Ooops!

General Wesley Clark explains Libyan invasion planned years in advance.

Michael Parenti: The U.S. War on Yugoslavia.

The Military-Industrial Complex from Eisenhower to Obama

Dagens citat: Geroge Kennan

“USA rummer 50 pct. af verdens rigdomme, men kun 6,3 pct. af dens befolkning. I den situation kan vi ikke undgå at være genstand for misundelse og vrede. Vor egentlige opgave i den kommende tid vil blive at udforme de relationer, der tillader os at bevare denne ulighed, uden at det sker på bekostning af vor nationale sikkerhed. I den hensigt må vi se bort fra al sentimentalitet og dagdrømmeri og over alt koncentrere vor opmærksomhed om vore umiddelbare nationale formål. Vi har ikke behov for at bilde os ind, at vi har råd til uegennytte og velgørenhed. Vi må holde op med at tale om så vage og urealistiske mål som menneskerettigheder, højnelse af levestandarden og demokratisering. Den dag er ikke langt borte, hvor vi må handle ud fra ren magtstrategi. Desto mindre vi hæmmes af idealistiske slagord, desto bedre.”

George Kennan (1948).

Bob Woodward kritiserer Donald Rumsfeld.

Den legendariske amerikanske journalist Bob Woodward, bedst kendt for sine afsløringer i Watergate-skandalen der væltede den amerikanske præsident Richard Nixon, kritiserer i skarpe vendinger forhenværende forsvarsminister Donald Rumsfeld i et gæsteindlæg på Foreign Policy's site:

Rumsfeld's memoir is one big clean-up job, a brazen effort to shift blame to others -- including President Bush -- distort history, ignore the record or simply avoid discussing matters that cannot be airbrushed away. It is a travesty, and I think the rewrite job won't wash.

The Iraq War is essential to the understanding of the Bush presidency and the Rumsfeld era at the Pentagon. In the book, Rumsfeld tries to push so much off on Bush. That is fair because Bush made the ultimate decisions. But the record shows that it was Rumsfeld stoking the Iraq fires -- facts he has completely left out of his memoir...

Læs resten her.

Reagans sande arv.

Professor i politologi, Peter Dreier, skriver i The Nation om Reagans sande arv:

...Many Americans credit Reagan with reducing the size of government. In reality, he increased government spending, cut taxes and turned the United States from a creditor to a debtor nation. During his presidency, Reagan escalated the military budget while slashing funds for domestic programs that assisted working-class Americans and protected consumers and the environment. Not surprisingly, both George H.W. Bush and George W. Bush followed in Reagan’s footsteps.

But, unfortunately, so did Bill Clinton. During his first campaign for the presidency, Clinton correctly observed that “the Reagan-Bush years have exalted private gain over public obligation, special interests over the common good, wealth and fame over work and family. The 1980s ushered in a Gilded Age of greed and selfishness, of irresponsibility and excess, and of neglect.” But a few years later, as president, Clinton proclaimed, echoing Reagan, that “the era of big government is over,” which he carried out by slashing welfare benefits for poor children.

Indeed, Reagan’s most important domestic legacy is our government’s weakened ability to do its job protecting families, consumers, workers and the environment.

How did Reagan revise America’s thinking about the role of government? Before Reagan took office, the American public was already growing more skeptical about government and politicians, exacerbated by the lies told by Presidents Lyndon Johnson and Richard Nixon about the Vietnam war, Nixon’s Watergate scandal and President Jimmy Carter’s inability to deal with the twin problems of rising prices and unemployment, often called “stagflation.” But Reagan—with his avuncular style, optimism and just-plain-folks demeanor—turned government-bashing into an art form.

And he had a lot of help. Accompanying the Reagan era was the rise of a well-oiled corporate-funded conservative propaganda machine—including think tanks and lobby groups, endowed professorships at universities, legal advocacy organizations, magazines, and college student internships to train the next generation—designed to demonize activist government and glorify unregulated markets. Years before Rush Limbaugh began his radio ministry to his conservative congregation of ditto-heads, Reagan and this right-wing echo chamber were on the job.

