The Great Debate UK

UK deficit cutting – lessons for the US

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USA-BUDGET/The news that China is engaged in talks over the building of a rival to the Panama Canal ought to set alarm bells ringing in Washington – and not just because of its obvious geopolitical implications. It is yet another sign that the Chinese have finally woken up to the fact that relending their hoard of dollars straight back to the USA is not a very smart policy, at least not as long as the Federal Government carries on spraying out greenbacks like a tipsy GI on furlough, and without Chinese support, the outlook for the Treasury bond market looks threatening.

Those who argue that it is a bad time for imposing austerity should be ignored – in the good times there was no sense of urgency, and in any case deficit reduction has to be a multiyear project. The Federal deficit is running at over 10 percent of GDP and the projections for the coming decade on unchanged policies are too frightening to contemplate.

That is the background to the Obama budget – in qualitative terms, it is very similar to the scenario faced by Britain’s new Coalition Government when it came to power last May. What lessons can America draw from the UK experience?

One caveat needs to be made at the outset. Since the mills of government grind slowly, the full impact of Britain’s austerity budget is only just beginning to be felt, so some judgements may be a little premature. However, start with Britain’s mistakes. It was a gross error to ringfence any spending items – and the choice of the National Health Service and Overseas Aid as protected species was particularly perverse, not least because it left the defence budget to sustain a sizeable cut while the country is still at war. America should nominate no sacred cows. The burden of the cuts has to fall overwhelmingly on the big spending programs: social security, Medicare and Medicaid, and defence.

What WikiLeaks reveals about the changing map of global power

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-Andrew Hammond is a Director at ReputationInc. The opinions expressed are his own-

The WikiLeaks release last month of around a quarter of a million classified U.S. State Department documents has, by critics, been variously characterised as the “September 11 of world diplomacy” (Italian Foreign Minister Franco Frattini); an “attack on the international community” (U.S. Secretary of State Hilary Clinton); and a threat to “democratic sovereignty and authority” (French Government Spokesman Francois Baroin).

from Tales from the Trail:

Reuters/Ipsos poll: 52 pct don’t think Obama will be re-elected

President Barack Obama is not up for re-election this week, but the outcome of congressional elections will be seen as a referendum on his policies.

A Reuters/Ipsos  poll predicts that Republicans will take control of the House of Representatives by winning 231 seats, compared with 204 seats for Democrats, in the midterm elections Tuesday.

What can the U.S. learn from the Spending Review?

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Watching George Osborne present the results of the Government’s Comprehensive Spending Review last week, two thoughts went through my mind.

On a personal level, how could I have been so wrong about Cameron and Osborne? A pre-election blog of mine was titled “A Pair of Lightweights”. Both have already done enough to assure even the most cynical observer (which probably doesn’t mean me) that they are every bit as serious as the job they face.

from The Great Debate:

Obama, Moses and exaggerated expectations

-Bernd Debusmann is a Reuters columnist. The opinions expressed are his own-

President Barack Obama is close to the half-way mark of his presidential mandate, a good time for a brief look at health care, unemployment, war, the level of the oceans, the health of the planet, and America's image. They all featured in a 2008 Obama speech whose rhetoric soared to stratospheric heights.

"If...we are willing to work for it, and fight for it, and believe in it, then I'm absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs for the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last best hope on earth."

from Afghan Journal:

How many al Qaeda can you live with ?

(A box of  'Super Osama bin Laden" candles bought at a bazaar in Kandahar)

(A box of 'Super Osama bin Laden" candles bought at a bazaar in Kandahar)

A furious debate has raged for several months now whether it makes sense for the United States to throw tens of thousands of  soldiers at a handful of al Qaeda that remain in the Afghanistan-Pakistan theatre, nine years after launching the global war on terrorism.

CIA director Leon Panetta  told ABC News in June thatal-Qaeda’s presencein Afghanistan was now “relatively small … I think at most, we’re looking at maybe 50 to 100.” And in nextdoor Pakistan, arguably the more  dangerous long-term threat, there were about 300  al Qaeda leaders and fighters, officials separately estimated.

from The Great Debate:

The U.S. war in Iraq is over. Who won?

The end of America's combat mission, after seven and a half costly years, has raised questions that will provide fodder for argument for a long time to come: Was it worth it? And who, if anyone, won?

It's too early to answer the first question, according to U.S. Secretary of Defense Robert Gates, a man of sober judgment. "It really requires a historian's perspective in terms of what happens here in the long run ... How it all weighs in the balance over time remains to be seen."

from The Great Debate:

U.S. aid, Israel and wishful thinking

In June 1980, when an American president, Jimmy Carter, objected to Jewish settlements in Israeli-occupied territories, the Israeli government responded by announcing plans for new settlements. At the time, settlers numbered fewer than 50,000.

In 2010, another American president, Barack Obama, is calling for an end to settlements he considers obstacles to peace between Israel and the Palestinians. Israeli authorities responded by announcing new ones, illegal under international law. Settlers now number close to half a million.

from The Great Debate:

Islam, terror and political correctness

-- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own. --

The Islamic terrorists of the Bush era are gone. They have been replaced by violent extremists in a purge of the American government's political lexicon. Smart move in the propaganda war between al Qaeda and the West? Or evidence of political correctness taken to extremes?

from Tales from the Trail:

If healthcare wasn’t enough, Obama just picked another fight

One thing is clear. President Barack Obama is not afraid of a fight.

He battled all last year with Republicans and some of his own Democrats trying to get healthcare reform through the political headwinds. OBAMA/

Now he's going to take on Republicans with trying to repeal the "Don't Ask, Don't Tell" policy on gays serving in the military.

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