US Credit Worthiness, Tax Hikes and the Balancing of the Federal Budget

Krishna Tummala, director of Kansas State’s public administration program and professor of political science simply explains the reason for the nation’s burgeoning debt:

People demand more services but are not always willing to pay taxes. The politicians promise more services without telling them the cost and that they must be paid for. Instead, they use the so-called painless way to go about this by allowing deficit budgets. This means not only the politicians must educate themselves on the issues, but their constituents as well.

He adds that the argument that the federal government should live like we do, within our means, is hypocritical. The personal debt of Americans is close to $2 trillion, so effectively we all live in debt. The federal government just is behaving like we do. Moreover, it has the responsibility for the common welfare and general defense, as the Constitution requires. Yet state governments, 48 of which require a balanced budget by law, are favorably compared to the federal government. But state governments differ in their budgeting compared to the fed. The federal government has only one budget, but each state has two, a current account and a capital account. Only the state’s current account—effectively its day to day running costs—must be balanced. The capital account is the place for major project expenditures, and they have to be carried forward annually.

The federal government borrows money through Article I of the US Constitution, and had it not been able to, it could not have borrowed $15 million from Britain in 1803 to complete the Louisiana Purchase. It doubled the size of the country, made it possible for it to be united coast to coast, and without it, it perhaps would never have become the world power it is. Now the national debt is $14 trillion, but it is not owed to the British. The Chinese have around $3 trillion of it.

People who want a balanced budget, many of them Republicans, have to realize that it will need taxes to be raised. Cutting expenditures will not be enough, and will shut down the country first. But Republicans will not condone tax hikes because the people with the money are leading Republican donors. So, cooperation between the parties has been lacking, only quarreling, a lot of posturing and little dialogue. The deadline for increasing the debt ceiling is 2 August, with the country’s credit worthiness at stake. If the debt ceiling is not extended, the country will default, hitting the economy of the whole world, everything now being so interconnected.

The country’s credit worthiness underpins the financing of debts. Foreign countries must have confidence in the US economy or they will not be willing to lend. Of course, credit ratings agencies such as Moody’s and Standard & Poor’s can evaluate the soundness of the US economy but the ratings agencies were giving excellent ratings to the financial sector “before it went belly-up”, Tummala wryly concluded!

Is the US Ambassador in Kabul a Liar or an Idiot?

Karl Eikenberry, the US ambassador in Kabul, was quoted in the UK Guardian by Jonathan Steele (The Taliban’s wishlist, 21 June, 2011) as solemnly pronouncing:

America has never sought to occupy any nation in the world. We are a good people.

This is staggering. Americans incessantly complain that the rest of the world hates them, and always want to do them harm, even though they are “good people”. Are these Americans, blind, or deluded, or are these just neocon lies to feed the self righteous ignorance of the US public?

Eikenberry is a diplomat and sits in the center of a ten year long war against the present occupation of Afghanistan by the US and its sycophantic allies. Nor can he be unaware that the US just fought a terrible war for no obvious moral cause in Iraq, dividing and devastating the country, and still occupy it with tens of thousands of soldiers. They have just joined with France and the UK via NATO in an unjustified attack on Libya, which has again divided the country and will require another occupying force to prevent a civil war if Gaddafi is ousted.

Richard Carter, replying to Eikenberry in the Guardian adds the following historical synopsis of significant US occupations, omitting minor ones:

There’s Honduras (seven times between 1903 and 1989), Nicaragua (seven times between 1894 and 1933, not to mention the support for the Contra terrorists in 1981-90), China (six times between 1894 and 1949), Cuba (five times between 1912 and 1933), Haiti (five times between 1891 and 2005), the Dominican Republic (four times between 1914 and 1966), El Salvador (twice: 1932, 1981-92), Mexico (twice: 1913, 1914-18) and Vietnam (once, but for 15 years)….

Isn’t it about time that the US public caught on—they have a problem with their leaders, and that means with their much vaunted democracy. These wars do not and cannot help the ordinary US citizen whether poor or middle class. Only the rich profit out of them, and the US has been ruled on behalf of this rich minority for the whole of the time R Carter surveyed.

