Why is the economy so important?

[MayheM]

Unless large-scale war is waged, every country will eventually end up like Greece. It's simple math.

That's actually why we will all end up like Greece. The way the economy is set up right now it is meant to insure that there is no large ways anymore. We are all tied together to withe our economies to insure we do no have another world war. It is the same premise as Mutually Assured Destruction. If one country attacks another it will in turn effect everyone. In theory it is a good idea and was done for a good reason, but everyone had the mindset that entire countries are too big to fail.

It scares the hell out of me that the USA owes so much money to other countries. I was talking to the CFO (Chief Financial Officer) at my work last week. He explained to a bunch of us how much a trillion dollars actually is. This is what he said. "If a company was founded at the beginning of recorded time, roughly 4000 years ago. And said company was doing poorly from day one loosing 1 million dollars a day. It would still take not have lost 1 trillion dollars at present day. To think the USA owes almost 13 trillion dollars at this point is RIDICULOUS!!! The government keeps spending money like it grows on trees. Any smart person when they go into debt looks at what they really need and makes cuts to put them selves on the path to being debt free. Though the answer on the table is now a VAT (value added tax) which in the middle of a bad economy where no one is buying things will actually strangle any hope of a recovery. But this problem started a long time ago, before Obama, and before W. Bush. It is just that W Bush Shifted gears and started speeding up, and Obama floored the peddle. Only time will tell if we can pull out of the funk that is our current economy, and I hope all countries can get back on track. Because like it or not, we are all in it together.

[Dionysos]

No, the debt accumulates and increases regardless of war - and unless that debt is reset by a large-scale war (world war, not something "tiny" like Iraq or Afghanistan), it'll go on until the system fails in a spectacular way. Fighting small wars against/in countries that have little or no involvement in the global economy is of course only worsening the problem, even though the companies involved are seeing great profits.

It's likely though that people are so afraid of the economy that a large war like this will only be considered when the shit already hits the fan.

The point is the debt though and the debt automatically linked to currency. It's simply mathematically impossible to pay back all debt with the money in the system, or even a considerable amount. Every country in europe (except parts of scandinavia etc, Norway in particular because of the oil) has a debt that is out of control and which steadily grows, they're just not as ludicrously high as the US' debt yet as to attract attention. But it's all the same, and it's pretty much irreversible without a system-wide reset (hopefully planned and gradually). Germany (and probably other countries as well) would be well above the allowed margin of debt per GDP if they didn't fix their accounting so that certain loans and debts don't show up in the domestic deficit.

Don't know if this was posted before, but it's highly relevant to debt and interest (and of the course the ludicrous need for ever lasting growth). Economy mentioned in part 3:

[Terr]

The point is the debt though and the debt automatically linked to currency. It's simply mathematically impossible to pay back all debt with the money in the system, or even a considerable amount.

Worth meditating on: For every $1 in debt that we pay so that our children don't have to, we're reducing their inheritance by $1 (Which grows faster?)

[Jangalomph]

Unless large-scale war is waged, every country will eventually end up like Greece. It's simple math.

Can some one tell me how a war benefits? All i see is death and destruction..

[Zabiela]

Can some one tell me how a war benefits? All i see is death and destruction..

Waging war benefits Governments and their economy:

http://en.wikipedia.org/wiki/Military-i ... al_complex

WW2 was one of the main things that got the US out of the great depression.

[Jangalomph]

That didn't tell me much.. I wanna know HOW it does, because all it does is spend money.. But then again after WWII you see videos of people hula-hooping and jumping and cheering because we were out of recession and back on track.. How does that work?

[Major Banter]

Imagine no employment. At all. There's zero money to be had.

Then along comes Japan and they're all "COME AND HAVE A GO"

So America is all "dickheads" and prints fuckloads of cash, boosting inflation but getting money into the system. They spend this on massive munition factories and start to kill some Japs. Japan spends fuckloads of money but cash is pouring into the US as they service thier own business; cash is cycling within the US - bank to military, military to private companies, companies to public; the public get wages and spend it on goods and that money cycles its way into the bank. Bam. America is a cycling economy, self contained with cash coming in from other countries.

