USA—A Failed State by Paul Craig Roberts

**Imbar** · 11-01-2009

National Bankruptcy

The USA—A Failed State
by Paul Craig Roberts on October 21, 2009

The U.S. has every characteristic of a failed state.

The U.S. government’s current operating budget is dependent on foreign financing and money creation.

Too politically weak to be able to advance its interests through diplomacy, the U.S. relies on terrorism and military aggression.

Costs are out of control, and priorities are skewed in the interest of rich organized interest groups at the expense of the vast majority of citizens. For example, war at all cost—which enriches the armaments industry, the officer corps and the financial firms that handle the war’s financing—takes precedence over the needs of American citizens. There is no money to provide the uninsured with health care, but Pentagon officials have told the Defense Appropriations Subcommittee in the House that every gallon of gasoline delivered to U.S. troops in Afghanistan costs American taxpayers $400.

“It is a number that we were not aware of, and it is worrisome,” said Rep. John Murtha, chairman of the subcommittee.
According to reports, the U.S. Marines in Afghanistan use 800,000 gallons of gasoline per day. At $400 per gallon, that comes to a $320,000,000 daily fuel bill for the Marines alone. Only a country totally out of control would squander resources in this way.

While the U.S. government squanders $400 per gallon of gasoline in order to kill women and children in Afghanistan, many millions of Americans have lost their jobs and their homes and are experiencing the kind of misery that is the daily life of poor Third World peoples. Americans are living in their cars and in public parks. America’s cities, towns and states are suffering from the costs of economic dislocations and the reduction in tax revenues from the economy’s decline. Yet, Obama has sent more troops to Afghanistan, a country halfway around the world that is not a threat to America.

It costs $750,000 per year for each soldier we have in Afghanistan. The soldiers, who are at risk of life and limb, are paid a pittance, but all of the privatized services to the military are rolling in excess profits. One of the great frauds perpetuated on the American people was the privatization of services that the U.S. military traditionally performed for itself. “Our” elected leaders could not resist any opportunity to create at taxpayers’ expense private wealth that could be recycled to politicians in campaign contributions.

Republicans and Democrats on the take from the private insurance companies maintain that the U.S. cannot afford to provide Americans with health care and that cuts must be made even in Social Security and Medicare. So how can the U.S. afford bankrupting wars, much less totally pointless wars that serve no American interest?

The enormous scale of foreign borrowing and money creation necessary to finance Washington’s wars are sending the dollar to historic lows. The dollar has even experienced large declines relative to currencies of Third World countries such as Botswana and Brazil. The decline in the dollar’s value reduces the purchasing power of Americans’ already declining incomes.
Despite the lowest level of housing starts in 64 years, the U.S. housing market is flooded with unsold homes, and financial institutions have a huge and rising inventory of foreclosed homes not yet on the market.

Industrial production has collapsed to the level of 1999, wiping out a decade of growth in industrial output.

The enormous bank reserves created by the Federal Reserve are not finding their way into the economy. Instead, the banks are hoarding the reserves as insurance against the fraudulent derivatives that they purchased from the gangster Wall Street investment banks.

The regulatory agencies have been corrupted by private interests. “Frontline” reports that Alan Greenspan, Robert Rubin and Larry Summers blocked Brooksley Born, the head of the Commodity Futures Trading Commission, from regulating derivatives. President Obama rewarded Larry Summers for his idiocy by appointing him director of the National Economic Council. What this means is that profits for Wall Street will continue to be leeched from the diminishing blood supply of the American economy.

An unmistakable sign of Third World despotism is a police force that sees the pubic as the enemy. Thanks to the federal government, our local police forces are now militarized and imbued with hostile attitudes toward the public. SWAT teams have proliferated, and even small towns now have police forces with the firepower of U.S. Special Forces.

Summons are increasingly delivered by SWAT teams that tyrannize citizens with broken down doors, a $400 or $500 repair born by the tyrannized resident. Recently, a mayor and his family were the recipients of incompetence by the town’s local SWAT team, which mistakenly wrecked the mayor’s home, terrorized his family and killed the family’s two friendly Labrador dogs.
If a town’s mayor can be treated in this way, what do you think is the fate of the poor white or black? Or the idealistic student who protests his government’s inhumanity?

In any failed state, the greatest threat to the population comes from the government and the police. That is certainly the situation today in the U.S.A. Americans have no greater enemy than their own government. Washington is controlled by interest groups that enrich themselves at the expense of the American people.

The 1 percent that comprise the superrich are laughing as they say, “Let them eat cake.”

