Opinion

Gregg Easterbrook

Why Obama should pay more in taxes

Apr 20, 2011 09:44 EDT

President Barack Obama wants to increase taxes on the wealthy, and surely is correct that this must be part of any serious plan to control the national debt. Consider the case of a wealthy couple who made $1.7 million in 2010, yet paid only 26.2 percent in federal income taxes — though the top rate supposedly is 35 percent, and the president says that figure should rise to 39.6 percent. The well-off couple in question is Barack and Michelle Obama, whose tax returns, just released, show they paid substantially less than the president says others should pay.

If Obama is in earnest about wanting increased taxes on the wealthy, then he should send the United States Treasury $182,998. That’s the difference between his Form 1040 Line 60 (“This is your total tax”) and what he would have owed at the higher rate (plus limits on itemized deductions) he himself advocates.

So why doesn’t he tax himself more? The Form 1040, after all, only stipulates the minimum tax an American must pay. More is always welcome. Obama should write a check to the United States Treasury for $182,998.

Wealthy people who say the rich should pay higher taxes — Bill Gates and Warren Buffett have joined Obama in declaring this — are free to tax themselves. If you believe the top rate should rise to 39.6 percent (Obama) or 50 percent (Buffett), then calculate the difference and send a check for that amount to the Treasury. Of course no one individual doing this, even a billionaire, would have much impact on the deficit. But if rich people who say they believe in higher taxes were willing to practice what they preach, this would prove their sincerity, making legislation on the point more likely.

“The most fortunate among us can afford to pay a little more,” President Obama said last week about debt and taxes. So why didn’t he? The president is covered by his own definition of “fortunate,” since his proposal calls for higher taxes on individuals earning more than $200,000 or couples earning more than $250,000.

Compared to the tax returns of the rich generally, the president and First Lady look good. They gave $245,000 to charity in 2010, or 14 percent of their income — admirable generosity, and a better number than posted by most recent presidents and vice-presidents.

Figures from the Internal Revenue Service show that in 2008, the most recent year for which statistics are available, the wealthy paid only about 17 percent of their income in federal taxes — less than the president’s 26 percent in 2010, and much less than the official top rate of 35 percent for the bulk of a well-off filer’s income.

That the wealthy as a group are paying 17 percent of their income as federal income taxes, down from 26 percent from the wealthy as a group in 1992, is a result of the tax cuts enacted under George W. Bush in 2001 and 2003, and extended under Obama last year.

The slashing of taxes for the wealthy is well-known — but Bush’s cut reduced taxes for typical people, too. The lower part of the rate structure is now so low that in 2008, 45 percent of American households paid no federal income taxes at all, according to the Tax Policy Center. Americans as a whole paid an average of just 9.2 percent of their income as federal income taxes.

Both figures are postwar lows. The Tea Party claim that federal taxes are rising is, simply, factually untrue.

Falling taxes for average people have played as much a role in the ballooning federal debt as have falling taxes for the rich. In turn, soaking the rich cannot, alone, tame the national-debt monster.

Calculations based on IRS figures suggest — only rough estimates are possible, as tax laws can change economic behavior — that raising the amount of income actually paid as taxes by the rich from the current 17 percent to 26 percent, what the Obamas paid, would bring in about $200 billion a year in fresh federal revenues. Increasing the figure to about 30 percent (likely actual result of the tax changes Obama advocates) would raise the new-revenue total to about $300 billion annually.

Such amounts would ease the deficit, but hardly represent a cure — government red ink is projected to hit $1.6 trillion this fiscal year. There simply isn’t a long-term deficit solution based only on taxing the rich. Social Security benefit cuts, and more taxes on the middle class, will be needed too.

Sustained 5-to-6 percent GDP growth would solve the deficit problem painlessly, by raising revenue without tax increases or Social Security cuts. While such growth, roughly double the current number, is possible, it seems unlikely.

Though tax increases alone cannot put the country’s fiscal house in order, the president should set a better example on his own tax returns.

That $245,000 the Obamas gave to charity, for example — deducting it on their Schedule A reduced their federal tax bill by roughly $85,000, and cut their Illinois state tax bill too. But you’re not required to deduct charitable giving, or to claim any tax favor. Deductions and tax credits are options. If you think the government deserves more of your income, don’t claim them.

Obama said last year that itemized deductions for the wealthy should be phased out — then on his own tax return, claimed a huge itemized deduction. Until those who advocate higher taxes for the well-off practice what they preach, the national debt situation may only get worse.

COMMENT

optimatorz & br_add: Your payroll tax argument is a complete canard. You know as well as I do that medicare and SS payroll taxes at best slightly defray the cost of future services consumed by that 45%-49% who do not pay federal income taxes. Of course, now you’ll make the incorrect argument that some small fraction of those don’t live long enough to recoup their contributions to SS and medicare, but on an actuarial basis that cohort not only makes their money back while freeloading on other government services, but they even make a profit on these payroll tax contributions. Excise taxes, you say? Seriously? So those in higher tax brackets are hit less by these because they *gasp* save money. Perish the thought. Surely it’s much better to encourage boundless consumption. What could possibly go wrong with subprime lending after all?

