A very simple way to restore American finances

The global growth in military expenditure during 2010 was almost entirely due to the United States. Military spending in the rest of the world increased by just 0.1%. Over the period 2001–10, in fact, US military spending increased by 81%, compared to 32% in the rest of theworld.

The term ‘rest of the world’ is misleading. Chinese military spending increased by 189% in real terms between 2001 and 2010, an average annual increase of 12.5%. But nevertheless, forgetting relative expenditures – and thinking instead of what is affordable in the US – Congress should surely stop arguing about a few per cent on this budget here and that policy there. The question to ask – or is it just me? – must be “Who is likely to threaten America seriously with technological weapons over the next twelve months?”

I choose that time period advisedly, because US spending on security, defence and ‘military updates’ during 2011 came in at just under a trillion Dollars. And during that same period,  the American deficit was $1.27 trillion. In other words, with just one year’s holiday from Pentagon madness, the United States could pretty damn near eradicate its trade gap.

Is anyone really trying to tell me that in that one year, America would fall so far behind in military technology, the Chinese would be marching unattacked along Wall St to proclaim the Sino-American Communist People’s Republic?

Now let’s ask another question: “Who in their right mind really thinks that Wall Stret earns its keep?”

This is a Page One calculation, but let me give it to you anyway. The money siphoned out of the US economy by the banks during QEs 1 and 2 – calculated against the lending they might have produced for US exporters –  nets out at a deficit reduction of some $2 trillion.

The bottom line of these brief observations is very simple: if the White House had the balls to face out the military and the bankers, within eight years Washington could pay off the entire national debt. As of March 1, 2012, that debt stood at $15.501 trillion. Company investment, banker loans and pretty minute reductions in military spend could achieve a USA in the black with money and time to spare by 2020. All it would take would be for the BS to stop, and political will to prevail.

In Britain, some very similar calculations apply to things like the renewal of the Trident nuclear weapons programme, and the risible failure of our banks to lend to these medium to biggest companies exporting our craftsmanship, technology innovations, and engineering skills.

Week in, week out, statistics list gains in retail sales on both sides of the Pond. They show increases in banking incomes derived from mergers and acquisitions. But this ‘growth’ is meaningless if it doesn’t produce profitable export business. It seems to me weird that I have to keep on repeating this mantra in post after post. Perhaps a viral campaign of texts, emails and pohone calls to our MPs and Congressmen might do the trick.

Failing that, I’m at a loss as to what to suggest.