Taki?s Magazine, edited by Taki Theodoracopulos

**FL Patriot** · 11-01-2009

Originally Posted by Imbar

National Bankruptcy

The USA—A Failed State
by Paul Craig Roberts on October 21, 2009

The U.S. has every characteristic of a failed state.

The U.S. government’s current operating budget is dependent on foreign financing and money creation.

Too politically weak to be able to advance its interests through diplomacy, the U.S. relies on terrorism and military aggression.

Costs are out of control, and priorities are skewed in the interest of rich organized interest groups at the expense of the vast majority of citizens. For example, war at all cost—which enriches the armaments industry, the officer corps and the financial firms that handle the war’s financing—takes precedence over the needs of American citizens. There is no money to provide the uninsured with health care, but Pentagon officials have told the Defense Appropriations Subcommittee in the House that every gallon of gasoline delivered to U.S. troops in Afghanistan costs American taxpayers $400.

“It is a number that we were not aware of, and it is worrisome,” said Rep. John Murtha, chairman of the subcommittee.
According to reports, the U.S. Marines in Afghanistan use 800,000 gallons of gasoline per day. At $400 per gallon, that comes to a $320,000,000 daily fuel bill for the Marines alone. Only a country totally out of control would squander resources in this way.

While the U.S. government squanders $400 per gallon of gasoline in order to kill women and children in Afghanistan, many millions of Americans have lost their jobs and their homes and are experiencing the kind of misery that is the daily life of poor Third World peoples. Americans are living in their cars and in public parks. America’s cities, towns and states are suffering from the costs of economic dislocations and the reduction in tax revenues from the economy’s decline. Yet, Obama has sent more troops to Afghanistan, a country halfway around the world that is not a threat to America.

It costs $750,000 per year for each soldier we have in Afghanistan. The soldiers, who are at risk of life and limb, are paid a pittance, but all of the privatized services to the military are rolling in excess profits. One of the great frauds perpetuated on the American people was the privatization of services that the U.S. military traditionally performed for itself. “Our” elected leaders could not resist any opportunity to create at taxpayers’ expense private wealth that could be recycled to politicians in campaign contributions.

Republicans and Democrats on the take from the private insurance companies maintain that the U.S. cannot afford to provide Americans with health care and that cuts must be made even in Social Security and Medicare. So how can the U.S. afford bankrupting wars, much less totally pointless wars that serve no American interest?

The enormous scale of foreign borrowing and money creation necessary to finance Washington’s wars are sending the dollar to historic lows. The dollar has even experienced large declines relative to currencies of Third World countries such as Botswana and Brazil. The decline in the dollar’s value reduces the purchasing power of Americans’ already declining incomes.
Despite the lowest level of housing starts in 64 years, the U.S. housing market is flooded with unsold homes, and financial institutions have a huge and rising inventory of foreclosed homes not yet on the market.

Industrial production has collapsed to the level of 1999, wiping out a decade of growth in industrial output.

The enormous bank reserves created by the Federal Reserve are not finding their way into the economy. Instead, the banks are hoarding the reserves as insurance against the fraudulent derivatives that they purchased from the gangster Wall Street investment banks.

The regulatory agencies have been corrupted by private interests. “Frontline” reports that Alan Greenspan, Robert Rubin and Larry Summers blocked Brooksley Born, the head of the Commodity Futures Trading Commission, from regulating derivatives. President Obama rewarded Larry Summers for his idiocy by appointing him director of the National Economic Council. What this means is that profits for Wall Street will continue to be leeched from the diminishing blood supply of the American economy.

An unmistakable sign of Third World despotism is a police force that sees the pubic as the enemy. Thanks to the federal government, our local police forces are now militarized and imbued with hostile attitudes toward the public. SWAT teams have proliferated, and even small towns now have police forces with the firepower of U.S. Special Forces.

Summons are increasingly delivered by SWAT teams that tyrannize citizens with broken down doors, a $400 or $500 repair born by the tyrannized resident. Recently, a mayor and his family were the recipients of incompetence by the town’s local SWAT team, which mistakenly wrecked the mayor’s home, terrorized his family and killed the family’s two friendly Labrador dogs.
If a town’s mayor can be treated in this way, what do you think is the fate of the poor white or black? Or the idealistic student who protests his government’s inhumanity?

In any failed state, the greatest threat to the population comes from the government and the police. That is certainly the situation today in the U.S.A. Americans have no greater enemy than their own government. Washington is controlled by interest groups that enrich themselves at the expense of the American people.

The 1 percent that comprise the superrich are laughing as they say, “Let them eat cake.”

