Friday, July 27, 2012
Al-Qaeda Still Alive
It looks like al-Qaeda is still alive. They are somewhat active in Iraq, Syria, and Mali. Al-Qaeda is is a radical Sunni group; most of the 9/11 hijackers came from Sunni Saudi Arabia. Now they are one of the groups terrorizing the current Shiite government of Iraq, and one of the groups undermining the Alawite/Shiite government of Assad in Syria. Meanwhile they are taking over the government of Mali in central Africa. So, the US is opposing al-Qaeda in Iraq in order for us to support the Maliki government we have set up, although Maliki is very close to Iran, our declared enemy. We are supporting the goal of al-Qaeda in Syria of overthrowing Assad, even if we so not support al-Qaeda explicitly. The Syrian rebels deny that they work with al-Qaeda, which may be true, but only because al-Qaeda works in Syria without identifying itself overtly. Finally, in Mali al-Qaeda makes no bones about openly taking over the government, leading to concerns that it may become a new base of operations for al-Qaeda, as Afghanistan was before 9/11, according to CNN's Erin Burnett.
Saturday, July 14, 2012
Is Ameica Still a Great Nation? 2
All the talk about the European atom smasher finding the Higgs boson adds to the perception of the decline of America. The US was supposed to have a particle accelerator in Texas, the Superconducting Super Collider, to rival CERN's in France and Switzerland, but we decided in 1993 that we couldn't afford it. Maybe the world doesn't need two huge accelerators, but the fact is that today Europe has one and the US doesn't. Two generations ago, the US would have been in the lead.
Today, the US has no manned access to space. Ironically, we have the International Space Station, but no American way to get people to or from it. We are dependent on the Russians to transport the crew. When I was doing science work at American embassies overseas, one of the best selling points we had was NASA. NASA had a wonderful reputation, mainly build on manned missions like the moon landing and the Shuttle, but also on scientific missions, particular the Hubble space telescope. The moon landing is now several generations ago, the Shuttle is in museums, and we have no way to service the Hubble, which will eventually die in orbit. You could see how important manned space activities were when the Shuttles were flown to the various museums that will house them. People stopped whatever they were doing to watch the Shuttles fly over on the 747 transport. That greatness is gone. NASA 20 years ago was what Apple was like before Steve Jobs died. It was a world leader that caught everyone's imagination. America has lost its Apple.
After the fall of Berlin wall, the US instituted a number of programs to help the Eastern European nations coming out of Communism. I went to Poland to run the Maria Sklodowski Curie Fund to help Polish scientists by financing small scientific cooperative projects between American and Polish scientists. We signed an agreement to maintain the cooperation for five years. After two years, the Republicans took over Congress in the Newt Gingrich revolution, and cancelled funding for the cooperation years earlier than specified in the agreement. The US did it under terms of the agreement that were put in for the Poles in case they ran out of funds, saying that the agreement could be cancelled if either party found it impossible to fund it. The only reason it was impossible for the US was that Congress refused to do so. It was an enormous contrast to the Marshall Plan that the US funded after World War II. The US had relatively much more debt, still had some rationing as a result of the war, but we sacrificed to help the Europeans. The Republican revolution was not that generous. In large measure, the European Union stepped in where the US failed, and is largely responsible for the current day success of the Poles and other Eastern Europeans. The contrast between the "greatest generation's" Marshall Plan, and the Gingrich Revolutions selfishness could hardly be starker.
The continual growth of a huge national debt and budget deficit is another sign of decline. There is nothing wrong with going somewhat into debt sometimes,but going hugely into debt all the time is bad. Although they agree there is a problem, the US is badly divided on this issue, with Democrats saying that taxes must be raised, while Republicans say expenses must be cut. The Democrats are in general more willing to put up with debt, but responsible Democrats less so. The US grew its social welfare programs, like Medicare and Social Security, when its economy was strong. Now we can't afford as much social welfare as we could a generation ago, but we can't have a civilized debate about how to reduce it, or pay for it. When you cut benefits, you hurt people. Today, Republicans, unlike Reagan, are unconcerned about who gets hurt; the taxpayers just want their money back. So, there is no discussion of how to reduce programs in a way that creates the least harm. There is more discussion of how to raise taxes, but only because the huge Bush tax cuts that were limited in time have been continued long past their intended expiration date. The "fiscal cliff" in theory will focus minds on taxes and budget cuts, but in fact Congress will probably muddle through without making a real decision. That is not the mark of a great nation.