Reagan’s fans give him credit for restoring the nation’s prosperity. But whatever economic growth occurred during the Reagan years mostly benefitted those already well off. The income gap between the rich and everyone else in America widened. Wages for the average worker declined and the nation’s homeownership rate fell. During Reagan’s two terms in the White House, the minimum wage was frozen at $3.35 an hour, while prices rose, thus eroding the standard of living of millions of low-wage workers. The number of people living beneath the federal poverty line rose from 26.1 million in 1979 to 32.7 million in 1988. Meanwhile, the rich got much richer. By the end of the decade, the richest 1 percent of Americans had 39 percent of the nation’s wealth....

The Nation: Reagan's Real Legacy.

USAs diktatorvenner.

PÅ Salon.com kan man læse om USAs øvrige diktatorvenner, nærmere bestemt Saudi-Arabiens konge Abdullah, Jordans konge Abdullah II, Guineas Teodoro Obiang Nguema Mbasogo, Uzbekistans Islam Karimov og Turkmenistans Kurbanguly Berdymukhamedov.

Salon.com: What other dictators does the U.S. support?

USA planlagde krig mod Afghanistan før 9-11 iflg. Pakistans tidligere udenrigsminister.

Den 18. september 2001, altså før Afghanistan-krigen påbegyndes i oktober måned, bringer BBC en artikel hvor den forhenværende pakistanske udenrigsminister Niaz Naik udtaler, at USA allerede havde planer om at angribe Afghanistan før den 11. september:

"Niaz Naik, a former Pakistani Foreign Secretary, was told by senior American officials in mid-July that military action against Afghanistan would go ahead by the middle of October.

Mr Naik said US officials told him of the plan at a UN-sponsored international contact group on Afghanistan which took place in Berlin.

Mr Naik told the BBC that at the meeting the US representatives told him that unless Bin Laden was handed over swiftly America would take military action to kill or capture both Bin Laden and the Taleban leader, Mullah Omar.

The wider objective, according to Mr Naik, would be to topple the Taleban regime and install a transitional government of moderate Afghans in its place - possibly under the leadership of the former Afghan King Zahir Shah.

Mr Naik was told that Washington would launch its operation from bases in Tajikistan, where American advisers were already in place.

He was told that Uzbekistan would also participate in the operation and that 17,000 Russian troops were on standby.

Mr Naik was told that if the military action went ahead it would take place before the snows started falling in Afghanistan, by the middle of October at the latest."

USA fortsætter sin undergravende virksomhed i Latin-Amerika.

USA har en lang historie hvad undergravende virksomhed i Latin-Amerika angår.

I Guatemala væltede man i 1953 Arbenz Guzman, den første demokratisk valgte præsident i Sydamerika. Han var ikke statskommunist, men en oprigtig demokrat, men han måtte fjernes da han udgjorde en trussel mod amerikanske forretningsinteresser, idet hans økonomiske reformer gik på tværs af United Fruit Company’s profitinteresser i landet.

I 1972 skabte man, gennem en årelang indsats fra CIAs side, grobunden for Augusto Pinochets militærkup i Chile og dermed grundlaget for omstyrtningen af den demokratisk valgte regering under ledelse af Salvador Allende som døde under kuppet.

I 1980erne støttede man under Reagan-administrationen en lang række fascistoide grupperinger i Latin-Amerika. Blandt andet støttede man de nicaraguanske Contraer med penge man havde tjent på at sælge våben til Iran, selvom Iran også på daværende tidspunkt var USAs officielle fjende. Støtten til Contraerne via våbenhandlen med Iran, gik hen og blev en national skandale - Iran-Contra affæren. Nicaragua lagde efterfølgende sag an mod USA ved International Cour de Justice og vandt sagen. Domsafsigelsen ved ICJ var hård. USA havde i landets handlinger mod Nicaragua brudt gældende international lovgivning i fire henseender, nærmere bestemt ved:

1) at intervenere i en andens stats affærer.
2) at have brugt magt mod en anden stat.
3) at krænke en andens stats suverænitet
4) at spærre for fredelig maritim handel.

Desværre tyder noget på, at historien om USAs undergravende rolle i Latin-Amerika langt fra er slut. I denne måned afholdt man i Washington et møde hvor højreorienterede nøglespillere i tidligere Latin-Amerikanske statskup mødtes med flere højtplacerede medlemmer af Kongressen, hvoraf flere bestrider vigtige udenrigspolitiske stillinger. Dette indikerer at USAs aggressive politik i regionen ikke blot er historisk og afsluttet, men derimod fortsat er aktuel. Læs mere her.

