S. government could run into trouble in early November. Without a debt ceiling increase, the Treasury would be unable to meet some of its financial obligations. Treasury bills would take a hit in international markets. With T-bills losing value in markets, interest rates—especially short-term interest rates—would start to rise. Rising interest rates would impair recovery from the 2008 financial crisis.

The assertion that a debt crisis would impair an already weak economic recovery is correct. However, any claim that the federal government is up against a hard deadline to meet its legal financial obligations is utterly untrue. The federal government holds vast amounts of property, all of which is available to be sold off. How much is needed to cover federal interest payments?

Interest rates are, for the moment, very low. Accordingly, interest payments on the debt are a small percentage of the total federal budget, despite the large size of the national debt.

With annual interest payments at a couple of hundred billion dollars, there is no impending debt-ceiling default crisis.

How exactly could the federal government pay interest on the national debt? To start with, the Federal Reserve now holds large numbers of mortgage-backed securities. There is some uncertainty over the market value of these securities, but their face value is immense, well over one trillion dollars. Sales of some of the better quality mortgage-backed securities could fund interest payments in the short term.

U.S. gold reserves are also substantial. The U.S. holds thousands of tons of gold at Fort Knox and at the New York Federal Reserve.

Sales of a small part of U.S. gold reserves could be used to make immediate interest payments.

The U.S. government also holds large amounts of idle real estate. The federal government spends $8 billion on vacant buildings annually. That’s for an estimated total of 55,000 to 77,000 buildings. The fact that our federal officials aren’t sure how many buildings they manage is itself disturbing, and a sign of incompetence. However, it seems that there are at least over 50,000 such buildings. How many hours would it take for federal employees who “manage” these buildings to post some of them on eBay? Surely sales of these properties would raise enough money to cover federal interest for about a month or two of the next year, even if each of these buildings sold for only a half a million dollars on average.

Efficient, competent public officials could simply announce auctions and begin to sell some of these buildings. Of course, red tape could delay property auctions. However, the Fed could make immediate interest payments by using its discretionary powers to sell mortgage-backed securities and gold reserves. President Obama could, in the meantime, expedite sales of vacant federal buildings—not to mention federal lands—by cutting red tape. (See map of federally managed land.)

The President has already acted in arbitrary—and some would say illegal—ways: by granting special exemptions from the Affordable Care Act to favored corporations, by using drones to kill U.S. citizens, and by targeting unfriendly political groups for audits. If Obama really wants save his beloved federal government from default, why shouldn’t he just use the extraordinary powers that he has already claimed to order the immediate sale of vacant buildings? The point here is not to encourage further illegality on the part of this President (he needs no assistance in such matters). The point here is that Obama does not have his back against a wall; there is no “gun to his head.” Obama has already claimed more than enough discretionary powers to prevent a debt-ceiling default in November. If default does happen it is entirely his choice, given that he has legal options and has already assumed various unconstitutional powers.

Obama has occasionally mentioned that some programs might be trimmed or cut. As Obama put it in 2010, “We cannot sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness, or exist solely because of the power of a politician, lobbyist, or interest group.” He added, “We simply cannot afford it.”

The federal government holds over 700 million barrels of oil in the Strategic Petroleum Reserve. Obama could raise billions of dollars for interest payments without selling the whole reserve. Some people might see sales of the SPR as irresponsible. However, the oil in this reserve is a small fraction of monthly oil consumption, U.S. oil production is rising, and owners of foreign oil have overwhelming financial interests in continued oil sales to the United States.

The federal government also holds a Strategic Helium Reserve. It was created for “national security,” for blimps used by the military leading up to and during World War II. This program is archaic and the government already sells some helium. It could sell all of it and shut this program down.

Default on the debt is always possible. Obama and his people at the Treasury Department could have refused to pay interest on the national debt last month even though they had this money at hand. They could choose to default next month even though they can get the money—either through legal means or according to Obama’s demonstrated willingness to act illegally. The sale of federal assets and closing of federal programs would do more than just meet short-term interest payments on the national debt. Movement of securities, gold, buildings, oil, and helium would put these resources in the hands of people who would not merely put these resources to better use, but to actual use. The leeway that exists in federal finances points to longer-term financial and economic problems. Why would Obama engage in fearmongering on the national debt when obvious solutions to this problem exist? For that matter, why would federal officials hold so many idle resources for so long?