A personal bugaboo for me has been America's hatred of its military since Vietnam. It's okay to hate the military as long as the nation is not threatened, but when it is, it may be hard to overcome. A good military requires good people to serve in it. Currently very few of the best Americans will serve. The service academies still turn out pretty good officers, but their perspective is somewhat limited. The military also needs outsiders who will bring a different outlook. This means you need some good people from Harvard and Stanford, as well a more graduates of good state universities. But today's generation grew up with parents or grandparents who avoided service in Vietnam, and who often pilloried veterans as psychotic baby killers, rather than praising them as defenders of the nation. Vietnam veterans probably share the homecoming experiences of Confederate veterans or low-ranking German soldiers who served under Hitler. The 9/11 attack began changing this attitude, because America really was attacked, but it was not a traditional military attack. Terrorists don't wear uniforms; The 9/11 attack was carried out by a handful of people who all died in the attack, except for Osama bin Laden and a few of his associates. Thus, it didn't really call for a military response, although that is how we responded. The resulting mess, getting rid of Saddam Hussein but strengthening the Iraqi regime, has not done a great deal to strengthen respect for the military, although it has helped. The Afghan war has at best been a wash, with no clear positive result from years of fighting. The fact that some many troops come home with mental problems has to some extend reinforced the perception that soldiers are psychotic killers, further discouraging people from joining the military. Without a strong military, the US position in the world is weakened, because it will be less able to respond if it is threatened by another country.
Today, the US has no manned access to space. Ironically, we have the International Space Station, but no American way to get people to or from it. We are dependent on the Russians to transport the crew. When I was doing science work at American embassies overseas, one of the best selling points we had was NASA. NASA had a wonderful reputation, mainly build on manned missions like the moon landing and the Shuttle, but also on scientific missions, particular the Hubble space telescope. The moon landing is now several generations ago, the Shuttle is in museums, and we have no way to service the Hubble, which will eventually die in orbit. You could see how important manned space activities were when the Shuttles were flown to the various museums that will house them. People stopped whatever they were doing to watch the Shuttles fly over on the 747 transport. That greatness is gone. NASA 20 years ago was what Apple was like before Steve Jobs died. It was a world leader that caught everyone's imagination. America has lost its Apple.
After the fall of Berlin wall, the US instituted a number of programs to help the Eastern European nations coming out of Communism. I went to Poland to run the Maria Sklodowski Curie Fund to help Polish scientists by financing small scientific cooperative projects between American and Polish scientists. We signed an agreement to maintain the cooperation for five years. After two years, the Republicans took over Congress in the Newt Gingrich revolution, and cancelled funding for the cooperation years earlier than specified in the agreement. The US did it under terms of the agreement that were put in for the Poles in case they ran out of funds, saying that the agreement could be cancelled if either party found it impossible to fund it. The only reason it was impossible for the US was that Congress refused to do so. It was an enormous contrast to the Marshall Plan that the US funded after World War II. The US had relatively much more debt, still had some rationing as a result of the war, but we sacrificed to help the Europeans. The Republican revolution was not that generous. In large measure, the European Union stepped in where the US failed, and is largely responsible for the current day success of the Poles and other Eastern Europeans. The contrast between the "greatest generation's" Marshall Plan, and the Gingrich Revolutions selfishness could hardly be starker.
The continual growth of a huge national debt and budget deficit is another sign of decline. There is nothing wrong with going somewhat into debt sometimes,but going hugely into debt all the time is bad. Although they agree there is a problem, the US is badly divided on this issue, with Democrats saying that taxes must be raised, while Republicans say expenses must be cut. The Democrats are in general more willing to put up with debt, but responsible Democrats less so. The US grew its social welfare programs, like Medicare and Social Security, when its economy was strong. Now we can't afford as much social welfare as we could a generation ago, but we can't have a civilized debate about how to reduce it, or pay for it. When you cut benefits, you hurt people. Today, Republicans, unlike Reagan, are unconcerned about who gets hurt; the taxpayers just want their money back. So, there is no discussion of how to reduce programs in a way that creates the least harm. There is more discussion of how to raise taxes, but only because the huge Bush tax cuts that were limited in time have been continued long past their intended expiration date. The "fiscal cliff" in theory will focus minds on taxes and budget cuts, but in fact Congress will probably muddle through without making a real decision. That is not the mark of a great nation.