To those who want conservatives to relinquish their future SS and medicare payments, I say OK. But, you have to agree to return all of my payments to date with a rate of return equal to the S&P500 over that same period. I will gladly save for my own retirement expenses as long as you stop taking my money and spending it for me.

Finally, the fact that Obama chose to take the deduction for his charitable giving speaks volumes about his insincerity. If all of the federal budget is true and noble, then he should happily give up that deduction. It’s not a case of being a “chump.” The federal government is simply a metacharity. Instead, he clearly believes that he can spend that money better than the federal government. And if that’s true for him, then why not others?

Posted by center_right | Report as abusive

The decline of incumbency and the rise of third-party spoilers

Apr 4, 2011 15:57 EDT

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U.S. forces are fighting three costly, inconclusive wars; unemployment is 8.8 percent and the president’s new budget proposal would double the national debt in a mere 10 years. What a great moment for Barack Obama to declare for reelection.

Obama enters the 2012 race as the clear favorite. His poll numbers are weak but his public respect is solid; his money position is outstanding; even people like me, who think runaway federal borrowing is an error of historic proportions, admire the president. I can see myself pulling the lever for him in 2012, as I did in 2008.

Set aside zip code analysis and Electoral College positioning — what two leading indicators should give Obama pause? The decline of incumbency and the rise of third-party spoilers.

Presidential incumbency brings many advantages, not least of which is command of the nation’s attention. White House incumbents standing for reelection are 21-7 in American annals.

But recent trends matter most, and recently, incumbents have been on a mere 3-3 streak. Ronald Reagan (1984), Bill Clinton (1996) and George W. Bush (2004) were reelected. But Gerald Ford (1976), Jimmy Carter (1980) and George H. W. Bush (1992) were defeated when standing for reelection with all the powers and advantages of incumbency. Once, Americans almost always voted to retain an incumbent chief executive. Not anymore. Lately voters have been ornery.

Now factor in spoiler candidates who run for reasons of ego, knowing they can’t win. Carter lost because a third-party vanity candidate, John Anderson, siphoned off liberal voters. The elder Bush lost because a third-party vanity candidate, Ross Perot, siphoned off conservative voters. Plus, in 2000, a third-party vanity candidate, Ralph Nader, threw the election to the younger Bush, away from Al Gore, who prevailed in the popular vote.

That’s three of the last seven presidential elections swung by third-party candidates who were in the race mainly as acts of self-flattery. We live, after all, in an era in which personal promotion often trumps substance.

Right now a three-way 2012 race seems unlikely. But it’s only April 2011. In April 2007, no one was taking a certain junior senator from Illinois seriously as a presidential aspirant.

Suppose Michael Bloomberg — who was a Democrat, and then a Republican, and now is an extremely wealthy Independent — ran a vanity third-party campaign for the White House. He could gain traction as a protest vote for disenchanted Obama supporters. Mr. President, I’d appoint Bloomberg to something important ASAP if I were you.

And what of the likely opposition field? In alphabetical order:

Michele Bachmann. If this nut job gets anywhere near the Oval Office, there will be a mass migration to Canada. Democratic campaign strategists are rooting for Bachmann — she gets the Republican nomination, and the Obama reelection becomes a walkover.

Haley Barbour. A flaming hypocrite, Barbour denounces government spending yet lavishly wastes taxpayer funds on himself.

Newt Gingrich. A blazing-torch-visible-from-orbit hypocrite, it’s hard to believe even one Republican woman will vote for Gingrich, and women are increasingly important to the GOP. Not clear why any man would vote for him, either.

Mike Huckabee. A charming guy with potentially broad appeal. His current job as a cable commentator offers a lot more longevity than being a candidate.

Jon Huntsman Jr. Nobody’s heard of him. He’s an engaging public speaker who makes a fresh impression with a fascinating personal story. Sound like anyone we know four years ago?

Sarah Palin. Her grasp of public affairs is better than pundits acknowledge. But what is her substantive achievement? Palin quit on her first term as Alaska governor. Couldn’t take the pressure of even a single term running a state with one-quarter of one percent of the country’s population. Has tremendous potential for a meltdown.

Tim Pawlenty. No big negatives, which is deceptively important. Not clear what he stands for beyond his own career.

Mitt Romney. Bowled a gutter ball in the 2008 Republican nomination race, but Reagan lost the Republican nomination in 1976 then won on his second attempt. Has uncanny ability to seem phony even when he’s telling the truth.

Rick Santorum. There’s no minimum to the number of votes Santorum could draw.

The wild card:

Michael Bloomberg running as a Republican. This would require significant bridge-building with a party he theatrically resigned from. Paired with a social-conservative running mate, Bloomberg as a Republican might knock Obama from the White House.