The reason why the federal government runs deficits nearly every year, despite collecting trillions in annual taxes, is because it wastes vast amounts of money on dysfunctional programs and special-interest payoffs. An efficient government would not need to tax and borrow nearly as much as does the federal government. The gross inefficiency of government has put federal finances in long-term jeopardy.

The real debt ceiling is determined by the ability of all working Americans to pay more taxes. How much more can we pay? Continued structural deficits and rising entitlement spending will result in default on the national debt, but not for a number of years. The existing path of long-term federal spending does surpass the capacity of taxpayers to fund the federal government, as it is currently designed. Future default on the national debt will have severe consequences. However, Obama’s willingness to engage in demagoguery on the immediate debt-ceiling issue is one of many signs that politicians are unwilling to take necessary steps to fix long-term fiscal finances.

The legal debt-ceiling crisis of 2013 is manufactured and phony. Even if Congress refuses to raise the legal debt ceiling this year, there are many ways of avoiding immediate default. The real problem we face is wasteful and irresponsible spending that will make default unavoidable eventually. Long-run default is, of course, avoidable. What we need are real cuts in federal spending, actual sales of federal assets and properties, and rationality in federal finances. Cutting spending and selling assets are easier said than done. Achieving smaller government will require a dramatic shift in public opinion. Americans need to realize that politicians who try to scare us are the ones that we really should fear.

D. W. MacKenzie is an assistant professor of economics at Carroll College in Helena, Montana. 

This article was originally published by The Foundation for Economic Education.
Why I Prefer the “Fiscal Cliff” to the Alternative – Video by G. Stolyarov II

Why I Prefer the “Fiscal Cliff” to the Alternative – Video by G. Stolyarov II

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Mr. Stolyarov expresses hope that Congress will fail in its attempt to avert the overhyped “fiscal cliff” and that this deficit-reducing package of measures will take effect. Mr. Stolyarov is no friend of tax increases, but he expects that most of those will be undone. On the other hand, reductions in planned federal spending – especially military spending – would be more difficult to undo under a “fiscal cliff” scenario, and this therefore presents an opportunity for friends of liberty to gain ground.

If the “fiscal cliff” (which is not really that bad at all) is averted, then this would send a signal to politicians that there exists no substantive strong incentive to negotiate any further deficit or debt reductions.

Remember to LIKE, FAVORITE, and SHARE this video in order to spread rational discourse on this issue.

Support these video-creation efforts by donating. (See the sidebars of the linked pages for donation options in USD and Bitcoin.)

References

– “United States fiscal cliff” – Wikipedia
– “List of countries by military expenditures” – Wikipedia

The CBO Sees the Economic Cliff Ahead – Article by Ron Paul

The CBO Sees the Economic Cliff Ahead – Article by Ron Paul

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The New Renaissance Hat
Ron Paul
June 19, 2012
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In early June 2012 the Congressional Budget Office (CBO) issued its annual long-term budget outlook report, and the 2012 numbers are not promising. In fact, the CBO estimates that federal debt will rise to 70% of GDP by the end of the year– the highest percentage since World War II. The report also paints a stark picture of entitlement spending, as retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to explode as a percentage of GDP in coming years.

While the mainstream media correctly characterized the CBO report as highly pessimistic, they also ignored longstanding errors of methodology in CBO estimates. And those errors tend to support arguments for higher taxes and government spending, when in fact America needs exactly the opposite.

As Paul Roderick Gregory explained in a recent Forbes column (http://tinyurl.com/cf746dl), CBO has always applied wrongheaded assumptions inherent in Keynesian economics when forecasting future deficits – no matter how many times both history and economic theory have proven such assumptions incorrect. In particular, CBO seems wedded to two enduring Keynesian myths: First, that higher taxes necessarily increase federal revenue and have no negative effect on the economy; and second, that lower government spending hurts the economy.  Neither is true, of course.

CBO also fails to factor in unexpected wars and expensive foreign entanglements, and we should not assign too much validity to predictive models based on peace. Judging from the actions and rhetoric coming from both parties in Washington, new military entanglements in Syria and Iran may well spike military spending in coming years.

Despite these sobering budget realities, the CBO report suggests that a solution is possible with merely a few minor adjustments in the way Congress handles economic issues. But what we need are not minor adjustments, but rather a fundamental shift in our philosophy of government.  If we could come to our senses about the proper role of government in America, and what level of government interference is appropriate in a free economy, we would quickly find that there is no reason for government to spend so much, borrow so much, and tax so much.

