Adnan Khan, Economics Correspondent

Capitalism's ability to continually plunge into crisis raises the spectre that the free economy works only with the leg-up provided by the state.

In early August the US Congress approved a new $460 bn defence budget with the full support of the Democrats by a vote of 395 to 13. The US military budget is now larger than the military budgets of the next fourteen biggest spenders combined, and over eight times larger than the second largest military spender, China.

The budget did not include nuclear weapons research, maintenance or production, which is in the Department of Energy budget, nor does it include the wars in Iraq and Afghanistan which are largely funded through extra-budgetary supplements, which in 2007 amounted to $120 bn. So in reality the total US defence budget is closer to $680 billion out of a total federal budget of $2.9 trillion. The department of defence will spend most of US taxpayer's money then any other department, even more then the department of social security.

America recently expressed its intention to establish long-term military bases in Iraq. On a visit to Honolulu on May 31, Robert Gates, the defence secretary, said that America was looking for a "long and enduring presence", under an arrangement with the Iraq government. "The Korea model is one, the security relationship we have with Japan is another," he said. American troops have been in South Korea since the end of the Korean War and in Japan since 1945. In the first week of June White House spokesman Tony Snow confirmed that President Bush wanted a lengthy troop presence in Iraq. "The situation in Iraq, and indeed, the larger war on terror, are things that are going to take a long time," he said.

The G8 summit held between the 5th and 8th June in Heiligendamm, Germany, comprised the world’s most powerful nations.  This year’s G8 summit attracted more attention than previous summits due to the number of pre-summit meetings, discussions and speeches made by the representative heads of states. UK Prime Minister, Tony Blair’s, grand finale tour of Africa included the messages he has reiterated for the last two years of ‘putting Africa on the agenda’ ‘keep promises to Africa’ and ‘put Africa on the map’ however Britain has been at the forefront of derailing the 2005 Gleneagles deal on debt relief and aid to Africa. Germany’s Angela Merkel weighed in with her bit for Africa at a G8 preparatory meeting by criticizing China’s programme of economic support for Africa mentioning ‘the plan could bring a return of the debt woes that have plagued the continent in the past.’