Dig down in the comments on another post and you’ll find some strong arguments being made for drastic cuts in the Navy and other services to help improve America’s balance sheet for the long haul. Clearly, restoring the health of the economy is a national security issue, but reports on the economy are vulnerable to hyperbole and predictions on how long the current downturn will last vary.

While the economy is in fact weak, in an environment where bad economic news makes good headlines, sells newspaper and drives traffic to media outlets, and economic issues and proposed remedies are highly politicized, it is challenging to objectively weigh economic issues against other national security issues. Unemployment is rising, several major industries are in genuine crisis and consumer confidence is low, but many of the key metrics grabbing headlines have been worse in the post-Depression period, yet did not require massive government intervention or austerity measures to correct. The less politicized economists seem to be predicting the recession will last another 12-18 months, with a few predicting as long as 24-36 months.

We also appear to be seeing a rebalancing in security challenges. The war in Iraq is drawing down, and while resources must be shifted from Iraq to Afghanistan, it’s not unreasonable to believe America’s commitments to “boots on the ground” in far away lands will decrease on the order of 30 to 50 thousand troops over the next two years. Meanwhile, maritime challenges are on the upswing and global maritime presence and engagement is becoming a more pressing requirement to maintain the free flow of trade and regional stability.

So, given the situation America faces at home and abroad, three questions come to mind:

  1. Are the current economic problems significant enough to make the economy America’s #1 security problem and warrant substantial reductions in defense spending?
  2. Does the current plan to build the end strength of the Army and Marine Corps need to be reconsidered?
  3. Should defense dollars be reallocated among the services to give higher priority to resurgent naval threats and maritime security initiatives?

What say you?

[Update1] Looks like somebody at CBO may already be saying “yes” to question #2:

The Congressional Budget Office prepared some budget alternatives for Congress to deal with defense budget shortfalls.

The alternative budget…proposes increasing enrollment fees and copayments for military retirees using the defense health care system and a reduction in Army and Marine Corps personnel.




Posted by Chris van Avery in Uncategorized
Tags: , , ,

You can leave a response, or trackback from your own site.

  • http://newwars.wordpress.com Mike Burleson

    My thoughts:

    #1-I think overreaction to the economy is making things worse, not better. Over-spending got us into this mess, but even more spending will certainly not get us out.

    #2-The Army and Marines have done most everything right in combating the real threat to our security, Islamic terrorism and the rise of the Third World. Raising troop levels or at least rebuilding and reequipping the forces we do have is not only the right thing for America, it is long overdue.

    #3-Considering the USN and the USAF are more concerned about threats we never seem to fight, and are the costliest to equip, I think it would be ludicrous to increase budgets here given the current naval leadership, or lack thereof. When we find another Cebrowski to take the Fleet to task for its obsession with 10,000+ ton battleships to fight pirates and Iran, or emphsasising manned naval air in the UAV era, or keeping ships numbers at 300 or less when we are spread so thin, then and only then should we consider increasing the Navy’s budget. Right now this would be throwing good money after bad.

  • Compound Fracture

    “Are the current economic problems significant enough to make the economy America’s #1 security problem and warrant substantial reductions in defense spending?”

    Absolutely. I mean, I don’t know about “#1,” but it certainly is a security problem. Foreign powers hold about a third of the total U.S. debt, with the Chinese and Japanese leading the way. Japan is an ally, but what of China? We currently owe both countries over one trillion dollars. That said, In Fiscal Year 2008, the U. S. Government spent $412 Billion of your money on interest payments to the holders of the National Debt. That’s just servicing the debt – not paying it off. Think of how much money that is. It’s almost the budget for the entire DoD. Think of what we could do with that money. We funded NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion – to cite a few examples – so many lost possibilities there. Had we handled our government spending differently, I bet we’d have humans on Mars by now.

    “Does the crashing economy and essentially bankrupt federal government warrant substantial reductions in defense spending?”