Are Americans Sick Of War?

A poll by “Pulse Opinion Research” shows that 72 percent of likely voters in the US think that the country is fighting too many wars abroad. Operations continue incessantly overseas and new ones always arrive when old ones seem to be getting settled, like Libya after Iraq. The US people increasingly want to know when the military will finally listen to the people and step back.

Americans see the country deep in hock, and millions unemployed and underemployed, while millions more, even middle class people, worry about the possibility of getting the bullet—fired! Or their compensation slashed in some economy drive. Yet administrations always have plenty of money to fight foreign wars. Something Americans can do without in these allegedly hard times is their tax dollars wasted on useless wars.

With Americans wanting out, this administration is doing little. Yet Obama campaigned under the banner of “Change”, of which ending war was one prominent constituent part, but like Clinton he has broken every promise and spinelessly has bent over to the militarists and the armamaments manufacturers, introducing the US into more wars on his watch. Even a Republican presidential candidate, Ron Paul, thinks these wars “endless” and “unwinnable”.

Is Paul doing the same as Obama? Codding the voter? Elections in the USA are an utter fraud. It does not matter who wins, the same policies—aimed at keeping the military and industrial barons and their financiers in banking and insurance swimming in profits—are retained, and the professional lobbyists in Washington with their bucketloads of bribery dollars can always get their own way with grasping representatives. They all have their price, and it isn’t high for the filthy rich minority with enough megabucks to control the USA.

Yankees threw off the yoke of the English, but now they'll have to throw off the yoke of their home grown oppressors. The Brits had to do the same. They threw out the king in the seventeenth century, but kings returned. In the nineteenth century, they had to strike and riot to get the two reform acts passed that pulled the greedy rich into some order for a couple of centuries. Now the British will have to do it again, too!

Jane Hirschmann of “Jews Say No!” Says “No!” to Israel’s Gaza Policy

In November 2008, the ceasefire ended—Israeli soldiers broke it in a cross-border raid killing six members of Hamas. In response, rockets were launched into Israel, so Israel, fortified with American weaponry, attacked the people of Gaza. Approximately 1,400 Palestinians, mostly civilians, were killed compared to 13 Israelis. Gaza was pulverized. Judge Richard Goldstone and his team reported there was no doubt that the people of Gaza were disproportionally affected.

Right after the invasion in Gaza I became one of the organizers of “Jews Say No!” in New York City. We wanted to make clear that the Israeli government did not speak in our name as they claimed. I began reading about the occupation, settlements in the West Bank and East Jerusalem, the building of the separation wall, Jewish-only streets for Israeli settlers, special identity papers for Palestinian citizens of Israel—one step away from wearing a yellow star—and the other indignities endured by the people of Palestine on a daily basis. And I saw the total collusion by the US government—its unconditional support no matter what the Israeli government did, including giving them 30 billion dollars over a 10-year period for weaponry—F16s, Apache helicopters, white phosphorus, Caterpillar bulldozers used to destroy homes in Bedouin encampments—used ruthlessly against the Palestinians. This was intolerable for me.

I understand the fears and frustrations of Israelis being fired upon by rockets and the resultant deaths and injuries. But what about the thousands of Palestinians being killed and whose homes, schools, hospitals, farms, mills, factories and infrastructure are being destroyed? What about a people living under a brutal occupation who are being denied the right to live with dignity in their own homeland? The siege and blockade of Gaza continue. The Israeli government controls the land, sea and air of this small area (25 miles long and roughly six miles wide) where 1.6 million people live.

Lightly edited extract from Counterpunch. Jane Hirschmann is a member of “Jews Say No!” in New York City and one of the national organizers of the US Boat to Gaza. Hirschmann has been active in anti-war efforts for the past four decades. She is a psychotherapist and the co-author of three books. More information about the The Audacity of Hope is available at www.ustogaza.org.

