by Charles Hugh Smith, Of Two Minds:
Dear Imperial America: the lifestyle you ordered is permanently out of stock.
Our extraordinary misallocation of national treasure and political power has set a banquet of consequences that few are willing to face, much less address head-on. If we had to sum up this vast misallocation, we might start by characterizing it as the result of a multitude of elites playing Empire with money borrowed from future generations.
We can start the list of extraordinary misallocations of national treasure with the Neocon’s endless wars of choice. Ten years ago, estimates of the total cost of the Iraq misadventure were $3 trillion: Cost of Iraq War: $3 Trillion; Cost of Solar Plants to Power all 105 million U.S Households: $500 Billion (April 10, 2008)
(Yes, I know solar energy is not “the solution” due to intermittency, lack of storage, fossil fuels are needed to build and maintain the solar infrastructure, etc.–but the point is: would we be better off if we’d invested 20% of the money squandered on the Iraq misadventure on alternative energy, even with all its limitations?)
But this does not exhaust the list of extraordinary misallocations of treasure. Universities have found the funds to build grand edifices on campus (never mind the trillion dollars in student loan debt that funded the delusions of grandeur) while much of the rest of our educational infrastructure crumbles as deferred maintenance takes its inevitable toll.
Public transit systems such as the San Francisco Bay Area’s BART always find the funds to pay for hefty raises and gold-plated benefits for employees and managers, meanwhile the system’s core has crumbled due to–you guessed it–hundreds of millions of dollars in long-deferred maintenance.
While employee wages, benefits and pensions dominate local government outlays, maintenance is funded by selling bonds, which cost twice as much over the long run due to interest and other costs.
Where cities and counties once funded school maintenance and filling potholes out of tax receipts, now many locales demand taxpayers approve tens of millions of dollars in new bonds to pay for these basic infrastructure maintenance projects.
It has reached the point that even maintaining city parks requires borrowing millions.
Political elites have found that promising the impossible–lower taxes and increased benefits/entitlements–keeps them in power, and as long as the credit spigot of new government borrowing is wide open, there are no limits on how many more trillions of dollars in future interest payments can be promised to win re-election today.
The fact that this sets a toxic banquet of consequences for future taxpayers and beneficiaries–no worries, some future politico will have to sit down at that banquet:
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