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"[N]ot long ago, to suggest that the Bush administration's policies might actually be driven by those ideologues - that the administration was deliberately setting the country up for a fiscal crisis in which popular social programs could be sharply cut - was to be accused of spouting conspiracy theories."
- Paul Krugman, New York Times, Tuesday 27 May 2003

"$44.2 trillion... That's the total "fiscal imbalance" figure Jagadeesh Gokhale, an economist with the Cleveland Federal Reserve and the American Enterprise Institute (AEI), and Kent Smetters, an economist at the Wharton School of the University of Pennsylvania, calculated in a recent, unpublished study about new methods of federal budget accounting."
- Mark Gongloff, "The $44 trillion hole? Recent study says Social Security, Medicare shortfalls could be far bigger than previously thought. CNN/Money, May 29, 2003

"I don't want to abolish government, "I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."
- Grover Norquist, May 25, 2001 NPR Morning Edition interview.

"There is no such thing as an apolitical food crisis."
- Amartya Sen

Taking the Fiscal Train Wreck
to the Poverty Draft

Jamey Hecht

© Copyright 2005, From The Wilderness Publications, All Rights Reserved. May be reprinted, distributed or posted on an Internet web site for non-profit purposes only.

January 4, 2005, PST 0800 (FTW) --The total US government revenue lost to the Bush tax cuts is approximately four times the revenue lost to the Iraq War. In this second stolen term, the administration intends to hemorrhage more money into particular private coffers and force an ever-greater share of the remaining tax revenue into the arms procurement cartel we call the Pentagon.

"In 2004," says the Center on Budget and Policy Priorities, "revenues will total 15.8 percent of GDP under current law, the lowest level since 1950." If the tax revenue is contracting and the "Defense" budget is expanding in absolute size (rather than only as a percentage of the shrinking total tax revenue appropriated by Congress), some of the money for all that hardware is coming from outside the tax base. Much of it is coming from narcotraffic and banking fraud. The rest is new debt.

For a look at the magnitude of these cuts and their effects on domestic spending, see: Richard Kogan and David Kamin, "Large Tax Cuts But Little Else: Administration Proposes Tax Cuts That Cost Vastly More Than Other Domestic Initiatives Combined." January 23, 2004, Center on Budget and Policy Priorities. Most of the remaining tax revenue will fund the state-socialist system of America's 6,702 active military bases around the world, where everything is paid for by the public, from recreation to food, clothing, and energy. 1

The administration (let's call it, collectively, "Bush") has chosen these tax cuts for a tightly interlocking set of reasons. Cutting the taxes of the wealthy will do more than repay Bush's political debts. It will oblige the government to continue borrowing at such high rates that the dollar will probably crash during the remainder of Bush's 2nd term. Ten years ago the Newt Gingrich brigade deliberately "shut down the government" in an episode of centralized rightist tyranny disguised as libertarian rebellion. This was supposedly done to oppose "big government," even while the Clinton administration was slashing and burning federal payrolls like a Wendy's executive in the Amazon. It wasn't done for small government; it was done for no government. But "government" in this rhetoric refers to everything federal except the national security state (which is entitled to all the revenue it can extort, launder, borrow, or print up from nothing).

Last month in "As The World Burns," FTW's third-ever economic alert, Mike Ruppert observed: "An all-out run on the dollar is imminent and from the moment that begins we will be living in a whole new ruthless and unforgiving world. The best way to weaken the American military before fighting it is to eliminate as much of its funding as possible." The same article described the management of the dollar's decline from the Chinese side: "…according to a November 29th AP story reprinted in Forbes - China's Central Bank has now moved in to try and manage the dollar's decline by buying and selling [dollars] through its four largest banks. The likely intent is to allow all the other nations aligning with this plan to get out safely with minimal losses."

China has reason to moderate the dollar's fall, but would also like to "weaken the American military before fighting it." On the Washington side, the Bush plan looks eerily similar: manage the dollar's decline in a way that allows the super-rich Right ("some people call you the elite… I call you my base") to get out with minimal losses; watch the international capital fly out of the US; then send the US military to go get the fossil fuels that give the money its value. The capital flight will make the whole country look like Flint, Michigan, stampeding the general population into recruitment/relief centers. When the dollar does crash, the working class will be so hard hit that what we now call a "poverty draft" will become either direct conscription (unlikely, though not for the reasons currently claimed) or a new kind of poverty draft that inflicts economic collapse in order to mobilize as large a fraction of the entire population as it sees fit. The reality of public military enlistment will be desperate self-preservation; the media story will be noble self-sacrifice.

An inflationary currency crash (like what afflicted the German mark in 1923) will wipe out the value of private savings and raise interest rates, causing mortgage defaults and bankruptcies. At that point the offshore capital currently held by U.S. elites will come home, to buy up the forfeited assets of the waitresses and the cab drivers and even the middle-management.

Recruitment has fallen off considerably, and public support for the Iraq War, never robust, has become feeble.2 Imperial overstretch is on everyone's lips and the White House has quieted down about Iran and North Korea (as for the Bush Mars project, you dreamed it). "Currently over 40% of the troops being rotated into Iraq are National Guard members and Reservists," states the Iraq War soldiers' and veterans' site Operation Truth. "This reliance on Reservists hasn't been seen since World War II; of the 2 million people who served in Vietnam, only 9,000 were National Guardsmen." Although many Iraq War veterans return to an America of deteriorating health, lost wages, and homelessness, the recruiter's mentally spellbinding cash-dangle will only get more powerful as real wages fall.

1 At least 6,702 American-operated military bases dot the globe, in a configuration that looks a lot like four other world maps superimposed: oil, natural gas, opium, and coca.

2 Gary Nurenberg, "National Guard Facing Recruitment Shortfall," 12/17/2004. "Facing a recruiting shortfall of 30 percent in the last two months alone, the National Guard is now offering cash incentives of up to 15 thousand dollars to attract new members… The Army expects to miss its annual recruiting goal by 8% -- the biggest shortfall since 1979."


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