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As Ye Sow, So Shall Ye Reap

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Source: Paul Craig Roberts


The year 2014 could be shaping up as the year that the chickens come home to roost.

Americans, even well-informed ones, don't know all of the mistakes made by neoconized and corrupted Washington in the past two decades. However, enough is known to see that the US has lost economic and political power, and that the loss is irreversible.

The economic cost of this loss will be born by what remains of the middle class and the increasingly poverty-stricken lower class. The one percent will have offshore gold holdings and large sums of money in foreign currencies and other foreign assets to see them through.

In the political arena, the collapse of the Soviet Union presented Washington with the grand opportunity to reallocate the Pentagon budget to other uses. Part of the reduction could have been returned to taxpayers for their own use. Another part could have been used to improve worn out infrastructure. And another part could have been used to repair and improve the social safety net, thus insuring domestic tranquility. A final, but perhaps most important part, could have been used to begin repaying the Treasury IOUs in the Social Security Trust Fund from which Washington has borrowed and spent $2 trillion, leaving non-marketable IOUs in the place of the Social Security payroll tax revenues that Washington raided in order to fund its wars and current operations.

Instead, influenced by neoconservative warmongers who advocated America using its "sole superpower" status to establish hegemony over the world, Washington let hubris and arrogance run away with it. The consequence was that Washington destroyed its soft power with lies and war crimes, only to find that its military power was insufficient to support its occupation of Iraq, its conquest of Afghanistan, and its financial imperialism.

Now seen universally as a lawless warmonger and a nuisance, Washington's soft power has been squandered. With its influence on the wane, Washington has become more of a bully. In response, the rest of the world is isolating Washington.

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The prime minister of India, Manmohan Singh, recently declared China and Russia to be India's "most important partners" with whom India shares "common strategic interests." Prime Minister Singh said: " India and Russia have always had a convergence of views on global and regional issues, and we value Russia's perspective on international developments of mutual interest."

India joined China in expressing concerns about the Federal Reserve's practice of printing money in order to cover Washington's vast red ink. The BRICS (Brazil, Russia, India, China, South Africa) are taking steps to create their own method of settling trade accounts in order to protect themselves from the looming dollar implosion,

China has forcefully called for a "de-Americanized world." After watching the "superpower" offshore a large part of its GDP to China and then add to the diminished tax base the burden of $6 trillion in wars that brought no booty and served no US interest, China has concluded that American power is spent. The London Telegraph thinks "it is only a matter of time before the renminbi replaces the dollar as the primary currency for trading commodities and resources."

The Obama regime attempted to attack Syria based on the sort of lies that the Bush regime used to invade Iraq, only to be slapped down by the British Parliament and Russian government. This rebuke was followed by the childishness of the government shutdown and threat of default. Consequently, the Washington morons have lost their monopoly on economic and political leadership. A few days ago the British government announced a historic agreement that permits British investors direct access to China's markets and allows Chinese banks to expand their operations in Great Britain.

In Australia, the US dollar will no longer be used as the currency in which to settle the Australian trade accounts with China. Instead of dollars, trade will be settled in the Chinese currency.

Washington served as cheerleader, as did most economists and libertarians, while US corporations, greedy for short-term profits and executive bonuses, offshored US industry and manufacturing, calling it free trade. The obvious and predicted result is that China's demand for resources needed to fuel its industrial and manufacturing power now dominates markets. This means that the US dollar is being displaced as world currency. The only market that America dominates is the market for financial fraud.

When industrial, manufacturing, and tradeable professional service jobs are offshored, they take US GDP and tax base with them. The foreign country gets the benefit of the relocated economic activity. Due to the revenues lost from jobs offshoring, there is a large gap between federal revenues and federal expenditures. As Washington's irresponsible behavior has raised so many doubts about the dollar's value and the government's commitment to stand behind its massive debt, foreign countries with trade surpluses with the US are less and less willing to recycle those surpluses into the purchase of US Treasury debt.

Today the two largest holders of US Treasury debt are not investors or even foreign central banks. The two largest holders are the Federal Reserve and the Social Security Trust Fund.

As for those $6 trillion wars, that's to pay for national defense to protect us from women, children, and village elders in far away countries devoid of air forces and navies, and to provide those recycled taxpayer monies from the military/security complex that find their way into political contributions.

The Wall Street gangsters sighed with relief over the last minute debt ceiling agreement. This shows how short-term Wall Street's outlook is. All the October agreement did was to push off the crisis to January and February. The "debt ceiling agreement" did not produce a new debt ceiling that would last beyond February, and it did not resolve the large difference between federal revenues and expenditures. In other words, the can was again kicked down the road. A repeat of the October fiasco won't play well.

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http://www.paulcraigroberts.org/

Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available here. His latest book,  How America Was Lost, has just been released and can be ordered here.

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Yeah and we have AIPAC and the secret rulers behin... by Bill Johnson on Wednesday, Oct 23, 2013 at 12:36:52 PM
All it will take is one tuned-in F├╝rher (leader) ... by Luis Magno on Wednesday, Oct 23, 2013 at 8:10:04 PM
Thank you, Dr. Roberts. I can not find even one re... by Hosea McAdoo on Wednesday, Oct 23, 2013 at 2:02:31 PM
"We are looking at a fascist dictatorship and a fe... by Luis Magno on Wednesday, Oct 23, 2013 at 7:49:38 PM
One of the reasons for eliminating the middle clas... by yunus Luebben on Thursday, Oct 24, 2013 at 11:57:30 PM
"Now seen universally as a lawless warmonger and a... by Robert S. Becker on Wednesday, Oct 23, 2013 at 2:36:01 PM
Robert S. Becker, Thanks for the dose of sanity!... by Luis Magno on Wednesday, Oct 23, 2013 at 8:14:35 PM
Sir, Americans, even well-informed ones like you,... by Susan Lee Schwartz on Wednesday, Oct 23, 2013 at 4:15:28 PM
Yes, of course, you are 100% right. But don't expe... by Luis Magno on Wednesday, Oct 23, 2013 at 8:18:26 PM
 Madam,  It's a ''little'' worse than th... by Ad Du on Thursday, Oct 24, 2013 at 10:51:04 AM
Another great article Paul.so sad that we... by Carol Jackson on Wednesday, Oct 23, 2013 at 6:33:35 PM
Another great article for the lemmings!... by Luis Magno on Wednesday, Oct 23, 2013 at 8:19:49 PM
Yes, the article has the potential to awaken ... by Michael Sacco on Thursday, Oct 24, 2013 at 11:07:50 PM
Left hand on Lincoln's bible, right hand raised, h... by Lance Ciepiela on Wednesday, Oct 23, 2013 at 8:32:20 PM
Had Romney won in 2012 we would ALL already be liv... by Luis Magno on Wednesday, Oct 23, 2013 at 8:56:05 PM
Had Rommey won, perhaps the liberal left would hav... by Truth Will Prevail on Thursday, Oct 24, 2013 at 9:18:00 AM
I should add that, of course I did not support,or ... by Truth Will Prevail on Thursday, Oct 24, 2013 at 10:00:30 AM
An old tactic tried and true used by debunkers and... by Lance Ciepiela on Thursday, Oct 24, 2013 at 11:46:47 AM