Where’s the market opportunity in the contemporary American political marketplace? There is no prominent Roe-supporting, experienced, centrist Republican who’s gone after teachers’ unions and government-worker pensions. There will be if Bloomberg returns to the GOP.

Photo: A screen capture image from a video announcement of U.S. President Barack Obama’s 2012 re-election campaign that was launched on April 4, 2011. Obama, a Democrat who won a sweeping victory over Republican Senator John McCain in 2008 with a message of change, said in a low-key email to supporters that he was filing papers to start his re-election bid in a formal way. REUTERS/http://www.barackobama.com/

COMMENT

Mr Easterbrook, Why don’t you just go ahead and state out loud that you will support and vote for any Democrat and mock and ridicule any Republican?

Posted by mheld45 | Report as abusive

The federal spending controversy

Mar 9, 2011 15:00 EST

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With another federal spending controversy brewing on Capitol Hill, recall that in his 2010 State of the Union Address, President Barack Obama said, “We’ve already identified $20 billion in savings for next year.” Now it’s next year — so what happened to the $20 billion in savings? Let’s follow the bouncing budget cut.

The “$20 billion” promise was not the sort of empty verbiage that dominates the federal spending debate. How many times have you heard a politician thunder about cutting spending but not cite even one specific reduction he or she supports? A year ago, the Office of Management and Budget laid out Obama’s proposed cuts in specific detail.

Some highlights: End production of the C-17 cargo plane, $2.5 billion saved. End federal funding for local hospital construction, $338 million saved. End the Save America’s Treasures program, $30 million saved. (The new book “Triumph of the City” by Edward Glaeser of Harvard argues that programs such as this actively backfire by slowing urban rebirth.)

Cut the Homeland Security Activities budget of the Environmental Protection Agency — the EPA fights terrorism? — by $35 million. Cut $1.5 billion in tax favors to Big Oil. Eliminate numerous overlapping education-grant initiatives. Cut $20 million from the critical, crucial, vital Right-Size Component Personnel Travel program. A litany of specific federal spending or tax-favor reductions were proposed in 2010 by the White House. The total saved came to $23 billion, more than the president promised.

Here’s what happened: nothing.

The spending cuts the president requested in 2010 were part of his fiscal 2011 budget proposal — and Congress never voted on the FY11 budget. Since October, the country has been operating on “continuing resolution,” meaning the budget of fiscal 2010 is frozen in place:  including billions of dollars in spending that even a liberal Democratic White House considers improvident.

Congress failed to enact an FY11 budget because of the childish sandbox fight between Republicans and Democrats over who would be blamed for what. The effect of Congress’s failure to fulfill its duty is to ensure that even clearly undentified wasteful spending continues. Welcome to Washington!

Last week, Congress approved a continuing resolution that keeps government in operation till mid-March. Included in the bill was about $2 billion in spending cuts for 2011 — less than 10 percent of what President Obama backed, and more to the point, a barely detectable 0.05 percent of all federal spending for this year. Nevertheless, Senator Dianne Feinstein of California called the cut “huge.” For politicians  whose mindset is giveaway, giveaway, giveaway, a 0.05 percent reduction is strict discipline.

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The Senate is considering a continuing resolution that would carry the country through the end of the fiscal year. Democrats have proposed an additional $11 billion in cuts, which Senator Dick Durbin of Illinois calls “the limit” of possible cuts. Durbin’s “limit” — $2 billion already cut, $11 billion more reduced — would be considerably less than what President Obama said in 2010 he wanted to cut. And this “limit” cut would still represent just one-third of 1 percent of 2011 federal spending.

Many of the reductions in spending and tax favors that President Obama requested in 2010 are now in the White House’s proposed fiscal 2012 budget. So that critical, crucial Grants to Manufacturers of Worsted Wool program may finally go out of existence — assuming Congress ever deigns to enact an FY12 budget. Congress might even finally eliminate an Army Corps of Engineers allocation hilariously called the Low-Priority Construction Projects Program. Deleting the program — “Mr. Chairman, my agency desperately needs more funding for low-priority projects” — would save $214 million in a year. If, that is, Congress ever enacts a budget.

The lesson of the phantom $20 billion budget cut is that anybody can blow hot air about big spending reductions in the future: all that can be believed is cuts in the current year.

Last month, President Obama announced a plan to reduce the deficit by $2.2 trillion over the next decade. But hardly any cuts take effect now; the bulk of the president’s proposed reductions would not begin until 2016, when a second-term Obama would be preparing to leave office. Tea Party types, for their part, call for extensive future spending cuts — but want to exempt defense and Social Security. Unless defense and Social Security are on the table, as the recent bipartisan debt-reduction commission concluded, no significant fiscal reform are possible.

Saying the country will spend without restraint now but switch to strict fiscal discipline in the future is like saying, “I can quit smoking anytime I want.” In 2010, the White House asked for $20 billion in spending cuts, and Congress would not make the cuts. Until Congress makes right-now, this-year cuts, the national debt situation will keep getting worse.

