BIG MILITARY SPENDING BOOST THREATENS OUR ECONOMY AND SECURITY by RON PAUL

On Friday the House overwhelmingly approved a massive increase in military spending, passing a $696 billion National Defense Authorization bill for 2018. President Trump’s request already included a huge fifty or so billion dollar spending increase, but the Republican-led House found even that to be far too small. They added another $30 billion to the bill for good measure. Even President Trump, in his official statement, expressed some concern over spending in the House-passed bill.

According to the already weak limitations on military spending increases in the 2011 “sequestration” law, the base military budget for 2018 would be $72 billion more than allowed.

Don’t worry, they’ll find a way to get around that!

The big explosion in military spending comes as the US is planning to dramatically increase its military actions overseas. The president is expected to send thousands more troops back to Afghanistan, the longest war in US history. After nearly 16 years, the Taliban controls more territory than at anytime since the initial US invasion and ISIS is seeping into the cracks created by constant US military action in the country.

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The Pentagon and Defense Secretary James Mattis are already telling us that even when ISIS is finally defeated in Iraq, the US military doesn’t dare end its occupation of the country again. Look for a very expensive array of permanent US military bases throughout the country. So much for our 2003 invasion creating a stable democracy, as the neocons promised.

In Syria, the United States has currently established at least eight military bases even though it has no permission to do so from the Syrian government nor does it have a UN resolution authorizing the US military presence there. Pentagon officials have made it clear they will continue to occupy Syrian territory even after ISIS is defeated, to “stabilize” the region.

And let’s not forget that Washington is planning to send the US military back to Libya, another US intervention we were promised would be stabilizing but that turned out to be a disaster.

Also, the drone wars continue in Somalia and elsewhere, as does the US participation in Saudi Arabia’s horrific two year war on impoverished Yemen.

President Trump often makes encouraging statements suggesting that he shares some of our non-interventionist views. For example while Congress was shoveling billions into an already bloated military budget last week, President Trump said that he did not want to spent trillions more dollars in the Middle East where we get “nothing” for our efforts. He’d rather fix roads here in the US, he said. The only reason we are there, he said, was to “get rid of terrorists,” after which we can focus on our problems at home.

Unfortunately President Trump seems to be incapable of understanding that it is US intervention and occupation of foreign countries that creates instability and feeds terrorism. Continuing to do the same thing for more than 17 years – more US bombs to “stabilize” the Middle East – and expecting different results is hardly a sensible foreign policy. It is insanity. Until he realizes that our military empire is the source of rather than the solution to our problems, we will continue to wildly spend on our military empire until the dollar collapses and we are brought to our knees. Then what?

JANET YELLEN: THE FALSE PROPHET OF PROSPERITY

Federal Reserve Chair Janet Yellen recently predicted that, thanks to the regulations implemented after the 2008 market meltdown, America would not experience another economic crisis “in our lifetimes.” Yellen’s statement should send shivers down our spines, as there are few more reliable signals of an impending recession, or worse, than when so-called “experts” proclaim that we are in an era of unending prosperity.

For instance, in the years leading up to the 2008 market meltdown, then-Fed Chair Ben Bernanke repeatedly denied the existence of a housing bubble. In February 2007, Bernanke not only denied that “sluggishness” in the housing market would affect the general economy, but predicted that the economy would expand in 2007 and 2008. Of course, instead of years of economic growth, 2007 and 2008 were marked by a market meltdown whose effects are still being felt.

Yellen’s happy talk ignores a number of signs that the economy is on the verge of another crisis. In recent months, the US has experienced a decline in economic growth and the value of the dollar. The only economic statistic showing a positive trend is the unemployment rate — and that is only because the official unemployment rate does not count those who have given up looking for work. The real unemployment rate is at least 50 percent higher than the manipulated “official” rate.

A recent Treasury Department report’s called for rolling back of bank regulations could further destabilize the economy. This seems counterintuitive, as rolling back regulations usually contributes to economic growth. However, rolling back bank regulations without ending subsidies like deposit insurance that create a moral hazard that incentivizes banks to engage in risky business practices could cause banks to resume the unsound lending practices that were a major contributor to the growth, and collapse, of the housing bubble.

The US economy is already faced with several bubbles that could implode at any time. These include bubbles in student loans and automobiles sales, and even another housing bubble. The most dangerous of these bubbles is the government bubble caused by excessive spending. According to a 2016 study by the Mercatus Center, at least four states could soon join Puerto Rico and Illinois in facing bankruptcy.

Of course, the mother of all government bubbles is the federal spending bubble. Despite claims of both defenders and critics of the president’s budget, neither President Trump nor the Republican Congress have any plans for, or interest in, reducing spending in any area. Even the so-called cuts in Medicare and other entitlement programs that have generated such hysterics are not real cuts, but “reductions in the rate of growth.”

Some fiscal conservatives are praising the administration’s proposal to finance transportation spending via government bonds. However, the people will eventually have to pay for these bonds either directly through income taxes or indirectly through the inflation tax. Government-issued bonds harm the economy by diverting investment capital away from the private sector to the “mixed economy” controlled by politicians, bureaucrats, and crony capitalists.

If Congress continues to increase spending and the Federal Reserve continues to facilitate that spending by monetizing the debt, Americans will face an economic crisis more severe than the Great Depression. The crisis will likely result from a rejection of the dollar as the world’s reserve currency. Those of us who know the truth must redouble our efforts to ensure a peaceful transition away from the Keynesian system of welfare, warfare, and fiat currency to a society of peace, prosperity, and liberty.