US Government

FOREIGN POLICY:
Obama seeks to expand arms exports by trimming approval process

MILITARY: INTELLIGENCE.
Washington Post: Top Secret America.

PRISONS: HUMAN RIGHTS.
http://www.newyorker.com/reporting/2009/03/30/090330fa_fact_gawande
http://dissidentvoice.org/2009/11/confronting-human-rights-abuses-in-us-prisons/
http://www.commondreams.org/headlines06/0712-08.htm
http://www.thirdworldtraveler.com/Human_Rights/Rights_Police_USA_RFA.html

whistleblowing on surveillance

Visit msnbc.com for Breaking News, World News, and News about the Economy

Drawing the Future From the Past...

The bombing was relentless. From 1964 to 1973, the United States dropped more than 2 million tons of ordnance on Laos. That's a planeload of bombs every eight minutes, 24 hours a day, for nine years. Laos has the unfortunate distinction of being the most heavily bombed country in the history of the world.
"In the area of Xieng Khoang, the place of my birth, there was health, good earth, and fine weather," one survivor, a 33-year-old man, recalls of that period. "But then the airplanes came, bombing the rice fields and the forests, making us leave our land and rice fields with great sadness. One day a plane came bombing my rice field as well as the village. I had gone very early to harrow the field. I thought, ‘I am only a village rice farmer, the airplane will not shoot me.’ But that day truly it did shoot me and wounded me together with my buffalo, which was the source of a hundred thousand loves and a hundred thousand worries for me."

For nearly three decades, the U.S. secret war in Laos and the impact of the most massive bombing campaign in the world was nearly forgotten. For those who remembered, the events seemed surreal. They witnessed the reckless destruction of a people and their land, and careful efforts by the U.S. government to conceal it. For those too young to know, gathering information and knowledge of this history was scattered and fragmented. It seemed the secret war in Laos and its aftermath would remain a secret.

But then a remarkable set of drawings and eyewitness accounts came to light. Laotian villagers put their memories on paper in the 1970s to depict the secret bombing of their country. This trove of reminiscences became the inspiration for Legacies of War. Founded by Laotian Americans in 2004, the project raises awareness about the history of the Vietnam War-era bombing in Laos. Using a unique combination of art, culture, education, community organizing, advocacy, and dialogue, Legacies of War also works for the removal of unexploded bombs in Laos, to provide space for healing the wounds of war, and to create greater hope for a future of peace.

A Secret War, a People Scattered
When the United States withdrew from Indochina, the "Secret War" in Laos was lost to history. But the legacy of the war lives on. Up to 30% of the cluster bombs dropped by the United States in Laos failed to detonate, leaving extensive contamination from unexploded ordnance (UXO) in the countryside. That translates into 78 to 130 million unexploded bomblets. Over one-third of the land in Laos is contaminated. These "bombies," as the Lao now call them, have killed or maimed more than 34,000 people since the war's end, and continue to claim more innocent victims every day. About 40% of accidents result in death, and 60% of the victims are children. UXO remains a major barrier to the safety, health, livelihoods, and food security of the people of Laos.

The war also displaced up to one-third of the Lao population. Nearly 750,000 would eventually become refugees in France, Australia, and Canada, among other countries. Over 350,000 refugees from Laos came to the United States after having experienced war, destruction, death, imprisonment, family separation, loss of homeland, loss of identity, and loss of control over their destinies. Many had undiagnosed post-traumatic stress disorder. But these weren't things Laotian refugees had the luxury to contemplate, for basic economic survival trumped all other needs.

Drawing on the Past
Between December 1970 and May 1971, Fred Branfman, an American, and Boungeun, a Lao man, collected illustrations and narratives in the Vientiane refugee camps, where bombing victims fled. The drawings and narratives represent the voiceless, faceless, and nameless who endured an air war campaign committed in secrecy. Drawn in pencil, pens, crayons, and markers, they are raw and stark, reflecting the crude events that shaped their reality. The simplicity of the narration and drawings emphasize the illustrators' identities as ordinary villagers who bore witness to a devastating event.

