Last week, the U.S. Secretary of Defense Robert Gates asked Congress toappropriate $190 billion in new money for 2008, to fund the wars in Iraq,and Afghanistan, $42 billion more than anticipated. Senator Robert Byrdpointed out that this would put the cost of the American invasion of Iraqabove $600 billion. It is hard to imagine money more misspent.

The Iraq war has gone on for longer than the First World War, and no endis in sight. Though it is opposed by the Bush administration, the U.S.Senate has approved a bill that would partition Iraq into three states(Kurd, Shiite, and Sunni) supposedly to reduce chaos, and in the hope offacilitating the U.S. withdrawal. In other words, American Senators thinkthe imperial power should get to draw the map, just as the British didwhen it decided the borders of what is today Iraq.

The descent of the U.S. from its position of unquestioned dominance ofworld affairs has picked up speed. From the fall of Saigon to thecatastrophic failure in Iraq, the tendency has been unmistakable. The U.S.acts to protect its privileges as world leader, and American mistakes andexcesses promote the very decline it works to reverse.

In an interview around his recently released memoirs, the ultimateWashington and Republican insider, former Federal Reserve Chairman AlanGreenspan let drop that the Iraq invasion was all about oil. So, thebudget allocations of over $600 billion were not about fighting terrorismas Secretary Gates pretended to Congress; the money was actually spent onwhat most of the world has known the war was about from the beginning:blood for oil.

The Independent reports that the Iraq dictator Saddam Hussein could havebeen bought off for a mere $1 billion, eliminating the need for theinvasion to remove him in the first place.

The decline of the American empire can be seen in the daily life ofAmericans. Some 10 per cent of the population goes hungry regularly. Of the20 industrialized nations, in the 1980s the increase in purchasing powerof the working population was lowest in the U.S., in the 1990s, itaveraged 0.1 per cent—U.S. workers work more hours and have less vacationthan workers in other industrialized nations.

On issues such as adult literacy, child mortality, access to healthservices, the U.S. ranks outside the top forty nations surveyed by the U.N.Meanwhile there is $600 billion for war against Iraq.

For pregnant woman in the U.S., the principal cause of death is murder.The current American president was elected in 2000 by electoral fraud inthe state of Florida, and in 2004 by fraud in Ohio. A majority ofAmericans do not vote.

The arena of international finance is where the U.S. decline is the mosttelling. The ability to buy abroad, and pay with its own money is whatsets the U.S., as the world power, apart from other nations. But, the openline of credit granted to Americans by the rest of the world is nowbecoming more expensive, because the value of the U.S. dollar is fallingagainst major currencies. As the value of the dollar plummets, interest onforeign loans goes up, and investments abroad become more expensive.

The bundling of doubtful (sub-prime) mortgage loans, and their sale onglobal markets as securities, by leading U.S. financial institutions, hasset off a crisis of international confidence with serious repercussionsfor the U.S. economy. To offset the damage, the U.S. Federal Reserve easeddomestic credit. But, reducing domestic interest rates, simply transfersdomestic economic weakness over to the external weakness of the U.S.dollar hastening the international decline of the U.S.

A lower U.S. dollar is an effective form of U.S. protectionism. Canadaresorted to the same strategy in the mid-1990s, following the failure offree trade to ignite a manufacturing boom as predicted by its supporters.Low domestic interest rates favour consumer borrowing, not the ability offinancial institutions to rebuild their balance sheets. If financialuncertainty persists, interest rates will go up to strengthen U.S. banksand the dollar.

The weak U.S. dollar is simultaneously a cause and a consequence of U.S.decline. Ending the Iraq war will likely require an international coalitionof the willing, to tell the next U.S. administration that it must get out,and an American president ready to listen. Beginning an era of wiseinvestment, to replace decades of wasteful military spending, will takemuch more than a change of government. It will require acknowledgment thatthe U.S. has to choose between being a democracy, and running an empire.

Duncan Cameron

Duncan Cameron

Born in Victoria B.C. in 1944, Duncan now lives in Vancouver. Following graduation from the University of Alberta he joined the Department of Finance (Ottawa) in 1966 and was financial advisor to the...