Monthly Archives: July 2014

$18 Trillion

“The federal government’s total debt is approaching $18 trillion. Its operating deficit was more than $1 trillion in each of the years 2009-12 and $680 billion in 2013. These numbers are too immense and unfamiliar to be useful. (A trillion is not yet even a standard measure—it means a thousand times a billion in the United States and a million times a billion in much of Europe.) Christopher DeMuth

Our Democratic Debt

Christopher DeMuth, National Review, July 21, 2014, p. 28, 29

Content imageThe federal government’s total debt is approaching $18 trillion. Its operating deficit was more than $1 trillion in each of the years 2009–12 and $680 billion in 2013. These numbers are too immense and unfamiliar to be useful. (A trillion is not yet even a standard measure—it means a thousand times a billion in the United States and a million times a billion in much of Europe.) Better to convert them to portions of the economy and government, so that the current debt is 103 percent of U.S. gross domestic product and the 2013 deficit was 4 percent of GDPand 20 percent of federal spending. These ratios put the dollar figures in perspective. The GDP ratio shows the burden of the debt (a larger economy can afford to borrow more, just as a higher-income family can afford a larger home mortgage), and the spending ratio shows how much of our government we are declining to pay for with our taxes. And they facilitate comparisons over time (effectively adjusting for inflation) and across nations with larger and smaller economies. But ratios are still just numbers: They need interpretation to tell us what they mean for our personal circumstances and those of our government.

We are not getting much help from public officials and policy experts, whose interpretations tend to be abstract and amorphous. The consensus formulation, embraced by President Obama, Speaker of the House Boehner, and the Congressional Budget Office, among many others, is that our current debt and deficits are “unsustainable.” This suggests that they are tolerable for the time being but will need to be reduced by some degree sometime in the future. Such a judgment has the advantage of sounding responsible and admonitory while suiting the short time horizons of democratic politicians and their preoccupation with immediate electoral exigencies.

And they have a point: Why not kick this can down the road? Experts have been warning for decades that our debt and deficits are unsustainable, yet here we are today, out and about and being sustained by an economy and government that continue to chug along even though the debt is bigger than ever. The only debt crises most of us have noticed have been the periodic impasses between the president and Congress over the debt ceiling—the statutory mechanism for enforcing Congress’s second enumerated power (Article I, Section 8 of the Constitution), which is to “borrow money on the credit of the United States.” Recurring annual deficits have obliged the Treasury Department to ask Congress to raise the ceiling a dozen times since 2000, and Congress is always reluctant to recognize the gap between spending and tax revenues that its policies have created. The most recent stand-offs threatened, in July 2011, default on U.S. debt service payments or drastic cuts in government spending, and then produced a two-week government shutdown in October 2013. But Congress invariably resolves these crises by raising the ceiling to make room for additional borrowing, whereupon everyone sighs in relief and gets back to business.

A somewhat edgier formulation of our fiscal situation is that debt and deficits are “robbing our grandchildren.” This is Speaker Boehner’s position today, and it was President Obama’s position when, as a senator, he opposed President Bush’s proposed debt-ceiling increase in 2006—but Obama renounced it when campaigning for his own increase in 2011. It seems to be the position of the opposition party—an attempt to use moral suasion when practical forms of persuasion are unavailable. I think there is much truth in the expression but that it is too broad and rhetorical. When a city sells revenue bonds to finance highway or airport improvements, is it robbing from future generations? The “greatest generation” of Americans that fought and won World War II borrowed hundreds of billions of dollars to do so; was it robbing from the future or securing the future? Continue reading

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Children at the Border

“This crisis [Central American children] was born of American self-indulgence.” Mary Anastasia O’Grady

“Venezuela, under Hugo Chavez, began facilitating the movement of cocaine from producing countries in the Andes to the U.S., also via Central America.” Ibid

What Really Drove the Children North

Our appetite for drugs caused the violence that made life unbearable in much of Central America.

Mary Anastasia O’Grady, The Wall Street Journal, July 21, 2014, p. A 11
children_on_borderIn a nation where it is not uncommon to hear the other side of the Rio Grande referred to as “South America,” it is amusing to observe the recent wave of self-anointed experts in the U.S. opining authoritatively on the causes of child migration from Central America.

Some of these are talking heads of conservative punditry who seem to know zip about the region and show no interest in learning. They wing it, presumably because they believe their viewers and listeners will never know the truth and don’t care. What matters is proving that the large number of unaccompanied minors piling up at the border is President Obama’s fault for somehow signaling that they would not be turned back. The origins of the problem are deemed unimportant and the fate of the children gets even less attention.

Thank heaven for four-star Marine Corps Gen. John Kelly, who knows something about war and failed states and now heads the U.S. military’s Southern Command, which keeps an eye on the region. He has spent time studying the issue and is speaking up. Conservatives may not like his conclusions, in which the U.S. bears significant responsibility, but it is hard to accuse a four-star of a “blame America first” attitude.

To make the “Obama did it” hypothesis work, it is necessary to defeat the claim that the migrants are fleeing intolerable violence. This has given rise to the oft-repeated line that “those countries” have always been very violent.

That is patently untrue. Central America is significantly more dangerous than it was before it became a magnet for rich and powerful drug capos. Back in the early 1990s, drugs from South America flowed through the Caribbean to the U.S. Continue reading

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Gordon College

“When D. Michael Lindsey, the president of a well-known Christian college in Wenham, Mass., called Gordon College, signed a letter to President Barack Obama with 13 other religious leaders on July 1, he can’t have known what he was getting into.” David Skeel

The Next Religious Liberty Case

After Hobby Lobby, a Christian college asked for a different kind of exemption. Then came the backlash.

David Skeel, The Wall Street Journal, July 18, 2014, p. A9

BN-DT107_edp071_G_20140717180127When D. Michael Lindsey, the president of a well-known Christian college in Wenham, Mass., called Gordon College, signed a letter to President Barack Obama with 13 other religious leaders on July 1, he can’t have known what he was getting into.

The letter urged the president to exempt religious groups from an executive order that will bar the government from contracting with organizations that discriminate on the basis of sexual orientation or gender identity. A week earlier, numerous other religious leaders—including many college presidents—had sent a similar letter.

But that was before the Supreme Court’s sharply divided Hobby Lobby decision holding that the Affordable Care Act’s contraception mandate violated the religious-freedom rights of several for-profit corporations. Now it seems Gordon College has stirred up another big religious-freedom controversy.

The Obama administration announced its intention to issue the nondiscrimination order several weeks before the Hobby L obby decision, after the House failed to pass the Employment Non-Discrimination Act, which would prohibit sexual orientation or gender identity discrimination in all employment contexts.

But the administration was waiting to see how the court would rule in Hobby Lobby. Though the decision did not involve sexual orientation, and for-profit corporations are not the focus of the executive order, Hobby Lobby might provide clues about the scope of religious freedom. But the Hobby Lobbymajority carefully sidestepped the issue, emphasizing that the ruling applied only to a few forms of contraception at issue in the case.

Despite its silence on sexual orientation, Hobby Lobb y‘s vindication of religious-freedom rights emboldened the leaders to send their letter. “We must find a way,” they wrote, “to respect diversity of opinion on [sexual orientation and gender identify issues] in a way that respects the dignity of all parties to the best of our ability.” Continue reading

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