Ellen Brown begins a recent essay explaining the genesis of a bill to create bank credit in Minnesota for the funding of infrastructure: "In August 2007, the nation was stunned by the collapse of a major Minneapolis bridge, killing thirteen. The bridge had been rated structurally deficient by the U.S. government as far back as 1990, and it was only one of more than 70,000 bridges across the country with that rating. The American Society of Civil Engineers estimated that it would take nearly $190 billion to fix the country's failing bridges over the next two decades." See: Minnesota Bank Proposal Those living in Vermont or New York might remember that the Champlain Bridge was just replaced due to extensive corrosion. At least it was condemmed before it fell down.
Where did the money go? The recently deceased Chalmers Johnson called it "Military Keynesianism". For those who don't follow arcane economics lingo, Keynes was a British economist who said that in a period of slow or declining economic growth (recession or depression), that goverment spending was needed to "prime the pump" of the economy. The US recovery from the Great Depression due to WWII military spending gave credence to this analysis. Except now we have permanent Military Keynsianism.
Johnson cites an unbelieveable statistic from the late Seymour Melman, the Columbia University advocate of military conversion, and the "peace dividend". "By 1990, the value of the weapons, equipment, and factories devoted to the military was 83% of the value of all plants and equipment in American Manufacturing. From 1947-1990 the combined US military budget amounted to $8.7 trillion...Military industries crowd out the civilian economy (GF-and other government spending like bridges) and lead to severe economic weakness. Devotion to military Keynsianism is, in fact, a form of slow economic suicide."
But isn't military spending good for the economy as former President George W. Bush told Argentine President Kirchner in Oliver Stone's recent movie "South of the Border?"
Johnson quotes historian Thomas Woods, "According to the US DOD, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985 the Dept of Commerce estimated the value of the nation's plant and equipment and infrastructure at just over $7.29 trillion. In other words, the amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock."
A study by economist Dean Baker of CEPR in 2007 concludes, "In fact most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment." Why would this be? Think about nuclear weapons. The best possible use for them is not to use them at all. At the peak the US had 32,500 nuclear weapons. Think about the massive cost of something that then (thankfully) sits on the shelf.
Finally Johnson quotes Harvard econ prof Benjamin Friedman, "Again and again it has always been the world's leading lending country that has been the premier country in terms of political influence, diplomatic influence, and cultural influence...we are now the world's biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone." Think about that when you pay your family's $10,000 per year contribution to the Iraq and Afghanistan wars. (see Gaelan Brown's blog for source of figures) Who will stop the madness of military Keynesianism? Obomber or Romney? LOL.
Johnson concludes, "Our short tenure as the world's "lone superpower" has come to an end." All that's left is for the fat lady to sing, when the US goes broke. It won't be long now.
All quotes from Dismantling the Empire, by Chalmers Johnson, Metropolitan Books/Henry Holt and Co. 2010