Why Scientists Often Have To Repeat Their Studies

Harvard sleep expert, Dr Charles Czeisler, has spent about $3 million over the years showing that doctors who don’t get enough sleep make mistakes on the job. Yet long shifts for interns and residents are a staple of hospital culture, and, as anyone’s welfare in hospital might be at stake, one might have thought it important to rectify excessive hours.

But it has taken Czeisler the best part of three decades getting the medical establishment to acknowledge it, and still the rules governing doctors’ working hours remain hard to change. When he gave evidence that workers on rotating shifts at a chemical plant suffered from disrupted sleep, the medical establishment said doctors were different. Czeisler’s data “was dismissed out of hand”. They kept using the same argument even when tests had refuted it. When he published results showing that physicians’ 24 hour plus shifts contributed to car accidents and attention lapses at work, some said it might be true—but not for them!

In 2008, the Institute of Medicine issued guidelines calling for limiting interns’ and residents’ shifts to 16 consecutive hours. Eventually, authorities did cut back to 16 hours, but only for interns. Czeisler had studied interns, so the establishment claimed they had seen no evidence for residents! Now Czeisler is having to research whether residents’ performance also is affected by lack of sleep. “I can’t believe we have to do this extra study.”

Science cannot accept a single study as definitive proof of its findings. Some error could have been made or some bias have been inadvertantly built in, and any such mistakes need independent repetition of the study to discount error. Repeating a previous study which confirms it multiplies the reliability of both studies. Moreover, this case on the working hours of hospital doctors shows another reason why some research has to be repeated—a refusal to act on well established scientific work for political or economic reasons, or simply reasons of will.

Daniele Fanelli, an expert on bias at the University of Edinburgh in Scotland, points this out. “People want to draw attention to problems” rather than aiming to find something new, especially when important policy decisions are being delayed by procrastination or lack of political will. Experts have to prove some things again and again to get decision makers to act. Some might object that it is not a scientist’s job to persuade decision makers, but it is the duty of all of us to do it, surely, especially when the proof is there that lack of action is costing lives.

“There are some subjects where it seems you can never publish enough”, says Ronald J Iannotti, a psychologist at the National Institutes of Health. “Think about the number of studies that had to be published for people to realize smoking is bad for you.” Almost 50 years after cancer and lung disease were first linked to smoking, work continues to be published because the extent of the problem is still challenged, not least by those who make money out of selling tobacco products. A detailed analysis in the Canadian Medical Association Journal has had painstakingly to lay out that secondhand smoke in cars is bad for children. Many people will say that is too obvious to merit funding, but cigarette vendors, and those still addicted to smoking evidently still need reminding that harming the health of kids is not excusable—it is wrong.

The Ig Nobel Prizes are spoof awards to mock improbable research. One winner was a study that found nose picking was common among teens. Some might consider the research is not only pointless but in bad taste(!), yet it can hardly be said to be obviously so, and finding that it is common has health consequences. Staphylococcus aureus is a bacterium that is getting highly dangerous through its growing resistance to antibiotics (MRSA).

Iannotti says, even if initial findings seem self evident “you still need to establish the facts. That’s how science moves forward—incrementally”. Plainly not every study is equally worthwhile, and some studies approved for funding might be bad decisions, but the danger is that an over zealous aim to cut back on wasteful research will succeed only in cutting out useful research.

It would be far more useful to cut back on the excessive rewards given to bankers for not doing much at all, and to stop giving them even bigger rewards for wrecking the national economy. It is far more costly and ridiculous to reward useless bankers than it is to hand out funds for occasionally poorly thought out scientific studies. Bankers reward themselves with millions of dollars each a year. Many useful studies cost buttons by comparison, but no one seems to object to us giving megabucks to greedy bankers for doing little of merit.

People of Color Will be the US Majority by 2042

America's Tomorrow from PolicyLink on Vimeo.

The faces of America’s children are changing and many believe that the still white majority population and the political leaders do not see themselves in these new faces. By 2042, most Americans will be people of color. Already, California, Texas, Hawaii, New Mexico, and DC have more people of color than whites. And today, nearly half of all children are kids of color. If they don't succeed, the nation won't succeed.

