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03 January 2015


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VMI is not "a real military school?" You don't understand the system. The military will always look to believe its leaders, always. that is irrelevant to my argument. We are talking about the inadequacy of the American civilian response to stress. pl

Bill H

The political order in STs quite appealed to me. I particularly liked the bit where the professor is asking the student why the current franchise method is used and answers himself, "because it works and no previous method has worked." In particular he describes former use of a universal franchise and regards it as "insane." And to think it was written in 1959.


Service equals citizenship!



What other poor decisions would the civilian leadership have to make before you start to dissuade people from serving in the military?


Had the government opted to let defaults take place and many of the banks, etc. which took on too much risk to get wiped out in 2008-2010, it would have certainly helped to get a good amount of people of this country "back on track".


Yay to ex-PFC Chuck for bringing up MMT and UMKC's economics department!

Here's another chart to take a look at. It was created by Scott Fullwiler (a MMT scholar) to show how economist Wynn Godley's (another MMT god) three sectors work...to the penny since 1952. The three sectors are: government, private, and foreign.

The red is the federal government
The blue is the private sector
The green is the foreign sector.

All three sectors CANNOT be in surplus (or deficit) at one time. Only two can. Please note the absolute mirror-like quality around the zero-line. These sectors add up to the penny.

You will notice that in 1999, the government goes into surplus for the first time since 1927-1930! That ring a bell? Look what happens to the private sector. It goes into deficit. (That was when Alan Greenspan was telling everyone to take out equity loans on their houses to make up for lagging wages.)

Whenever the private sector goes into deficit to that extent, you get a depression. We have had seven depressions as a result of the private sector going into deficit or the government balancing the budget in the history of the USA. The first one was 1836 when Andrew Jackson balanced the budget because he didn’t know what he was doing.

Look what happened to the private sector in 1997 when that idiot Jacob Lew pushed through the Balanced Budget Act of 1997. The private sector went into deficit. The only reason why the recession/depression of 2008 was delayed was because of the dot com and housing bubbles. (Clinton went along with it because he was an ex-state governor, and states and local govts should balance their budgets; he was not ready for prime-time at the federal level, and neither is his wife. )

Clinton and his minions caused this. Add the failure of the Clinton administration to regulate the unregulated mortgage banks—the S&L regulators warned them back then—which allowed the CEOs of those mortgage banks to rape their banks with staggering profits for the NUMBER of loans created, then get out before the bank went belly-up. (Well, actually, the NY Fed is supposed to regulate them, and the FBI warned Congress in open testimony on the Hill in September 2004 that there was an “epidemic of mortgage fraud.” But Timothy Geithner didn’t give a shit.)

Obama has hired both of these idiots: Geithner and Lew. I don’t know whether we can survive another two years of Obama, his judgment is so profoundly bad.

Oh, yeah: the return of the private sector into surplus in the third quarter of 2008 is the result of the automatic stabilizers kicking in. They are unemployment insurance and other safety nets. Without them, the result would have been 10X worse than it was. Bernanke said after he left office that the 2008 GFC was actually worse than the Great Depression.


Another interesting point. Jan Hatsius, the inside Goldman Sachs economist for the top wealthiest people in the world--he better perform or Hatsius and GS are out of a job--said that Wynn Godley's three sector analysis is his most important working tool.


To that end, some might be interested in this post and discussion on what ex-PFC Chuck is talking about. Bill Mitchell is worth listening to if you are inclined and have the time: http://www.nakedcapitalism.com/2015/01/bill-mitchell-demystifying-modern-monetary-theory.html

Disclaimer: I'm all over it in the comments. (I have invested *enormous* amounts of time to undo my 'we borrow from China' perspective over the past four years. These people describe how things work, and I have verified with calls to the Fed and US Treasury, even the Congressional Research office. I triple-check everything. My mind likes to know how things work. I'm really a simpleton that way. What goes into what and causes what? In my view, MMT is telling the truth, and I thank ex-PFC Chuck for bringing it to the attention of Colonel Lang's august group.)



The desire to serve is so strong in those who want to join that I cannot imagine how you could drive young people away. OTOH, a steady erosion of pay and benefits for the true career professionals can easily cause young professionals to leave to protect their families. pl



Having spent a decade in the Navy my opinion on academy graduates is not that high.


9/11 occurred during an expansion of cable news, and its subsequent effect on tv and print news. Emphasis was placed on narcissistic human interest stories (how the news affects YOU!); focussing on individual people's pain to local tragedies (hurricanes, murders and so on), rather than placing them into proper context (which would reassure people that they are not a big threat). This conditioned people to always have heightened feeling of evil being at their throats, and that such feelings were the social norm and expected to be displayed.

9/11 just overwhelmed those citizens, and neither the media or, especially, politicians, were attempting to reassure or contextualize that event. If the news media had spent years elevating the minor and mundane tragedies of human existance, on what rational plane could they place the 9/11 tragedy? Contextualizing threats remains difficult for the media, and impossible for a mainstream politician even today. The peer pressure to be a fearful sheep is too strong.

Ask more of citizens, but don't absolve the cultural environment in which they've grown.


In the spirit of debate I believe the Committee should read a criticism that points to the fallacy at the heart of MMT that a sovereign can print all the money it needs to purchase goods and pay it's debts denominated in its currency. History has proven otherwise with numerous collapses of sovereign currencies to worthlessness. Havenstein's experiment being a classic 20th century example.



