Obama owns the debt now

The debt is up about 60% since Obama took office. This can't go on forever.

http://www.usatoday.com/story/opinion/2013/01/14/debt-deficit-obama-congress/1830363/

President Obama, the Democrats, and plenty of Republicans in Congress, would like it if you'd spend the next few weeks talking about gun control. That's because when you are, you're not talking about the country's financial situation.

And, as the graph included here, taken from OMB budget data, illustrates, the situation is dire. Spending keeps going up. Revenues, however, are not. And, since we're borrowing the difference, President Obama has what Politico is calling a debt problem: "The staggering national debt — up about 60% from the $10 trillion Obama inherited when he took office in January 2009 — is the single biggest blemish on Obama's record, even if the rapid descent into red began under President George W. Bush. Obama has long emphasized Bush's role in digging the immense hole. But he owns it now."

Chart showing federal government outlays and receipts from 1999 to 2012.(Photo: Reason Magazine)

Well, things did start to go south under Bush. But look at that graph more closely. In 2003, when we invaded Iraq (one of those "two wars on the credit card" that Obama likes to blame for the debt), and when we passed the Bush tax cuts (the other thing Obama likes to blame for the debt) revenue actually started to climb. The revenue and spending lines start to converge, and, as they head up to 2006 it actually looks as if the two might cross, with revenue outpacing spending.

Even the New York Times noticed, spotting unexpected increases in revenue in 2005, and in 2006 noting that a "surprising" increase in tax revenues was closing the budget gap. The heady possibility of surpluses was in the air. But -- look at the graph again -- everything changes in 2007.

What happened in 2007? The financial crisis hadn't struck yet. But we did elect a new Democratic Congress, with Democrats controlling both houses for the first time in over a decade. The trend immediately reversed, and became much worse with President Obama's election in 2008 and inauguration in 2009. (In fact, despite talk of "wars on the credit card," we could save a lot of money by cutting defense spending back to where it was in 2007.)

So does that mean that the ballooning debt is all Obama's fault? No. Most of those spending bills got Republican votes, too. But it does mean that, as Politico notes, Obama now owns the 60% increase in the debt that has occurred on his watch, and can no longer credibly blame Bush (under whom plenty of Democrats voted for spending bills).

Economist Herbert Stein observed that something that can't go on forever, won't. The United States can't go on forever increasing its debt by 60% every four years. Therefore, it won't. The only question is how things will stop -- smoothly or catastrophically.

As we head into the next debt-ceiling debate, it's worth considering these words from a patriotic senator concerned with America's future:

"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. . . . It is a sign that the U.S. government can't pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government's reckless fiscal policies. … Leadership means that 'the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America's debt limit."

The senator? Sen. Barack Obama, in 2006.

I wish that guy was President now.

Glenn Harlan Reynolds is a professor of law at the University of Tennessee.

http://www.nationalreview.com/articles/337578/our-sort-war-terror-victor-davis-hanson

Either by design or through incompetence, the Obama administration’s war on terror has become indefinable. In fact, to the degree that there are identifiable policies, they seem either internally contradictory or at odds with other administration policies.

THE INHERITED PROTOCOLSWhat is the current Obama position on the so-called Bush-era war-on-terror protocols? Are they still useful in stopping terrorists, irrelevant, toxic, or sort of all three? The administration has never given us an explanation of its attitude toward the continued operation of Guantanamo Bay, the use of military tribunals, the exact status of renditions, the use of preventive detention, and the employment of the Patriot Act, especially wiretaps and intercepts.

To the extent that anyone could define the present anti-terrorism policy, it might be paraphrased along the following lines: “We rejected these protocols when, as outside critics, there was partisan advantage in doing so. But after assuming office, we found them useful, embraced most of them and even expanded some, preferred to ignore that about-face, assumed that the global and the domestic Left would not object any longer — given that their opposition was more to Bush than to his policies per se — and wish to continue these measures even as we keep quiet about them.”

THE EUPHEMISM WARSimultaneously with the flip-flop over the Bush inheritance, the administration also waged an ancillary war of euphemism. Jihad was not to be defined as an Islamist holy war against the West, but was to be officially regarded as a sort of Deepak Chopra personal struggle to achieve spiritual purity. The words Islamist and Islamism fell out of use. “The War on Terror” was rightly derided as a war against a tactic, but the phrase was wrongly not replaced with a more honest and accurate “War on radical Islamists, jihadists, and Salafists.” Absurdities, like “overseas contingency operations” and “man-caused disasters,” followed and yet were not seriously employed for more than a week even by those who coined them. According to the Department of Defense, “workplace violence” best explained Major Hasan’s butchery of 13 of his fellow soldiers at Ford Hood — an act whose real significance was the possible harm to the military’s vaunted diversity program.

Eric Holder pontificated about trying Khalid Sheikh Mohammed as a civilian in a New York federal court but then, given the popular outrage, quietly tabled that foolhardy idea. Support for the proposed Ground Zero mosque was likewise supposed to offer proof of administration outreach to Muslims, and likewise backfired. There was talk of ensuringMiranda rights for foiled foreign terrorist suspects — and then that too was quietly dropped. There were also loud threats of trying former CIA interrogators for their supposed use of torture — and then that was too quietly tabled. Apparently, the point of these missteps had been to placate possible liberal critics by painting a civil-libertarian veneer over the substantial continuation of the Bush war on terror. Or was there any idea at all, as policies were as haphazardly proposed as they were dropped and forgotten?

