State's Bogus 'Iranian Threat'
- Yesterday we identified a permanent fiscal crisis
as one of the quadruple witching forces arising in
October 2017 which will shatter the global financial
bubble. Today the Donald is on the cusp of making
the crisis dramatically worse by decertifying the
Iranian nuke deal, thereby reinforcing another false
narrative that enables the $1 trillion Warfare State
to continue bleeding the nation's fiscal solvency.
In a word, the whole notion that Iran is a national
security threat and state sponsor of terrorism is
just as bogus as the Russian meddling story or the
claim that the chain of events resulting from
the coup d' etat fostered by Washington on the
streets of Kiev in February 2014 is evidence of
Russian expansionism and aggression.
Likewise, it's part of the same tissue of lies which
led to Washington's massive, destructive and
counterproductive interventions in Syria and Libya
-- when neither regime posed an iota of threat to
the safety and security of the American homeland.
To the contrary, all of these false narratives are
the cover stories which justify the Warfare State's
massive draw on the nation's broken finances. We
will get to the Big Lie about Iran momentarily, but
first it is useful to demonstrate just how
enormously excessive the nation's defense budget
actually is, and why the denizens of the Imperial
City---especially the neocon ideologues----find it
necessary to peddle such threadbare untruths.
Spoiler alert: Iran has actually never attacked a
single foreign nation in modern history whereas
Washington has chosen to unilaterally intervene in
or arm virtually every surrounding country in the
Here's some historical context that
dramatizes our point about Washington's hideously
excessive spending on defense. Back in 1962 on the
eve of the Cuban Missile Crisis, the US defense
budget was $52 billion, which would amount to $340
billion in today's (2017$) purchasing power.
Needless to say, the world came to the brink of
nuclear Armageddon at a time when the Soviet Union
was at the peak of its power and was armed to the
teeth. In addition to thousands of nuclear warheads
deliverable by missiles and bombers, it had 50,000
tanks facing NATO and nearly 4 million men under
The now open Soviet archives, of course, show that
the Soviets had far more bark than bite and never
conceived of attacking the US or even western
Europe; they didn't remotely have the wherewithal or
the strategic nerve.
Nevertheless, by 1962 false moves and
provocations by both sides had created a state of
"cold war" that was real. Yet even then, the $340
billion military budget was more than adequate to
deter the Soviet threat. Nor is that our view as
an armchair historian.
The 1962 defense budget was essentially President
Dwight D. Eisenhower's budget, and it is one that he
had drastically slashed from the $500 billion (in
today's dollars) he had inherited from Truman at the
end of the Korean War.
That is to say, the greatest general who ever led
American forces had concluded that $340 billion was
enough. And that came as he left office warning
about just the opposite----the danger that the
military/industrial complex would gain inordinate
political power and pursue foreign policies which
required ever larger military spending.
Unlike standard cold warriors, Ike believed that the
ultimate national security resource of America was a
healthy capitalist economy and that excessive
government debt was deeply inimical to that outcome.
That's why he balanced the Federal budget three
times during his tenure and presided over a fiscal
consolidation---thanks to sharply reduced defense
spending---that generated an average deficit of
hardly 1 percent of GDP. That's an outcome scarcely
imaginable at all in the present world.
Even then, the Soviet empire with all the captive
republics that have become independent nations since
1991 (e.g. Ukraine, Belarus, Kazakhstan etc.) had a
GDP in 1960 that was estimated to be 50 percent the
size of the US. So Ike's bet was that capitalist
growth over time was the ultimate source of national
strength; that a healthy domestic economy
would eventually leave the centralized
command-and-control Soviet economy in the dust; and
that ultimately the Kremlin's brand of statist
socialism and militarism would fail.
He was right. Russia today is a shadow of what
Ronald Reagan called the Evil Empire. Its GDP
of $1.3 trillion is smaller than that of the New
York metro area ($1.6 trillion) and
only 7 percent of total US GDP.
Moreover, unlike the militarized Soviet economy
which devoted upwards of 40 percent of output to
defense, the current Russian defense budget of $60
billion is just 4.5 percent of its vastly shrunken
So how in the world did the national security
apparatus convince the Donald that we need the $700
billion defense program for FY 2018----12X bigger
than Russia's---- that he just signed into law?
What we mean, of course, is how do you explain
that---- beyond the fact that the Donald knows
virtually nothing about national security policy and
history; and, to boot, is surrounded by generals who
have spent a lifetime scouring the earth for enemies
and threats to repel and reasons for more weapons
and bigger forces.
