Dismantling the Empire_ America's Last Best Hope - Chalmers Johnson [16]
U.S. global power, as presently conceived by the overwhelming majority of the U.S. establishment, is unsustainable. . . . The empire can no longer raise enough taxes or soldiers, it is increasingly indebted, and key vassal states are no longer reliable. . . . The result is that the empire can no longer pay for enough of the professional troops it needs to fulfill its self-assumed imperial tasks.
In February 2006, the Bush administration submitted to Congress a $439 billion defense appropriation budget for fiscal year 2007. As the country entered 2007, the administration was preparing to present a nearly $100 billion supplementary request to Congress just for the Iraq and Afghan wars. At the same time, the deficit in the country’s current account—the imbalance in the trading of goods and services as well as the shortfall in all other cross-border payments from interest income and rents to dividends and profits on direct investments—underwent its fastest ever quarterly deterioration. For 2005, the current account deficit was $805 billion, 6.4 percent of national income. In 2005, the U.S. trade deficit, the largest component of the current account deficit, soared to an all-time high of $725.8 billion, the fourth consecutive year that America’s trade debts set records. The trade deficit with China alone rose to $201.6 billion, the highest imbalance ever recorded with any country. Meanwhile, since mid-2000, the country has lost nearly three million manufacturing jobs.
To try to cope with these imbalances, on March 16, 2006, Congress raised the national debt limit from $8.2 trillion to $8.96 trillion. This was the fourth time since George W. Bush took office that it had to be raised. The national debt is the total amount owed by the government and should not be confused with the federal budget deficit, the annual amount by which federal spending exceeds revenue. Had Congress not raised the debt limit, the U.S. government would not have been able to borrow more money and would have had to default on its massive debts.
Among the creditors that finance these unprecedented sums, the two largest are the central banks of China (with $853.7 billion in reserves) and Japan (with $831.58 billion in reserves), both of which are the managers of the huge trade surpluses these countries enjoy with the United States. This helps explain why our debt burden has not yet triggered what standard economic theory would dictate: a steep decline in the value of the U.S. dollar followed by a severe contraction of the American economy when we found we could no longer afford the foreign goods we like so much. So far, both the Chinese and Japanese governments continue to be willing to be paid in dollars in order to sustain American purchases of their exports.
For the sake of their own domestic employment, both countries lend huge amounts to the American treasury, but there is no guarantee of how long they will want, or be able, to do so. Marshall Auerback, an international financial strategist, says we have become a “Blanche DuBois economy” (so named after the leading character in the Tennessee Williams play A Streetcar Named Desire) heavily dependent on “the kindness of strangers.” Unfortunately, in our case, as in Blanche’s, there are ever fewer strangers willing to support our illusions.
So my own hope is that—if the American people do not find a way to choose democracy over empire—at least our imperial venture will end not with a nuclear bang but a financial whimper. From the present vantage point, it certainly seems a daunting challenge for any president (or Congress) from either party even to begin the task of dismantling the military-industrial complex, ending the pall of “national security” secrecy and the “black budgets” that make public oversight of what our government does