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Rollingthunder
22nd Apr 2005, 06:22
Bush's $82bn war budget approved

The bill calls for Bush to improve war cost estimates
The US Senate has approved President George W Bush's request for an extra $81.3bn (42.6bn) for military operations in Iraq and Afghanistan.
A majority of 99-0 agreed the spending, which will mostly be used to pay army wages and replace or repair equipment.

But some funds will also go towards helping tsunami victims and paying for additional US border guards.

The new money pushes war spending to about $300bn (158.6bn) since the 11 September 2001 attacks.

The amount is in addition to the Pentagon's annual budget, which already totals more than $400bn.

BBC online


What am I thinking.....give me a minute...it'll come...wait.....
Oh yeah...wouldn't this money provide adequate health plans for all Americans and they can get the fcuk out of the middle east?

pipersfather
22nd Apr 2005, 07:57
Couldn't Bush have bought those countries for the amount spent on the war?

BombayDuck
22nd Apr 2005, 10:10
Cliff's job has been outsourced.

How may I help you?

SaturnV
22nd Apr 2005, 12:28
Scrubbed, US credit overseas. Likely to be about another $60 billion or so in the red in the imbalance account for March, $700 billion or more for this year.

The piper will come calling one of these days, sooner rather than later at this rate. A year ago when the current account balance was negative by only $550 billion or so, the calculations were that financing this American spending was consuming about 75 percent of the total annual savings of the rest of the world.

When you start chasing scarce capital, you begin paying a premium in the form of higher interest rates, which can become higher still if those doing the financing begin to think you are on a monetary devaluation course, or you won't pay the debt.

Total debt owed by the US to the rest of the world should be $5 trillion within another year or so (the US was a net creditor nation less than 20 years ago).

If an equivalent of 'interest' (at a five percent rate) is annually paid on this $5 trillion debt, that is an annual outflow of $250 billion for starters. And when one adds the annual costs of more imported oil and consumer goods, and future increments of government debt, the US economy begins to look like it is nearing the event horizon of an economic black hole.

Boney
22nd Apr 2005, 12:38
Reminds of a classic Black Sabbath song .....

WAR PIGS

BahrainLad
22nd Apr 2005, 12:43
All very well SaturnV, but what happened to the old adage...."If you owe the bank 1,000, you've got a problem. If you owe the bank 1,000,000,000, the bank's got a problem..."

autosync
22nd Apr 2005, 16:30
According to the Crusty's, the whole reason they went to war in the first place was to make money from selling the oil.
In which case it would sound like the worst investment of all time.

SaturnV
23rd Apr 2005, 19:17
Ah, Brainlad...the European Central Bank incurred an annual loss in 2004 of 1.636 million euros, almost entirely due to depreciation of its US dollar holdings against the euro.

Bankers tend to frown on losses on this scale, and the frowns deepen when they read of (a few so far) American economists saying the easiest way for getting out of this imbalance problem and growing debt to the rest of the world is to cheapen the dollar a lot further still... not yet to Weimar-style levels, but wheelbarrow makers might not be a bad stock sector to invest in.

BenThere
24th Apr 2005, 02:44
Were any of you making such predictions when the Euro slid from its introduction price of $1.18 to $.85 within two years of its intro?

You can't extend a trend too far out because economies are constantly adjusting. I remember not so long ago that Japan was outdoing everyone and America was doomed. As a schoolboy I was taught to worry about the overtaking economic strides of the Soviet Union. Now it's China and India to lead the world in the coming decades. Don't be so sure.

I wouldn't worry about America going broke as there is too much girth to its economy, depth to its wealth, and creative energy in the minds of its people.

Did the European central bank lose any of that money to Argentina's repudiation of its debt? Or was it all chalked up to US profligacy? By the way, 1.636 million euros won't even pay the lunch tab for the bureaucrats in Brussels.

Conan The Barber
24th Apr 2005, 06:13
Well Benthere, usually it is better not to flaunt one's ignorance.

But please go ahead.....

BenThere
24th Apr 2005, 13:03
Conan,

Please inform me, sir. What was ignorant in the above so I don't repeat the mistake? Thanks for the intervention.

Cheers,
Ben

ORAC
24th Apr 2005, 14:42
Philip Larkin - Homage To A Government

Next year we are to bring all the soldiers home
For lack of money, and it is all right.
Places they guarded, or kept orderly,
We want the money for ourselves at home
Instead of working. And this is all right.

It's hard to say who wanted it to happen,
But now it's been decided nobody minds.
The places are a long way off, not here,
Which is all right, and from what we hear
The soldiers there only made trouble happen.
Next year we shall be easier in our minds.

Next year we shall be living in a country
That brought its soldiers home for lack of money.
The statues will be standing in the same
Tree-muffled squares, and look nearly the same.
Our children will not know it's a different country.
All we can hope to leave them now is money.

SaturnV
24th Apr 2005, 15:25
Benthere, it seems you are confident that all trends will eventually normalize. But this presupposes that however 'normal' is defined, it will be at an economically benign point; a rosy equilibrium so to speak.

Analogies to other countries and other times don't fit the present situation of the world's most powerful economy pretty much pushing through the stops on a credit ride to who knows exactly where.

Japan, one country you cite, has household savings rates far exceeding those of the United States. Rates as high as 20 percent 30 years ago, allowing Japan to self-finance its economic boom and its government debt. The United States borrows from the rest of the world for the same purpose.

In 1988, the U.S. imported an average of 5.1 million barrels of oil a day. In 2003, the daily average was 9.7 million barrels. What level of imports would you consider to be within the normal range? What price per barrel would it take to bring import levels to a normal range? Morgan Stanley recently forecast that oil would need to reach $100 a barrel before the U.S. got serious about energy conservation (and lowered the demand for imported oil).

In 1987, the U.S. was a net creditor nation, i.e., the world owed more to the U.S. than the U.S. owed to the rest of the world. Ever since, the general trend is of increasing imbalances and greater indebtedness. (The blips on the trend are from Clinton and Congress putting the government in the black and starting to pay down the debt. Bush and the current Congress have reversed that course.)

Warren Buffet forecasts that current trends will leave the U.S. owing about $11 trillion to the rest of the world a decade from now. The cost of servicing that debt by then will be a staggering drag on the economy, even at relatively low interest rates (which they are not guaranteed to be). And even a decade hence -- unless the trend was suddenly and miraculously reversed to a point of balance -- the U.S. would be cumulating additional debt and additional interest costs. In Buffet's phrasing, the U.S. is being changed from an "Ownership society" to a "Sharecropper society."