For instance, an 18-year-old woman remembers, "In the year 1967, my village built small shelters in the forest and we had holes in the bamboo thicket on top of the hill. It was a place to which we could flee. But there were two brothers who went out to cut wood in the forest. The airplanes shot them and both brothers died. Their mother and father had just these two sons and were both in the same hole with me. I think with much pity about this old father and mother who were like crazy people because their children had died."

Each of the illustrations demonstrates the violence of warfare. However, the images of blood and death are contradicted by the memories of the scenic and peaceful village life these survivors once lived. Scenes show farmers tending to their rice fields, monks praying at the temple, women going to the market, and children playing in the schoolyard. The drawings capture the very moments when their lives and society were forever altered. The illustrations and narratives are at the heart of the Legacies of War National Traveling Exhibition, which is accompanied by historical photos, maps and other relevant documents to give context to the decade-long bombings.

Only a small circle of individuals knew of the existence of these illustrations. The pictures hadn’t been seen in decades, not since the end of the war. A fortuitous meeting between me and Institute for Policy Studies director John Cavanagh led to the return of the illustrations to the Lao American community. In the last several years, thousands of visitors have seen the illustrations through the Legacies of War traveling exhibit and other community forums. Although most Laotian Americans didn't experience the same horrors depicted in the drawings, the illustrations invoke memory of their own stories of refuge, survival, and resilience.

The reaction to the drawings was instructive to Legacies’ work. Initially considered an artifact, the illustrations have become a living document. One at a time, each drawing tells the story of a survivor. Although the illustrations were from four decades ago, they inspire others to share their stories, contributing to a collective narrative that began long ago in Laos, but continues today through the voices of Laotian Americans.

Following a viewing of the illustrations at an exhibit in Lowell, Massachusetts, a Lao woman in the audience stood up to speak at a community forum, "The illustrations made me remember. I have not shared, not even with my family because I didn't think it was important. When I was a young woman in Laos, I worked as a nurse to help people hurt by the bombing. Every day, the airplanes would come: Boom! Boom! Boom! And then one day, it came so close to us, we had to hide in the cave and we hear right outside the cave, the sound so loud. It scared me so much. I feel so lucky I did not die. The pictures made me remember. I am so sad that today, people in Lao are still being hurt and dying from these bombs." The woman, whose husband had spoken on several occasions about his experience, had never shared hers. The illustrations and community forum gave her a chance to tell her story for the first time in 30 years. Today, she remains engaged in educating people in the Boston-area about the bombing and its aftermath.

These new voices and stories are captured in various ways through Legacies of War: interactive exhibition pieces, community programs, oral history interviews, theater performance pieces, and new commissioned works of art. Based on oral histories collected from Laotian refugees and their descendents, the Refugee Nation theater piece reveals connections between U.S. and Southeast Asian history, and the unique challenges faced by political refugees and their American children. Touching on themes of identity, globalization, and activism, it brings a Laotian voice to a growing part of the Asian-American Diaspora that is yet to be included in the American experience. <

The integration of storytelling, art, and performance are critical in breaking the silence. By creating multiple access points of engagement, Legacies of War facilitates the connection of personal stories to a collective experience in recognition that we are not alone in our experiences, that we are connected to a larger narrative and a larger context. The acknowledgement of a shared journey and struggle could lead to collective strength and power.

Since the end to the U.S. wars in Southeast Asia, many other wars have been waged, in other parts of the world, in new terrain, villages, and communities. Yet, the wars in Southeast Asia lingers. And for the people living in Laos as well as those who became refugees, the lingering impact of war remains ever present in their daily lives. Although war and conflict created the refugee community, they don't have to define it. Through the transformative power of stories, art, and performance, Laotian Americans are evolving from victim to agency of change. "Now that I know about the secret war," said a Lao American student in Seattle, "I have to do something about the horrible things that are still happening to people. As Americans, we must do something."

Another victim, a 37-year old woman, reflects, "Our lives became like those of animals desperately trying to escape their hunters . . . Human beings, whose parents brought them into the world and carefully raised them with overflowing love despite so many difficulties, these human beings would die from a single blast as explosions burst, lying still without moving again at all. And who then thinks of the blood, flesh, sweat and strength of their parents, and who will have charity and pity for them?...In reality, whatever happens, it is only the innocent who suffer. And as for other men, do they know all the unimaginable things happening in this war?"