The problem I have with Godley's chart is his definition of financial surplus. Does it include on and off balance sheet items? Does it include the net present value of guarantees and contractual promises? How does he explain the fact that the federal government debt has increased every year since 1952 except one. How can there be a federal government surplus then? How does he explain the periods when the US government debt declined and the private sector deleveraged?


Col. Lang,

Firstly and with respect, I mentioned Starship Troopers because I detect a feeling here that America "doesn't deserve" the men and women of its armed services and an associated contempt for civilians. This is a dangerous emotion. This next stage of the destruction of your Republic is to endow servicemen and ex servicemen with rights and privileges enshrining them as a class above "ordinary" people, that is why I referred to Robert Heinleins novel that I first read with awe as a teenager.

I need not describe the beginnings and characteristics of German militarism to you or SST readers, nor the details of the doings of the Praetorian Guard in Rome, nor the dozens of military dictatorships all based on the notion that the military must "save" the country from its undeserving people. It is one thing to honor sacrifice and heroism and care for veterans, it is another thing to elevate the military merely for having served, especially when you consider the teeth to tail ratio and the fact that few will have put their lives on the line.

As for the American people what did you expect? The American public education system is rotten. The media does its best to encourage people to be narcissistic self absorbed morons and the result? Contrast the alleged behaviour of New Yorkers after 911 with the British during the WWII London Blitz! In fact it might be entertaining for a good comedy writer to try.

I see no obvious solution to the problem until the military suffers a major reverse, perhaps on the scale of the Somme, and the community and legislators realise what a self serving house of cards the military industrial complex has become.



No one expects Heinlein's polity to be established, but the present system no longer functions. American institutions of government are certain to change. Australian government has now given you Tony Abbott. Before that you had GW Bush's friend, John Howard. Perhaps you should deal with the mote in your own eye. pl

Babak Makkinejad

That is an interesting concept; a constitution for Pakistan or Egypt or Indonesia in which the state is the military - like the Mamlukes - and that only those who had joined and served could vote - after they were discharged.

A federal system could also be thus constructed - with the local constabulary's veterans only being able to vote in local provincial elections but not the federal elections.

One could envision cities and hamlets being organized that are autonomous - everyone in those cities could vote in the city elections but not in the local (provincial) or federal elections.

Add to it the dual monarchy concept of Pournelle's and it might just work.



IMO Heinlein had it right that opportunity had to be provided to all those who chose to serve. pl

different clue

And I would add . . . the carefully staged and paced anthrax attacks, engineered to raise the fear and terror at a time when ordinary-citizen people were still trying to restrain it.

They were designed to put anthrax in the public mind and keep it there for when the "anthrax excuse" would be contrived against Saddam Hussein.


PL, good on you for linking to Fallows' article. He has some follow-on posts on his blog, which make for interesting reading. What is your opinion of the Hart Commission memo?

For those interested, he links to some of his source material here: http://www.theatlantic.com/politics/archive/2014/12/a-reading-list-on-the-tragedy-of-the-american-military/384065/

alba etie

Yes there was a huge crowd swell of push back against the Bushcheney Iraqi war. Even here in deeply conservative Texas there were large demonstrations with ZERO MSM coverage. The Ed Gillispie's & the Gen Barry McCafferety 's where all over the TeeVee as well - mounting an disinformation campaign to further the BushCheney neocon agenda. Moreover the sane voices of reason who spoke up about "Bushcheney -- having no clothes ' all paid a price; including our esteemed host Col Lang here at SST . "What more could we have done " hard to say at this point . But I know moving forward we all have a duty to our Country , to Our Military , and each other not ever to be stampeded into another Iraq 2003 . And for me that starts at the ballot box in 2016 .

alba etie

Bill H
My other Heilen favorite was "Farnham's Freehold "


MRW thanks for this video! Bill's ideas on 'full employment' are really interesting.


"History has proven otherwise with numerous collapses of sovereign currencies to worthlessness. "

Oh yeah? ;-)

Name them.

P.S. I'll respond to the Jesse articles below because there's no room here. We're getting into 1"-2" column territory.



"the fallacy at the heart of MMT that a sovereign can print all the money it needs to purchase goods and pay it's debts denominated in its currency."

Well, since we've been doing it since 1933 to great effect, where's the fallacy? Since this new economic reality created the middle class post-WWII, where's the fallacy? Since the government creates interest-free money everytime Congress appropriates spending which increases the wealth of the people, where's the fallacy?

Or, are you of the mind that someone in downtown China is counterfeiting US dollars that we then "borrow" because we can't create currency ourselves?

Suggest you read "Keep From All Thoughtful Men" by military historian James (Jim) Lacey (2011). It's how we won WWII. Three government economists understood the effect of going off the gold standard in 1933 and put the country back to work with extraordinary logistics and planning, and in fact, controlled when we entered the war. They stopped the Pentagon from entering two years earlier when, as Lacey maintains, the economists argued that we would lose. Lacey discovered misfiled documents in the National Archives that showed what and how it was done.



To put Jesse's articles in perspective: "Jesse — The Great Fallacy at the Heart of Modern Monetary Theory"


Smart comment.

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