Photos; Top: Shadows are cast on the White House in the early morning in Washington, February 4, 2009. REUTERS/Larry Downing, Bottom: Marine One (top) carrying U.S. President Barack Obama approaches the South Lawn as he returns to the White House from Camp David in Washington, February 8, 2009. REUTERS/Jim Young

COMMENT

The only way to stop the reckless spending is to “stop the spending”…and you do this by NOT increasing the debt ceiling. Contrary to misguided beliefs, this does NOT mean we default on our debt. Rather, it simply means that without the ability to recklessly print new money or sell debt, it means we will be forced to cut current programs (something we don’t now do) and use these reprogrammed funds instead to pay off debt obligations. This has a four-fold benefit: 1) it stops the spending once and for all, 2) it forces us to make the hard decisions to cut current programs NOW and use that money instead to pay off debt, 3)it puts us on “glide slope” to eventually be debt free and to have a balanced budget as the economy has time to grow 4) it means we DO honor our existing debt obligations (there are no defaults as the liberals have claimed)!

Posted by sr71 | Report as abusive

Obama must say ‘no’ to federal spending

Jan 25, 2011 22:58 EST

obamaSOTU2011President Barack Obama’s conciliatory tone in his State of the Union Address was exactly what the country needs at this moment. And once again, Obama showed he is the best political orator since Ronald Reagan.

On tone and feeling – which matter a great deal in politics – the president deserves high marks. So too do members of Congress who for once behaved in a bipartisan manner, not like squabbling children.

Substance? That’s another matter.

In the address there was a lot of talk about jobs and innovation, both obviously important: but issues that no president controls. There was talk of better access to high-speed Internet and of regulatory and tax-loophole reform: not one single person opposes either. There was dream-world talk of high-speed rail and energy in the year 2035. But there were precious few specifics regarding what will be done right now to address runaway federal debt. And runaway federal debt, which suggests the U.S. future may be less bright, is a major issue holding the economy back.

The president proposed a five-year freeze in discretionary federal spending, which he acknowledged is a mere 12 percent of the federal budget. A freeze in 12 percent of future spending – that’s all you got?

The president vaguely mentioned cuts in “community action,” giving no details. Obama endorsed the military budget cuts proposed by Defense Secretary Robert Gates, and those cuts are well-advised. But note the wording: “The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.” Gates has the right idea, but no Secretary of Defense can “agree” to “cut” even a dollar from Pentagon spending – Congress controls the military budget. Obama created the impression that cuts have already happened, leaving open the door for Congress to reinstate spending.

No other specific spending reduction was proposed.

Last year in the State of the Union Address, Obama said, “We’ve already identified $20 billion in savings for next year.” Now it’s next year – what about that $20 billion in savings? Unmentioned.

In June 2001, Obama said, “Next year, when I start presenting some very difficult choices to the country, I hope some of these folks who are hollering about deficits and debt step up, because I’m calling their bluff.” Now it’s next year. Where were the difficult choices? Unmentioned. No bluff was called.

Even in the course of speaking about stopping increases in discretionary spending, Obama said he’d exempt spending for “innovation and education,”  information technology, research “and especially clean energy technology.”

These are important. But if you declare a blanket freeze and then start making exceptions in the same speech, nobody will take the freeze seriously. Lobbyists will say that ethanol subsidies are “innovation” and thus exempt them from cuts. Lobbyists will say the same about corporate handouts, and about every other kind of boondoggle. Make one exception, and it will open the door for many exceptions. Which the president has already done.

And what about the deficit commission report? The president misrepresented it, saying, “Their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it – in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.” Notice what’s missing – the deficit commission recommendations to increase the Social Security retirement age and cut Social Security benefits to the rich.

Cutting the Social Security retirement age – everyone knows longevity has increased since the Social Security system began in 1935 – and eliminating Social Security transfer payments to the rich are the most promising ideas to reduce runaway growth in the federal debt. The president not only didn’t endorse these ideas, he pretended they did not exist. On this point Obama seemed more concerned with being reelected – seniors vote, the young don’t – than acting responsibly in his stewardship of the nation.

Obama’s vague language about spending restraint in the future – which boiled down to, “I’ll quit smoking next year” — must be weighed against last month’s $900 billion decision not only to extend existing tax cuts but add new ones. The White House backed a $800 billion stimulus bill in 2009, then the $900 billion tax-cut decision in 2010 – that’s an additional $1.7 trillion added to the national debt, a breathtakingly lavish giveaway at the same time that the president talks in the most hesitant terms of minor cuts that might take place at unspecified future dates.

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The Tea Party, which supported the new $900 billion tax cut, deserves its share of blame. After coming to office with a promise of fiscal crackdown, the Tea Party’s first act was to back a huge, undisciplined giveaway.