Copyright © 2008, Institute for Policy Studies

http://www.fpif.org/fpiftxt/5719

CIA Tactics Endorsed In Secret Memos Waterboarding Got White House Nod

The Bush administration issued a pair of secret memos to the CIA in 2003 and 2004 that explicitly endorsed the agency's use of interrogation techniques such as waterboarding against al-Qaeda suspects -- documents prompted by worries among intelligence officials about a possible backlash if details of the program became public.

The classified memos, which have not been previously disclosed, were requested by then-CIA Director George J. Tenet more than a year after the start of the secret interrogations, according to four administration and intelligence officials familiar with the documents. Although Justice Department lawyers, beginning in 2002, had signed off on the agency's interrogation methods, senior CIA officials were troubled that White House policymakers had never endorsed the program in writing.

The memos were the first -- and, for years, the only -- tangible expressions of the administration's consent for the CIA's use of harsh measures to extract information from captured al-Qaeda leaders, the sources said. As early as the spring of 2002, several White House officials, including then-national security adviser Condoleezza Rice and Vice President Cheney, were given individual briefings by Tenet and his deputies, the officials said. Rice, in a statement to congressional investigators last month, confirmed the briefings and acknowledged that the CIA director had pressed the White House for "policy approval."

The repeated requests for a paper trail reflected growing worries within the CIA that the administration might later distance itself from key decisions about the handling of captured al-Qaeda leaders, former intelligence officials said. The concerns grew more pronounced after the revelations of mistreatment of detainees at the Abu Ghraib prison in Iraq, and further still as tensions grew between the administration and its intelligence advisers over the conduct of the Iraq war.

"It came up in the daily meetings. We heard it from our field officers," said a former senior intelligence official familiar with the events. "We were already worried that we" were going to be blamed.

A. John Radsan, a lawyer in the CIA general counsel's office until 2004, remembered the discussions but did not personally view the memos the agency received in response to its concerns. "The question was whether we had enough 'top cover,' " Radsan said.

Tenet first pressed the White House for written approval in June 2003, during a meeting with members of the National Security Council, including Rice, the officials said. Days later, he got what he wanted: a brief memo conveying the administration's approval for the CIA's interrogation methods, the officials said.

Administration officials confirmed the existence of the memos, but neither they nor former intelligence officers would describe their contents in detail because they remain classified. The sources all spoke on the condition of anonymity because they were not cleared to discuss the events.

The second request from Tenet, in June 2004, reflected growing worries among agency officials who had just witnessed the public outcry over the Abu Ghraib scandal. Officials who held senior posts at the time also spoke of deteriorating relations between the CIA and the White House over the war in Iraq -- a rift that prompted some to believe that the agency needed even more explicit proof of the administration's support.

"The CIA by this time is using the word 'insurgency' to describe the Iraq conflict, so the White House is viewing the agency with suspicion," said a second former senior intelligence official.

As recently as last month, the administration had never publicly acknowledged that its policymakers knew about the specific techniques, such as waterboarding, that the agency used against high-ranking terrorism suspects. In her unprecedented account to lawmakers last month, Rice, now secretary of state, portrayed the White House as initially uneasy about a controversial CIA plan for interrogating top al-Qaeda suspects.

After learning about waterboarding and similar tactics in early 2002, several White House officials questioned whether such harsh measures were "effective and necessary . . . and lawful," Rice said. Her concerns led to an investigation by the Justice Department's criminal division into whether the techniques were legal.

But whatever misgivings existed that spring were apparently overcome. Former and current CIA officials say no such reservations were voiced in their presence.

In interviews, the officials recounted a series of private briefings about the program with members of the administration's security team, including Rice and Cheney, followed by more formal meetings before a larger group including then-Attorney General John D. Ashcroft, then-White House counsel Alberto R. Gonzales and then-Defense Secretary Donald H. Rumsfeld. None of the officials recalled President Bush being present at any of the discussions.

Several of the key meetings have been previously described in news articles and books, but Rice last month became the first Cabinet-level official to publicly confirm the White House's awareness of the program in its earliest phases. In written responses to questions from the Senate Armed Services Committee, Rice said Tenet's description of the agency's interrogation methods prompted her to investigate further to see whether the program violated U.S. laws or international treaties, according to her written responses, dated Sept. 12 and released late last month.

