Why is the US Empire Going Bankrupt?

America’s Imperial Overstretch

This week, SU-24 fighter-bombers buzzed a U.S. destroyer in the Baltic Sea. The Russian planes carried no missiles or bombs.

Message: What are you Americans doing here?

In the South China Sea, U.S. planes overfly, and U.S. warships sail inside, the territorial limits of islets claimed by Beijing.

In South Korea, U.S. forces conduct annual military exercises as warnings to a North Korea that is testing nuclear warheads and long-range missiles that can reach the United States.

U.S. warships based in Bahrain confront Iranian subs and missile boats in the Gulf. In January, a U.S. Navy skiff ran aground on an Iranian island. Iran let the 10 U.S. sailors go within 24 hours.

But bellicose demands for U.S. retaliation had already begun.

Yet, in each of these regions, it is not U.S. vital interests that are threatened, but the interests of allies who will not man up to their own defense duties, preferring to lay them off on Uncle Sam.

And America is beginning to buckle under the weight of its global obligations.

And as we have no claim to rocks or reefs in the South China Sea — Vietnam, Taiwan, Malaysia, Brunei and the Philippines do — why is this our quarrel?

If these rocks and reefs are so vital they are worth risking a military clash with China, why not, instead, impose tariffs on Chinese goods? Let U.S. companies and consumers pay the price of battling Beijing, rather than U.S. soldiers, sailors, and airmen.

Let South Korea and Japan build up their forces to deal with the North, and put Beijing on notice: If China will not halt Kim Jong Un’s nuclear weapons program, South Korea, and Japan will build their own nuclear deterrents. Half a century ago, Britain and France did.

Why must we forever deter and, if need be, fight North Korea?

And why is the defense of the Baltic republics and East Europe our responsibility, 5,000 miles away, not Germany’s, whose economy is far larger than that of Russia?

Even during the darkest days of the Cold War, U.S. presidents refused to take military action in Hungary, Czechoslovakia or Poland.

When Moscow intervened there, the U.S. did nothing. When did the independence of Eastern Europe become so vital an interest that we would now risk war with a nuclear-armed Russia to ensure it?

Under Article 5 of NATO, an attack upon any of 28 allied nations is to be regarded as an attack upon all.

But is this the kind of blank check we should give Turkey’s Recep Tayyip Erdogan, who, a few months back, ordered a Russian fighter plane that crossed into Turkish territory for 15 seconds be shot down?

Do we really want to leave to this erratic autocrat the ability to drag us into a war with Russia?

When Neville Chamberlain in 1939 handed a war guarantee to a junta of Polish colonels, who also had an exaggerated opinion of their own military power and prowess, how did that work out for the Brits?

America should not write off the Baltic Republics or Eastern Europe. But we should rule out any U.S.-Russian war in Eastern Europe and restrict a U.S. response to Russian actions there to the economic and diplomatic. For the one certain loser of a U.S.-Russian conflict in Eastern Europe — would be Eastern Europe.

As for Iran, the U.S. intelligence community, in 2007 and 2011, declared with high confidence that it had no nuclear weapons program.

Since the Iran nuclear treaty was signed, 98 percent of Iran’s enriched uranium has been shipped out of the country; no more 20 percent enriched uranium is being produced; the Arak reactor that could have produced plutonium has been scuttled and reconfigured; and nuclear inspectors are crawling all over every facility.

Talk of Iran having a secret nuclear-bomb program and testing intercontinental missiles comes, unsurprisingly, from the same folks who assured us that Iraq had weapons of mass destruction.

The goal is the same: Stampede America into fighting another war, far away, against a nation they want to see smashed.

Since the end of the Cold War in 1991, this country has been steadily bled and slowly bankrupted. We are now as overextended as was the British Empire in the 1940s.

And like that empire, we, too, are being challenged by nations that seek to enlarge their place in the sun — a resurrected Russia, China, Iran. And we are being bedeviled by fanatics who want us out of their part of the world, which they wish to remake according to the visions of their own faiths and ideologies.

Time for a reappraisal of all of the war guarantees this nation has issued since the beginning of the Cold War, to determine which, if any, still serve U.S. national interests in 2016. Alliances, after all, are the transmission belts of war.

This is not isolationism. It is putting our country first, and staying out of other people’s wars. It used to be called patriotism.

From Lewrockwell.com, here.