THE DRONE KILLINGSFrom 2005 to 2008 the U.S. may have killed between 200 and 700 enemy combatants or suspected terrorists through some 50 or so strikes by pilotless drones. Originally, the program was either used in close support of U.S. troops fighting in Iraq or Afghanistan — drones being more or less equivalent to manned bombing missions or missile or mortar strikes — or employed against suspected al-Qaeda terrorists on the Afghanistan-Pakistan border. Such strikes were, nonetheless, often criticized by the Left as leaving the theater of war and entering the realm of contract assassination.

Yet in the first four years of the Obama administration, the program was vastly expanded, as the kill tally soared to between 2,500 and 3,000 from some 300 or so strikes. Indeed, although the wars in both Afghanistan and Iraq were supposedly winding down, the Obama administration probably killed more suspects by drone in its first year than had the Bush administration in its entire eight-year tenure. Even more important than the vastly greater frequency, Obama brought some new dimensions to the drone attacks : 1) The targeted killings were used far distant from ongoing warfronts and well apart from support for ground troops, as the U.S. now blew apart suspects — including American citizens — as far away as Yemen and the Horn of Africa. A Predator was no longer analogous to a pilotless F-16 used against enemy forces in the field, but more a sort of super-telescopic assassination rifle aimed, in Cold War–era style, against suspected individual enemy agents. 2) The program was institutionalized, on the theory that the Left would not dare object and thereby endanger the Obama domestic agenda. (The Right, it was assumed, would keep quiet, content at least that the judge, jury, and executioner Predators were putting some fear into jihadists as we withdrew from the Middle East.) So much a part of the American political scene have Predator drones become that Obama off-handedly joked about using them against any potential suitors of his two daughters. (Imagine, a decade ago, George W. Bush joking about such lethal forces keeping young men away from his daughters.) We would read in addition, through timely leaks from administration aides, that Obama sought philosophical guidance from moralists like St. Augustine and St. Thomas Aquinas before he signed off on the next suspect to be blown up. Such agonizing apparently meant that an intellectual rather than a redneck was pulling the trigger. The result is that few now remember that the United States used to object vehemently to the Israelis’ use of the same tactic of airborne targeted assassination against Palestinian terrorists in the West Bank.

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Israel’s Shortsighted Assassination

http://www.nytimes.com/2012/11/17/opinion/israels-shortsighted-assassination.html

AHMED AL-JABARI — the strongman of Hamas, the head of its military wing, the man responsible for the abduction of the Israeli soldier Gilad Shalit — was assassinated on Wednesday by Israeli missiles.

Why? Israel’s government has declared that the aim of the current strikes against Gaza is to rebuild deterrence so that no rockets will be fired on Israel. Israel’s targeted killings of Hamas leaders in the past sent the Hamas leadership underground and prevented rocket attacks on Israel temporarily. According to Israeli leaders, deterrence will be achieved once again by targeting and killing military and political leaders in Gaza and hitting hard at Hamas’s military infrastructure. But this policy has never been effective in the long term, even when the founder and spiritual leader of Hamas, Sheik Ahmed Yassin, was killed by Israel. Hamas didn’t lay down its guns then, and it won’t stop firing rockets at Israel now without a cease-fire agreement.

When we were negotiating with Hamas to release Mr. Shalit, members of the Israeli team believed that Mr. Jabari wouldn’t make a deal because holding Mr. Shalit was a kind of “life insurance policy.” As long as Mr. Jabari held Mr. Shalit, Israelis believed, the Hamas leader knew he was safe. The Israeli government had a freer hand to kill Mr. Jabari after Mr. Shalit was released in October 2011. His insurance policy was linked to their assessment of the value of keeping him alive. This week, that policy expired.

I believe that Israel made a grave and irresponsible strategic error by deciding to kill Mr. Jabari. No, Mr. Jabari was not a man of peace; he didn’t believe in peace with Israel and refused to have any direct contact with Israeli leaders and even nonofficials like me. My indirect dealings with Mr. Jabari were handled through my Hamas counterpart, Ghazi Hamad, the deputy foreign minister of Hamas, who had received Mr. Jabari’s authorization to deal directly with me. Since Mr. Jabari took over the military wing of Hamas, the only Israeli who spoke with him directly was Mr. Shalit, who was escorted out of Gaza by Mr. Jabari himself. (It is important to recall that Mr. Jabari not only abducted Mr. Shalit, but he also kept him alive and ensured that he was cared for during his captivity.)

Passing messages between the two sides, I was able to learn firsthand that Mr. Jabari wasn’t just interested in a long-term cease-fire; he was also the person responsible for enforcing previous cease-fire understandings brokered by the Egyptian intelligence agency. Mr. Jabari enforced those cease-fires only after confirming that Israel was prepared to stop its attacks on Gaza. On the morning that he was killed, Mr. Jabari received a draft proposal for an extended cease-fire with Israel, including mechanisms that would verify intentions and ensure compliance. This draft was agreed upon by me and Hamas’s deputy foreign minister, Mr. Hamad, when we met last week in Egypt.