"I asked that . . . Ashcroft personally advise the NSC principles whether the program was lawful," Rice wrote.

Current and former intelligence officials familiar with the briefings described Tenet as supportive of enhanced interrogation techniques, which the officials said were developed by CIA officers after the agency's first high-level captive, al-Qaeda operative Zayn al-Abidin Muhammed Hussein, better known as Abu Zubaida, refused to cooperate with interrogators.

"The CIA believed then, and now, that the program was useful and helped save lives," said a former senior intelligence official knowledgeable about the events. "But in the agency's view, it was like this: 'We don't want to continue unless you tell us in writing that it's not only legal but is the policy of the administration.' "

One administration official familiar with the meetings said the CIA made such a convincing case that no one questioned whether the methods were necessary to prevent further terrorist attacks.

"The CIA had the White House boxed in," said the official. "They were saying, 'It's the only way to get the information we needed, and -- by the way -- we think there's another attack coming up.' It left the principals in an extremely difficult position and put the decision-making on a very fast track."

But others who were present said Tenet seemed more interested in protecting his subordinates than in selling the administration on a policy that administration lawyers had already authorized.

"The suggestion that someone from CIA came in and browbeat everybody is ridiculous," said one former agency official familiar with the meeting. "The CIA understood that it was controversial and would be widely criticized if it became public," the official said of the interrogation program. "But given the tenor of the times and the belief that more attacks were coming, they felt they had to do what they could to stop the attack."

The CIA's anxiety was partly fueled by the lack of explicit presidential authorization for the interrogation program. A secret White House "memorandum of notification" signed by Bush on Sept. 15, 2001, gave the agency broad authority to wage war against al-Qaeda, including killing and capturing its members. But it did not spell out how captives should be handled during interrogation.

But by the time the CIA requested written approval of its policy, in June 2003, the population of its secret prisons had grown from one to nine, including Khalid Sheik Mohammed, the alleged principal architect of the Sept. 11, 2001, attacks. Three of the detainees had been subjected to waterboarding, which involves strapping a prisoner to a board, covering his face and pouring water over his nose and mouth to simulate drowning.

By the spring of 2004, the concerns among agency officials had multiplied, in part because of shifting views among administration lawyers about what acts might constitute torture, leading Tenet to ask a second time for written confirmation from the White House. This time the reaction was far more reserved, recalled two former intelligence officials.

"The Justice Department in particular was resistant," said one former intelligence official who participated in the discussions. "They said it doesn't need to be in writing."

Tenet and his deputies made their case in yet another briefing before the White House national security team in June 2004. It was to be one of the last such meetings for Tenet, who had already announced plans to step down as CIA director. Author Jane Mayer, who described the briefing in her recent book, "The Dark Side," said the graphic accounts of interrogation appeared to make some participants uncomfortable. "History will not judge us kindly," Mayer quoted Ashcroft as saying.

Participants in the meeting did not recall whether a vote was taken. Several weeks passed, and Tenet left the agency without receiving a formal response.

Finally, in mid-July, a memo was forwarded to the CIA reaffirming the administration's backing for the interrogation program. Tenet had acquired the statement of support he sought.

Conversations With History: How the War on Terror Turned into A War on American Values

Conversations host Harry Kreisler welcomes New Yorker writer Jane Mayer to discuss her book, The Dark Side. She explains how, under the direction of Vice President Cheney and his Assistant David Addington, the Bush administration, contrary to American history and tradition, implemented a policy of torture and rendition in violation of U.S. and international law. She describes the resistance within the government and the military to these actions. Mayer also offers a compelling account of what happened to detainees under the Cheney/Addington regime. She analyzes long term consequences for the fight against terror and for U.S. moral leadership in the world.

Sickness Unto Debt by Ron Paul

Ron Paul var opstillet som præsidentkandidat for Det Republikanske Parti.

One of the burning questions regarding the recently passed bailout, and the one that almost no one has bothered to answer, is how the government intends to pay for it. Governments have three main methods by which they can raise funds: taxation, printing new money, and debt. As our $10 trillion national debt shows, the federal government has always enjoyed raising money by issuing new debt. Money is gained upfront, while the cost of repaying that debt is pushed onto future generations.