    I think I’ve made my point regarding this matter in the Which Child Do You Sell First? comments. In my mind, the only question is: will Navy leadership be on point leading the way with measured, deliberate action, or will they be at the point reacting to the sharp knife of crisis management and massive cuts they no longer have any control over? I believe we should lead the way and show the nation how the Navy still produces the finest leadership.

    And the question really is in three parts. “Are the current economic problems significant enough,” is its own question. The answer: Yes! As I asked before, how are we as a nation going to fund the unfunded $40 to $55 trillion in obligations our government has committed us to over the next 25 to 35 years? How? You think we have problems now, wait until military retirement checks don’t go out, or go out virtually worthless due to hyper-inflation. Same with Social Security. That Ponzi scheme is coming due – quickly. So what do we do? Raise taxes to 75% of income? In this current economy – in any economy?

    Folks, we really are sitting on top of a massive, ticking time-bomb. It’s time to acknowledge it and prepare accordingly.

    “Does the current plan to build the end strength of the Army and Marine Corps need to be reconsidered?”

    Yes. Keep in mind how the following is my opinion, and is what I would like to see done to handle the “reconsidered.” It’s time to bring the troops home and convert them to what our founder’s envisioned. A massive standing Army gives politicians too much of an opportunity for meddling in the affairs of other countries. Whether or not we think the meddling is a good idea is quickly becoming irrelevant. We can no longer afford to do so.

    The troops can be returned to reserve status with some troops remaining active to handle training the reserve militia, and others helping to finally secure our borders and ports. Some of the savings can be used for training and organizing the military into the militia force the founders envisioned, and the rest can be used to begin to repay our massive debt, and to help fund the unfunded obligations we carry. It is time for the U.S. to look after the U.S.

    It may help you to know that I look at the world in the way I do, because of the way I conduct my own life. I keep very little debt. I am able to feed my family if the grocery stores close. I can supply power to my house if the grid goes down. If my fuel storage runs low, I can live without power. I am able to defend myself in several different ways, but I do not go looking to fight with or interfere in the lives of my neighbors. No man is an island, and each of us must depend on somebody else or the natural environment for survival, but I believe we, the U.S., have become too dependent on foreign countries for our survival. In other words, I’d like to see us as a nation conduct ourselves more like I conduct myself as a private individual. We need to be independent and able to stand on our own. At one time we were. Was the country better off then, or is it better off now?

    “Should defense dollars be reallocated among the services to give higher priority to resurgent naval threats and maritime security initiatives?”

    Not to belabor the point I’ve made elsewhere, but isn’t the Navy the only constitutionally authorized standing military force? I don’t need to tell anyone here why the founders wrote that into the constitution – we have thousands of miles of coast, and we are dependent upon open sea lanes for efficient trading with other nations. We need a strong Navy. But again, I ask, do we need ten times more CVBGs than any other nation?

    That’s my two cents.

  • RickWilmes

    I work for an international silicon wafer manufacturer that provides wafers for the semi-conductor industry. Tonight, we are having a meeting that will directly deal with the current economic meltdown. I will have more to say and will be focussing on Question #1 once I know the outcome of the meeting tonight. In the mean time, here is some information relevant to my comments in the other post concerning Samsung.

    1. The world’s largest conglomerate by revenue.
    2. The world’s largest electronics company.
    3. The world’s second largest shipbuilder.

    Background on Samsung..

    Yankee Sailor says: If the Samsung stuff is relevant to another post, put it there.

  • CF

    I just read the update link. Interesting, but it’s going to get much worse than that. My prediction is the 2010 defense budget will be the last of the budgets that look anything like what we’re used to seeing. Money printing is only good for so long.

  • FOD Detector

    I’m kind of amazed you could imply this economic crisis is overstated in order to fill newscasts and boost newspaper sales.

    From a National Security perspective, here are the problems:
    -when Wall Street sneezes, the rest of the world catches a cold. Any economic downturn is going to be magnified in Third World countries. Terrorism often finds fertile ground among the poor. Moreover, bad economic times tend to cause already shaky regimes (read: Pakistan, NOK, etc.) more volatile.
    -all of our defense industries run on credit. If this credit isn’t available or costs a lot more, DoD winds up paying much more for existing programs-or decides not to pursue them at all. Goodbye RDT&E.
    -A s mentioned previously, China will be able to advance, even at a diminished pace, while the US and Europe decline.
    -Looking longer term, Americans have lost about a quarter of their net wealth over the past year or so. This likely means fewer kids going to college.