The goal was to move beyond the patterns of the past. For years, it has been the same story: Israeli intelligence discovers information about an impending terrorist attack from Gaza. The Israeli Army takes pre-emptive action with an airstrike against the suspected terror cells, which are often made up of fighters from groups like Islamic Jihad, the Popular Resistance Committees or Salafi groups not under Hamas’s control but functioning within its territory. These cells launch rockets into Israeli towns near Gaza, and they often miss their targets. The Israeli Air Force responds swiftly. The typical result is between 10 and 25 casualties in Gaza, zero casualties in Israel and huge amounts of property damage on both sides.

Other key Hamas leaders and members of the Shura Council, its senior decision-making body, supported a new cease-fire effort because they, like Mr. Jabari, understood the futility of successive rocket attacks against Israel that left no real damage on Israel and dozens of casualties in Gaza. Mr. Jabari was not prepared to give up the strategy of “resistance,” meaning fighting Israel, but he saw the need for a new strategy and was prepared to agree to a long-term cease-fire.

Gershon Baskin is a co-chairman of the Israel Palestine Center for Research and Information, a columnist for The Jerusalem Post and the initiator and negotiator of the secret back channel for the release of Gilad Shalit.

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Sheikh Yassin and Rantissi are the most significant militant figures to have been killed by Israel since the outbreak of the intifada.

Both escaped earlier attempts on their lives by the Israeli armed forces, but both became victims of missile strikes.

The assassinations provoked condemnation from Arab and European countries while each time the US called for all sides to remain calm.

Hamas warned that the September 2003 attempt on Sheikh Yassin would open "the gates of hell". though Israeli Prime Minister Ariel Sharon remained defiant, saying that Hamas leaders were all "marked for death".

http://news.bbc.co.uk/2/hi/middle_east/3556809.stm

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http://www.nytimes.com/roomfordebate/2012/11/14/how-can-targeted-killings-be-justified

• The Rule of Proportionality

  ALAN M. DERSHOWITZ, AUTHOR, "THE TRIALS OF ZION"
  Assassination will often be the least bad alternative in an inevitable choice of evils.
• 

  Lawful Versus Wise Policy

  GEORGE BISHARAT, LAW PROFESSOR
  Decades of Israeli assassinations of Palestinian leaders have produced only more opposition to Israeli policies.
• 

  Transparency and Accountability

  MICAH ZENKO, COUNCIL ON FOREIGN RELATIONS
  The U.S. has conducted targeted killings in nonbattlefield settings and refused to provide even the minimal amount of information to determine justification.
• 

  A Carefully Calibrated Attack

  JESSICA SNAPPER, SECURITY ANALYST
  Critics refer to assassinations as “unethical,” but the only unethical action you can take in warfare is the failure to act in the best interest of your people.
• 

  Precision Saves Lives

  GEORGE JONAS, AUTHOR, "VENGEANCE"
  Some think killing a nameless enemy is an act of war but targeted assassination is murder. They’re mistaken.
  
  

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Both Left and Right assumed, apparently rightly, that more bad guys were being eliminated than innocents, and the pilotless missions allowed the public a general sense that we were doing something about terrorists while not risking our soldiers in the process — and most certainly not capturing enemy combatants, interrogating them, and adding to the tally inside the politically incorrect Guantanamo. For the global media, the fact that the president turned to philosophy in his angst over killing record numbers, that former Guantanamo critic and Yale Law dean Harold Koh often signed off on the legality of such assassinations, and that it was not George Bush who authorized them, made the kill missions politically correct.

STRATEGIC INCOHERENCEThere is no coherent strategy for reducing Middle Eastern support for radical Islam, for promoting U.S.-friendly regimes, and for fostering human rights and consensual government. Iraq is no longer the bad war and Afghanistan the good one we took our eye off; instead, we exited the former and will the latter regardless of the situation on the ground — on the rough premise that Bush started them, and Obama finished them, and that is all ye need to know.

To this day, no one in the administration can define “lead from behind” in the Libyan context. No one can explain what happened in Benghazi. And no one can summarize what is going on at present in Libya — or whether such an interventionist model is a blueprint for any future action elsewhere. When in 2009 Iranians hit the streets in protest against the mullahs’ theocracy, the administration went mum. Bashar Assad was first a “reformer” who might help to unlock the Israeli-Palestinian impasse, then a psychopath who was on the eve of getting the same just deserts from NATO as did Moammar Qaddafi, then someone who should be left alone to kill 60,000 of his own, then a run-of-the-mill thug not much worse, or better, than the motley groups seeking to dethrone him.

All we can say about the administration’s approach to democratic Israel between 2009 and 2013 is that our present coolness is still far warmer than Obama would have wished — as post-election realities and appointments will probably soon make clear. The administration had no consistent position on the Arab Spring other than that the elected anti-American Islamist totalitarians almost seem to be preferable to the odious pro-American dictatorships they are replacing — but how and why is left unsaid. The cost of nation-building has been replaced by the economy of assassination — as the idealist Bush, with his speeches on freedom, gave way to the cynical Obama, with his private musings about who’s next on the Predator list.

As far as weaning ourselves off oil goes, the administration either ignored or opposed horizontal drilling and fracking, the only sure way to achieve political independence from the Middle East in the foreseeable future. To the degree that we are now more energy independent — so far mostly a private initiative on private lands — it is despite, not because of, Obama’s record on energy. Our $5 trillion in new debt will curtail our military options, but it is a mystery whether the administration laments that its huge serial deficits demand commensurate cuts in defense, or whether the latter all along was a desired result of the former.