This method is especially favored today, since imposing $700 billion worth of taxes would lead to widespread public dissatisfaction. When the cost of all the recent bailouts plus the cost of all the new lending facilities the Federal Reserve has initiated are added together, we quickly reach a figure in the trillions of dollars. Even with the debt ceiling being raised to $11.3 trillion, the issuance of debt alone cannot begin to cover the cost of all the bailouts in which the government is engaged. Every indication is that the government will use both debt and inflation in its attempt to keep the economy running at full speed.

Debt financing has begun in earnest, as the national debt has increased $600 billion over the past three weeks, and most of that increase came even before the $700 billion bailout bill was passed. I fully expect that trend to continue in the near future and would not be surprised if we see another debt-limit increase slipped into another economic stimulus package that might be passed before the new year. Now that our foreign creditors are less willing to purchase our debt, what debt we cannot sell to foreigners will be monetized through the Federal Reserve, resulting in increased inflation.

In fact, money supply data for the narrowest measure, the adjusted monetary base, show an unprecedented increase, far higher than when Chairman Alan Greenspan attempted to reflate us out of trouble after the dot-com stock bubble burst. That intervention on Greenspan's part, pumping in liquidity and driving interest rates down, led to the real estate bubble, and Chairman Ben Bernanke unfortunately seems to be following the same script as his predecessor in resorting to credit creation and low interest rates. Even were this effort to succeed, it would only delay the inevitable. In order for the economy to return to normal, the Federal Reserve must cease the creation of new credit, overvalued assets must be allowed to fall in price, and malinvested resources must be allowed to liquidate and be put to use in more productive sectors.

The government's reaction to the credit crisis is based on the erroneous belief that the rate of economic growth over the past 10 to 15 years was the result of natural free-market processes, which is not the case. Rates of economic growth during the dot-com and real estate booms were clearly indicative of an overheated economy, and any attempt to try to stimulate the economy to return to such rapid growth will fail. Rather than allowing asset bubbles to pop and malinvested resources to liquidate, Federal Reserve monetary policy has attempted to pump more and more new money and credit into the system to try, in vain, to sustain the economic boom.

The monetary base jumping by such a large margin is an indicator that the Federal Reserve has not learned from its mistakes and is hoping to get out of this economic downturn by creating even more credit out of thin air. With such large increases in the monetary base and with banks legally able to hold zero reserves, the vaunted money multiplier effect could theoretically reach infinity. If our policymakers fail to come to their senses, there is a real danger that we could end up in a hyperinflationary crisis such as the ones that beset Germany in the 1920s and Argentina and Zimbabwe in more recent decades

The common measure of inflation, the consumer price index, has been so manipulated over the years that it cannot be trusted to be an accurate indicator of the true effect of inflation on people's pocketbooks. This is especially true of “core inflation,” which eliminates food and energy prices, the two staples that are most important to every American. When the CPI figure is computed using the original method of calculation, it comes out to more than 10 percent per year, which is a more accurate indicator of the inflation being felt by middle-class Americans.

For years, I pointed to the now-discontinued M3 money supply figure, the broadest measure of the total money supply, and remarked how its rate of growth far outpaced the officially reported rate of inflation. Since inflation is chronically underreported, I continue to view money supply figures as a more accurate indicator of the true direction of prices. Now that the monetary base has spiked so dramatically, the result will be seen over the next few months as this new credit works its way through the system, resulting in significantly higher inflation. Unfortunately, because M3 is no longer reported, the full effect of this inflation on the U.S. economy will go unreported in official statistics.

Our government has lived beyond its means for decades. We now face a crucial juncture, at which we determine whether to continue down the path of debt, inflation, and government intervention or choose to return to the economics of the free market, which have been ignored for almost a century. Increased debt leads to higher taxes on future generations, while increased inflation diminishes the purchasing power of American families and destroys the dollar. No society has ever been achieved prosperity through indebtedness or inflation, and the United States is no exception. We cannot afford to continue our current policies of monetary expansion and unending bailouts. Unless we return to sound monetary policy, sharply reduce government expenditures, and realize that the government cannot act as a lender of last resort, we will drive our economy to ruin.

http://www.thebigmoney.com/print/414