  • http://informationdissemination.blogspot.com/ Yankee Sailor

    FD said, “I’m kind of amazed you could imply this economic crisis is overstated in order to fill newscasts and boost newspaper sales.”

    Here’s an example of what I mean, from a publication with a generally Conservative (and sensationalist) reputation: “Unemployment jumps to 7.2% in December; worst year for layoffs since 1945″.

    It is true that the raw number for job losses is the largest since 1945, but since the U.S. population has more than doubled since 1945, as a percentage of population the losses aren’t quite as historic as the headline implies. Indeed, based on a real analysis of the data, losing 2.6 million jobs in 2008 is less than half the loss experienced 1945 as a percentage of population. In addition, I’d be willing to bet that the losses in 1945 included a large number women leaving the work force and returning to the traditional roles of the era, which is would make the any comparison difficult.

    Having worked in publishing, I can guarantee you that the headline was crafted to attract attention and generate readership.

  • http://informationdissemination.blogspot.com/ Yankee Sailor

    CF Said: It’s time to bring the troops home and convert them to what our founder’s envisioned. A massive standing Army gives politicians too much of an opportunity for meddling in the affairs of other countries.

    This is not really an economic argument, though; it’s a political argument.

  • Byron

    Not to mention, that during unstable times (and Lord knows there’s plenty of that to be had) you don’t slash your nations defense force. If he were alive, I’d suggest you ask Admiral King what his opinion might be on the subject.

  • CF

    OK, YS, clear it up for me once and for all. “it’s a political argument.” Is that particular portion of my writing you quoted off limits here? I will try my hardest to understand and obey your answer, and if I can’t understand or obey, I promise you: I will leave.

  • RickWilmes

    That damn political issue again. YS, I just read your post on comment doctrine. I have a question not only related to that but it is particularly import for how I am going to proceed with my comments in this post. I need to establish your particular context in regards to your knowledge concerning economics. As an example, have you read Jean-Baptiste Say’s treatise on economics titled?

    A Treatise on Political Economy

    What, a treatise on politics and economics :) How are we going to separate the two?

    My questions are important because Say also has a particular attitude towards using statistics in ones analysis concerning economic issues.

    Thanks in advance.

  • FOD Detector

    YS: Hate to break it to you, but the way they (the BLS) calculate the unemployment rate has evolved greatly since the end of WWII.

    The 7.2% figure is very, very conservative. The 7.2% figure is what’s called the U-3 rate. The U-3 rate doesn’t count those who have lost full-time employment and either are now working part-time or those who are unemployed but whose benefits have run out. It also doesn’t count those who have stopped looking for work or are employed intermitently (the U-6 rate). All in all, if we calculated unemployment the same way we did in ’45, we’d be looking at unemployment rate around 15-16%.

  • http://informationdissemination.blogspot.com/ Yankee Sailor

    CF,

    Maybe I wasn’t clear in my post or comments. Can you state a political position that our force structure should be guided by the Founding Fathers’ intent? Absolutely, and Americans and policy makers should be reminded of that original intent from time to time.

    In this specific post however, I asked, “Does the current plan to build the end strength of the Army and Marine Corps need to be reconsidered” when viewed in the context of the current economic crisis and shifting military requirements. It seems to me the point you were making about returning to a military that fit with the Founders’ vision could be made in any economic and security environment. To me, it doesn’t add much to this particular discussion because the odds of it happening are pretty darn small.

  • CF

    Ah, I get it. And yes, you’re correct of course, “seems to me the point you were making about returning to a military that fit with the Founders’ vision could be made in any economic and security environment.”

    “To me, it doesn’t add much to this particular discussion because the odds of it happening are pretty darn small.”

    True as well. I guess I need some schoolin’ in “staying on point.”

