The pseudo conference led by the Bush administration at the end of last week led to the news that domestic spending will be held at the same level in 2005 as in 2004. Defense programs and, naturally, interest on the federal debt, are excluded. Given that inflation is running at 3% per year, this means that social programs will be cut in real terms. Here is implementation of the Bush plan to overspend to the extent that the federal budget for social programs will have to shrink.
Of course the president has to make statements related to budget austerity because of the growing outcry against the profligacy of the US government. The IMF has already been delivering warnings concerning the lack of budget control in the US. The countries which finance the US (Japan, China, the EU nations) are restive about the continuation of the blank check they have always given to the US to be the "consumer of last resort."
But the US is increasingly considered to be a "rogue state" by the rest of the world. Public opinion in the rest of the world views the US as a loose cannon on the deck of world peace and prosperity. If past action is the best predictor of future action, the US under Bush will continue to act without regard to the interests of the rest of the world. The reaction of the rest of the world will be collusion to place economic restraints on the US through a decrease of financial support. We shall see what the reaction of US consumers will be to skyrocketing prices due to the continued depreciation of the US dollar.
The Soviet Union repressed consumer spending and social programs for years as it pumped all possible resources into defense industries and defense technology. Ultimately the popular pressure was so great that the Soviet Union unraveled, in spite of the attempt to ease restrictions on personal rights through the glaznost and perestroika. The population just would not support the continued priorities of supporting the defense industries and the nomenclatura living high on the hog while the majority of the population stood in line for hours to be able to buy toilet paper with a surface like sandpaper.
Last week we were treated to the news that the Missile Defense Shield has once again failed to function after two years of work and billions of dollars spent since the last dismal failure two years ago. At some point people will begin to notice that we continue to pour megamillions into "defense" when we grow increasingly insecure, and 30 percent of the population have no basic healthcare.
Eventually Americans may wake up to the fact that we are increasingly moving toward the category of third world country. We already have the small superclass of wealthy people, living high on the hog while the middle class and all classes slowly slide into poverty.
Will our progress continue to follow the trajectory of the Soviet Union as the implantation of a facist regime at the top continues?