America’s Allies Jump Ship

As Ukraine Collapses, Europeans Tire of US Interventions

On Sunday Ukrainian, prime minister Yatsenyuk resigned, just four days after the Dutch voted against Ukraine joining the European Union. Taken together, these two events are clear signals that the US-backed coup in Ukraine has not given that country freedom and democracy. They also suggest a deeper dissatisfaction among Europeans over Washington’s addiction to interventionism.

According to US and EU governments – and repeated without question by the mainstream media – the Ukrainian people stood up on their own in 2014 to throw off the chains of a corrupt government in the back pocket of Moscow and finally plant themselves in the pro-west camp. According to these people, US government personnel who handed out cookies and even took the stage in Kiev to urge the people to overthrow their government had nothing at all to do with the coup.

When Assistant Secretary of State Victoria Nuland was videotaped bragging about how the US government spent $5 billion to “promote democracy” in Ukraine, it had nothing to do with the overthrow of the Yanukovich government. When Nuland was recorded telling the US Ambassador in Kiev that Yatsenyuk is the US choice for prime minister, it was not US interference in the internal affairs of Ukraine. In fact, the neocons still consider it a “conspiracy theory” to suggest the US had anything to do with the overthrow.

I have no doubt that the previous government was corrupt. Corruption is the stock-in-trade of governments. But according to Transparency International, corruption in the Ukrainian government is about the same after the US-backed coup as it was before. So the intervention failed to improve anything, and now the US-installed government is falling apart. Is a Ukraine in chaos to be considered a Washington success story?

This brings us back to the Dutch vote. The overwhelming rejection of the EU plan for Ukrainian membership demonstrates the deep level of frustration and anger in Europe over EU leadership following Washington’s interventionist foreign policy at the expense of European security and prosperity. The other EU member countries did not even dare hold popular referenda on the matter – their parliaments rubber-stamped the agreement.

Brussels backs US bombing in the Middle East and hundreds of thousands of refugees produced by the bombing overwhelm Europe. The people are told they must be taxed even more to pay for the victims of Washington’s foreign policy.

Brussels backs US regime change plans for Ukraine and EU citizens are told they must bear the burden of bringing an economic basket case up to European standards. How much would it cost EU citizens to bring in Ukraine as a member? No one dares mention it. But Europeans are rightly angry with their leaders blindly following Washington and then leaving them holding the bag.

The anger is rising and there is no telling where it will end. In June, the United Kingdom will vote on whether to exit the European Union. The campaign for an exit is broad-based, bringing in conservatives, populists, and progressives. Regardless of the outcome, the vote should be considered very important. Europeans are tired of their unelected leaders in Brussels pushing them around and destroying their financial and personal security by following Washington’s foolish interventionism. No one can call any of these recent interventions a success and the Europeans know it.

One way or the other, the US empire is coming to an end. Either the money will go or the allies will go, but it cannot be sustained. The sooner the American people demand an end to these foolish policies the better.

From Lewrockwell.com, here.

המדינה מרעילה את יהודיה

“הבשר המוברח” מיו”ש: הפקחים הונחו להעלים עין

לחצים של הממשל האמריקאי, של מתאם פעולות צה”ל ביהודה ושומרון ושל ארגונים בינלאומיים הם שעמדו מאחורי הכנסת הבשר המזוהם למסעדות ולחנויות בישראל במשך שנים. ממידע שהגיע ל’מקור ראשון’ ול-nrg עולה כי שיקול מדיני גרם לממשלות ישראל להתיר להכניס תוצרת של מפעלי בשר פלסטיניים ביו”ש לתחומי הקו הירוק, בידיעה שהבשר אינו עומד בתקני בריאות הציבור. 

“עצמו עיניים במודע”, טוען פקח הבקיא בפרטים, “הייתה הנחיה, אך נאמר לשוטרים ולפקחים לא לאכוף אותה. באופן רשמי ההיתר היה להכניס את הבשר למפעלים במזרח ירושלים, אך למעשה מרגע שחצו את המחסומים לא הייתה כל מניעה להגיע איתו למערב העיר, לבית-שמש ולתל-אביב”. הנוהג נפסק רק לאחרונה בעקבות החלטה של שר החקלאות, אורי אריאל, שסירב להמשיך ולהעלים עין מהתופעה. הסירוב הזה גרר את חשיפת התופעה בימים האחרונים של הבשר המוברח. 

