Mike Whitney

President Bush has consistently defended his massive $500 billion tax cuts. He has insisted that deficit spending be a "permanent" part of the national budget. His economic plan has eroded the confidence of central banks around the world and increased the federal debt by a whopping $3 trillion. Still, he persists in his claim that deficits should be an enduring function of government.

Doesn't this confirm that bankrupting the country is an integral part of the Bush grand strategy?

What more proof do we need?

Imagine someone stealing your credit card and running up a $450,000 bill year after year and then defending the theft as necessary to "create more jobs" as the "trickle-down" theorists do?

Would you take such a person at his word?



Deficits are theft; and the determination to make these lavish tax cuts for the wealthy permanent proves beyond a doubt that it is part of a larger strategy to bring about an economic meltdown that will change the political complexion of the country.

What else could it mean?

Dick Cheney recently opined, "Reagan proved that deficits don't mean anything."

Liar.

In fact, Cheney was part of the Reagan administration when Reagan's tax cuts created monstrous $200 billion deficits, up 75% from 1980. The effects were devastating. Unemployment jumped to 10%, the 30 year mortgage skyrocketed to 15%, the economy ground to a standstill, and the nation plunged into the deepest recession since the 1930s.

Cheney fully understands the suffering that deficits produce. Now, he wants to continue that misery as a permanent function of government.

Why?

Is it really so important to reward the "fortunate 1%" that the administration would risk the economic well-being and solvency of the nation?

And, what is the relationship between the ocean of debt produced by the Bush team and their strengthening of police-state apparatus like unlimited spying on Americans, the NSS (Bush's new Secret Police), the uniform Federal ID program, the Patriot Act, and Halliburton's $385 million contract from Homeland Security to construct new detention and processing facilities within the United States?

Is the ascendancy of the police-state intended to balance the catastrophic effects of economic destruction? Or, do the new instruments of repression anticipate the "political turmoil" (Warren Buffet's words) that naturally results from financial collapse?

The Bush master-plan is no different than the economic shock-therapy the United States has directed at the third world for decades. The strategy is simple and straightforward, but virtually foolproof in achieving its objectives; the crushing of the middle class and the subsequent shifting of the nation's wealth to the "oligarchy of racketeers" who run the system.

The levers of power have all been faithfully assembled by Bush operatives, while America's $3 trillion trade deficit looms overhead like the sword of Damocles. As the underpinnings of economic wellbeing continue to deteriorate; causing further job-flight, credit spending, and soaring energy prices; the power-brokers at the head-of-state calmly arrange the instruments of repression they'll need to maintain order.

Did we really imagine the chickens would never come home to roost?

Regardless of what the public-relation gurus on the business channel say, the state of the union is disastrous. Bush has intentionally looted the treasury and torpedoed America's economic future. Federal Reserve chief, Alan Greenspan cooperatively kept interest rates low so the greatest swindle in history could take place while the drowsy American public snoozed away.

Thanks, Alan.

Americans refuse to believe that bubbles (housing or stock market) are brought about by the deliberate and politically-motivated actions at the Federal Reserve.

Huh?

Everyone agrees about the effects of high interest rates; why would there be so much uncertainty about low interest rates?

Just as high interest rates slow the economy by making loans on investment more expensive; so too, low interest rates naturally produce increased speculation by making cheap money available to a greater number of people. Greenspan knew as early as 1996 that the stock market was over-inflated when he warned that "there was a stock market bubble at this point" that is "a problem we should keep our eye on". (Remember "irrational exuberance"?) Still, he accommodated his friends in Washington and Wall Street by waiting until tens of thousands of Americans had lost their savings (and retirement) before ratcheting up interest rates and cooling down the spec-market. The final loss to investors was an estimated $7 trillion dollars, an amount that pales in comparison to the current housing bubble which "The Economist" calls "the greatest bubble in history". Again, it was Greenspan who instigated the housing bubble by dropping rates to a paltry 1.5% following the decline in the stock market. Regrettably, the results will be even more ruinous this time.

Never the less, low interest rates are an effective way of creating bubbles and thereby transferring wealth from one class to another. The other two "tried-and-true" methods are tax cuts and hyperinflation; both parts of the Greenspan legacy. (Expect a weakening dollar as the effects of the massive trade deficit set in)

To argue that the Federal Reserve does not support a political agenda that favors elite interests, is to say that it is not a privately-owned institution (which it is) which operates in conjunction with major investors; particularly the energy giants, the mainstream media, arms-manufacturers, and the political establishment. The Federal Reserve is joined at the hip with the Bush White House. In fact, the administration is merely a reflection of the values and goals of the financial powerbrokers at the central banks.

Don't expect any complaints from Alan Greenspan about the rough-treatment of prisoners at Guantanamo Bay. The cadres of elites are of "one mind" on the current global crusade for a new world order. If that means torturing a few thousand innocent people; so be it.

Doomsday

There are numerous signs that the nation's free ride will soon be over. Gold is skyrocketing as perceptive investors see the cracks and fissures appearing in the economic foundation that binds the debtor-kingdom together. Twitchy investors are watching for news about Iran, rebel attacks in Nigeria, or a potential sell-off of greenbacks in China. Market analysts may feign equanimity but they are walking on the knifes-edge expecting the worse.

But, the worse is unavoidable; the country is dead broke. Last year alone Americans not only spent more than they earned for the first time since the great Depression; they also borrowed an additional $600 billion from their home equity to pay off credit card debt and consumer loans! This tells us that the all signs of growth in the economy are the result of credit spending. Home equity has become the new ATM card, demonstrating once again that the country is running on fumes.

This quarter's slow growth of 1.1%, shows that the well has run dry and consumer spending (which accounts for 70% of GDP) is down for the count. Interest rates are going up, the dollar will soon be sinking, energy costs are soaring, and the unemployment line is getting longer.

Time to find a nice comfy spot beneath the freeway on-ramp...and bring your own cardboard.

The Clinton strategy would have made the transition more agreeable, but the result of globalization is roughly the same. Businesses and jobs pack up and leave driving wages through the floor, while the social safety net continues to worsen by congressional edict. The main difference with Clinton is that he strengthened the dollar by balancing the budget and showed little appetite for creating the police-state apparatus that the Bush claque relishes.

The Bush administration is preparing for a quick but agonizing transition. They have painstakingly removed whatever laws stood in the way of autocratic government. The courts will brandish the rubber stamp for the supreme executive, the congress will languish as a ceremonial institution, and the compliant media will shower praise on the Dear Leader's iron-fisted methods of keeping the peace.

Economic disintegration is the catalyst for changing the fundamental institutions of government. The globalists in the White House have played a major role in numerous coups across the planet, all producing the same basic result; a military dictatorship with a strongman at the head of state. America is being readied for a similar transformation.