The real answer, however, is both simple and
consequential. To wit, the entire prosperity and
modus operandi of the Imperial City is based on a
panoply of "threats" that are vastly exaggerated or
even purely invented; they retain their currency by
virtue of endless repetition in the groupthink that
passes for analysis. We'd actually put it in the
category of cocktail party chatter.
For crying out loud. Why is Russia considered a
threat to the American homeland when it doesn't even
have a blue water navy or any other basis to project
offensive power to the North American continent?
Indeed, its "attack" fleet consists of a single,
40-year old smoke-belching aircraft carrier that
could never get out of the Mediterranean
bathtub ringed by overwhelming US forces.
Beyond conventional offensive power there is the
non-power of its 1500 or so deployable nuclear
warheads. Whatever you may think of Vlad Putin's
kleptomania and hard-edged suppression of internal
dissent, he is surely the "Cool Hand Luke" of the
modern world. Do you think he would be rash or
suicidal enough to threaten the US with nuclear
Or for that matter that Russia with its
pipsqueak $1.3 trillion GDP and limited military
capacity actually intends to invade and occupy
Europe, which has a GDP of $17 trillion and
sufficient military force---even without the
US----to make such a project unthinkable
so what if the Chinese want to waste money building
sand castles (i.e. man-made islands with military
uses)in the South China Sea. It's their
backyard---just as the Gulf of Mexico is ours.
Besides, the great Red Ponzi is utterly dependent
upon exporting $2 trillion per years of goods to the
US, Western Europe, Japan, South Korea etc. Without
those markets its massively
leveraged, speculation-ridden, malinvested bubble
economy would collapse in 6 months or less. So does
anyone really think that the PLA (People Liberation
Army) will be bombing 4,000 Wal-Marts in America any
The truth is, the US defense budget is hideously
oversized for a reason so obvious that it
constitutes the ultimate elephant in the room. No
matter how you slice it, there just are no real big
industrialized, high tech countries in the world
which can threaten the American homeland or even
have the slightest intention of doing so.
Indeed, to continue with our historical
benchmarks, the American homeland has not been so
immune to foreign military threat since WW II.
Yet during all those years of true peril, it never
spent close too the Donald's $700
For instance, during the height of LBJs Vietnam
folly (1968) defense spending in today's dollars was
about $400 billion. And even at the top of Reagan's
utterly unnecessary military building up (by the
1980s the Soviet Union was collapsing under the
weight of its own socialist dystopia), total US
defense spending was just $550 billion.
That gets us to the bogus Iranian threat. It
originated in the early 1990s when the neocon's in
the George HW Bush Administration realized that with
the cold war's end, the Warfare State was in grave
danger of massive demobilization like the US had
done after every war until 1945.
So among many other invented two-bit threats, the
Iranian regime was demonized in order to keep the
Imperial City in thrall to its purported
national security threat and in support of the vast
global armada of military forces, bases and
occupations needed to contain it (including the
Fifth Fleet in the Persian Gulf and US bases
throughout the region).
The truth, however, is that according to the 2008
NIE ( National Intelligence Estimates) of the
nation's 17 intelligence agency, the Iranian's never
had a serious nuclear weapons program, and the small
research effort that they did have was disbanded by
orders of the Ayatollah Khamenei in 2003.
Likewise, what the Imperial City claims to be state
sponsored terror is actually nothing more than
Iran's foreign policy---something that every
sovereign state on the planet is permitted to have.
Thus, as the leader of the minority Shiite schism of
the Islamic world, Iran has made political and
confessional allliances with various Shiite regimes
in the region. These include the
one that Washington actually installed in
Bagdad; the Alawite/Shitte regime in Syria; the
largest political party and representative of 40
percent of the population in Lebanon(Hezbollah); and
the Houthi/Shitte of Yemen, who historically
occupied the northern parts of the country and are
now under savage attack by American weapons supplied
to Saud Arabia.
In the case of both Syria and Iraq, their respective
governments invited Iranian help, which is also
their prerogative as sovereign nations. Ironically,
it was the Shiite Crescent alliance of
Iran/Assad/Hezbollah that bears much of the credit
for defeating ISIS on the ground in Mosul, Aleppo,
Raqqa, Deir ez-Zor and elsewhere in the now largely
defunct Islamic State.
In tomorrow's installment we will address the
details of the Iran nuke agreement and why the
Donald is making a horrible mistake in proposing to
decertify it. But there should be no doubt about the
consequence: It will reinforce the neocon dominance
of the Republican party and insure that the
nation's $1 trillion Warfare State remains fully
Needless to say, that will also insure that the
America's gathering fiscal crisis will turn into an
outright Fiscal Calamity in the years just ahead.
David Stockman's Contra Corner.