George W. Bush will go down in history as the president who fiddled while America lost its superpower status.
Bush used deceit and hysteria to lead America into a war that is bleeding the US economically, militarily, and diplomatically. The war is being fought with hundreds of billions of dollars borrowed from foreigners. The war is bleeding the military of troops and commitments. The war has ended the US claim to moral leadership and exposed the US as a reckless and aggressive power.
Focused on a concocted "war on terrorism," the Bush administration diverted money from the New Orleans levees to Iraq, with the consequence that the US now has a $100 billion rebuild bill on top of the war bill.
US efforts to isolate Iran have been blocked by Russia and China, nuclear powers that Bush cannot bully.
The Iraqi war has three beneficiaries: (1) al Qaeda, (2) Iran and (3) US war industries and Bush-Cheney cronies who receive no-bid contracts.
Everyone else is a loser.
The war has bestowed on al Qaeda recruits, prestige, and a training ground.
The war has allied Iran with Iraq's Shi'ite majority.
The war has brought soaring profits to the military industries and the firms with reconstruction contracts at the expense of 20,000 US military casualties and tens of thousands of Iraqi civilian casualties.
The Republican Party is a loser, because its hidebound support for the war is isolating the party from public opinion.
The Democratic Party is a loser, because its cowardly acquiescence in a war that is opposed by the majority of its members is making the party irrelevant.
The latest polls show that a majority of Americans believe the US cannot win against the Iraq insurgency. The majority support withdrawal and the redirection of war spending to rebuilding New Orleans. Despite the clarity of the public's wishes, the Republican Party continues to support the unpopular war.
With the exceptions of Reps. Cynthia McKinney and John Conyers, Democrats fled the scene of the Sept. 24 antiwar rally in Washington DC. The cynical Democrats are apparently owned by the same interest groups that own the Republicans and are refusing the mantle of majority party that the electorate is offering to the party that will end the war.
The Bush administration is churning out red ink in excess of $1 trillion annually. The federal budget deficit is approaching $500 billion. The US trade deficit is approaching $700 billion.
The budget deficit is being financed by foreigners, primarily Asians who now hold enough US government debt to exercise power over US interest rates and the value of the dollar whenever they decide to use the power that Bush has placed in their hands.
The trade deficit is being financed by turning over the ownership of US assets and future income streams to foreigners, making Americans forever poorer from the loss of accumulated wealth.
For the time being, China is willing to accumulate US assets as a way of taking over our consumer markets, attracting US manufacturing industry with cheap labor subsidized by artificial currency values, and gaining our technology. China's strategy is to over-value the US dollar in order to encourage the transfer of US economic capabilities to China. China's strategy gives artificial value to the dollar and keeps US interest rates at an artificial low.
The values of US stocks, bonds, and real estate depend on the support that Asians' economic strategies provide the dollar and US interest rates. As Asia achieves its goal of preeminence in manufacturing, innovation, and product development, the strategy will change. Once China completes its acquisition of US capabilities, it will no longer have a reason to support the dollar.
When the dollar goes, it will affect costs, profits, interest rates and living standards in dramatic ways. Costs and interest rates will soar, and profits, living standards, equity values, bond prices and real estate will plummet.
These unpleasant events await only Asia's decision to curtail its support for US red ink. That will happen when this support no longer serves Asia's interest.
When Asia pulls the plug on the dollar, the US government will find that monetary and fiscal policy are powerless to offset the consequences.
Compared to US budget and trade deficits, terrorists are a minor concern. The greatest danger that the US faces is the dollar's loss of reserve currency role. This would be an impoverishing event, one from which the US would not recover.
An intelligent government sincerely concerned with homeland security would find a way to halt the global labor arbitrage that is stripping the American economy of high value-added jobs and manufacturing capability, thereby causing the US trade deficit to explode. The loss of tax base that results when US companies outsource jobs and relocate production abroad makes it ever more difficult to balance a budget strained by war, natural disasters, and demographic impact on Social Security and Medicare.
Time is running out for Republicans and Democrats to escape from the distraction of a pointless war and to focus on the real threats that endanger the United States of America.
Dr. Roberts, [email him] a former Associate Editor of the Wall Street Journal and a former Contributing Editor of National Review, was Assistant Secretary of the Treasury during the Reagan administration. He is the author of The Supply-Side Revolution and, with Lawrence M. Stratton, of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Click here for Peter Brimelow's Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.
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