Taki?s Magazine, edited by Taki Theodoracopulos

What an awesome article. Thank you for posting this. I love reading any thing I can get my hands on By Dr. Roberts. I don't believe these people who are allowing this to be done (SWAT kicking in doors) understand that this is the America that their children will have to grow up in.

Again, thank you.

**FL Patriot** · 11-02-2009

NEW YORK (Reuters) - The U.S. economy has been kick-started into growth but stock investors still face an uncertain outlook as Wall Street gears up for comments from the Federal Reserve and a key report on employment this week.
The Fed's policy statement could signal fewer liquidity measures for markets, while nonfarm payroll data and the Institute for Supply Management surveys on the manufacturing and services sectors will give early indications of how the economy is faring in the fourth quarter.
Investors are nervous that monetary and fiscal stimulus measures may be ended too soon.
"If the government pulls out too early and they are not spending, (and) the consumer is not spending, you've got a big issue," said Anthony Conroy, head trader for BNY ConvergEx, an affiliate of the Bank of New York.
The bankruptcy of CIT Group Inc (CIT.N) on Sunday will also feed pessimism about the economy this week, traders said. The century old commercial lender was brought down by the global credit crisis that left it unable to fund itself, while the recession left it with too many bad loans.
The filing, one of the largest in U.S. corporate history, was widely expected and analysts said it will be an underlying negative for stocks, but not a dominant downside driver.
S&P 500 stock index futures opened slightly lower on Sunday and the U.S. dollar edged higher as news of the bankruptcy spurred traders to reduce risk-taking.
U.S. stocks slumped on Friday in a stark reminder that investors remain highly sensitive to signs of economic weakness. The Standard & Poor's 500 Index .SPX closed out its first down month in eight on October's final trading day as investors questioned the sustainability of the rally.
"You got a spurt that was stimulus driven," said Fred Dickson, a market strategist at D.A. Davidson & Co. in Lake Oswego. "The common belief right now is that the economy will move forward in the fourth quarter, but probably at a little slower pace than in the third quarter."
Financial markets are bracing for a possible change of wording in the Federal Open Market Committee's statement, expected on Wednesday at the end of its two-day meeting, that could hint interest rates are headed higher late next year.
That, and any hint the Fed may start to pull back some of the liquidity it has been providing to markets through its debt purchases, could hurt stocks.
"If you got language along those lines that suggested that they could be raising maybe a little bit earlier than what folks were expecting, then yes, I would expect the market to sell off on that news," said Thomas Wilson, a managing director in the institutional investments and private client group at Brinker Capital in Berwyn, Pennsylvania.
MORE PINK SLIPS IN OCTOBER
The number of jobs cut by U.S. employers is expected to have fallen in October. But a negative surprise like last month, when the unemployment rate hit its highest level in 26 years, could undermine confidence in the economic recovery, driving stocks lower.
The nonfarm payrolls data, due on Friday, is expected to show U.S. employers cut 175,000 jobs in October, according to economists polled by Reuters. In comparison, September's job cuts totaled 263,000, far exceeding economists' forecast. Continued...

**FL Patriot** · 11-02-2009

On My Mind

Be Prepared for the Worst

Ron Paul, 10.29.09, 09:20 AM EDT
Forbes Magazine dated November 16, 2009
The large-scale government intervention in the economy is going to end badly.

Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.

A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.

Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan's excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions.

Rather than allow the market to correct itself and clear away the worst
excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.

This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble's collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve's balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?

What is more likely happening is a repeat of the Great Depression. We
might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.

Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury's program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person's pocket and gives it to someone else without creating any new wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.
The only remaining option is to have the Fed create new money out of thin air. This is inflation. Higher prices lead to a devalued dollar and a lower standard of living for Americans. The Fed has already overseen a 95% loss in the dollar's purchasing power since 1913. If we do not stop this profligate spending soon, we risk hyperinflation and seeing a 95% devaluation every year.

Ron Paul is a Republican congressman from Texas.

**FL Patriot** · 11-02-2009

YouTube - YOUR FEAR=THEIR MONEY

**FL Patriot** · 11-02-2009

Common Sense 2009

The American government -- which we once called our government -- has been taken over by Wall Street, the mega-corporations and the super-rich. They are the ones who decide our fate. It is this group of powerful elites, the people President Franklin D. Roosevelt called "economic royalists," who choose our elected officials -- indeed, our very form of government. Both Democrats and Republicans dance to the tune of their corporate masters. In America, corporations do not control the government. In America, corporations are the government.

