It’s Not Debt, It’s Soviet-Style Central Planning

The last time a President and Congress combined to indebt the country like this year’s nearly $1 trillion proposed borrowing was when another President was yelling across the border taunting someone to “Tear Down That Wall!”  Funny how times have changed.  And above all, funny how those who celebrated Reagan’s badgering of the Soviet Union in how it treated its border regions are now those who are clamoring for…what’s that???  A wall!

Now, in fairness, it takes a lot of $20 billion walls to blow through a trillion dollars.  But as I watched the Super Bowl 52 (well done Philadelphia Eagles!) on my toasty Melbourne Monday afternoon what I found more irritating than the slightly over 2 minutes Tom Brady had at the game’s end to pull off a Brady come-back was the drumbeat of ads from the Australian Government in Canberra talking about the $200 billion it plans to spend on the “defense industry” in the next 10 years.  You heard that correctly.  In a world where civilized economies could be diversifying industries towards the 21^st century in fields of health, food sustainability, energy and alternative utilities, the U.S. and its marsupial infested cousin to the South are going into debt to fund future conflict.  And before my holier-than-thou readers wag their heads in disapproval about what “others” are funding, let’s remember that the Treasury shows that it’s “households” that hold $1.345 trillion in Treasuries for their retirement, investment and insurance savings.  That’s right, to maintain the standard of living that you currently plan to have in your later years, you are funding a tired, conflict fueled behemoth.

Let’s unpack this a bit.  In our Soviet-style economic planning, we subsidize the industries that we use to define our national interest.  In the case of the U.S., no peacetime economy has ever lasted a generation without subsidized conflict.  Oh, and by ever, I mean since the 18^th century!  From DuPont’s gunpowder to Raytheon’s missiles, we’ve decided that our ‘nation of values’ values death and destruction more than any other industry.  For the lazy reader, I’m including our obese expenditure on “health care” which spends over 30% of the TOTAL expenditure on the last year of “life”.  Dying, death, and debt are our national values!  And this year, this President and Congress are driving the hearse with NASCAR aggression. 

Now, in the case of the U.S., spending enormous sums on military technology, infrastructure and development makes sense.  We fight a lot!  And many of our policies disenfranchise the majority of the world’s population igniting hostilities in various locations.  But in the Land Warfare Doctrine of Australia, the last 40 years of deployments for armour have been in Vietnam, Somalia, Timor Leste, Iraq and Afghanistan.  With the exception of Timor (strategically important due to the oil and gas revenue “shared” with Australia), none of these conflicts were of strategic importance and none of them were fights that Australia picked.  In fact, NATO conflicts account for much of Australia’s defense “partnerships”.  That’s right!  The NORTH ATLANTIC!!!  So when the government announces $200 billion in expenditures in the next 10 years, what precisely is the Australian taxpayer getting for their money?  Security?  No.  They’re getting centrally-planned economy financial returns.  Defence of Australia (DOA) is not about the continent’s security.  It’s about maintaining global economic ties with certain allies. 

If one is to examine the present state of geopolitics, one of the highest probability conflict zones in the near future is the Northern Pacific.  Petulance between Washington and Pyongyang could ignite conflagration.  But with the inertia of history, conflict between China and the U.S. is highly probable.  Australia has 41% of its economic input coming from… uh oh… the wrong geoparadox.  Australia’s defence doctrine is unapologetic in its U.S. loyalty and its U.S. and European technological subjugation.  And when the U.S. and China are in conflict, Australia’s defence infrastructure will be pledged to the detriment of its largest customer (4 times more trade with China than the U.S.)!

President Trump’s massive debt expansion to subsidize the conflict he sees as inevitable almost makes perverse sense.  Australia’s military expansion to support that conflict stretches beyond the limits of ludicrous.  And while we’re at it, China’s offensive military capability is more likely to be in the communications and cyber infrastructure arena – not in an arena dominated by planes, submarines, and armour.  Is that the spending priority of the Turnbull government?  I’m afraid not.  In short, in a planned economy, bad decisions make bad industrial and economic policy inevitabilities.  In an unplanned, planned economy, $200 billion and the future of a nation are placed in peril.  But, never fear, according to the TV ad campaign, it’s where the jobs of the future are to be found!

Now back to the real winners.  China and emerging economies.  While the World War II allies continue their relentless descent into oblivion chasing the armored illusions of a secure past, real leadership is considering a world worth living in.  While Western-style economies have war, banking, disease management and electricity as their only levers, other parts of the world are examining alternative industrial futures independent from these legacies.  And while classically trained economists run around talking about the Fourth Industrial Revolution fueled by Klaus Schwab and his parka-clad sycophants in Davos, much of the world is seeing the Internet of Things, 3-D, quantum computing virtual as a world not worth pursuing.  Rather than looking at gadgets, real leadership is examining emancipation from the impulse that gave rise to the first industrial revolution – namely, the dominion of the few industrialists over the consuming masses.  Real markets, real economies, and the potential for actual civilization will not be delivered in a 4^th turning.  It will be possible when We The People start treating each other with respect and humanity.  This could be called the First Human Awakening!

Take 2 hours and check out a deeper exploration of this latest film I'm working on:  American R/evolution

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