El Conquistqdor Francisco de Orellana

El Conquistqdor Francisco de Orellana
The Conquistador who put the Amazaon baisn "on the map"....Francisco Orellana

Thursday, July 28, 2011

And the Empire Goes Broke.......

We've been putting the pieces together. Last weekend, we noticed that the "Imperial Agenda" was part of the reason the middle class is going broke.

Cheap credit helped finance the middle class spending spree. It also helped finance the empire. Without artificially cheap credit, neither the federal government, nor US households, would be in the mess they're in today.

And now the empire follows its own inevitable course. Bread at home. Circuses abroad. The voters won't give up either one.

As for the bread at home, 44 million people now get food stamps. One of every four children gets them. The US Treasury sends out 88 million checks every month. And 51% of the public now gets some of its money from the feds.

Overseas, the circuses get bigger, more costly, and more absurd. The US is now involved in 6 military adventures in the Mideast and North Africa, if you include its intervention in Yemen and Pakistan. It maintains bases all over the world. And it now costs $1 million to keep a single US soldier in the field in Afghanistan.

How long can it afford the costs? The federal government gets roughly $2.2 trillion in tax revenue. It spends roughly $3.6 trillion. You can see for yourself, the feds have to borrow nearly 50 cents for every dollar in revenue.

But wait...we'll 'grow our way out of debt' just like we've always done in the past, won't we?

Uh...no. Not this time.

Because the last time the US had this much debt was immediately after WWII. "After" is the key word. WWII had a beginning and an end. The homeland population made sacrifices during the war so they were ready to spend when it was over. Military spending could be dramatically cut, too, giving the domestic economy a boost.

But now, the wars never begin and never end. There are no declarations of war. No debates in Congress. No surrenders. No armistices. No ticker-tape parades. We now have wars that go on forever against enemies who are never clearly identified, at costs that can't be calculated and for reasons that can't be explained.

Meanwhile, at home, the feds no longer offer relief to those who are temporarily unemployed or to an economy that is in cyclical recession. Now, they give permanent support to people whose jobs are gone forever...and to an economy locked in an eternal slump.

The wars go on and on overseas. At home, the recovery never comes. And the Empire goes broke.


Bill Bonner
for The Daily Reckoning

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