    So, if you’re talking “status quo” then I really have no opinion – other than “get back to the founders’ basics” because I’m not educated enough to have an informed opinion on the subject. I’m not a professional military man, YS. I served 7 and left, and it was a long time ago. Thanks for the clarification.

  • http://j.diyala2006@yahoo.com Flashman

    As to question #1 – yes. The state of the economy has been the most significant security risk – and overall risk to the nation – for a couple decades. Given the overall lack of domestic savings combined with the increasing rate by which the U.S. is dependent on leverage by foreign financiers (China, Gulf States, Japan, EU), our overall ability to make political decisions has been significantly constrained. (Peterson Institute for International Economics has several interesting articles describing the phenomenon and it’s risk to our economy http://www.iie.com/publications/papers/paper.cfm?ResearchID=704)

    Ultimately, the ability to establish security — whether through military force or otherwise — is derived from the ability to be flexible when making political choices. I just don’t see how we have the same degree of flexibility at this point, due to the leveraged economy, that we did almost 40 years ago.

    The recent economic downturn will ultimately also have a significant ‘strategic communications’ effect. Keeping in mind that Islamist ideology, at its base, is being offered up as an alternative political/social arrangement than Western democratic capitalism, the potential failure of DemoCapitalism will likely send a few more folks into the arms of Al Qaida (I don’t think it will be droves, but AQ will pick up on the ‘failure’ of the U.S. economy as part of its message, if it has not already).

    The PRC has deliberately pursued an economic policy that supports — if not truly the basis — its grand strategy. The investments the PRC has made in Taiwan, Southeast Asia, and Africa all serve to support its economy and security. Ulimately, the PRC’s economic choices have constrained the US’s political choices in the event of a conflict with Taiwan or regarding US involvement in the PRC’s sphere of influence. Have we done the same?

    For Q#2 – No. The DOD budget was not what got us into this plight in the first place, and the security threats that exist justify a standing military in the name of providing the U.S. with credible diplomatic flexibility. All elements of the DOD were drastically undersized. Does anybody recall the deployment of nearly 500,000 troops in 1990/1991? We only have about $160,000 troops fielded currently between Afghanistan and Iraq and are struggling to maintain that force.

    Q#3 – We continue to throw good money after bad with both services. Even with a great economy, I’m curious about the threat estimates used to drive the production of systems such as the F/A-22, LCS, and ABM systems. How do these items support our grand strategy? Are there lower-cost alternatives?

  • http://informationdissemination.blogspot.com/ Yankee Sailor

    CF said: So, if you’re talking “status quo” then I really have no opinion – other than “get back to the founders’ basics”….

    While I don’t think your remedy is a politically viable or wise option, the fiscal concerns you raise are very important. Other than James Rickards, I don’t think there’s anyone discussing the security impact of the type of economic doomsday scenario that might be developing. The current situation and plan to remedy it raises a lot of tough questions. Not just “can we afford what we’re doing today?”, but also “what will having to service those debts do to our ability to positively influence the security environment for the next 25 or 50 years?”

  • RickWilmes

    YS,

    I wasn’t completely clear on my comments about Samsung, they will also be relevant to what I have to say in this post so bear with me. This is a complex issue and I won’t be able to cover it all in one single comment.

    After my meeting tonight and my comments tomorrow, I think I will be able to clear some of the confusion centered around my posts.

  • Dave Kisor

    One economic bone of contention is the US’s exorbitantly high business tax. At 33%, we are essentially shooting ourselves in the foot, which is a reason many business’ are outsourcing overseas where it is considerably lower, thereby eliminating employed Americans. To turn a profit, you have to inflate your costs and if you have a high overhead, you’ll really have to sock it to them.

    As for question 1, I’m not certain if the economic downturn is a security problem, but it’s a furball I wouldn’t want to have to clean.

    I also agree there is a degree of overreaction, as once the word “recession” is mentioned, bankers, financiers and their ilk tend to panic in droves, which could amplify the actual situation. Mention depression and the panic really sets in.

