Keynes did once say only half facetiously that the most direct route to spurring flagging demand would be to have gangs digging holes and then filling them back up. The Washington War Party has now apparently turned Keynes' aphorism into an extension of statecraft.
Still, it shows that in a faltering economy that has been ru
ined by decades of Keynesian policy, desperate politicians will go to any length to "print" more GDP. Indeed, they do so glibly---even if it clashes with the stated purpose of foreign policy. To hear Secretary Kerry tell it, you would think we were trying to dampen tensions in the Middle East on multiple fronts including easing the nuclear standoff with Iran, negotiating a solution to the Syrian carnage and generally reducing tensions along the Sunni/Shiite divide.
Accordingly, it is not exactly clear how supplying an entirely new air force (36 planes) comprised of highly lethal, advanced F-16 fighters to a nation on the verge of civil war fits into that equation. Indeed, if the F-16s stay in the hands of the current Shiite government in Baghdad, it is not clear what threat they guard against because the regime is on cozy terms with its sectarian brethren in Tehran.
In the alternative, if the al Qaeda insurrectionists--- who control Fallujah, Anbar province and much of the Sunni corridor in the Euphrates valley up into Syria---- manage to get their hands on them, surely another kind of hell would break loose.
Indeed, the lunacy of this F-16 transfer program merely illustrates a larger point. All of the DM economies are becoming desperate arms merchants. Defense procurement adds directly to GDP---even if orders are later subsidized through the back door of financial guarantees and below market credits.
Yet this madness does occasionally reach a point of absurdity as in the current French insistence on delivering two Mistral-class attack carriers to Russia. Presumably they will be home-ported in Putin's newly annexed port of Sevastopol in Crimea!
Once upon a time, American capitalism was healthy enough not to need the arms merchant business; and the nation had recoiled enough against the mis-begotten intervention in the Great War that Washington led a global disarmament campaign for the entire decade of the 1920s. That was before we had GDP accounts and before Keynes recanted his faith in free trade and gold-backed money.
In those benighted times, it seems, politicians didn't realize the possibilities attendant to destroying another nation's air force so that it could be re-created with brand new planes---perhaps on a serial basis.
From Tyler Durden at Zero Hedge
It seems like it was only yesterday when the US, under the guise of a fabricated WMD threat, was invading Iraq to liberate its oil deposits.
Fast forward to this week, when as Reuters reports, the US will deliver the first of 36 F-16 fighter jets to Iraq in what Baghdad's envoy to the United States called a "new chapter" in his country's ability to defend its vast borders with Iran and other neighbors.
Which merely shows that since the US has "sanctioned" virtually every other potential customer of US weapons, it now has no choice but to invoice defense machinery deliveries (and boost factory orders and GDP) to former enemies. It also means that in several years, when Iraq reverts to a posture that is unfriendly to the US, and when the US shale boom is long gone and foreign sources of petroleum are once again all the rage, the US will have to fight its own fighter jets in the name of yet another war of democratic liberation and emancipation.
Iraqi Ambassador Lukman Faily will travel to Lockheed's Fort Worth, Texas, plant on Thursday for a ceremony at which Lockheed and the U.S. government will formally deliver the first F-16 to Iraq.A group of three or four new jets will be ferried to Iraq before the end of the year.
"Iraq is a large country with over 3,600 km of borders, and we need to protect them," Faily told Reuters in a telephone interview. "We as a country didn't have that capability before." Iraq has had no real air force since the U.S.-led invasion in 2003 that eventually toppled Saddam Hussein.
Smart: first the US wipes out a country's air force, then it sells it its new air force. Rinse. Repeat. And just to make sure that Iraq is well-armed and believes it has a fighting chance, the US earlier in March provided Iraq with some 100 Hellfire missiles as well as assault rifles and other ammunition. Then in April the US sent more arms, providing Iraq with 11 million rounds of ammunition and other supplies....
Only Iraq is not dumb: the country knows it is only a matter of time before the resurgent Iraq airforce is considered a threat by the same US who is providing it, and knowing the winds of realpolitik are fickle, it is also aligning itself with Russia, the Czech Republic and others:
Baghdad has also signed military contracts with Russia and the Czech Republic, among others, and has said it will not be able to fully defend its airspace until 2020.
Iraq also plans to buy Boeing Co Apache helicopters and other weapons from the U.S. government as it assumes responsibility for its own defense and counterterrorism efforts. Faily said the U.S. government appreciated the urgency and scale of the challenge that Iraqi is facing given continued and mounting strife with insurgents.
"They know that the sooner and the wider capabilities they provide us, the more ability we will have to reduce the vicious cycle of killing where the terrorists are attacking our people," he said.
He probably is referring to the CIA-sponsored Afghani freedom fighters led by one Osama bin Laden who also, surprisingly, ended up turning on the US? But that doesn't matter for now. All that matters is that the US GDP building must go on:
Faily said Iraq was completing work on the air base in Balad where the new jets will be housed. He said some Iraqi pilots had already been trained to fly the new planes, and more were in training now. Iraq ordered a first batch of 18 F-16s in 2011 for $3 billion, followed by a second order of 18 jets in October 2012.
... With more GDP growth to come:
Lockheed said the Iraqi order would keep the F-16 production line running through late 2017, but it continues to bid for new orders in hopes of continuing production through 2020. The company has built more than 4,540 F-16 aircraft to date.