The Bankrupt Power
Safar 18, 1432 A.H, Sunday, January 23, 2011
In the name of Allah, the Most Gracious and the Most Merciful.
Today America is bankrupt. It can no longer finance and control the world. The richest country of the world is the most debt-ridden country of the world. The super power that once used to give loans to others is today drowned overhead with debts—about $ 14 trillion, which it can’t pay. What a good saying, “As you sow, so shall you reap.” America faced bankruptcy and deficiency because of its negligence and arrogance.
If we look at the past, we can see that when Bill Clinton was vacating office for George Bush in 2000, there was a surplus of $300 billion in the treasury. When Bush turned to spending astronomical amounts both at the military and financial fronts following the 9/11, the surplus became deficit. In the first two years, the surpluses of $300 billion were spent. In the following two years it rose to 600 billion dollars. In the next two years, the debt was $ 900 billion. In 2009, it went up to $1.2 trillion. Today it is nearly $ 1.7 trillion, being unprecedented in the history of America.
This has forced America to borrow more money and to revamp its debilitating economy. It did so, taking heavy debts from Japan, China, Saudi Arabia and other gulf countries. In the first term of Bush, the debt reached $7.6 trillion. But in his second reign, it rose to $ 10.6 trillion. Today it stands at $ 14.02 trillion. More than half of the present debts occurred in the past six years, when Iraq and Afghanistan wars were at their heights. If we spread the debts over the American population, every American has borrowed approximately $45,300.
Regional analysts say, America must spend $1.3 trillion more than its revenues in the current year. Because budget deficit is increasing by $400 billion per day, it brings America to the verge of sinking with the passage of each day.
It means America has to borrow 40 cents of every dollar that she spends. On January 15, the finance secretary said that this was unprecedented in the history of America. The irony is that the two major parties blame each other for the crisis. Congress is compelled to either remove the legal limitation on debt to give free hand to the government to borrow more money, or to bring great cut in expenditure. But whatever step they may take, it will not make any difference. In war times, debts usually increase but not to the extent that the former President Bush was responsible for. He bankrupted the state and left it to Obama in that dilapidated condition.
The trouble is that an interest of $6 trillion dollar is added to the debt of $14 trillion. The actual interest is$ 900 billion but for some reasons it rises to $600 trillion i.e.
A. Since the government can’t pay it back, therefore the interest multiplies.
B. The lenders (states, companies, banks, individuals etc.) raise interest rates.
C. The government has lost its credibility against the lenders and is imposing its self-made regulations.
D. The government keeps the military expenditure and budget both on its high level. Therefore both of the wars are supported by loan.
The Pentagon’s budget is $717 billion for 2011. An additional amount of $200 billion is allocated for war in Afghanistan and Iraq and the so called “War on Terror”.
The Soviet Union is dead now. The Warsaw Pact is buried. So why is she (America) destroying the world? Why did she waste her 6,000 soldiers in vain and $3 trillion over-spending? Why all this?
The war in Afghanistan and Iraq has left behind three main questions unsolved:
1. Would America have lost so much, if Bush had not been made the President?
2. Would America not be in debt to that extent, again if Bush had not been the president?
3. Would America not see the crisis so heavily if he had not been at the helms of affairs?
All the answers could be but only in the negative. Attacks over Afghanistan and Iraq affected the stocks market. Companies were damaged and bankrupted. In 2007-2008, a great regional crisis started. This ushered in financial and commercial deficit-- the immediate affect being on the housing and mortgage sector. The economy melted down, growing debts followed. Dollars were printed without any support, dwindling its value and increasing the inflation and financial deficit. Large companies touched the peak of the crisis, compelling the government to save them from bankruptcy by giving them billions of dollars. It encircled America like a chain and is difficult for her to get rid of.
The former Soviet Union would not transcend to admit that the Afghan war was bringing them to knees. In the same way the America is not ready to accept this bitter reality that the main cause behind the crisis is the Afghan war.
How and when can America get rid of the current $14.02 trillion? The answer is ambiguous. We can say that it is a back- breaking and irreversible crisis, swallowing America day by day. Can’t we say that this hurricane is just like the strong waves of the Red sea, which engulfed the Pharaoh, putting him stayed in their embrace for ever?
The Islamic Emirate Of Afghanistan