A personal bugaboo for me has been America's hatred of its military since Vietnam. It's okay to hate the military as long as the nation is not threatened, but when it is, it may be hard to overcome. A good military requires good people to serve in it. Currently very few of the best Americans will serve. The service academies still turn out pretty good officers, but their perspective is somewhat limited. The military also needs outsiders who will bring a different outlook. This means you need some good people from Harvard and Stanford, as well a more graduates of good state universities. But today's generation grew up with parents or grandparents who avoided service in Vietnam, and who often pilloried veterans as psychotic baby killers, rather than praising them as defenders of the nation. Vietnam veterans probably share the homecoming experiences of Confederate veterans or low-ranking German soldiers who served under Hitler. The 9/11 attack began changing this attitude, because America really was attacked, but it was not a traditional military attack. Terrorists don't wear uniforms; The 9/11 attack was carried out by a handful of people who all died in the attack, except for Osama bin Laden and a few of his associates. Thus, it didn't really call for a military response, although that is how we responded. The resulting mess, getting rid of Saddam Hussein but strengthening the Iraqi regime, has not done a great deal to strengthen respect for the military, although it has helped. The Afghan war has at best been a wash, with no clear positive result from years of fighting. The fact that some many troops come home with mental problems has to some extend reinforced the perception that soldiers are psychotic killers, further discouraging people from joining the military. Without a strong military, the US position in the world is weakened, because it will be less able to respond if it is threatened by another country.
Monday, July 09, 2012
Barclays Adds to Bankers' Poor Image
The revelation that Barclays Bank manipulated the LIBOR interest rate is another example of corruption among world class bankers. Although Barclays is the only bank which has admitted guilt so far, it seems clear from emails and other documents that the manipulation was widespread among the other world class banks that Barclays did business with, probably including such big names a JP Morgan Chase and Citibank. Jamie Dimon was just on Capitol Hill testifying about loosing billions of dollars in bad investments, but the Senators and Congressmen basically gave him a pass. With few exceptions they praised him and asked for his advice on banking regulation and the economy. I was ashamed of my Senator, Michael Bennet, for kowtowing to Dimon by throwing him softball questions. Now Jamie Dimon's similarly named colleague at Barclays, Robert Diamond, has resigned under pressure for rate fixing.
It is clear why the banking community, and Jamie Dimon in particular, were so opposed to Elizabeth Warren's taking over the Consumer Financial Protection Bureau. They were afraid that she would be a real police woman, and they knew that they were dirty. They may not be criminals, but they are dishonest and corrupt. They have just manipulated the Congress to make it legal to do the unscrupulous things that they do. Their actions are often so complicated and involve such obscure financial instruments that it is very difficult to specify them as crimes, but Elizabeth Warren, as a Harvard law professor, could probably have done it. So, Jamie Dimon and his fellow big-shot bankers paid lobbyists and congressmen and senators directly to keep her out. He obviously got to President Obama, too, which is why I am not voting for Obama. He sold out America for something -- money, Jamie Dimon's love? I don't know what, but I don't like it. It was not good for the country.
It is clear why the banking community, and Jamie Dimon in particular, were so opposed to Elizabeth Warren's taking over the Consumer Financial Protection Bureau. They were afraid that she would be a real police woman, and they knew that they were dirty. They may not be criminals, but they are dishonest and corrupt. They have just manipulated the Congress to make it legal to do the unscrupulous things that they do. Their actions are often so complicated and involve such obscure financial instruments that it is very difficult to specify them as crimes, but Elizabeth Warren, as a Harvard law professor, could probably have done it. So, Jamie Dimon and his fellow big-shot bankers paid lobbyists and congressmen and senators directly to keep her out. He obviously got to President Obama, too, which is why I am not voting for Obama. He sold out America for something -- money, Jamie Dimon's love? I don't know what, but I don't like it. It was not good for the country.
Friday, July 06, 2012
Is America Still a Great Nation?
Morning Joe on MSNBC had an excellent discussion of the Presidency this morning with several historians. It mainly focused on recent Presidents, but they were compared to the really great Presidents of history. Unfortunately, the recent Presidents don't measure up to Washington, Jefferson and Lincoln, except perhaps for FDR.
There was a lot of praise for Reagan, JFK, Truman, Eisenhower and some others. The best justification for Reagan was that he inspired a new conservative, Republican attitude which has continued to this day. I think Reagan was a decent guy, but for some reason today's Republicans fail to see the full scope of his presidency. First, his tax cuts created budget deficits which bedevil the US up to today. He was actually too nice for many Republicans. He surrounded himself with conservative, true believers who cut taxes drastically in anticipation of his cutting government expenditures. However, when Reagan found that the draconian budget cuts his staffers had proposed would actually lead to widespread hardship in the US, perhaps including starvation, deaths from easily cured diseases, etc., he backed off, under pressure from Democrats. The result was that we got the tax cuts without the budget cuts and budget deficits into the distant future. Only Clinton eventually returned the nation to a surplus, ant then only for a few years. To Reagan's credit, when he realized the damage his tax cuts were doing to the country, he raised taxes, a fact today's Republicans seem to overlook when they lionize him. He was President when we won the Cold War, but that was in large part due to the containment policy that the US had instituted long before Reagan was President.
