Suppose you were the leader of a nation beset by mounting economic woes, mired down in massive debt, with a rapidly shrinking manufacturing sector, rampant unemployment, a crumbling infrastructure and a society filled with anger, frustration and fear of the future. Knowing the depth of America's escalating problems would you continue to allow what's left of the nation's wealth to be wasted on the proliferation of war and the expansion of a military empire?
The fact of the matter is that America is incapable of funding this agenda of war. So what does it do? Well it continues to use its foreign credit cards and run its dollar printing presses almost non-stop. Now here's how bad this situation has become: for every dollar that America spends it is forced to borrow $.40 from China, Japan, other foreign nations, as well as many private investors. That fact has been confirmed by reputable sources; here's just one of many.
Now, consider that America's annual Defense Department and national security budget is a staggering $1.3 trillion. Each year nearly 40% of that amount, let's say $500 billion, must be borrowed in order to keep our nation afloat. So if we project this trend for the next 10 years that would mean that our current $14 trillion national deficit would balloon to nearly $20 trillion. That's shocking but are these leaders showing any real intent to scale back this massive borrowing that is weakening this nation financially?
Here is the key question: why is the U.S. continuing to expand an already overextended military empire when it simply does not have the funds to maintain it? Even if the U.S. was financially strong and stable such an extensive empire would be very difficult to sustain; but, with a rapidly declining economy and an eroding financial foundation, the immense burden of military operations is, without a doubt, very damaging to our economic health.
There are those who dismiss this kind of thinking and contend that, given time, all our problems will end; that America's current economic crisis will not last, that it's merely a part of the normal economic cycle; that, according to the principles of economics, our economy expands to some point, contracts as we enter a recessionary period, and then returns to normal levels. Sorry, not this time. This time it isn't going to work that way.
Why? Well one major reason is that this nation has largely lost its manufacturing sector that is such an important contributor to our economy and GDP. It's often said that manufacturing is the engine that drives American prosperity and is central to our economic and national security. A quote from Federal Reserve Chair Ben Bernanke in 2007: "I would say that our economy needs machines and new factories and new buildings and so forth in order for us to have a strong and growing economy."
Unfortunately this is simply not happening as our manufacturing, as a percent of GDP, has seen a continuing decline, from 25 percent in 1980 to its current 11 percent. Just in the past 10 years or so it has declined 6%, a very negative trend. Instead of creating new manufacturing to increase our exports and domestic sales, plus creating new jobs, we have seen over 40,000 U.S. factories closed over the past decade.