Foreign policy often proves ironic. Sometimes chaos and confusion have their place. By posing as a post-national Nobel laureate, by promulgating all sorts of politically correct bromides, and by serially trashing the unpopular George Bush, Barack Obama found that he could do almost anything he wished, from eliminating hundreds of Taliban and other assorted suspected terrorists to killing bin Laden. Blowing up a suspect terrorist and any bystanders is now a moral act, whereas waterboarding three confessed terrorists was deemed immoral. The best that can be said for the Obama record is that if we are confused by it, then so must be our enemies.

As a final footnote, a common denominator to the simultaneous embrace and cheap public criticism of the Bush protocols, to the euphemisms, and to the expansion of the drone program has been the role of John Brennan, nominated last week to head the CIA.

Democrats Behaving Badly

http://www.nytimes.com/2013/01/13/opinion/sunday/bruni-democrats-behaving-badly.html?_r=0

By FRANK BRUNI

Published: January 12, 2013

FOR the textbook definition of not knowing enough to quit while you’re ahead, please turn your attention to Harry Reid, he of the scabrous tongue and rotten temper, a boxer in his youth and a pugilist to this day, throwing mud along with punches and invariably soiling himself.

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Reid, the Democratic majority leader in the Senate, couldn’t just stand back and relish the recent spectacle of House Republicans making callous fools of themselves by stalling aid to communities walloped by Hurricane Sandy. He wasn’t satisfied that these Republicans were vilified not only in the news media but also by some members of their own tribe, like Peter King and Chris Christie. No, he had to get into the ring himself, and his genius strategy once there was to pit one storm’s victims against another’s, to stage a bout between Atlantic City’s splintered boardwalks and Louisiana’s failed levees. What a titan of meteorological tact.

Noting that Congress had provided help after Hurricane Katrina more quickly and generously than after Sandy, Reid said: “The people of New Orleans and that area, they were hurt, but nothing in comparison to what happened to the people in New York and New Jersey. Almost one million people have lost their homes. One million people lost their homes. That is homes, that is not people in those homes.”

Let’s put aside, for the moment, his fleeting difficulty distinguishing a biped with a weak spot for reality TV from a wood, brick or maybe stucco structure in which several bipeds watch TV. Let’s focus instead on his math. The one million figure is easily more than twice the combined tally of domiciles not only destroyed but also damaged in New York, New Jersey and Connecticut. It’s an invention. And if comparisons are to be made, consider this one: as a result of Katrina, 1,833 people died — more than nine times as many as died in connection with Sandy. Using the word “nothing” anywhere in the vicinity of Katrina defies both belief and decency, and Reid was indeed forced last week to apologize, his effort to shame his Republican foes having brought a full measure of shame to his own doorstep, yet again.

Why did he make the effort in the first place? Democrats came out of the 2012 elections looking good, and the country’s changing demographics suggest that they could come out of 2016 and beyond looking even better, especially if Republicans don’t accomplish a pretty thorough image overhaul. And that overhaul isn’t exactly proceeding at a breakneck pace. The perseverance of far-right obstructionists in the House stands in the way, leaving the party in grave trouble. If its foes were smart and humble, they’d do what a sports team with a big lead does. They’d play error-free ball.

Not Reid. And not President Obama, whose recent actions have been careless at best and cavalier at worst. There was the gratuitously provocative nomination of Chuck Hagel for defense secretary, followed by the gratuitously insulting invitation of Louie Giglio, a Georgia pastor, to give the inaugural benediction. That plan was abandoned after the revelation of Giglio’s past remarks that homosexuality offends God, that homosexuals yearn to take over society and that a conversion to heterosexuality is the only answer for them. Giglio would have been the second florid homophobe in a row to stand with Obama and a Bible in front of the Capitol — Rick Warren, in January 2009, was the first — and while it appears that this double bigotry whammy wasn’t the administration’s intent, it’s an example of vetting so epically sloppy that it gives an observer serious pause about the delicacy with which Obama and his allies, no longer worried about his re-election, are operating.

The pick of Hagel underscores that indelicacy. There’s a potent case to be made for his installation as secretary of defense, but there are potent cases for others, and it’s hard to believe that Obama couldn’t have found someone who shared his values and would further his agenda but wouldn’t be such a guaranteed lightning rod for his Jewish, LGBT and female supporters, all of whom played crucial roles in his November victory.

Regarding women, Hagel’s record on reproductive freedom is as conservative as his record on gay rights, and it included his support for a ban on abortions in military hospitals, even for servicewomen prepared to pay for the procedures themselves. What’s more, Obama rolled Hagel out in a cluster of other high-profile nominees (John Brennan, Jack Lew, John Kerry) sure to be noted for their gender uniformity and to rekindle questions about the predominantly male club of advisers and golf and basketball partners who have the president’s ear. The upset was predictable and avoidable.

It has been noted, rightly, that the president put two additional women on the Supreme Court and that his percentage of female appointees is as good as President Bill Clinton’s was. But given the march of time since then, and given the questions raised during his first term about how valued women in the administration felt, and given his drumbeat that he was a champion for women in a way Mitt Romney could never be, shouldn’t he be surpassing Clinton? Going out of his way? There’s a perverse streak of defiance in him, and as donors and even Democratic lawmakers have long complained, gratitude isn’t his strong suit.