Of all the recent Presidents, I think George H.W. Bush (#41) was probably the best, but he doesn't compare to the pantheon of earlier greats. He won the first Iraq war, handling it much better than his son, Bush 43, did the second Iraq war. Additionally, after Bush 41 pledged not to raise taxes, he did raise them when he believed it was the best thing for the country, although he knew it would undermine his chances for re-election. He put the country ahead of his own personal career.
The Morning Joe historians commented about how important it was to have a war in order to have a memorable presidency. But to have a war be a positive for a president's legacy, they thought it had to be a war which the US fought all in. World Wars I and II are the only ones that fall into that category, and Wilson's handling of the World War I aftermath, partially due to his poor health, did not help his legacy. On the other hand, Franklin Roosevelt's handling of WW II secured his place in history. The Vietnam War besmirched all the presidents it touched, and Bush 43's mishandling of the Afghan War and the second Iraq war only sealed his reputation as a horrible, failed President.
Clinton and Carter did not get wars. Nobody much likes Carter, but grudgingly mentions his successful Middle East peace negotiations, which no one since him has been able to replicate, or even approximate. Clinton had Bosnia, which I don't remember anyone mentioning. It was a mixed bag for him; on one hand there was a lot of genocide before he did anything, on the other the Balkans have been relatively stable since the Dayton Accords.
There was a lot of sympathy for the largely ignored presidencies of Truman and Eisenhower, but they didn't rise to greatness. Truman basically took over from FDR at the end of WW II without messing up too badly. Eisenhower mainly presided over good times as the country recovered from WW II but fought the largely forgotten Korean War. The historians gave Eisenhower kudos for his handling of the Korean War, but I think it was more the precursor of the recent unsuccessful wars like Vietnam and Afghanistan. The US did not "win," and there is still no peace treaty ending it. I think the real hero of the post-World War II decade was Gen. George Marshall. He was probably more responsible for the Allied military victory than any other American military man. He was Eisenhower's mentor and boss. After the war he served as Secretary of State and Secretary of Defense, but he would not seek public office, despite his enormous popularity at the end of the war. He lent his name and prestige to the Marshall Plan, which was largely responsible for the prosperous Europe we have today (despite its current troubles with the Euro). Marshall never voted because he did not want political loyalties to get in the way of his service to his country. Eisenhower was not quite so willing to put his country ahead of his own personal career.
On the subject of military service, I am very disheartened that it has become such a badge of dishonor for political service. No recent President has been a veteran, although a number of veterans have run for President. Obama did not serve; he defeated McCain who was a prisoner of war in Vietnam. Bush was a coward who evaded service in Vietnam by joining a National Guard unit in Alabama for which he rarely did anything. His Vice-President Cheney was also a coward who evaded service in the military altogether, although he was draft age during the Vietnam War. Bush ran against Al Gore, who served in Vietnam despite his father's being a Senator. The Gore family, unlike the Bushes, had a tradition of military service to the country. Then Bush ran against Senator Kerry, whom he viciously attacked through the Swift Boat Veterans group, for being a Vietnam veteran. I find it disgraceful that Bush did it, and sad that this country despises veterans so deeply that the attack worked. Clinton, of course, ran against Bush 41, who was a decorated World War II pilot, and Bob Dole, another decorated World War II veteran who was badly wounded in Italy. Reagan served in the military during World War II, but sort of like Bush 43 did. Reagan stayed in California and made movies for the Army. Jimmy Carter was a Navy officer who graduated from Annapolis, and many of the earlier presidents had some military service.
There was a lot of praise for Reagan, JFK, Truman, Eisenhower and some others. The best justification for Reagan was that he inspired a new conservative, Republican attitude which has continued to this day. I think Reagan was a decent guy, but for some reason today's Republicans fail to see the full scope of his presidency. First, his tax cuts created budget deficits which bedevil the US up to today. He was actually too nice for many Republicans. He surrounded himself with conservative, true believers who cut taxes drastically in anticipation of his cutting government expenditures. However, when Reagan found that the draconian budget cuts his staffers had proposed would actually lead to widespread hardship in the US, perhaps including starvation, deaths from easily cured diseases, etc., he backed off, under pressure from Democrats. The result was that we got the tax cuts without the budget cuts and budget deficits into the distant future. Only Clinton eventually returned the nation to a surplus, ant then only for a few years. To Reagan's credit, when he realized the damage his tax cuts were doing to the country, he raised taxes, a fact today's Republicans seem to overlook when they lionize him. He was President when we won the Cold War, but that was in large part due to the containment policy that the US had instituted long before Reagan was President.