Both the Obama White House and the Tea Party types on the Hill said the latest tax cut was needed to revive the economy. But the economy fell into its current cold snap while big tax cuts were in effect. Most of the cuts extended in December were enacted in 2003. If having major tax cuts in place for seven years didn’t prevent the economic slowdown, why should we believe that more years of tax cuts will fix the slowdown? Here, I examine the argument that the parade of Washington special giveaways like this are a cause of the slow economy, not its palliative.

Bear in mind, the current bleak deficit picture is the picture before the health care reform bill causes federal medical spending to skyrocket. It may well prove that many aspects of Obama’s health care reform are justified – for millions of Americans, better health care coverage with less money stress will be a blessing. But the nation should be bracing for the invoice, which is likely to be substantial. Instead of saving to pay that invoice, we’re ordering another round of champagne.

Officially the health care reform bill will cut medical costs to taxpayers, but this is a fiction based on the bill’s assumption of fantastic savings from unspecified cuts in unspecified future years. Doug Elmendorf, director of the Congressional Budget Office, said in 2009 that ObamaCare will not bring down spending, rather “significantly expand federal responsibility for health care costs,” shifting the price from private payers to government.

Supposedly, health care cost restraint will be the task of a new Independent Payment Advisory Board. But the board’s first proposals are not due till 2014. This reflects the ritual of talking big about cost discipline, then postponing any action into the future while giving every interest group a bag of candy today. This analysis from the Centers for Medicare and Medicaid Services, which administers most federal health care spending, says the promised dramatic future cuts in health care costs are “extremely unlikely to occur.” If that reality were reflected in deficit estimates – all of which assume the magic-bullet of future health care cuts – the national debt meter would sink further into the red.

Consider that one month after the health care reform bill passed last spring, Congress, with White House backing, cancelled a scheduled cut in Medicare payments to physicians. The cut was first scheduled in 2003, and has been cancelled on an annual basis since. If even a minor, halting step in the direction of Medicare cost control was cancelled last year during a deficit crunch, it becomes “extremely unlikely” that very deep cuts will occur beginning in 2014. Yet instead of saving to prepare for that day, we’re spending like there is no tomorrow.

Prediction: Tomorrow will come.

The easy way out in politics is to talk vaguely about fiscal discipline, promising dramatic future action while giving away money hand over fist today. Nothing’s easier than to give away borrowed money. George W. Bush did this like mad in this final three years in office, and now Barack Obama is doing it in his first three.

Leadership means the ability to say the word “no.” From 2006 on, Bush never said the word “no.” Barack Obama, beginning his third year, has yet to pronounce the word “no” regarding any spending request.

Consider this quote: “Raising America’s debt limit is a sign of leadership failure. 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 problem and a failure of leadership. Americans deserve better. I therefore oppose the effort to increase America’s debt.”

Whose said this? Barack Obama, in 2006, opposing the first George W. Bush borrowing-based giveaway. If only the Obama of 2006, not the Obama of 2011, had presented tonight’s State of the Union Address.

Photos, Top: President Obama at the State of the Union in 2011. REUTERS/Kevin Lamarque
Bottom:
President Obama at the State of the Union in 2011. REUTERS/Jim Young

COMMENT

Our nation is on the brink of financial Armageddon and we must have a president who will lead. We need more than just tone, we need a president who will drive the sense of urgency that is missing in Washington. The hour is late and the consequences for us all are cataclysmic….be urgent Mr. President, be bold and lead!

Posted by actnow | Report as abusive

China should not be our next whipping boy

Oct 28, 2010 07:00 EDT

CHINA

Here we go again.

With a sort-of withdrawal from Iraq in progress, and a scheduled withdrawal from Afghanistan approaching, Washington needs a fresh adversary. How about China?

China is big and getting bigger. Its wealth and power is increasing. It’s inscrutable, whatever that means. (Just try understanding the United States.) And according to super-secret intelligence reports, China is pursuing national interest. This can’t be allowed — we’ve got to confront them!

Of course it is a standby of politics for governments to create international adversaries, in order to deflect criticism away from themselves. There’s a theory – best expressed in the great spoof Report From Iron Mountain — that while dictatorships can issue orders, democracies need enemies in order to prevent free men and women from saying, “To heck with central government.”

Polls suggest many Americans right now are contemplating the phrase “to heck with central government,” so perhaps Barack Obama’s White House thinks voters will be distracted if China is converted into an adversary. The idea is not new — the George W. Bush White House attempted the same.

When the younger Bush took office, the international scene was fairly tranquil, and at that point, people were tired of hearing Saddam Hussein blamed for everything. So Bush started talking tough about Beijing. This culminated in the Hainan Island incident, which raised international tensions. Cable news was abuzz with confronting China; Dick Cheney darkly hinted of war. The Council on Foreign Relations went to red alert.

Then 9/11 happened, and the China menace disappeared from headlines. Though not from intellectual discourse: this 2005 issue of The Atlantic, home to the very best general-interest public- policy writing, had “How We Would Fight China” as its main cover headline.