America balloons, Japs get beaten, they get spoils. America as a superpower owns new lands and gains revenue from them. Russians get all arsy in Cold War and America is all "BRING IT BITCHES". Russia does not have a cycling economy thanks to communism and nobody likes them, so they lose all thier money.

America ends up richer.

I think that's a hideously vague version of what's going on.

1984 explains it well and gives a damn good argument to why War is the ultimate tool of supression and profit.

[Zabiela]

That didn't tell me much.. I wanna know HOW it does, because all it does is spend money.. But then again after WWII you see videos of people hula-hooping and jumping and cheering because we were out of recession and back on track.. How does that work?

Contracts.

Defense contractors (companies that make weapons/defense systems) profit enormously from war- they get jobs to make new things from the government, who has a bunch of "war money" to spend. These companies in turn give contracts to smaller companies, and all these companies hire people, and make money. These companies funnel the money into resources and energy etc...

The economy is just the literal flow of cash (correct me if im wrong). A depression is when that flow comes to a halt, rendering things valueless. Waging a war gets cash flowing in all sorts of places in a country- mostly in the industrial/defense sector.


Dwight Eisenhower famously warned the nation of this in his farewell address. Its clear our politicians didn't really listen or care. Since his day, govt spending on defense has increased, so has the spending on companies building cruise missles and fighter jets.
Iraq seems to have been the least effective war at boosting the economy, hurray!


-Banter said it well

[Dionysos]

...
1984 explains it well and gives a damn good argument to why War is the ultimate tool of supression and profit.

YES. Everyone should read it.

However, wars such as Iraq do not benefit the economy of a country like WW1 or WW2 did, partly because of the way globalisation has transformed economy, but mostly because Iraq is a comparatively small war.

[Major Banter]

Iraq was all about oil. Except we didn't steamroller then as we had expected. Now we're stuck there on a humanitarian mission, draining resources rather than harvesting them.

I personally support the current state of affairs more than the previous though.

[Zabiela]

Iraq was all about oil.

Oil! Now there is something about the economy that I don't understand.

If anyone cares to continue explaining things- how does war drive the price of oil?

With the random spiking at the pump last year, it feels like we're just at the whim of some fatcat making "predictions".
Now the price seems steady, so local papers have shut up about things, except we're warned of a spike this summer.

[Major Banter]

OPEC control oil entirely. Governments like to think they have a leash but that's talk. If OPEC want to charge more, they will. Simple as that.

An economy depends on oil, and if you've got fuckloads, you control every economy on the planet. Why do you thing Saudi is one of the richest places on the planet? They were the first oil drillers and are still going strong.

Without oil, you are nothing.

[Zabiela]

Sounds like it'll be a fun day when natural reserves run out.

[polycruncher]

You guys are bang on the money (har har). I would add that the central banks have fought tooth and nail to establish world-wide hegemony, and that nations are only the implements (though some more useful than others) to manifest their goal. It is interesting to realise that George Bush's grandfather help fund the Nazis during WWII, and that the elements of the corporate elite plotted to stage a fascist coup d'etat in the US. This might seem to wander away from the OP's question, but I wanted to illustrate how important manipulation of the financial system is, and how it can be used as a weapon to subdue nations and effect political, commercial and sociological change.

Ref:
http://www.guardian.co.uk/world/2004/sep/25/usa.secondworldwar
http://en.wikipedia.org/wiki/Business_Plot

[Dionysos]

Actually, though oil might have been a part of it I think the most important reason for Iraq is simply spending money on war, not for the benefit of the country's economy, but certain groups of corporations and investors. I don't think the people in the key positions were or are stupid enough not to understand that this is a war that can not be won in the way that has been (loosely) stated. That must mean it's not supposed to be won, right?

Check the video above, the resources will "run out" pretty suddenly and without much warning, which of course means a big crisis and lots of suffering.