U.S. Federal Debt on 'Elevator to Hell'

Jun 19, 2011 – 06:26 PM

By: Gary_North

If you think the Federal debt ceiling is anything but an elevator, I’ve got news for you.

Maybe you saw the story about the Air Force airlift of $12 billion in unmarked bills that landed in Iraq sometime between 2003 and 2004 – no one seems sure just when. The story was written by a Los Angeles Times reporter and published on January 13.

There was a slight glitch in the execution of the plan. Some $6.6 billion of this – three fully loaded planes full – has gone missing.

The story was picked up by the Web, but got little play in the mainstream media. The Huffington Post and Fox News reported it, but not the other major media. The fact that several plane loads of shrink-wrapped $100 bills are unaccounted for is not big news in the minds of America’s mainstream editors. A search on Google reveals how little mainstream media interest there was.

There was a modification published by Fox. The auditor in charge said that he never used the figure $6.6 billion. He claimed that only $2.8 billion are unaccounted for. This story was also not picked up by the media.

My point is not that the Pentagon cannot account for either $6.6 billion in missing currency or only $2.8 billion. That is hardly news. My point is that the conflicting sums are so miniscule in comparison with what the U.S. government wastes every day that the story is not considered media worthy when any agency loses this much. The public is so used to stories of wasted billions that this story is a curiosity at best. I suppose that it would make a good Bruce Willis “Die Hard V: Payback!” script, with Bruce going over to the dark side and leading a team that flies the tax-free money to Switzerland. Yippee-ki-yay.

Yes, the Pentagon flew $12 billion in currency to Iraq. But why? The reporter did not ask why Iraq needed American currency. Why not just digits?

Why was the dollar the needed currency?

Who picked up the cash? There were not enough receipts.

The follow-up story in which the auditor provided the $2.8 billion figure indicates that he thinks the Iraq government got the money. He doesn’t really know. No one has asked what the Iraqi government intended to do with U.S. currency, as compared with digits that agencies normally use.

Who in the U.S. government authorized this transfer of funds? We do not know. Whose plan was being executed? We do not know.

This happened at least six years ago. Who in the U.S. government has been researching this? The money is long gone.

I could go on with other questions, to no avail. The facts are these: an unknown someone for no written official reason withdrew $12 billion in currency, loaded it onto 21 Air Force planes, flew the money to Iraq, where it was turned over to someone or other, with either $2.8 billion or $6.6 billion unaccounted for, sometime (no one seems sure) between 2003 and 2004. Explanation:

But U.S. officials often didn’t have time or staff to keep strict financial controls. Millions of dollars were stuffed in gunnysacks and hauled on pickups to Iraqi agencies or contractors, officials have testified.

Buried in the story is this tidbit: the U.S. government has spent $61 billion on reconstructing Iraq’s economy. This is in addition to the vastly large sums that the U.S. government spent on destroying the Iraq economy. Why? For these three words: “We got him.”

Yippee-ki-yay.

WASHINGTON’S FREE RIDE

The lunacy is not the missing $2.8 billion or $6.6 billion in shrink-wrapped bills. The lunacy is the entire endeavor in Iraq. But this lunacy has not penetrated the thinking of the majority of American voters. There are no protestors in the streets. There are no well-organized campaigns of letter-writing. Basically, nobody cares.

The Republican debates held this week did briefly touch on the issue, but Ron Paul was the only candidate who said emphatically that our troops should be brought home immediately. That was easy for him to say: he publicly voted against the Iraq war.

We are halfway through Obama’s third year, yet 45,000 U.S. troops are still there, plus however many mercenaries are on the payroll, a figure estimated in the past at 100,000. No one knows, any more than they know whether $2.8 billion or $6.6 billion in currency went missing. The point is, the voters do not really care that no one knows.

The public does not feel any pain from the war in Iraq. The Iraq war is still going on. We don’t need 45,000 troops plus mercenaries where there is no war. The World War II refrain – “Don’t you know there’s a war on?” – is applicable today. Hardly anyone knows. It’s no longer news.

Whenever the public feels no pain, the public does not care what the government does. The public is oblivious. The missing currency was not a big story, not merely because editors decided not to run it, but because they figured that it would not increase ratings or subscriptions to feature it. It was non-news. They perceive that the public is interested in other things, such as Congressman Weiner.

This lack of interest gives the politicians a free ride. They need not confront the issue of specific Federal spending. The deficit in general is of some interest, intermittently, but not the specific issues of the budget. Because Congress is unwilling to cut specific programs’ budgets, the general deficit is heading higher. Congress knows that the public does not care.

In a June 15 article, a MarketWatch columnist dismissed the Republican candidates’ debate with these words:

The half-minute answers forced the candidates to use Beltway shorthand in their answers that must have been indecipherable to any viewer who does not follow politics for a living. Texas congressman Ron Paul, for instance, babbled on about his fixation with the dollar as a reserve currency – a concern that is extremely remote for most voters.

Notice his dismissive adjective: “babbled.” This is the rhetoric of contempt. The author of the article is clearly uninterested in something so remote as the issue of the dollar’s reserve currency status. He has not spent 40 years, as Paul has, studying the Federal Reserve and monetary policy. In any case, 30-second sound bites do not allow time for babbling. But that did not faze the columnist’s choice of a word.

He, like most of his peers, is in the obfuscation business. “Pay no attention to the make-up of the Federal Open Market Committee, where the New York Federal Reserve Bank – a private corporation – alone among the regional FED banks, always has a voting member. Move along. There is nothing to see here.”

But his point regarding the public was well-taken. The concern of the mass of voters is not with the world reserve currency status of the dollar. They are concerned with unemployment. They are concerned with falling real estate prices, the possibility of the bankruptcy of Social Security and Medicare, and the disappearance of their dreams of a comfortable retirement. They are unaware of the tight connections among all of these concerns and Federal Reserve policy. Their ignorance benefits politicians, the Board of Governors of the Federal Reserve System, and the senior managers of the four or five largest U.S. banks. It gives these high-level decision-makers a free ride.

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