בשר מוברח צילום: דוברות המשטרה

מהמידע ומהמסמכים שהגיעו ל’מקור ראשון’ עולה כי במשך שנים הסכימו כל רשויות הממשלה הנוגעות בדבר לאפשר את הכנסת הבשר, מטעמים מדיניים. מדובר בראש ובראשונה במשרדי החקלאות והבריאות, אף שעדכונים הועברו גם לראש הממשלה ולשרי הביטחון והחוץ שכיהנו בישראל מתחילת העשור. 

כך למשל, במסמך רקע שכתב לפני שנתיים המנכ”ל הקודם של משרד החקלאות, רמי כהן, נכתב כי “ביוני 2010, לפי החלטת משרד הבריאות, הסתיים תוקפו של ההיתר. לאחר פנייה של גורמים מטעם מתאם הפעולות בשטחים ומשרד החוץ, וקבלת עמדתם של שר הביטחון ושר החוץ (אהוד ברק ואביגדור ליברמן – א”כ) שיש לאפשר את המשך הייבוא משיקולים מדיניים, ניתנה הנחיה לא לאכוף את האיסור על ייבוא מזון מעובד מן החי משטחי הרש”פ”. כמו כן נכתב במסמך שההנחיה המאפשרת הכנסת בשר “הוארכה מעת לעת”. 

ארגונים בינלאומיים התחייבו לסייע לפלסטינים לבנות מערכת פיקוח שתעמוד בתקנים המקובלים. המאמץ אכן הביא לשיפור מסוים, אך הבשר עדיין היה רחוק מהסף הנדרש להבטחת בריאות הציבור. הפלסטינים אף אמרו במהלך השיחות שאינם מוכנים לקבל תכתיבים תברואתיים מישראל, וסירבו לחתום על הטפסים ברשויות הבינלאומיות המסדירות סחר במוצרים מן החי. באפריל 2014, למשל, כתב כהן ש”הרשות הווטרינרית ברש”פ עדיין אינה עומדת באמות המידה הנדרשות להסמכה על פי התקנים בינלאומיים. יש צורך בתקופת זמן נוספת להביא לשיפור משמעותי בפיקוח הווטרינרי ברש”פ”. 

עם כניסתם למשרד החקלאות למדו השר אריאל והמנכ”ל שלמה בן-אליהו ש”השירות הווטרינרי ומשרד הבריאות לא מרוצים” מההסכמות בעניין ייבוא הבשר, וש”מבחינה מקצועית אין מקום לאפשר את הכנסת המוצרים, וההסכמה ניתנה עקב פניית גורמים מדיניים” – כך נכתב במסמך מאוגוסט 2015. בהנחיית אריאל נבחן הנושא מחדש, ובמהלך הבדיקה הגיעו למשרד החקלאות פניות חוזרות ונשנות של האמריקאים ושל מתאם פעולות הממשלה בשטחים, אלוף יואב (פולי) מרדכי, להמשיך להתיר את העברת הבשר למזרח ירושלים, אף שלא עמד בתקינה הנדרשת. 

בשלושה מכתבים ששיגר האלוף מרדכי בחודש שעבר למשרד החקלאות הוא ביקש להמשיך להתיר את שיווק הבשר בנימוקים מדיניים, ובראשם החשש שהרשות הפלסטינית תחרים את ישראל. בתגובה כתב לו המנכ”ל בן-אליהו: “פגיעה בריאותית באזרחי ישראל מול הטיעון שהרש”פ תחרים אותנו בלתי מתקבלת על הדעת. מערכת ההסכמים בין הצדדים מאפשרת לישראל למנוע סכנה בריאותית, ובמכתבך אין מועד ברור ותוכנית עבודה שתביא לתוצאה של עמידה בתקנים”. הוא הבהיר כי לנוכח הכשל הווטרינרי, לא תותר עוד הכנסת הבשר הפלסטיני לישראל למרות הלחצים הכבדים. 

נוסף ללחצים של אלוף מרדכי, גם הממשל האמריקאי דרש כאמור מישראל להמשיך בהכנסת הבשר לתחומי המדינה. הנושא עלה בהרחבה בחודש שעבר בפגישה בין הנספח הכלכלי של ארה”ב בישראל ובין צמרת משרד החקלאות. חמישה מנציגי השגרירות השתתפו בפגישה, שנמשכה שעתיים וחצי ורובה הוקדש לעניין הבשר הפלסטיני.

