How about $32,000 each, $5 gas and a military draft for your kids
First, let’s clear the air: Someone please tell the White House we’re already fighting World War III. Yes, they’re great at picking buzzwords, but the truth is our global “war on terror” has engaged (or enraged) every nation on the planet.
And according to the latest Congressional Budget Office estimates it’s costing America a whopping $2.4 trillion. That’s $8,000 for each of us. So what’ll the coming WWIV add? And how will it impact your retirement? Scary huh!
WWIV already? Yes, the White House is preparing us for an invasion of Iran. That case has been made by many neocons, most recently by Norman Podhoretz in his new book, “World War IV: The Long Struggle Against Islamofascism.” And as Pat Buchanan reacted on MSNBC’s “Hardball” about all their warning signals: “I don’t see how [the White House] can avoid attacking Iran and retaining their credibility going out of office.”
So what will WWIV cost you and me personally? This is crucial, folks, because every dollar spent on expanding our global “wars on terror” will be one less dollar for your retirement nest egg, your health care, your kids education, your grandkids lifestyle — all of which are being outsourced to a free market system that’s forcing you to take personal responsibility rather than get benefits from government or Corporate America.
Shortly after I posted a column on “Disaster Capitalism” (outsourcing government and military operations to mercenaries and Corporate America) the President did threaten Iran about starting “World War III.” See previous Paul B. Farrell.
And suddenly, before you can say “veto,” Congress and the media have once again caved, accepting the inevitability of WWIV in 2008, beginning with an attack on Iran.
Estimating costs easy, but politicians in denial
OK folks, I’m not a Pentagon strategist, but have some experience, starting with volunteering for the Marines in Korea. Since then stuff like military strategies, weapons, economics and financing wars have fascinated me. Everything: Big stuff like Alexander Hamilton’s commitment to repay Revolutionary War debt, detailed by a Goldman Sachs vice chairman. And little stuff like the Civil War when J.P. Morgan financed a deal to buy old rifles from the U.S. Army for $3.50, refit them and sell them back to the Army for $22 each, proof “Disaster Capitalism” is nothing new for Wall Street!
Economic forecasting is also not new for me. Over the years I’ve had to estimate the cost impact of a Navy Weapons Systems Research Lab and the debt load of the N.Y. State New Towns Development Corporation. At Morgan Stanley I analyzed the Federal New Town Program for the U.S. Department of Housing and Urban Development and some troubled banks, even predicting that deregulation would create a debt bubble and collapse the S&L industry.
In fact, such estimates are quite simple, just politically inconvenient. One was even classified secret by the government. So let’s estimate the potential economic costs of the coming WWIV:
Economic costs can be estimated by extrapolating from demographics. We’re already fighting wars in Iraq and Afghanistan, which have a combined population of 60 million. Generals are already telling us our volunteer military and equipment are near “broken,” strategically unable to engage on new fronts.
Still we are planning to attack Iran, a country of 65 million, at a time when its neighbor Pakistan, a country of 165 million, is rapidly destabilizing and it is a country that already has nuclear weapons and also offers sanctuary to Taliban and al-Qaida extremists. Others will be stirred to retaliate. So we could increase our exposure to hostile enemies by four times.
In addition to demographics, land mass is another factor in estimating military costs: Remember, we haven’t been able to find Osama bin Laden in Afghanistan for four years, even with a $50 million “dead or alive” bounty. And today our so-called ally Pakistan is offering him and his warriors a safe haven.
If we attack Iran our battlefield terrain exposure increases by 635,000 square miles on top of the 420,000 square miles in Iraq and Afghanistan combined, plus another potential 340,000 square miles in Pakistan and others. The geography alone could overwhelm a military already stretched thin. The costs will go through the roof. A military draft will be essential.
Will they listen?
I have no illusions that our political leaders will give more than lip service to any estimates of war costs. After all, they are already ignoring estimates from the CBO as well as the Government Accountability Office, driven by an ideology convinced that “deficits don’t matter.”
But living in denial can’t erase the fact that the added debt of WWIV will have an enormous impact on America. And it will certainly have a profound personal impact on every single investor, far, far more damaging than any failure to save “enough” for retirement. Or failure to pick the right index funds. Or failure to set up a diversified portfolio.
Why? Because the cost of WWIV will overwhelm all those other mistakes we make as individual investors.
So what can you personally expect as your cost from WWIV? We know an attack on Iran will also trigger widespread insurgencies in other Muslim nations siding with Iran, likely Pakistan and Syria. We can also expect Russia and China to increase their indirect support to insurgents, to keep the war fires burning and keep the price of oil high, further undermining America’s credibility and diminishing the value of the dollar as a reserve currency.
The added debt costs of World War IV seem obvious: An estimated cost of $10 trillion to fight for a decade is not unreasonable, four times the cost of the current fighting in Iraq and Afghanistan and the global “wars on terror.” And personally that will add roughly $32,000 more debt for every American — which is more than half what the average American currently has saved for retirement.
Underneath all these numbers, however, I feel a deep sense of sadness. Since the President’s “WWIII” threat, the economic lobe in my brain has been flashing new danger signals, reminding me of a warning by Nixon strategist Kevin Phillips in “Wealth & Democracy:” “Most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out.”
Once again, the lessons of history have been lost on the posturing of macho egos.
Halloween’s a great time for spooky warnings, even if no one listens. But maybe you also hear a growing drum beat, echoing the Iraq war run-up. Unfortunately, no new leaders seem willing to stand up to the coming “darkness” … to use Robert Redford’s recent comment in The Week magazine on the release of his new film, “Lions for Lambs:”
“I had great hopes that people would see movies like ‘The Candidate’ and ‘All the King’s Men’ and say ‘Hey if we’re not careful, we might get snookered.’ I discovered we Americans enjoy the distraction of entertainment but aren’t really interested in the deeper message. We don’t like to look inward; we don’t like the darkness.”
And that’s what really saddens me: Because, paradoxically, by not looking within the darkness gets darker until it consumes our souls, like in “The Night of the Living Dead.” Happy Halloween! End of Story
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