While Hagel lurched toward his confirmation hearings and Giglio skittered away, the Democratic Congressional Campaign Committee announced that it was sending each of the 35 Republican freshmen in the House a “tea party membership card,” which spelled out their rights to put “ideology over solutions,” to be horrid to women, to coddle Big Oil and “to create and/or ignore any national crisis.” Thus did the Dems turn legitimate gripes into schoolyard taunts that were more likely to inflame G.O.P. freshmen than to bully them into bipartisanship. What, beyond the theater of the gesture, was the point of it?

Granted, Republicans had done their own adolescent taunting, calling Democrats lap dogs in the Nancy Pelosi obedience school. But Democrats pride and market themselves as the reasonable adults in the equation, and that’s part of their currency with many voters. Why fritter it away?

And why abide the overwrought antics of Reid? He once compared opponents of Obama’s health care reform to enemies of emancipation. He took valid questions about Romney’s low tax bill and spun them into the unsubstantiated claim that Romney hadn’t paid any taxes for an entire 10-year period. Then he said the burden was on Romney to prove the charge untrue. Good thing our criminal courts don’t work that way.

Fiscal Hawks Need to Fight for the Debt Ceiling

http://reason.com/archives/2012/12/21/fiscal-hawks-need-to-fight-for-the-debt

Whenever the establishment left and right agrees on something, expect a big assault on our democracy. That is the case with the emerging consensus that the debt ceiling should be dumped—for two years at least—in any deal that replaces House Speaker John Boehner’s ill-fated Plan B ­so that spending hawks can’t later hold the economy hostage to extract cuts. But there are few external market checks on America’s profligacy. Without strong internal political checks, it might well spend itself into oblivion.

America’s total $16 trillion accumulated debt represents 100 percent of the GDP. Add in its $85-plus trillion in unfunded pension and health care liabilities and the debt shoots up to 550 percent—only marginally better than France. Every man, woman and child in America is currently on the hook for $190,000.

But the Obama administration obviously doesn’t give a hoot. Otherwise, its plan to avert the fiscal cliff would have included serious spending cuts and entitlement reform, not primarily a scheme to raise taxes on households making over $250,000 which would at best raise about $40 billion per year—around what Washington borrows every week.

As if that were not outrageous enough, the administration also demanded in its fiscal cliff package that Congress forever forfeit its constitutionally given debt authority. (This authority was already considerably weakened during World War I. At that time, Congress gave up its authority to approve debt issuance for specific projects. It started pre-approving instead a lump sum loan amount so that the president could raise money quickly to fund the war effort.) House Speaker John Boehner (appropriately) laughed at Obama’s suggestion at first. However, later he whispered in the president’s ear that he would be willing to lift the ceiling, which will expire in February, for a year if he went along with his Plan B. But with the collapse of that plan, it is likely that Obama will try and write in a two-year extension in whatever deal he works out with Congress now—and take away the only tool that Republicans have to enforce any spending discipline.

And in this he might get the help not just of liberals—but smart-set conservatives too.

Liberals have been railing against the ceiling ever since fiscal hawks used it to create a spending showdown last year. They argue that separating the budgeting and the borrowing functions of Congress means that Congress can authorize spending but then refuse to sanction the means to pay for it. “The idea that the Congress gets to vote twice on whether to pay for [expenditures] it has appropriated is crazy,” insists Bill Clinton. Liberals want America to follow other developed countries where legislators are required to approve new borrowing as part of the budgetary process.

What they ignore is that many of these countries have hard limits on debt issuance as part of the budgetary process—kind of like a Balanced Budget Amendment, which liberals resolutely oppose. For example, Germany has a constitutional amendment that requires that structural deficits not exceed 0.35 percent of GDP.

What’s more, that’s effectively how things worked in America until Democrats decided three years ago that passing budgets was a dispensable nicety and started authorizing spending through ad hoc resolutions. This meant they did not need to negotiate or set spending priorities to get a majority buy-in, a process that made raising the borrowing limit a fait accompli. But eliminating the ceiling in the absence of budgets is tantamount to giving Democrats a blank check and then gagging opponents from raising questions.

But liberals aren’t the only ones questioning the debt ceiling. Writing for the American, a magazine of the conservative American Enterprise Institute, Steve Conover notes that the possibility of America defaulting undermines investor confidence in America’s sovereign debt instruments, something that could raise borrowing costs and hurt growth.

That strains credulity.

For starters, not raising the borrowing limit doesn’t mean default. America’s annual debt service costs are only about 10 percent of federal revenues, which means that the country can easily pay investors, meet its obligations to its retirees (for now) and still have money left. It would certainly mean cutting spending somewhere, but that’s a prospect to be cheered, not lamented.

Furthermore, America has experienced an epic financial meltdown, sluggish growth and is up to its eyeballs in debt and credit markets are still offering it loans at effectively zero percent interest rates. It makes no sense that a little budget fight to put America on sounder fiscal footing would cause them to significantly jack up these rates.

But one reason credit markets have ignored America’s spending addiction is that, with Europe on the verge of meltdown, they have nowhere else to go. More importantly, the dollar’s status as a reserve currency makes it much easier for America to issue debt without fearing commensurate interest hikes. In other words, America’s superpower status has created an incentive for fiscal irresponsibility.