השר אריאל חשף אתמול בריאיון בגלי צה”ל קורטוב מהלחצים שספג. לדבריו, הוא אמר “לנציג של מעצמה גדולה מאוד” ש”כשאתם תהיו מוכנים להכניס את הבשר הזה לוושינגטון, אנחנו נסכים להכניס אותו לתל-אביב”. 

משגרירות ארצות הברית בישראל נמסר אמש בתגובה: כי “השגרירות לא לחצה על איש בסוגיה”. מלשכת מתאם הפעולות בשטחים נמסר כי אנשים “פועלים עם משרד החקלאות למול נציגי הרשות הפלסטינית על מנת להסדיר את התקינה והסטנדרטים הנדרשים על פי משרד החקלאות. כל ניסיון לטעון אחרת הינו מופרך מהייסוד”.

מאתר מקור ראשון, כאן.

Greedy Government Gezel (Robbery)

A Tale about Taxes

The other day I met a friend who is a large stockholder in General Motors, and he told me a story. A few weeks before, his son had used somewhat excessive strength on the mixing valve in his bathroom and broke the handle off. The local plumber couldn’t repair it, so he ordered and installed a new valve. The valve turned out to cost $22.50. The installation, at $4 an hour, brought the total up to $100.

That sounded steep enough; but it was not until my friend had made some mental calculations that he realized how steep it really was. His income falls into the 90 percent tax bracket. So he figured that in order to acquire the $100 with which to pay this plumber’s bill, he had to receive $1,000 in dividends from General Motors. (For the benefit of the non-mathematical, $1,000 in dividends minus $900 in taxes on them leaves $100 to pay a plumber’s bill.)

But this is only the beginning. In order to pay $1,000 in dividends, General Motors has to earn more than $4,000 before taxes. (General Motors earned $1,502,000,000 before payment of taxes in 1952. It had to pay $943,000,000 in taxes, leaving it $559,000,000 in net income, out of which it paid $362,000,000 in dividends. So for every $1,000 it paid out in dividends, it had to earn $4,149 before taxes.)

But in order to earn $4,149 before taxes, General Motors had to sell $21,570 worth of cars—say eighteen Chevrolets—to its dealers. (GM total sales and income in 1952 amounted to $7,645,000,000.) To sum up, because of cost and tax erosion, in order for my stock-holding friend to replace a bathroom valve, General Motors had to make and sell eighteen Chevrolets.

“So what?” some reader may ask. “If this fellow pays a 90 percent income tax, he must be rolling in it. Don’t expect me to weep.”

The point of the story is not that anyone should stop to weep, but that a few of us should stop to think. The question is not what our incredible burden of taxation is doing to this rich individual or that, but what effect is going to have in the long run on our whole economy—on productivity, wages, and employment.

Obviously a continuation of this rate and kind of taxation must undermine incentives, discourage new business ventures, and even prevent the formation of new capital for such ventures. For every dollar that General Motors paid to stockholders last year, it had to pay $3 to the government (not counting what it collected and paid in excise and sales taxes). The case of General Motors, in this respect, is not exceptional. The Department of Commerce estimates that corporate profits before taxes in 1952 were $39,700,000,000; that out of this the corporations had to pay $22,600,000,000 in taxes, and that they paid out $9,100,000,000 in dividends. In other words, the government took an average of 57 percent of all the earnings of the corporations. And for every dollar that the corporate stockholders got in dividends, the government got $2.48.

Even this does not tell us what the stockholders were able to keep in dividends after paying personal income taxes. A stockholder whose income gets into the top tax bracket of 92 percent can keep only 8 cents out of each dollar of dividends. The government gets the other 92 cents. Adding this to the $2.48 that it has already taken from the corporation gives the government $3.40. In other words, the government gets 42 times as much out of the average corporation as the investor in the top income-tax bracket is allowed to get and keep.

This may seem like a wonderful racket for the government while it lasts. But Congress should not be entirely astonished if it wakes up one day to discover—we hope not too late—that this division of the profits does not furnish the highest incentives for private investment in new enterprises; and that new venture capital has been drying up, with unpleasant effects on wages, employment, and production, and even on government revenues themselves. If we do not want to repeat the present predicament of England, we should not imitate the policies that brought her to it.

[Originally printed in Newsweek on March 30, 1953. Available in Business Tides: The Newsweek Era of Henry Hazlitt.]

From Mises.org, here.