    While service and information are nice to have, they are incapable of supporting an economy. An economy needs manufacturing and we’ve all but given it all away. I’ve met many in the construction trades who have little or no confidence in Chinese steel and will reject it whenever they get the chance, but at times that may be all some can afford.

    One fly in the ointment regarding the unemployment rate is before the Reagan era, the Military was not included in the rate, but to make themselves look good, they were included. Historically it is now a somewhat corrupted database.

    Thus ends my rant.

  • http://j.diyala2006@yahoo.com Flashman

    YS – No luck with the Rickards link, but I navigated to your blog. Yes, the doomsday scenarios are bleak, with the most credible being the piling on a bad situation by an international terrorist organization. I’d argued that Rickards discussion of the threat posed by the PRC is shallow — I’ll summarize to say that the PRC has almost as much to lose as we would if they devalued U.S. treasuries (the U.S. economy is also strong enough going forward that devaluation would actually result in U.S. treasuries being bought by other governments also capable of holding the debt, and the diversification would be an advantage of sorts).

    That said, I think the important thing to note is that the stage has been set for decline – serious economic decline – that correlates to less political flexibility to conduct the types of combat operations that we have become accustomed to in the past few decades. The root causes of this phenomenon have been the trade deficit and lack of national savings. Our current economic predicament is only one layer of that same ring of devilish economic inferno.

    Yes, it’s the economy.

    I agree with Rickards central argument concerning the threat of international terrorism: for the Islamic fundamentalists — they win if they can fundamentally shake the globalized economy and discredit its major proponents.

    VR

    Yankee Sailor says: I pooched the link, but it’s fixed now.

  • FOD Detector

    One economic bone of contention is the US’s exorbitantly high business tax. At 33%, we are essentially shooting ourselves in the foot, which is a reason many business’ are outsourcing overseas where it is considerably lower, thereby eliminating employed Americans.

    US outsourcing is not a function of the business tax; it is solely due to labor costs. If I can get an equally qualified programmer in Mumbai or Taipei for $25K per year, why should I pay the going US rate of $100K?

    When talking of tax rates, it’s helpful to understand effective tax rates. Due to many corporate tax loopholes, over 60% of US corporations paid no business taxes over the past 6-7 years. In many instances, upgrades of equipment by corporations is actually subsidized by the Govt.

  • Dave Kisor

    I was thinking more along the lines of smaller contractors, as that was what a former coworker told me when he got his general contractors license and got his DUNS number to be a federal contractor. I know the big kids can get away with a lot.

    Does it necessarily mean if the US if going to compete in the global market that we must perforce lower our standard of living?

  • RickWilmes

    THE FACTS

    In today’s Oregonian, it was announced that one of my company’s competitors, SEH America, is closing its plant for four weeks. Wafertech, one of my companies customers/competitors, is also cutting work hours and shedding jobs.

    In Dec. my plant shut down for two weeks. In January, my company shutdown for two weeks. At the end of February, we will again be shutdown for two weeks and for one week in March. My meeting, last night, was about changing from a 24hr/7day plant which requires 4 12 hour shifts to a 5 day a week/24 hour plant which requires only three shifts at 8 hr. I’ll leave it to the readers to do the math and understand the implications behind this change. (Hint: Less leaders, and no overtime pay.)

    My fabrication plant is designed very much like a ship, so I will put the following in ship terms. Aside from the two week shutdowns that we have been experiencing, our plant normally needs to run on 4 engines to maintain full steam ahead. When we are not dropping anchor for two weeks, we are driving around in circles on one engine in first gear or as Keynes would put it we are digging a hole and than filling it back up again to make work.

    With that said, most of the economic news over the last several weeks, is data for December and 4Q 2008. I am not going to waste my time arguing with the comments centered around the misconception that the economic situation is being sensationalized and that terms like “recession” and “depression” in the newspaper are making the situation worse. I know better and I am content to wait until April when the earnings reports for Samsung, Intel, Nokia and other companies that are mentioned in the below article are reported.

    Technology slowdown hits Samsung.