While policies are looking at slashing Medicaid and cutting education budgets, the future generations of Americans are paying the price. There was a time not that long ago when we listened to the voices of tomorrow and invested in our national future. The GI Bill, affirmative action, and strong unions all helped the “Greatest Generation” establish a potent and stable middle class—and gave their children tangible hope for the future. But we aren't doing that any more. Too many who have achieved success for themselves now want to pull up the ladder behind them.

People of color are disproportionately saddled with high poverty rates, failing schools, poor health, and under-invested communities. But white families that rely on the public education system struggle with these nationwide school budget squeezes. White college students are graduating with six figure debt. White workers who need public transit to get to their jobs are hurt by the lack of forward thinking investment. And white entrepreneurs are having to spend money giving new hires the job skills a strong public school system should offer. It's no way to run a country.

This study implies the need to promote equity—just and fair inclusion. The next generation of Americans needs to be supported and encouraged, regardless of their skin color. Economists and community leaders are now seeing this idea of equity is no longer a moral battle. It will become imperative in order for America to succeed on an economic level.

PolicyLink, an American research institute which works to advance social and economic equity within the United States has released their new report titled Prosperity 2050. The report shows how, over the next 30 years, the face of America will be changing.

PolicyLink’s CEO and founder, Angela Glover Blackwell, said that the success and the future of the United States will depend on the success of people of color. She believes that equitable policies, in light of this new information, will become an economic imperative more so than a moral one. The current discrepancies of social status and wealth between the different demographics could be harmful to the future of the United States.

As a nation, we can see our future and it is captured in the hopes and dreams of a 5-year-old Latina girl and a 7-year-old African American boy. Our success depends on theirs.

PolicyLink was founded in 1999 and works on the mission of Lifting Up What Works. They believe that those people that are facing the hardest challenges, mainly the low-income and colored communities, are the most important in finding and creating solutions. In areas such as jobs, public schools, and affordable housing, PolicyLink believes that equity must be behind all federal, state, and local policies.

Loans Give Hard Up Students a Buzz Until Pay Back Time Looms

Debt can be a good thing for young people—it can help them achieve goals that they couldn’t otherwise, like a college education…Young people seem to view debt mostly in just positive terms rather than as a potential burden.

Rachel Dwyer, assistant professor of sociology, Ohio State University

Professor Dwyer seems to be encouraging young people to take on more debt to feel empowered! A nationwide study she conducted with Randy Hodson, professor of sociology at Ohio State, and Laura McCloud, an Ohio State graduate now at Pacific Lutheran University, found many young adults actually feel empowered by their credit card and education debts rather than feeling stressed by them. Ms Dwyer did add that the results offer some worrying signs about how many young people view debt:

Debt can be a positive resource for young adults, but it comes with some significant dangers.

The more credit card and college loan debt held by young adults aged 18 to 27, the higher their self-esteem and the more they felt like they were in control of their lives. The effect was strongest among those in the lowest economic class. Only the oldest of those studied—those aged 28 to 34—began showing signs of stress about the money they owed.

Researchers examined data on two types of debt:

1. loans taken out to pay for college
2. total credit-card debt.

They looked at how both forms of debt were related to people’s self-esteem and sense of mastery—their belief that they were in control of their life, and that they had the ability to achieve their goals. Dwyer said:

We thought educational debt might be seen as a positive because it is an investment in their future, while credit card debt could be viewed more negatively

How debt affected young people depended on what other financial resources they had available:

• Those in the bottom 25 percent in total family income got the largest boost from holding debt—the more debt they held, both education and credit card, the bigger the positive impact on their self-esteem and mastery
• Those in the middle class didn’t see any impact on their self-esteem and mastery by holding educational debt, perhaps because it is so common among their peers that it is seen as normal, but they did see boosts from holding credit-card debt—the more debt, the more positive effects
• Those who came from the most affluent families received no boost at all from holding debt. Debt is not an issue for them. They have the most resources and options available to them.
• The oldest people in the study, those over age 28, were just starting to feel the stress of their debt.