If we simply allowed markets to work free of governmental or Federal Reserve interference, bad debt would be liquidated relatively quickly and malinvestment would be curtailed. Scaled-back regulations would encourage businesses to expand. Lower taxes would jump start investment and spur job creation.

This is not rocket science, it is Economics 101. All it would take is for government to get out of the way. There would be some short term pain, of course, but only by allowing the bubble to burst and bad debt to liquidate can we ever hope to begin building a real economy again.

The CBO report was alarming to most simply because they know neither party will take the steps necessary to avoid eventual fiscal calamity. Instead, despite their rhetoric, both parties want to maintain the fantasy that “deficits don’t matter.” But the CBO report, combined with what is happening in Greece and the European Union, should finally make the undeniable case that economic realities apply even to industrialized first world economies. We must take concrete steps today to avoid having America become the next Greece.

Representative Ron Paul (R – TX), MD, is a Republican candidate for U. S. President. See his Congressional webpage and his official campaign website. 

This article has been released by Dr. Paul into the public domain and may be republished by anyone in any manner.

The Costs of War – Article by Ron Paul

The Costs of War – Article by Ron Paul

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The New Renaissance Hat
Ron Paul
May 2, 2012
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This month Veterans Affairs Secretary Eric K. Shinseki announced the addition of some 1,900 mental health nurses, psychiatrists, psychologists, and social workers to its existing workforce of 20,590 mental health staff in attempt to get a handle on the epidemic of suicides among combat veterans. Unfortunately, when presidents misuse our military on an unprecedented scale – and Congress lets them get away with it – the resulting stress causes military suicides to increase dramatically, both among active duty and retired service members.  In fact, military deaths from suicide far outnumber combat deaths. According to an article in the Air Force Times this month, suicides among airmen are up 40 percent over last year.

Considering the multiple deployments service members are forced to endure as the war in Afghanistan stretches into its second decade, these figures are sadly unsurprising.

Ironically, the same VA Secretary Eric Shinseki was forced to retire from the Army by President Bush for daring to suggest that an invasion and occupation of Iraq would not be the cakewalk that neoconservatives promised. Then Deputy Secretary of Defense Paul Wolfowitz, who is not a military veteran, claimed that General Shinseki was “wildly off the mark” for suggesting that several hundred thousand soldiers would be required to secure post-invasion Iraq. Now we see who was right on the costs of war.

In addition to the hidden human costs of our seemingly endless wars are the economic costs. In 2008, Nobel Prize winning economist Joseph Stiglitz wrote “The Three Trillion Dollar War: The True Cost of the Iraq Conflict.” Stiglitz illustrates that taking into account the total costs of the war, including replacing military equipment and caring for thousands of wounded veterans for the rest of their lives, the Iraq war will cost us orders of magnitude greater than the 50 billion dollars promised by the White House before the invasion. Add all the costs of Afghanistan into the mix, wrote Stiglitz, and the bill tops $7 trillion.

Is it any wonder why our infrastructure at home crumbles, healthcare is more expensive and harder to come by, and unemployment together with inflation continue their steady rise? Imagine the productive power of that seven trillion dollars in our private sector. What could it have done were it in private hands; what may have been discovered, what diseases might have been cured, what might have been built, how many productive jobs created?

With the bills coming due for our decade of reckless military action, the cuts rarely come from the well-connected military industrial complex with their lobbyists and powerful political allies. In President Obama’s 2013 budget, troop strength is to be cut significantly while enormously expensive and largely superfluous weapons systems emerge essentially unscathed. As defense analyst Winslow Wheeler wrote this month, costs of the “next generation” fighter, the F-35, will increase by another $289 million. This despite the fact that the fighter is badly designed and already outdated, a “virtual flying piano” writes Wheeler.

The military contractors building monstrosities like the F-35 are politically connected and thus protected. Unfortunately, returning military veterans are less so. In the same 2013 budget, the White House proposes to increase medical and pharmaceutical costs paid by veterans while reducing their cost of living increases. And how many years of increasingly alarming mental illness and suicide statistics has it taken for the modest increase in resources to be made available?

Those who predicted the real costs of our decade of global military conquest were ridiculed, scoffed at, and fired. History has now shown us that much of what they warned was correct. America is clearly less secure after a decade of unnecessary wars. It is more vulnerable and closer to economic collapse. Its military is nearly broken from years of abuse. Will we come back to our senses?

Representative Ron Paul (R – TX), MD, is a Republican candidate for U. S. President. See his Congressional webpage and his official campaign website. 

This article has been released by Dr. Paul into the public domain and may be republished by anyone in any manner.