Just how DID the US finance the war in the first place?

[whosinpower]

I can't help feeling that it is oddly coinidental that the estimated cost of the Iraq war is precisely the amount that Paulson is asking for to bailout the financial crisis.

But ask yourselves this - given that the US taxpayer enjoyed tax breaks from this administration - how were they going to pay for the war? They would of had to borrow to finance it - borrow it from someone.......the US has switched from a manufacturing economic model to a financial model - where wealth is grown by pushing paper around, instead of making something to generate money via sales, wealth is created by estimating how much something is worth and gambling on the open market. So - you cannot dig yourself out of this mountain of debt by making stuff to sell.....instead you have to prove that the value given a stock, commodity or security is undervalued to encourage shareholders to buy and hold stocks.

In essence, the Bush administration borrowed against YOUR house to finance the war. Nice eh? And now that your house is worth less than they estimated - you are being asked to pony up - because the large financial institutions have realized they will be left high and dry. Oh - and if you don't - the financial world will end, millions of jobs will be lost, the American economy will plunge into depression. Those are your choices.

You can blame Wall Street if you want to. I certainly have no love for the power of greed. Wall Street did what it had to, to finance the war. It had to create a semblance of wealth for foreign investors to back and invest in America. That has fallen out, because your leaders sold out your jobs, your security and now your house. And now those same leaders are getting desperate - because it really is a desperate situation. They will cobble together some sort of deal to reflect what your home(which is real, and does have some value)might be worth in 2010. This is the only thing that keeps foreign investors like China from foreclosing on you. That is the confidence they are desperately looking for. That is why they are not so interested in getting at those who put the house on fire.

I guess what I am trying to say is that Wall Street and the credit crisis is a symptom. It is not the illness. Obama is in a very difficult position, and while I understand his willingness to give a bailout a chance - the bailout does not go nearly far enough to uphold, encourage and grow America's greatest asset - you.

[TooBigaTent]

1. By moving money around with no real benefit, except for the war industry. They also

greatly cut funding to states for education, healthcare, environmental protection, justice, etc...

[jobycom]

2. Wow. Intriguing way of looking at it. I had never thought of that before.

You're saying basically, if I get you, that BushCo used us as collateral, and now has to make us look prettier for our mortgage holders?

The problem, as I see it anyway, is that the financial economic model has no standard to base our wealth on. Money is labor, converted into tradeble format, and even though capitalists, who basically bundle and trade labor to create wealth, can inflate the value of that labor, of that money, through speculation and gambling and all the financial games they play, ultimately it is still tied to labor. Speculation simply inflates the value of the money until the value of labor catches up to it.

Ultimately, though, if labor goes down, then the value of the extra money generated must collapse back to real levels. That's where depressions and recessions come from, in my opinion--money is readjusting. That readjustment, though, isn't a perfect correction. Sometimes it can be slowed, allowing labor to increase in value enough that the fall is lessened--I'm picturing Wile E Coyote Economics churning his feet over a chasm but still moving forward enough to reach a ledge on the far side. That's what FDR's policies did--they created a net to keep the value from falling as quickly, and often to keep it from rising as recklessly.

But the protections of FDR have been dismantled. Money can fall not only to the value of labor, but it can hit labor so hard that it knocks it off its perch and into far greater depths than we expect. In that case, it isn't a correction--a recession--but a collapse--a depression.

If I get you right, you're saying that the money we borrowed for the war was based on the expectation that labor--money--would go up, as Reagan's economic beliefs and the Laffer Curve pretend it will, or really, that BushCo borrowed the money not even understanding the basics of money and the economy, believing that the value of the money would go up through stock market investments and mortgage and credit speculation, until what we owed was less than what we borrowed. Add to that the money he expected from the oil fields--both the money the government could steal directly, and the boost in our economy from what he thought would be lower gas prices.

But instead of going up, labor--money--was crushed under the burden of all the credit, and soon a reckoning will have to come. The plans now, whether they understand it or not, are an attempt to float money--to keep the coyote's legs churning--as long as possible, in the hope that the crash will be lessened, or even avoided. But BushCo doesn't understand money--they don't get that it's tied to labor. They have a simplistic, business-centric view that sees capital as something disconnected to labor, as something created by, rather than used by, Capitalists.

So they can't understand the basic underlying problem. They can only see the symptoms, like the credit crunch and the falling dollar, and think that fixing the symptom fixes the problem.

We need Dr. House to find the cause beneath the symptoms. Here's hoping Obama can be that doctor.

That's what your post made me think about, anyway. If I wandered from what you meant, apologies.

[whosinpower]

5. Yes he/they did

And what we are seeing now is the symptoms of a far graver issue - that 700 billion thrown back at institutional banks will not quell - because the basic issue goes back to what is the basic value of a home. And in times past, the basic value of a home is what people like you and me are willing to pay. Well, prices falling are indicitive that people cannot or are unwilling to pay mostly due to higher costs of gas, living, food, etc, etc. In that regard - the market is determined by what you and I are willing/able to pay.

700 billion to insure that those values of those homes do not fall further will not work. Because it is the public that will ultimately determine the price.....not Wall Street. And until the public are able to generate something tangible of value, they will be unable to buy.

The reason why this is a urgent issue is that it is my belief that your government borrowed to finance the war - how else have they paid for it? You are in a deficit so deep that it boggles the mind. So, it had to come from somewhere. And it had to be guarenteed with something, or at the very least, the money loaned had to show a chance of making a profit. I think the credit squeeze happened because someone, or a group of someones said enough is enough.

[asjr]

3. Is this why they have never included

the cost of Iraq in the budget numbers they give us?

[tama]

4. Demilitarize US n/t