The cover photomontage, in creepy distorted color, shows an ominous, slanty-eyed sailor. Maybe he has inscrutable intentions! The Chinese sailor stands in front of, well, you can’t really tell, but the stuff in the background looks threatening too. “The American military contest with China in the Pacific will define the twenty-first century. And China will be a more formidable adversary than Russia,” The Atlantic warned.

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Is the Chinese navy really a threat? Politically, is Beijing “newly assertive” or merely going through a natural transition as its stature grows? Do Beijing’s stances on exchange rates, trade and security threaten the United States, as opposed to merely annoying us? Because we annoy the living bejeezus out of them.

The United States wishes China would float its currency, rather than sustain fixed rates that promote Chinese trade. Governments make national policy based, usually, on what they believe advances their national interest. They may be wrong – maybe China should indeed stop managing the renminbi. But it’s ridiculous for Washington to act all horrified about Beijing using money to pursue its vision of national interest: if other nations told Americans how to use our money, we’d be outraged.

It is highly unrealistic for America to think China will fund the U.S. borrowing binge by purchasing Treasury bills; and also suppress its own consumption, while underwriting our middle class living standards by selling us cheap goods; and then also manage their currency to our liking.

U.S. political posturing about currency exchange rates go back at least as far back as the Ronald Reagan administration. American interest groups complain about exchange rates because this feels like something Washington should be able to control, whereas larger economic trends aren’t controlled by any government. When strong currencies benefit America, U.S. interest groups demand that. When weak currencies benefit us, we switch demands
Timothy Geithner just said:

G-20 emerging market countries with significantly undervalued currencies and adequate precautionary reserves need to allow their exchange rates to adjust fully over time to levels consistent with economic fundamentals.

Now, to whom could he be referring? Imagine how infuriating Beijing must find this sort of condescending hectoring, especially from a nation whose leaders will not take any step at all to put their own fiscal house in order.
China has many internal problems, including human rights abuses, corruption, pollution and lack of free speech. China’s relationship with Taiwan is a tense mess. The Han mistreat the Tibetans. The list of China’s faults could go on at some length.

But in the main, there has never been a superpower relationship like the one between Washington and Beijing — mainly constructive, mainly cooperative, neither side positioning to destroy the other.

CHINA

The world’s largest public works endeavor — the $75 billion South-to-North Water Transfer Project in its early stages in China — could be smashed from the air in a day by United States precision-guided bombs. China is building the project because Chinese leaders assume they will never go to war with the United States. That’s what we should assume too — and not make China into a distant whipping boy for our own domestic problems that U.S. leaders are afraid to face.

Should the United States fear the Chinese navy?
China is expanding its navy, which today is equipped only for coastal operation, though perhaps someday will venture into the “blue water” where the United States Navy rules. Not long ago, the U.S. Navy and Chinese navy (its delightful formal name is the Army Navy) conducted joint exercises. Recently they have not, though China just conducted a joint naval exercise with Australia. Here is the Pentagon’s latest report on the Chinese military, which is decidedly non-alarmist.

This is the warship in the background of the 2005 The Atlantic cover. It’s the lead ship of a class that was cancelled, which makes it sound a lot less menacing. The vessel is a guided-missile destroyer. China has a handful of this type, while the United States Navy has many dozens. The United States has large numbers of more potent guided-missile cruisers, and a huge lead in nuclear attack submarines capable of long stays submerged: any one of them could eat the entire Chinese surface fleet for lunch.

The United States has 11 supercarrier strike groups: China doesn’t even have an aircraft carrier, let alone a supercarrier strike group. China has purchased unwanted medium-sized aircraft carriers from Moscow and is tinkering with them, though none sail. China is believed to be designing its own 50,000-ton conventional-power aircraft carrier, which would be similar to what the United States called a “fleet carrier” during World War II, and not as powerful as the 100,000-ton nuclear supercarriers the United States builds at enormous expense.

Today’s Chinese navy would not dare throw a stone at the United States Navy, and that relationship should continue for a generation or more. Will it change eventually?

By toying with aircraft carriers, China may be testing the waters, as it were. In the mid-1930s, when treaties forbid Germany from building heavy combatant vessels, Hitler ordered construction of “pocket battleships,” largely to see how Paris and London would respond. When they did nothing, he approved  a rearming program for the Germany navy.

Certainly Beijing might be engaged in modest naval expansion to see how we respond, thinking that decades from now, it too will command supercarrier strike groups. Friendly Washington-Beijing relations seem a better hedge against that day than scowling and finger-wagging. The United States asserts a unilateral right to sail as many advanced warships as it pleases. On what grounds could this right be denied to China?