Having education debt is still associated with higher self-esteem and mastery, compared to those who don’t have any such debt. That suggests they still see some benefits to investing in a college degree. But the amount of education debt mattered—having higher levels of debt actually reduced their sense of self-esteem and mastery. Dwyer said:

By age 28, they may be realizing that they overestimated how much money they were going to earn in their jobs. When they took out the loans, they may have thought they would pay off their debts easily, and it is turning out that it is not as easy as they had hoped. We found that the positive effects may wear off over time, but they still have to pay the bills. The question is whether they will be able to.

The study involved 3,079 young adults who participated in the National Longitudinal Survey of Youth 1979—Young Adults sample. The NLSY interviews the same nationally representative group of Americans every two years. It is conducted by Ohio State’s Center for Human Resource Research on behalf of the US Bureau of Labor Statistics.

The results suggest that debt can be an important resource for young adults that allows them to make investments that improve their self-concept. But the results may also have troubling implications for the future of young people. Dwyer summed up:

Debt may make young people feel better about themselves in the short-term, but that doesn’t mean it won’t have negative consequences in the long term.

Some young people from all social classes see education as important enough to get into debt for, but those from poorer backgrounds get the biggest buzz from borrowing money, and the rich kids get little or none. It seems hardly surprising. Just being able to get the money will make many such kids feel that their education is already bringing benefits. As the debt mounts and the benefits begin to seem less clear and further off, their enthusiasm wears thin.

Poorer students must stay realistic about their future. They will have to pay back their loans and borrowings, so they should not take on excessive debt, and must not try to compete with middle class and rich kids at university. Rich kids have no worries whatever happens. They are assured of a substantial allowance and nepotistic job opportunities from daddy and mummy so can get no buzz from borrowing a the odd few thousand dollars.

A Civil War in the USA Today Would Mean Tens of Millions Dead

Which of the many wars the USA has been involved in since its inception has taken the greatest toll of US lives? The answer is the Civil War from 1861-65. It has always been said that 620,000 Americans died in that conflict, two percent of the US population at the time of 31 million. That would translate into well over 6 million deaths pro rata today, and that assumes nineteenth century weaponry.

It is impossible to catalogue the fate of each of the 3 million or more men who fought in the war, and neither the Union nor the Confederacy kept standardized personnel records, and the Confederate records, based on incomplete battle reports and deaths from non-combat causes like disease, were little better than guesswork. The figure was 258,000, a lot less than the more accurate Union figure.

Binghamton University historian J David Hacker now reveals the war’s dead numbered between 650,000 and 850,000, with 750,000 as the central figure, a central estimate 20 percent higher than old figure of 620,000. Hacker realized that civilian deaths were so low relative to soldiers’ deaths that he could compare the number of native-born men missing in the 1870 Census relative to the number of native-born women missing and produce an estimate of the number missing presumed dead from that. He looked at the ratio of male survival relative to female survival for each age group, found the normal peace time pattern in survival rates for men and women by looking at the numbers for 1850-1860 and 1870-1880. Then he compared the war decade, 1860-1870, relative to the pattern. Hacker says:

You can track the number of people of certain ages from one census to the next, and you can see how many are missing.

Pulitzer Prize-winner James McPherson, the greatest living historian of the war, says:

I have always been convinced that the consensus figure of 620,000 is too low, and especially that the figure of 260,000 Confederate dead is definitely too low. My guess is that most of the difference between the estimate of 620,000 and Hacker’s higher figure is the result of underreported Confederate deaths.

McPherson says the new figure should gain acceptance among historians of the era:

An accurate tally—or at least a reasonable estimate—is important in order to gauge the huge impact of the war on American society.

If the recent polarization in American society were to lead to a modern civil war of a similar ferocity, the portends are that, by comparison with the previous one, and allowing for the West's readiness to use WMD and automated killing machines like drone aircraft, deaths would be unimaginable. Yet the US ruling elite seem almost to be inviting it to happen. Maybe they should be less smug. Once US citizens realize the degree to which they have been robbed, it will happen. The kleptocrats will then have killed off the uncomplaining goose that has being laying them golden eggs for the last three decades.