The Horrific Bubble in US Military Spending

Nick Giambruno: Doug, I know you’ve been thinking about how the Greater Depression will unfold. It’s no secret the government has created the biggest credit bubble in history through endless money printing—euphemistically called QE—and now “NIRP” (negative interest rates). But I understand you’ve had a different “bubble” on your mind lately…

Doug Casey: Yes. I’ve been thinking about the gigantic bubble in military spending in the U.S. And how it’s one of the worst things that can happen, and at the absolute worst time. The U.S. Government is bankrupt, we’re about to go into the trailing edge of a monumental economic hurricane, and both of the presidential candidates are talking about vastly increasing military spending.

From an economic point of view, money spent on the military is almost totally wasted. It’s worse than money spent to dig holes during the day and then fill them in again at night—at least that does no actual damage. The “product” of the military is killing people and destroying property. And the amount of money the U.S. spends is provocative to other powers, who feel they have to counter with their own spending. Arms races never end well.

I’m going to say some unflattering things about the military, and realise it will probably shock most Americans to hear them. Americans still have a high regard for the military—far too much. They see it as one of the few American institutions that still “works.” They see it as something defending them from evil outside the borders of the “homeland”—which, by the way, is a very recently coined term. But the military is actually just another government bureaucracy, like the Post Office. Albeit much more heavily armed.

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Most people are unaware how dangerous the U.S. military has become to both the average American and the concept of America. The minions of the Pentagon aren’t protecting Americans. They’re actively endangering them, and what the country has always stood for. The situation has gotten totally out of control. Most obviously from a financial viewpoint.

The U.S. currently spends more on “defence” than the next seven governments combined… At one point recently, it was more than the rest of the world combined. But who really knows, since Pentagon accounting is so inaccurate and corrupt?

Nick Giambruno: The 2015 budget was $600 billion. More than three times what China spends.

Doug Casey: Well, again, nobody knows how big the Pentagon’s, or China’s, or Russia’s, or whoever’s, budgets really are. That’s just the “official” number, which doesn’t include quasi-military spending outside of the Department of Defense. Here, I’m thinking of Homeland Security, “black ops” slush funds, the Department of Energy where a lot of nuclear spending goes, NASA, CIA, and dozens of other ratholes that disguise the real budget. U.S. military spending could easily be over the $1 trillion mark. It’s clear the Pentagon itself doesn’t know.

In fact, nobody seems to know how much money is being spent or where it goes. I remember Rumsfeld once remarking, years ago, that they couldn’t find $2 trillion—but there was never a scandal, or even an attempt to find it. The news cycle just went on to the Kardashians or whatever. Now, according to the Office of the Inspector General, at least $6.5 trillion can’t be accounted for. And probably never will be. This is a truly unbelievable number. How dysfunctional has the system become that numbers like that can be dropped with impunity? World War 2 was only supposed to have cost $341 billion 1945 dollars…

Even though the law requires annual audits of all federal agencies, the Pentagon never complies. They just tell Congress that the books are such a mess, they can’t give accurate numbers. No matter; nobody is shutting down the Pentagon. The Pentagon—which is to say the military-industrial complex—is at once so sacrosanct, so gigantic, and so corrupt that nobody dares get to the bottom of it.

Nick Giambruno: Wow, it’s hard to imagine how many pockets that $6.5 trillion has lined around the Beltway…

Doug Casey: Indeed. It makes the TARP bailouts, which came in at around $700 billion, seem trivial in comparison. And nobody knows where that money went, either. It’s funny when you think of the saying attributed to Senator Everett Dirksen in the mid-60s: “A billion here, a billion there, and pretty soon, you’re talking real money.” We’re up to trillions now. Obama might soon be asking his science officer what comes after a trillion.

And this at a time when interest rates are at record lows, and every segment of society is carrying record high levels of debt. Frankly, something has to give… much higher interest rates, much higher taxes, much higher inflation, or perhaps a collapse of the system itself. Probably all of them together. When interest rates go back up to normal historic levels, that alone will collapse the structure.

It’s bad news all around… all this spending on an organisation with the primary mission of blowing things up. The military has become a giant golden hammer looking for a nail. It used to be that Congress actually had to declare a war. Starting with the Korean conflict, however, the president found he could commit the country not to just sport wars like we’ve always had in Central America, but to a major war. In fact, now the U.S. is in a constant state of undeclared war—Afghanistan, Iraq, Syria, Libya, and a dozen other Third World countries that you rarely hear about. Plus, playing chicken with the Chinese, the Russians, and the Iranians.

Nick Giambruno: What do you say to those who would say you’re anti-military?

Doug Casey: I don’t necessarily blame the average soldier or sailor. Most of them are just refugees from the barrios, ghettos, and trailer parks who are looking to improve themselves with a steady job. But they go through indoctrination that amounts to brainwashing and come to believe the U.S. is always on the right. I understand how that can happen; I went to a four-year military boarding school. Fortunately, that cured me of wanting to go to West Point. I was still silly enough to have signed up for the Marine’s PLC program during Vietnam—but extraneous events rescued me…

Sure, soldiers learn some good habits, like shining shoes and saying “Yes, sir” and “No, ma’am.” It’s understandable how many young people who join up see it as helpful. But they pick up plenty of bad habits, too. A military environment is necessarily degrading and dehumanising. They learn to obey orders blindly, and may end up doing things that will haunt them for the rest of their lives. Of course, the same is true of the grunts in absolutely every country in the world. It’s fun to put on a costume and be apotheosized as a hero—even when you’re really just cannon fodder.

I realise people think the military is “us.” But if you know anything about group dynamics, you realise that they’re loyal first to each other. Then to their employer. And last to the citizens.

The real problem, however, lies with the career officers, the Pampered Princes of the Pentagon, as my friend David Hackworth used to call them. They’re looking for conflicts to justify their existence, followed by a cushy job with the defence contractor whose weapons they helped acquire. As the radical writer, Randolph Bourne famously said, “War is the health of the State”—and the State is the enemy of every decent person. The military acts to turn average decent human beings into automatons, while its propaganda disguises savagery as heroism. No wonder that they really only want teenagers as recruits; young people are relatively thoughtless and highly malleable.

In a truly civilised society, people interact through persuasion. But as the federal government has grown bigger over the past two centuries, the force has become the dominant means of interaction. The thousands of laws, regulations, and outright violence from the police and military are manifestations of it. It’s no accident that people who wear uniforms tend to have an extra Y chromosome.

Reprinted with permission from Casey Research.

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