    “The world’s biggest manufacturer of memory chips and liquid crystal displays has been badly hit by a collapse in demand and price pressures in those segments. It reported Friday an operating loss of 937 billion won, or $672 million, for the October-December quarter compared with a 1.78 trillion profit during the same period a year earlier. The loss was below what analysts had expected.”
    One of the results of this economic meltdown is that state and local governments can not pay for their spending.

    Furlough Fridays begin for Calif. state workers .

    “California’s first-ever furloughs began Friday with more than 200,000 state workers expected to stay home without pay amid the state’s fiscal crisis.”

  • UltimaRatioReg

    Every cloud does have a silver lining. Three economies previously “emerging” have fallen on very hard times, which is not necessarily a bad thing. Russia and Iran are near economic collapse (REAL economic collapse, not the “US Economic collapse” version)and China’s is at risk of imploding onto the speculative bubble of a decade of 10-20% annual expansion.

    Russia and Iran, once swimming in petro-dollars, used the windfall to build military strength almost exclusively, both with the stated purpose of expanding influence and countering the West (US). China used massive government subsidies and a low-cost labor force to penetrate and inundate US markets with finished goods. They also spent on military expansion, but also began what can only be called a re-colonization of Africa, locking up petroleum and strategic mineral sources for PRC.

    Food for thought.

  • b2

    “The sky is falling”.

    Ho…hum. Nice and blue here. What is that about keeping your head when all the others around you…I hate the smell of fear.

    CF- We get it- “Country boys can survive” ho-hum…With a government check for incidentals!

    RW- I remember when the US made all silicon wafers…we’ll make the next great thing, too.

    I have faith in America. I have great faith in our military’s ability to adapt (economically, strategically and tactically) and still win, especially the US Navy. Near as I can see, good times and bad, they haven’t let us down since the War of 1812, in which we eventually prevailed. On the other hand, I have zero faith in politicians.

    BTW, ain’t this a post about economic v. military security?

    b2

  • UltimaRatioReg

    B2,

    Agreed on the confidence in America, particularly the American worker. And the US military. As long as the Federal Government doesn’t screw it up by killing initiative and punishing success even more than current regulations.

    As for Social Security (FOD), perhaps we should call it a “Johnson Scheme”. Though Ponzi is famous for it, Lyndon Baines made it an art form when he hung all the non-contributors off of the program with his “Great Society”.

    So, to answer the three questions in the blog,

    #1. No, the economy is not the biggest security problem. Even during the worst of the Carter years, the biggest security problem was external (USSR).

    #2. Don’t touch the force expansion of the Army and Marine Corps. Consider those to be an ounce of prevention.

    #3. No, do not reallocate. It would seem that more money reallocated would go to buying high-tech and high-dollar units regardless of the maritime threat. Until the Navy gets its own house in order with ship design and construction, money will not solve the problem.

  • UltimaRatioReg

    *Burma Shave*

    #1 Should read “No, the economy is not the biggest security problem. Even during the worst of the Carter years, the biggest security problem was external (USSR). This remains true today, though the threat is more diffuse.”

  • CF

    “CF- We get it- “Country boys can survive” ho-hum…With a government check for incidentals!”

    That’s what you think my posts are about?

    And what does the comment “With a government check for incidentals!” mean. I’d like you to clear that up for me, because right now, I’m seeing that as an unprofessional personal attack. Tell me why I’m wrong.

    Anyhow, I’m happy you have plenty of faith in Americans and the military – and zero on politicians. We see that the same.

    Where’s the money going to come from? 50 trillion. Where will that come from? We can revisit this matter in the future. In other words – time will tell. In the meantime, I’ve said my bit and done my duty as I see it.

  • Byron

    I think he means his retirement check…which he assuredly earned every penny of.

  • CF

    So the first part of the sentence is directed at me, and then after some ellipses it becomes about him?

    I don’t think so. I think he’s attacking me, my position, and my opinion.

    Basically, he dismissed what I had to say by calling me, in a subtle but unmistakable way, “A government dependent Hillbilly.”