Even if a debt-ceiling showdown causes some rate hikes, catastrophe wouldn’t follow. The resulting budgetary strain might well prod legislators to deal with the deficit now—forestalling a far uglier reckoning down the road.

Great powers fall not due to external threats but their own avarice. The existence of the debt ceiling suggests that America is aware of this. Republicans should yield as little as possible on this crucial tool. Cavalierly bargaining it away will be a terrible sign.

http://online.wsj.com/article/SB10001424127887324081704578232080227662110.html

Rivkin and Casey: The Myth of Government Default

The Constitution commands that public debts be repaid. There is no such obligation to fund entitlement programs.

By DAVID B. RIVKIN JR.
AND LEE A. CASEY

Three false arguments, pushed hard by the Obama administration and accepted on faith by the media and much of the political establishment, must be laid to rest if the American people are to understand the issues at stake in the federal "debt ceiling" debate.

The first is that Congress's failure to raise the debt ceiling—the amount of money the federal government is authorized to borrow at any given time—will cause a default on the national debt. The second is that federal entitlement programs are constitutionally protected from spending cuts. The third is that the president can raise the debt ceiling on his own authority.

To take up the first canard: Contrary to White House claims, Congress's refusal to permit new borrowing by raising the debt ceiling limit will not trigger a default on America's outstanding public debt, with calamitous consequences for our credit rating and the world's financial system. Section 4 of the 14th Amendment provides that "the validity of the public debt of the United States, authorized by law . . . shall not be questioned"; this prevents Congress from repudiating the federal government's lawfully incurred debts.

The original concern of this provision was to guarantee the integrity of federal debts incurred during and immediately after the Civil War (while the debts of the Confederacy were nullified permanently), and to ensure that a newly "reconstructed" Congress—to which the Southern states were readmitted—would not reverse these decisions. However, the amendment's language was not limited to the Civil War-related debts. In Perry v. United States (1935), the Supreme Court made clear that the provision "indicates a broader connotation" protecting the nation's debts as a whole.

This means that a failure to raise the debt ceiling—to prevent new borrowing—does not and cannot put America's current creditors at risk. So long as this government exists, and barring a further constitutional amendment, those creditors must be paid.

Nor are they at risk in practice, since the federal government's roughly $200 billion in tax revenue per month is more than sufficient to service existing debts. If the executive chose to act irresponsibly and unconstitutionally and failed to make any debt payments when they come due, debt-holders would be able to go to the Court of Federal Claims and promptly obtain a money judgment.

These basic facts should inform any credible decisions by credit-rating agencies in establishing the government's creditworthiness. Significantly, these agencies have traditionally acted favorably when heavily indebted countries have not defaulted on their debt but cut deeply their public spending.

Second, despite White House claims that Congress must raise the debt ceiling to pay the bills it has incurred, the obligations protected as "debts" by the 14th Amendment do not include entitlement programs such as Medicare and Social Security. These programs are not part of the "public debt," which consist of loans that are made to the federal government through bonds and similar financial instruments. Entitlement programs are instead political measures that are fully subject to the general rule that one Congress cannot, by simple legislation, prevent a future Congress from making cuts.

This fundamental and vital distinction is clear from both the text and the drafting history of the 14th Amendment's Section 4. The wording of the section was revised before its enactment and ratification to replace the term federal "obligations" with that of "debts," a far more narrow (and manageable) category.

The distinction was recognized by the Supreme Court in Flemming v. Nestor (1960), which involved the power of Congress to modify Social Security benefits. The court noted that entitlements and "contractual arrangements, including those to which a sovereign itself is a party, remain subject to subsequent legislation by the sovereign."

Congress can reduce a wide range of payments to various beneficiaries at any time by amending the statutes that authorize them or simply by failing to appropriate sufficient funds to pay for them. Nor does Congress have any legal or constitutional obligation to borrow money to pay for entitlements.

Third, assertions, most recently made by Nancy Pelosi, that the president can rely on Section 4 as a pretext for raising the debt ceiling by himself are manifestly incorrect and constitutionally dangerous. Section 4 grants no power whatsoever to the president—instead, the 14th Amendment grants Congress the "power to enforce, by appropriate legislation, the provisions of this article."

More fundamentally, this argument—which has been tentatively advanced and then tentatively withdrawn by the White House, both during the 2011 debt-ceiling battle and in the last several weeks—is contrary to the language, structure and history of the Constitution.

Like the British Parliament before it, Congress controls the power of the purse—the authority to raise taxes, borrow money and direct how revenues are spent. In particular, Article I, Section 2, grants to Congress the power "to borrow money on the credit of the United States." There is no similar grant to the president. Any effort by the chief executive to borrow money without congressional action would be every bit as injurious to our constitutional system as presidentially ordered taxation.

True enough, the "debt ceiling" is not a constitutional requirement. Congress could choose instead—as used to be the case during most of our history—to vote separately on the issuance of each federal debt instrument. However, nowhere in the Constitution is the president authorized to borrow or spend money without congressional action, except insofar Congress itself may permit.

Once these false arguments are cleared away, the real issue in the debt-ceiling debate becomes clear: the proper level of federal spending. Should Congress fail to increase the debt ceiling as much as the president wants, the effective result would be major government spending cuts, with payments on public debt excluded.

This is tough medicine and not to be administered lightly. If Republicans are serious about winning this debate, they must strive to convince the American people that such spending cuts are necessary, given President Obama's openly articulated unwillingness to implement any meaningful spending cuts other than defense and his clear preference for limitless borrowing.