This was never more obvious than with the Wall Street bailout, whereby the very corporations that caused the collapse of our economy were rewarded with taxpayer dollars. So arrogant, so smug were they that, without a moment's hesitation, they took our money -- yours and mine -- to pay their executives multimillion-dollar bonuses, something they continue doing to this very day. They have no shame.

They don't care what you and I think about them. Henry Kissinger refers to us as "useless eaters."
But, you say, we have elected a candidate of change. To which I respond: Do these words of President Obama sound like change?

"A culture of irresponsibility took root, from Wall Street to Washington to Main Street."

There it is. Right there. We are Main Street. We must, according to our president, share the blame. He went on to say: "And a regulatory regime basically crafted in the wake of a 20th-century economic crisis -- the Great Depression -- was overwhelmed by the speed, scope and sophistication of a 21st-century global economy."

This is nonsense.

The reason Wall Street was able to game the system the way it did -- knowing that they would become rich at the expense of the American people (oh, yes, they most certainly knew that) -- was because the financial elite had bribed our legislators to roll back the protections enacted after the Stock Market Crash of 1929.

Congress gutted the Glass-Steagall Act, which separated commercial lending banks from investment banks, and passed the Commodity Futures Modernization Act, which allowed for self-regulation with no oversight. The Securities and Exchange Commission subsequently revised its rules to allow for even less oversight -- and we've all seen how well that worked out. To date, no serious legislation has been offered by the Obama administration to correct these problems.

Instead, Obama wants to increase the oversight power of the Federal Reserve. Never mind that it already had significant oversight power before our most recent economic meltdown, yet failed to take action. Never mind that the Fed is not a government agency but a cartel of private bankers that cannot be held accountable by Washington. Whatever the Fed does with these supposed new oversight powers will be behind closed doors.

Obama's failure to act sends one message loud and clear: He cannot stand up to the powerful Wall Street interests that supplied the bulk of his campaign money for the 2008 election. Nor, for that matter, can Congress, for much the same reason.

Consider what multibillionaire banker David Rockefeller wrote in his 2002 memoirs:

"Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure -- one world, if you will. If that's the charge, I stand guilty, and I am proud of it."

Read Rockefeller's words again. He actually admits to working against the "best interests of the United States."

Need more? Here's what Rockefeller said in 1994 at a U.N. dinner: "We are on the verge of a global transformation. All we need is the right major crisis, and the nations will accept the New World Order." They're gaming us. Our country has been stolen from us.

Journalist Matt Taibbi, writing in Rolling Stone, notes that esteemed economist John Kenneth Galbraith laid the 1929 crash at the feet of banking giant Goldman Sachs. Taibbi goes on to say that Goldman Sachs has been behind every other economic downturn as well, including the most recent one. As if that wasn't enough, Goldman Sachs even had a hand in pushing gas prices up to $4 a gallon.

The problem with bankers is longstanding. Here's what one of our Founding Fathers, Thomas Jefferson, had to say about them:

"If the American people ever allow private banks to control the issuance of their currency, first by inflation, and then by deflation, the banks and the corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their father's conquered."

We all know that the first American Revolution officially began in 1776, with the Declaration of Independence. Less well known is that the single strongest motivating factor for revolution was the colonists' attempt to free themselves from the Bank of England. But how many of you know about the second revolution, referred to by historians as Shays' Rebellion? It took place in 1786-87, and once again the banks were the cause. This time they were putting the screws to America's farmers.

Daniel Shays was a farmer in western Massachusetts. Like many other farmers of the day, he was being driven into bankruptcy by the banks' predatory lending practices. (Sound familiar?) Rallying other farmers to his side, Shays led his rebels in an attack on the courts and the local armory. The rebellion itself failed, but a message had been sent: The bankers (and the politicians who supported them) ultimately backed off. As Thomas Jefferson famously quipped in regard to the insurrection: "A little rebellion now and then is a good thing. The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."

Perhaps it's time to consider that option once again.

I'm calling for a national strike, one designed to close the country down for a day. The intent? Real campaign-finance reform and strong restrictions on lobbying. Because nothing will change until we take corporate money out of politics. Nothing will improve until our politicians are once again answerable to their constituents, not the rich and powerful.

Let's set a date. No one goes to work. No one buys anything. And if that isn't effective -- if the politicians ignore us -- we do it again. And again. And again.

The real war is not between the left and the right. It is between the average American and the ruling class. If we come together on this single issue, everything else will resolve itself. It's time we took back our government from those who would make us their slaves.

Read more at: http://www.huffingtonpost.com/larry-flynt/common-sense-2009_b_264706.html