  • CF

    Wait, I left something out. What he called me, distilled down to its essence, is a, “Scared, government dependent Hillbilly.”

    He owes me an apology, or this blog isn’t nearly as professional as it tries to come off.

  • http://informationdissemination.blogspot.com/ Yankee Sailor

    b2: “Country boys can survive” ho-hum…With a government check for incidentals!

    This does come off as a personal attack. If that’s what you intended, I think it’s inappropriate. If you meant something else, I invite you to clarify.

    b2: BTW, ain’t this a post about economic v. military security?

    One of the questions asked was, “Are the current economic problems significant enough to make the economy America’s #1 security problem and warrant substantial reductions in defense spending?” As a result, a discussion to quantify the severity of the current economic crisis seems appropriate.

    I think for the purposes of avoiding a partisan brawl we should, however, stick to discussing whether to divert defense dollars in principle and not get into a discussion of exactly what to do with diverted dollars.

  • Byron

    I’d also like to add that one of the most common causes of disagreements like this are the fact that what is gentle sarcasm in one posters mind can easily become something else entirely when someone else means it…which is where smilies came in, lo those many years ago when the Internet was new and everything wax text based. You’ll note that I use them. It’s not to be cute. It’s to let people know I’m not serious, I’m either kidding them or being humorous..or trying to ;)

    So before you go straight to burner, ask what he meant. What he intended might be something very different indeed. I should know, I’ve had to put up a couple or three apologies for a misunderstanding myself.

  • RickWilmes

    URR,

    I have a couple questions and a comment concerning your Silver lining analogy.

    1. What is the difference between a ‘REAL economic collapse versus the “US Economic collapse” version’? In other words, what are thier causes and their effects?

    2. What facts of reality need to be identified in order to recognize the difference?

    Finally, my comment concerns the idea that “three emerging economies collapsing” as a result of the U.S. economic meltdown is somehow good. This instantly reminded me of the fallacy of the broken window and the following excerpt in particular which is taken from “Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt. .

    “Chapter III: The Blessings of Destruction

    SO WE HAVE finished with the broken window. An elementary fallacy. Anybody, one would think, would be able to avoid it after a few moments’ thought. Yet the broken-window fallacy, under a hundred disguises, is the most persistent in the history of economics. It is more rampant now than at any time in the past. It is solemnly reaffirmed every day by great captains of industry, by chambers of commerce, by labor union leaders, by editorial writers and newspaper columnists and radio and television commentators, by learned statisticians using the most refined techniques, by professors of economics in our best universities. In their various ways all dilate upon the advantages of destruction.

    Though some of them would disdain to say that there are net benefits in small acts of destruction, they see almost endless benefits in enormous acts of destruction. They tell us how much better off economically we all are in war than in peace. They see “miracles of production” which it requires a war to achieve. (p. 25)”

  • RickWilmes

    B2 says,

    “RW- I remember when the US made all silicon wafers…we’ll make the next great thing, too.”

    I agree, the next great thing America is creating are the radical capitalists that know how to defend capitalism on moral grounds. For example,

    The Clemson Institute for the Study of Capitalism will foster a world-class conversation on certain basic questions:

    What are the moral foundations of a free society?

    Are there objective principles of morality and justice on which the institutions of governments must rest and by which the decisions of public officials can be evaluated?

    What role should government play in a capitalist system?

    What is the proper relationship between government and the individual?

    What structures of government are most conducive to promoting the ideals of a free society?

    What is the relationship between economic and intellectual freedom? ”

    I also have a negative assessment of todays politicians who at this time are in the process of nationalizing the housing and financial market, and printing record levels of paper money.

    B2, do you agree with the stimulus package or not? If you disagree with the printing of money as a solution to our economic woes than, it terms of fundamentals, I do not see much of a disagreement between us.

    Hopefully, you can resolve what I also see as a personal attack on a fellow commenter. I think we should have a higher standard here at the USNI blog, so like several others I am eagerly waiting for a clarification on your postion.

    I will wait for a couple of days for any responses to my comments at this point, than I will provide my answer to Question # 1.

2014 Information Domination Essay Contest