COMMENT

It is difficult to understand American – calling any one who are improving their lots “enemies” and “threats”. No one can invade China, India, Japan without a all-out war being sanctioned.
The Chinese naval base is in Hainan island; that’s about it! The containment of Chinese trade routes and fishery is a concern for their growing population that has real needs. The next real threat globally is social, political and cultural difference between mainstream European, North American and North-East Asian. I don’t think India will be a superpower but a niche player to contain China through engagement with Pakistan. The Middle-Eastern countries – including Pakistan, also including the prevalent influence of Islam, will continue to be a balancing act for North-East Asian.
I believe the Japanese, in spite of demographic balance, has a lot to offer to North East Asians. They are more thorough in population propaganda and culturally more embedded than other emerging countries. Hence, a strong ballast will tide the nation over difficult times.
I thought I saw something in Obama and his vision delivery but somewhat disapointed with American’s idea of quick-fix. Americans are veryyy democratic and this social and cultural base is good for the world to follow. However, for the US to police global compliance is a different story

Posted by lphock | Report as abusive

Why did America spend so long in Iraq?

Sep 1, 2010 14:06 EDT

Last night President Barack Obama announced “the end of our combat mission in Iraq.” This is welcome news — if years late. Yet in an address to the nation that ranged as far afield as energy policy and “the limitless possibilities of our time,” the president never got around to the essential question of this costly bloodbath:

Why did the United States spend seven years fighting in Iraq?

By the estimate of the British correspondent John Burns and New York Times London bureau chief, who was living in Baghdad when the invasion began and remained there until 2008, the war killed 4,500 Americans and wounded 35,000 of them. It also caused “tens of thousands” of Iraqi civilian deaths; cost $750 billion, nearly enough to wipe out this year’s federal deficit; and created “the anti-Americanism that would become commonplace around the world.”

That last is all too easy to overlook. Before the 2003 invasion of Iraq, the world’s sympathy was with the United States. Everyone, including almost every Muslim, knew the 9-11 attack was heinous. Almost all nations, including nearly all Islamic nations, supported America’s counterattack in Afghanistan, which was clearly justified as self-defense.
Then we bombed and invaded Iraq, a country that had nothing to do with the 9-11 monsters, killing at least 10 times as many innocent civilians as were killed here on September 11. We took huge numbers of Iraqis prisoner, and tortured or humiliated them.

We blasted to the ground cities such as Fallujah, destroying the homes of innocents while using antipersonnel weapons, such as white phosphorous shells, which are designed to cause intense suffering before death.

We installed a puppet government and began to kill those who opposed it. Much of the world was disgusted, with reason. We practically begged the moderate Muslims of the world to turn against us.

Why?

Last night President Obama praised U.S. military forces in Iraq, who deserve praise. In a confused, stressful situation where it was hard to tell who the enemy was, 99 percent of U.S. soldiers, marines, sailors and aircrew carried themselves with honor. But why were our forces in a confused, stressful situation?

Iraq under Saddam Hussein was a horrible place, and Saddam was a horrible person. But there are other horrible places, and the United States ignores them. Why did we invade and occupy a country that posed no national security threat to the United States? Two presidents, George W. Bush and Barack Obama, have elaborately dodged this question. America deserves an answer.

The story constantly changes. At various points it was claimed by the second Bush White House and Defense Department that Iraq was building atomic weapons, or a stronghold of al Qaeda, or even planning an attack on the United States. A video timeline of Bush Administration statements about the need to attack Iraq is under the “latest program.” Regardless of whether Rachel Maddow is your cup of tea, it’s an informative timeline. All these claims were later retracted by the White House and Defense Department.

Suppose the true motives for the attack were to destroy banned weapons and depose Saddam. Morally, those motives can be defended. But, once American forces occupied Iraq, it took about a year to capture Saddam and hunt down his senior associates and to determine that there was no atomic bomb program. After doing this, why didn’t we just leave? If the United States had left after the first year – after performing the tasks that could be defended morally – the world might have admired us. Instead we stayed and stayed and stayed, killing and dying. Why?

The only attempt at explanation is circular. Last night Obama said, “A war to disarm a state became a fight against an insurgency.” The reason the insurgency came into being was to oppose the U.S. occupation: even Bush, by 2006, said the United States had become “an occupying force.” Many Iraqi insurgents are despicable people – terrorists and criminals. Some are patriots. If another nation invaded the United States, wouldn’t Americans be radicalized and use guerilla warfare against the occupiers? To invade a country, create an insurgency and then claim the insurgency you created rationalizes years of combat and killing is Orwellian.

But there would have been chaos and violence in Iraq if we’d just pulled out and left. How, exactly, would you characterize what happened in Iraq with the United States still there? The last six years of occupation have only served to delay the moment when Iraq confronts its fate – which has always been inevitable regardless of whether U.S. forces departed or remained.

Was the invasion “the madness of King George?” Conspiracy theories, especially in the Islamic world, hold the United States attacked Iraq out of a vicious desire to slay Muslims or a venal desire to seize oil or as a ploy to control the Middle East. The first two proposed explanations are nonsense (in Kosovo the United States fought to save Muslims, and Washington could have purchased all the oil in Iraq for far more cheaply than by seizing it). The third is implausible — if the U.S. goal was control of the Middle East, it sure didn’t work.

