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published: 09/08/04, 08:54
by philflamine
An IMF warning in the United States
War, the only alternative to the economic crisis
The Bush administration's self-congratulatory claims of record economic growth have been belied by the facts. In reality, unemployment is rising, domestic production is collapsing and the economy is turning towards war. The external debt is at a critical level, unprecedented for an industrialized country and, according to the International Monetary Fund, threatens the world economy. The specialization of the arms industries makes it impossible to return to a peace economy. The United States has entered an infernal cycle where their economic survival depends on the continuation of the war.




End 2003, the Commerce Department released its final estimate of growth in the United States: a jump of 8,2% gross domestic product (GDP) for the 3e quarter. The country had not seen such a strong growth since 19 years. In the same vein, the press hailed "the return of growth in the United States." Some analysts, however, have distanced themselves from this enthusiasm, observing that unemployment has risen sharply between 2000 and 2003 (4,0% in 2000, 4,8% in 2001, 5,8% in 2002 and 6,1% in 2003). But two important facts were quickly evacuated. Growth is in fact linked to the country's large debt and the redeployment of social spending to the military. The US economy is now war-oriented.





Credit growth
The United States financed their growth through indebtedness. In 2002, the country was experiencing its first budget deficit since 1997. It has gradually sunk from 1,5% to 2002, 3,5% to 2003 and should reach 4,2% in 2004. By way of comparison, the Eurozone fiscal stability pact sets a limit on 3%.

The external debt, which was in 2000 of 3 600 billion (39% of GDP), rose to 2003 6 500 billion (58,5% of GDP). A worrying assessment, carried out by the Congressional Budget Office, indicates that the debt should be 14 000 billion in ten years. Former Treasury Secretary Paul O'Neil, for his part, conducted a study that the US deficit in the next fifty years would reach 44 000 billion.

The 7 January 2004, International Monetary Fund (IMF) held a press conference on US tax policies and their implications for the global economy [1]. The organization, though created and largely led by Washington, has made a real indictment against the economic policy of the Bush administration. According to the IMF, the external debt of the United States has reached an unprecedented level for an industrialized country. This phenomenon causes an increase in interest rates and a slowdown in global growth.

Looting, the only strategy in the face of debt
Observing the vertiginous increase in debt that greatly exceeds the solvency of the country, Robert Freeman wonders about the economic orientation chosen by the Bush administration. According to him, there are five possible strategies. [2]

The first is to raise taxes and pay debts. This is clearly not the option chosen by the Bush administration. The second is to print greenbacks. But the massive use of such a solution would lead to an inevitable collapse of the economy.

A third strategy proposed by the IMF to Third World countries is to privatize domestic goods and sell them abroad. One might think this option very improbable. Yet, by letting the dollar go down, the Bush administration is not only promoting exports: it is also allowing foreign capital to buy back US companies.

A fourth strategy is to refuse to pay the debt, as did the Bolsheviks when they seized power in Russia. For Robert Freeman, this option is "closer than most US citizens imagine." Indeed, a significant part of the deficit concerns the financing of Social Security, whose privatization should be one of Bush's priorities. he won the 2004 elections.

But it is a fifth strategy that the Bush administration seems to have resolutely adopted. "In the end, there is still looting," says Robert Freeman. When the repayment of the debt of a nation becomes so important that it becomes impossible to reassure the creditors, it must seek a certain source of wealth, any source. The United States chose to attack Iraq, neither because Saddam Hussein possessed weapons of mass destruction, nor to establish democracy. The goal was to take control of oil, or rather the international oil market.

Growth linked to military spending
The facts confirm Robert Freeman's analysis: under the Bush administration, the US economy was oriented toward war and conquest.

The administration has legitimized the increase in the budget deficit by the need to wage war on terror. This justification has also made it possible to shift social infrastructure budgets to investments for war. Defense expenses increased from 3,1% of GDP to 2001, 3,4% to 2002 and 3,5% to 2003.

The growth of these public expenditures has benefited private arms companies. As a result, Northrop Grumman experienced a 57% increase in sales between 2002 and 2003 and went from a loss to a net profit. Boeing's defense division has accumulated operating income up by 38%. Sales at Lockheed Martin, the world's leading defense company, increased by 23%, while its aerospace division saw sales increase by 60%.

But according to Robert Pollin, professor of economics at the University of Massachusetts, spending on labor and armaments has remained relatively low. The lion's share went to Halliburton, Bechtel and some other private groups linked to the Bush administration.

Thus, the growth applauded by analysts mainly affects investments related to the war. During the second quarter of 2003, in the midst of the war against Iraq, about 60% of the growth rate was attributable to military spending. [3]





From the refusal to sign the Ottawa Treaty banning anti-personnel mines, the war against Iraq, to ​​the titanic military project of "Star Wars" and the setting up of a perpetual war on terrorism , all points to the new economic orientation of the United States turned towards war and conquest.

In the last century the reconversion of a war economy into a peace economy was extremely difficult. The transformation of an industry for military use was delicate. Today, the sophistication of armaments makes it impossible. The economic direction taken by the Bush administration is therefore without return. The war is for the United States the condition of its economic survival.

published: 11/08/04, 14:23
by philflamine
Unfortunately I do not have the exact source but it seems that the author of this article is Michael Moore ...... I contacted the IMF to have confirmation of the merits of the remarks and I await an answer.