Whether they can succeed in this task is unclear. But the public must at least be allowed to ponder these vital issues without being misled by false claims involving debt default, the nature of federal obligations, and which branch of government is in charge of the public fisc.

Messrs. Rivkin and Casey are partners in the Washington, D.C., office of Baker Hostetler LLP and served in the White House and Justice Department during the Ronald Reagan and George H.W. Bush administrations.

Is ObamaCare Causing Health Insurance Premiums to Rise?

http://reason.com/blog/2013/01/08/is-obamacare-causing-health-insurance-pr

The full title of the legislation commonly known as ObamaCare is the Patient Protection and Affordable Care Act. It's often described using just the last three words — the Affordable Care Act — and “affordability” was at the heart of the White House’s argument for the law. But so far, there are few signs that health care will become more affordable as a result of the law. Indeed, it increasingly looks as if the opposite could be true — that ObamaCare may be causing higher premiums rather than preventing them. 

Over the weekend, The New York Times published a report noting that health insurers across the nation are both “seeking and winning double-digit increases in premiums” — this despite the fact that “one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.”

The Times reports that health insurers have successfully raised rates by at least 20 percent in Ohio and Florida, increases that it says add several hundred dollars to the monthly cost of insurance. And in California, three insurers have requested increases of more than 20 percent for individuals who do not receive employer-sponsored insurance and small businesses. The story describes those two groups as “particularly vulnerable” to high rate increases.

The Times isn’t the first to report big health insurance increases coming down the pipeline. Aetna’s CEO warned last month that small and individual group markets were likely to increase by an average of 25 to 50 percent, and suggested that some policyholders might see their rates double.

What’s going on? Why are these rates going up?

A big chunk of the Times article focuses on the law’s insurance rate review provision, which gives the federal government the power to review but not reject health insurance rate increases.

Some state insurance regulators already have the power to reject rates, however, and the Times suggests that the double-digit rate increases  “[demonstrate] the striking difference between places like New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.”

So is the problem that ObamaCare did not grant new powers to reject rate increases? California health insurance commissioner Dave Jones offers an explicit endorsement of this theory, saying that the lack of new authority to reject health insurance rate increases is a “huge loophole in the Affordable Care Act.”

Jones might have rejected higher rates in California if given the chance, and it's true that some states, Massachusetts in particular, have used their rate authority aggressively. But the power to reject rates has not always stopped double digit increases in other states. In fact, according to a 2011 Congressional Research Service report on health insurance rate review policies in the states, both Ohio and Florida have “prior approval” requirements in place in their individual, small, and large group markets. In contrast to California’s “file and use” rules, which allow regulators limited power to disapprove a filing if an insurer is found to not be in compliance with some other regulation, prior approval rules mean that “insurance companies must file proposed rate changes and the state has the authority to approve, disapprove or modify the request.” And yet according to theTimes, both states have seen premium increases in excess of 20 percent.

Perhaps there's another explanation? For example: Might ObamaCare’s new rules and regulations being playing some role in the increases? There’s good reason to think the law itself is at least partially responsible.

It's seems likely, for example, that ObamaCare’s new coverage mandates have contributed to some of the increase in the individual market: Consulting firm Aon Hewitt estimates that those premiums have gone up about 5 percent as a result of the law.

That explains some of the increase. But not all of it. Which is why those looking for another culprit should consider the possibility that a provision intended to help consumers get better value for their money is actually costing them higher premiums.

That provision, often referred to as the 80/20 rule, sets mandatory medical loss ratios (MLRs) for health insurers. The MLR is an accounting requirement which says that insurers have to spend at least 80 percent of their total premium revenue on medical expenses, leaving just 20 percent for administrative costs, marketing, and other non-medical expenditures. Any insurer that fails to meet this target must issue rebates to customers. This year, insurers rebated about $1 billion.

The MLR provision creates two incentives for insurers to jack up health insurance premiums. One is the plain fact that with profit and administrative costs capped as a percentage of premium revenue, the easiest way to generate larger profits is to charge higher premiums.

The other is that the rebate requirement means insurers may need to charge higher up-front premiums in order to protect themselves from the risk of a bad year. As Scott Harrington, a professor in the University of Pennsylvania's Department of Health Management, explained in a November 2012 paper, that’s because health insurance claims — and thus MLRs — fluctuate significantly between years. Harrington's paper, which got funding from a health insurance trade group, argues that the annual variation, and the resulting uncertainty, creates a problem for insurers: If claims are low in a given year, they end up rebating the difference to the customer because of the MLR rule. If claims are unexpectedly high, however, they end up eating the difference. Insurers thus have a incentive to protect themselves by charging high premiums at the outset, and then paying those premiums back in rebates should claims come in at low or expected levels.

Is the MLR rule causing the higher premium requests? It's hard to say with certainty, but it fits the bill in many ways: Harrington's analysis suggests that the high up front premiums should be concentrated in the small-group and individual markets, which is exactly what the Times reports. No matter what, it's clear that ObamaCare isn't resulting in lower premiums. And for many people, in the years after the law, premiums aren't just going to up up a little. They're going to rise a lot. 