In his 2008 book The Bush Tragedy, Jacob Weisberg proposes an explanation that seems chillingly believable.  George W. Bush, Weisberg shows, grew up obsessed with proving that he was tougher than his father George H. W. Bush; the obsession was complicated by the father being a hero at the Battle of Midway in World War II, while the son went to great lengths to avoid military duty in Vietnam. During the 1991 Gulf War, the father’s army expelled Saddam from Kuwait but did not enter Iraq to depose the dictator — the elder Bush saying then, and maintaining since, this was because the international community had not sanctioned an attack on Iraq itself.

When the younger Bush became president and 9-11 created a pretext for use of the military, Weisberg’s theory continues, he seized the chance to invade Iraq, do what his father did not and become tougher than his father, at least within his own mind, since masculinity is not required to sit at a desk and tell others to die.

Bush Administration figures such as Vice President Dick Cheney, CIA Director George Tenet and Defense Department advisor Douglas Feith deliberately lied about the situation in Iraq in order to justify war, and Democrats in the House and Senate, in order to avoid criticism, rolled over.

We don’t have a peace treaty with Iraq. After all the cost in blood and sorrow, the United States and Iraq don’t have a peace agreement. For that matter, Iraq never formally surrendered. Think these are formalities? Peace treaties are the gold standard of success on the battlefield. Wars that “end” without them don’t really end.

There was no peace treaty to conclude the Korean War — just a 1953 armistice that stopped the shooting. That the Korean War did not end in a peace agreement is a reason military tensions between North and South Korea continue today. Fifty-seven years later, the terms of the armistice are still observed, but little else has been agreed on. For all the sacrifice in Iraq, where’s the treaty that spells out peace and friendship?

All we have is a “Status of Forces Agreement.” In 2008, the Bush Administration completed a SOFA in which Iraq’s sort-of government formally accepted the United States occupation, in return for the United States promising to depart if so instructed. By the terms of the SOFA, Baghdad could order Americans out of the country on short notice – and the United States would have no choice but depart. A referendum to see if the Iraqi people approve of the SOFA, and thereby grant legitimacy to the invasion, has been postponed repeatedly.

The July 2009 deadline to remove U.S. combat forces from Iraqi cities wasn’t an Obama idea, it was specified by the SOFA. So too was the current exit of heavy combat forces such as armored units. Though Barack Obama has been wise to withdraw heavy combat forces, he’s only following the script the Bush Administration laid out before leaving office. It borders on the bizarre to think that after campaigning for the presidency partly on his opposition to the presence of U.S. forces in Iraq, Obama is still following Bush’s Iraq timetable after being president for nearly two years, and not acting on any new vision of his own.

Is the “mission accomplished?” Bush famously claimed this while looking ridiculous on the deck of the Abraham Lincoln in 2003, and Obama sort-of claimed it from the White House last night. The claim is impossible to assess – since we still don’t know what the mission was.

Would the dead have wanted us to continue fighting? A haunting question of combat is whether others must fall to honor the sacrifices of those who have fallen before. It was argued during the Vietnam War that simply leaving would mean those who already had died there had died for naught. Last night, Obama essentially used this argument, quoting an Army sergeant as saying, “I know that to my brothers in arms who fought and died, this day would probably mean a lot.”

We live in a society that conducts these kinds of debates in sound bites. Once, the debate was conducted in poetry. In 1915, the Canadian physician John McCrea – who perished in World War I – wrote the poem In Flanders Fields, which argues that dead soldiers would want others to die, until there is victory. This poem became a sensation in the United Kingdom and the United States. Its relevant stanza:

To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep.

In 1918 Wilfred Owen, a British poet who served in World War I and died in France days before the ceasefire, argued the opposite in the poem Dulce et Decorum Est. This poem became a second public sensation. Its relevant stanza:

My friend, you would not tell with such high zest
To children ardent for some desperate glory,
The old lie; Dulce et Decorum est
Pro patria mori
.

The Latin means, “it is sweet and right to die for your country.” It is etched on the chapel wall at Sandhurst, the British school for army officers.

The fallen cannot speak: it is reasonable to suppose they would think others should keep fighting if there were something to fight for, but oppose others dying so that politicians can avoid being honest or making hard decisions. We kept fighting in Iraq. And we still don’t know why.

COMMENT

Yes – great article. I don’t believe that GWB had the intent of going down in history as the silliest president ever elected. Instead he acted on instruction from former friends in the CIA, GOP top people, his father and even a former UK PM. They created thousands of jobs in the US, revitalised a military industry that had gone belly up by the end of the “cold war” – and with a popularity rating about to go through the floor, he needed an enemy, and start a war.
What is silly is that nobody convinced him that the enemy had long evacuated to Mars. A nuclear assault on an enemy here would not hurt anyone. But then again, GWB will never go down in history as “clever”.
Those who seek an “independent investigation” – this is available, just approve of the ICC and ask this to raise charges – e.g. “Crimes Against Humanity” is obvious, since he violated the UN a number of times, and presented false evidence to them.

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