Spending money you don’t have, on things that you destroy when you use them, which often both cause expensive ongoing damage and which reduce the desire for others to subsequently do business with you sure sounds like a recipe for economic disaster.

“Hey, honey, let’s buy ostrich eggs, watches and art glass on credit and lob them around the neighborhood with a trebuchet!”

Astonishingly, this is how the USA spends much of its money.

There are three broad aspects to our debt crisis. First, in the current

fiscal year (2008) we are spending insane amounts of money on “defense”

projects that bear no relationship to the national security of the

United States. Simultaneously, we are keeping the income tax burdens on

the richest segments of the American population at strikingly low

levels.

Second, we continue to believe that we can compensate for the

accelerating erosion of our manufacturing base and our loss of jobs to

foreign countries through massive military expenditures — so-called

“military Keynesianism,” which I discuss in detail in my book Nemesis: The Last Days of the American Republic.

By military Keynesianism, I mean the mistaken belief that public

policies focused on frequent wars, huge expenditures on weapons and

munitions, and large standing armies can indefinitely sustain a wealthy

capitalist economy. The opposite is actually true.

Third, in our devotion to militarism (despite our limited

resources), we are failing to invest in our social infrastructure and

other requirements for the long-term health of our country. These are

what economists call “opportunity costs,” things not done because we

spent our money on something else. Our public education system has

deteriorated alarmingly. We have failed to provide health care to all

our citizens and neglected our responsibilities as the world’s number

one polluter. Most important, we have lost our competitiveness as a

manufacturer for civilian needs — an infinitely more efficient use of

scarce resources than arms manufacturing.

Read How To Sink America by Chalmers Johnson for more. Here are a few things that jumped out at me:

– “This brings U.S. spending for its military establishment during the

current fiscal year (2008), conservatively calculated, to at least $1.1

trillion.”

– “On November 7, 2007, the U.S. Treasury announced that the national debt

had breached $9 trillion for the first time ever. … When George [W.] Bush became

president in January 2001, it stood at approximately $5.7 trillion.”

– “‘According to the U.S. Department of Defense, during the

four decades from 1947 through 1987 it used (in 1982 dollars) $7.62

trillion in capital resources. In 1985, the Department of Commerce

estimated the value of the nation’s plant and equipment, and

infrastructure, at just over $7.29 trillion. In other words, the amount

spent over that period could have doubled the American capital stock or

modernized and replaced its existing stock.’

The fact that we did not modernize or replace our capital assets is one

of the main reasons why, by the turn of the twenty-first century, our

manufacturing base had all but evaporated.”

– “‘Today we are no longer the world’s leading lending country.  In fact we are now the world’s biggest debtor country'”