Doing the research the New York Times won’t

http://dailycaller.com/2013/01/10/doing-the-research-the-new-york-times-wont/#ixzz2HgKVIFNp

n Sunday’s New York Times, Elisabeth Rosenthal claimed, as the title of her article put it, “More Guns = More Killing.” She based this on evidence that would never be permitted in any other context at the Times: (1) anecdotal observations; and (2) bald assertions of an activist, blandly repeated with absolutely no independent fact-checking by the Times.

There is an academic, peer-reviewed, long-term study of the effect of various public policies on public, multiple shootings in all 50 states over a 20-year period performed by renowned economists at the University of Chicago and Yale, William Landes and John Lott. It concluded that the only policy to reduce the incidence of, and casualties from, mass shootings are concealed-carry laws. The Times will never mention this study.

Instead, Rosenthal’s column proclaimed that armed guards do not reduce crime because: “I recently visited some Latin American countries … where guards with guns grace every office lobby, storefront, ATM, restaurant and gas station. It has not made those countries safer or saner.”

So there you have it: The cock crowed, then the sun came up. Therefore, the cock’s crowing caused the sun to come up. Rosenthal went to Harvard Medical School.

Here’s a tip: High-crime areas are often bristling with bulletproof glass, heavy-duty locks, gated windows and armed guards. The bulletproof glass doesn’t cause the crime; it’s a response to crime. On Rosenthal’s logic, hospitals kill people because more people die in hospitals than outside of them.

(In any event, the Lott-Landes study didn’t recommend armed guards, but armed citizens.)

Rosenthal also produces a demonstrably false statistic about Australia’s gun laws, as if it’s a fact that has been carefully vetted by the Newspaper of Record, throwing in the true source only at the tail-end of the paragraph:

“After a gruesome mass murder in 1996 provoked public outrage, Australia enacted stricter gun laws, including a 28-day waiting period before purchase and a ban on semiautomatic weapons. … Since, rates of both homicide and suicide have dropped 50 percent …,” said Ms. Peters, who lobbied for the legislation.”

“Ms. Peters” is Rebecca Peters, a George Soros-funded, Australian anti-gun activist so extreme that she had to resign from the International Action Network on Small Arms so as not to discredit the U.N.-recognized organization — which isn’t easy to further discredit.

Could the Times’ public editor weigh in on whether unsubstantiated quotes from radical activists are now considered full and complete evidence at the Times?

It would be as if the Times headlined an article, “Abortion Increases Risk of Breast Cancer” with the sole support being a quote from Operation Rescue’s Randall Terry. (Except Terry would have evidence.)

Whether or not the homicide rate went up or down in Australia as a result of strict gun control laws imposed in 1997 is a fact that could have been checked by Times researchers. But they didn’t, because facts wouldn’t have given them the answer they wanted

Needless to say, the effect of Australia’s gun ban has been extensively researched by Australian academics. As numerous studies have shown: After the gun ban, gun homicides in Australia did not decline any more than they were expected to without a gun ban.

Thus, for example, according to the Australian Institute of Criminology, the homicide rate has been in steady decline from 1969 to the present, with only one marked uptick in 1998-99 — right after the gun ban was enacted.

The showstopper for anti-gun activists like Ms. Rosenthal and Ms. Peters is the fact that suicides by firearm seemed to decrease more than expected after the 1997 gun ban.

But so did suicides by other means. Something other than the gun ban must have caused people to stop guzzling poison and jumping off bridges. (Some speculate that it’s the availability of anti-depressants like Prozac.)

Curiously — and not mentioned by Rosenthal — the number of accidental firearms deaths skyrocketed after Australia’s 1997 gun ban, although the law included stringent gun training requirements.

It turns out, until the coroner has certified a death as a “suicide,” it’s classified as “unintentional.” So either mandatory gun training has led to more accidents, or a lot of suicides are ending up in the “accident” column.

Most pinheadedly, especially for a graduate of the Harvard Medical School, Rosenthal says: “Before [the gun ban] Australia had averaged one mass shooting a year. [Since then] there have been no mass killings.”

Mass murder is a rare enough crime that any statistician will tell you discerning trends is impossible. In this country, the FBI doesn’t even track mass murder as a specific crime category.

After Truman Capote’s “In Cold Blood” killers slaughtered the entire Clutter family in Holcomb, Kan., the murder rate in that quiet farming town went up 400 percent in a single year! Was it Holcomb’s big showing at the 4-H club competition that year?

Totally unbeknownst to Elisabeth Rosenthal, Australian academics have already examined the mass murder rate by firearm by comparing Australia to a control country: New Zealand. (Do they teach “control groups” at Harvard?)

New Zealand is strikingly similar to Australia. Both are isolated island nations, demographically and socioeconomically similar. Their mass murder rate before Australia’s gun ban was nearly identical: From 1980 to 1996, Australia’s mass murder rate was 0.0042 incidents per 100,000 people and New Zealand’s was 0.0050 incidents per 100,000 people.

The principal difference is that, post-1997, New Zealand remained armed to the teeth — including with guns that were suddenly banned in Australia.

While it’s true that Australia has had no more mass shootings since its gun ban, neither has New Zealand, despite continuing to be massively armed.

The only thing Australia’s strict gun control laws has clearly accomplished is increasing the amount of violent crime committed with guns immediately after the ban took effect. Of course, Times reporters don’t have to worry about violent muggings, rapes and robberies because they live in doorman buildings.

For those who can’t afford fancy doorman buildings, bad journalism kills.