The only real solution to a sustained US recovery is for massive public government investment, that then subsequently creates income. Investment precedes income creation, it does not necessarily follow it any longer in a world of 21sts century global finance capital. Just calling for income growth (via minimum wage hikes, more contingent job creation, tax cuts, or whatever) will not necessarily result in US-based investment if Capitalists continue to shift to more profitable financial speculation offshore; public investment must therefore occur prior to income growth in order to generate a sustained recovery.
In today’s world of 21st Century Global Finance Capital, don’t expect capitalists to invest in real production and thus jobs and income in the US economy as they did decades ago. They are too busy making greater profits offshore and in financial asset speculation, leveraging the trillions of dollars of free money and credit created for them by the Federal Reserve. If real investment in the US economy is ever to return, it will have to come via major public investment initiatives. And if not, expect chronic economic stagnation to continue, as has been the case since 2010.
Meanwhile, we continue with our military empire, trying to maintain our supremacy in the world.
Rather than fixing the infrastructure, which the American Society of Civil Engineers ranks in its annual report card as a D+, the federal government’s “financing is lavished without stint to promote every kind of war industry, and foreign investing by U.S. firms.” As Seymour points out “there is no public ‘space’ for dialogue on how to improve the quality of our lives. Such topics are subordinate to ‘how to make war.’”
Not only does Empire foreign policy undermine the federal budget, with 55% of discretionary spending going to the military, but it also undermines the US economy as jobs are shipped overseas and corporations hide trillions of dollars in assets overseas to avoid paying taxes Empire economics does not serve the workers in the US or abroad and does not serve the security of people as safety nets are shredded as austerity is needed to fund weapons and war.
The cost of war has escalated. Just one weapons system, the F-35, a fighter jet that has been grounded because it does not work, has cost $49 billion per year since the program begin in 2006. Hayes Brown of Think Progress made a list of what that money could have been spent on instead. It could have bought a mansion for every homeless person, fed every school child in the US, funded every humanitarian crisis or provided global security through the UN or provided funding to rebuild America.
The last 100 years of Empire and imperialism brought the US great wealth, creating the largest economy in the world which the IMF values as $17 trillion or one-quarter of the global economy. Today, the US economy is struggling with high unemployment, record numbers of Americans dropping out of the job market, large trade deficits and declines in many measures of standard of living. At the same time, other countries, most notably China, India, Brazil and Russia, are beginning to challenge the US. These countries along with South Africa joined together to create the BRICS development bank to challenge the World Bank and IMF, which are dominated by the US and its western allies. This may be the most important challenge to US economic dominance since 1945 especially when combined with bilateral agreements between countries that omit the US dollar, weakening its position as the reserve currency of the world.
The scenario ends with:
“After years of swelling deficits fed by incessant warfare in distant lands, in 2020, as long expected, the U.S. dollar finally loses its special status as the world's reserve currency. Suddenly, the cost of imports soars. Unable to pay for swelling deficits by selling now-devalued Treasury notes abroad, Washington is finally forced to slash its bloated military budget. Under pressure at home and abroad, Washington slowly pulls U.S. forces back from hundreds of overseas bases to a continental perimeter. By now, however, it is far too late.”
“Counterintuitively, as their power wanes, empires often plunge into ill-advised military misadventures. … These operations, irrational even from an imperial point of view, often yield hemorrhaging expenditures or humiliating defeats that only accelerate the loss of power.” He points to the invasion and occupation of Iraq and Afghanistan, with war threatened in Pakistan.
“Despite the aura of omnipotence most empires project, a look at their history should remind us that they are fragile organisms. So delicate is their ecology of power that, when things start to go truly bad, empires regularly unravel with unholy speed: just a year for Portugal, two years for the Soviet Union, eight years for France, 11 years for the Ottomans, 17 years for Great Britain, and, in all likelihood, 22 years for the United States, counting from the crucial year 2003.” (Note: the year of the invasion and occupation of Iraq.)
“If, however, we were to dismantle our empire of military bases and redirect our economy toward productive, instead of destructive, industries; if we maintained our volunteer armed forces primarily to defend our own shores (and perhaps to be used at the behest of the United Nations); if we began to invest in our infrastructure, education, health care, and savings, then we might have a chance to reinvent ourselves as a productive, normal nation.”