Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Military Might Cannot Win the Economic Struggle!

Politics / Global Debt Crisis May 07, 2010 - 06:52 PM GMT

By: Sy_Harding

Politics Best Financial Markets Analysis ArticleGovernment budget deficits and the debt crisis they created in Greece, and concerns that Portugal, Spain, Ireland, and Italy may be nearing similar situations, have been dominating the news and roiling global stock, bond, and currency markets for several weeks.


Some analysts say it’s a forerunner of what is coming to the U.S. a few years down the road.

We all realize how federal budget surpluses of $200 billion in the late 1990’s turned into increasingly sizable annual deficits thereafter, the deficit expected to exceed $2 trillion this year.

It’s not possible to balance the budget with two recessions, two stock market collapses, and two expensive wars in ten years, to say nothing of the expense of the last two years of rescuing the financial system from its worst collapse since the Great Depression.

But when you look at how government spends money you have to wonder if they even try.

Most people aren’t old enough to remember Dwight Eisenhower, Supreme Commander of Allied Forces in World War II, and two-term President (1953-1961) after the war, who achieved federal budget surpluses in several of his years in office.

In his farewell speech he warned that the “greatest peril” facing the country in the future would be the “military-industrial complex”. He warned that the combined power and ability of the military and the major corporations that manufacture military equipment, to convince the nation of danger and therefore the need for huge military spending could allow them to take control of the federal budget and change the economic landscape.

I thought about that as I read the government’s release last week of the previously secret U.S. inventory of nuclear warheads.

And I thought about it again when I read the remarks this week of Defense Secretary Robert Gates regarding the size of the U.S. Navy. 

Most people who bothered to read the report on nuclear warheads were probably shocked to learn that at their peak in 1967 the U.S. had 31,255 nuclear warheads. Enough to annihilate 31,255 cities?

Several nuclear arms proliferation agreements since have resulted in the dismantling and scrapping of most of them, (that expensive process also bringing large contracts to the military contractors that built them in the first place). Yet even now we still have 5,113 warheads, enough to annihilate 5,113 cities. (I realize that is an exaggeration since some of the later warheads are smaller, for tactical use on battlefields). But still the thought of being able to set off 5,000 nuclear warheads, just from our side, seems like more than enough to annihilate the world. 

I know. I know. It’s not expected they will ever be used. They’re just a deterrent to those who would attack us. But still, an inventory of 31,255 nuclear warheads in 1967 was crazy, and the current perceived need for 5,113 not much more sane.

Could most of those hundreds of billions of dollars, perhaps $trillions, to make them in the first place, and maintain and control them for all these years, have made a difference in the annual federal budgets without affecting the safety of the country?

The number of needed nuclear warheads isn’t the only foolish decision that makes U.S. military expenses the largest segment of the Federal budget, and U.S. military spending 47% of total global military spending.

In Washington this week, in reference to the Navy’s insistence on maintaining and adding to its 300-ship navy, Defense Secretary Robert Gates asked why the U.S. Navy needs 11 full carrier strike groups when the next largest navy power has only one.

Such massive naval power is not only overkill, it doesn’t even meet the needs of modern warfare. It’s designed to prevail in battles carried out on the high seas between powerful naval forces – a form of ‘ancient’ warfare that is no longer possible, since there are no other naval powers to combat.

Has Congress and the military not noticed that the wars of the last 50 years have been fought in jungles and deserts and city streets? Nor can you win the war against small groups of terrorists from multiple countries with the threat of having 5,113 nuclear warheads, or a 300-ship navy, when the attacks are individual car bombs in crowded cities, or from high-jacked airplanes.

As Defense Secretary Gates said about modern-day threats on the high seas, “You don’t need a billion dollar guided-missile destroyer to chase down and deal with a bunch of pirates wielding AK-47 rifles.”

I think of this when I see the financial dangers facing other nations with high debt loads and their inability to cope with them, and then look at the way Congress is talking about fighting the massive U.S. budget deficits with proposals to cut back on the costs of education, social security, and the like.

I thought when the USSR turned to capitalism and broke up into smaller countries, ending the cold war, and China decided it would be easier to defeat the U.S. economically than militarily, that the U.S. military-industrial complex would be downsized to the new reality.

But as Eisenhower warned us, I underestimated the power of its lobbying efforts on Congress. There is hardly a congressional district that does not contain either a large military base, or a large manufacturer of military equipment.

China must be laughing at the way we have spent our resources so implausibly, in preparation to re-fight World War II, at the expense of potentially losing the real global competition, which is economic.

Sy Harding is president of Asset Management Research Corp, publishers of the financial website www.StreetSmartReport.com, and the free daily market blog, www.SyHardingblog.com.

© 2010 Copyright Sy Harding- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in