Of all the recent Presidents, I think George H.W. Bush (#41) was probably the best, but he doesn't compare to the pantheon of earlier greats. He won the first Iraq war, handling it much better than his son, Bush 43, did the second Iraq war. Additionally, after Bush 41 pledged not to raise taxes, he did raise them when he believed it was the best thing for the country, although he knew it would undermine his chances for re-election. He put the country ahead of his own personal career.
The Morning Joe historians commented about how important it was to have a war in order to have a memorable presidency. But to have a war be a positive for a president's legacy, they thought it had to be a war which the US fought all in. World Wars I and II are the only ones that fall into that category, and Wilson's handling of the World War I aftermath, partially due to his poor health, did not help his legacy. On the other hand, Franklin Roosevelt's handling of WW II secured his place in history. The Vietnam War besmirched all the presidents it touched, and Bush 43's mishandling of the Afghan War and the second Iraq war only sealed his reputation as a horrible, failed President.
Clinton and Carter did not get wars. Nobody much likes Carter, but grudgingly mentions his successful Middle East peace negotiations, which no one since him has been able to replicate, or even approximate. Clinton had Bosnia, which I don't remember anyone mentioning. It was a mixed bag for him; on one hand there was a lot of genocide before he did anything, on the other the Balkans have been relatively stable since the Dayton Accords.
There was a lot of sympathy for the largely ignored presidencies of Truman and Eisenhower, but they didn't rise to greatness. Truman basically took over from FDR at the end of WW II without messing up too badly. Eisenhower mainly presided over good times as the country recovered from WW II but fought the largely forgotten Korean War. The historians gave Eisenhower kudos for his handling of the Korean War, but I think it was more the precursor of the recent unsuccessful wars like Vietnam and Afghanistan. The US did not "win," and there is still no peace treaty ending it. I think the real hero of the post-World War II decade was Gen. George Marshall. He was probably more responsible for the Allied military victory than any other American military man. He was Eisenhower's mentor and boss. After the war he served as Secretary of State and Secretary of Defense, but he would not seek public office, despite his enormous popularity at the end of the war. He lent his name and prestige to the Marshall Plan, which was largely responsible for the prosperous Europe we have today (despite its current troubles with the Euro). Marshall never voted because he did not want political loyalties to get in the way of his service to his country. Eisenhower was not quite so willing to put his country ahead of his own personal career.
On the subject of military service, I am very disheartened that it has become such a badge of dishonor for political service. No recent President has been a veteran, although a number of veterans have run for President. Obama did not serve; he defeated McCain who was a prisoner of war in Vietnam. Bush was a coward who evaded service in Vietnam by joining a National Guard unit in Alabama for which he rarely did anything. His Vice-President Cheney was also a coward who evaded service in the military altogether, although he was draft age during the Vietnam War. Bush ran against Al Gore, who served in Vietnam despite his father's being a Senator. The Gore family, unlike the Bushes, had a tradition of military service to the country. Then Bush ran against Senator Kerry, whom he viciously attacked through the Swift Boat Veterans group, for being a Vietnam veteran. I find it disgraceful that Bush did it, and sad that this country despises veterans so deeply that the attack worked. Clinton, of course, ran against Bush 41, who was a decorated World War II pilot, and Bob Dole, another decorated World War II veteran who was badly wounded in Italy. Reagan served in the military during World War II, but sort of like Bush 43 did. Reagan stayed in California and made movies for the Army. Jimmy Carter was a Navy officer who graduated from Annapolis, and many of the earlier presidents had some military service.
Tuesday, July 03, 2012
Gun Walking v. Gun Sales
The debate over the Congressional contempt citation for Attorney General Holder has obscured the debate about supplying weapons to Mexican drug gangs. The gun lobby has done a great job of obscuring the fact that the US is supplying many weapons to the gangs without the ill-advised "Fast and Furious" operation. This Huffington Post article about the Mexican Ambassador to the US's testimony before Congress lays out the damage that the US sale of weapons has done to Mexico. In most cases the weapons are supplied by Americans who profit by selling them the weapons -- gun dealers and American buyers serving as shills for Mexican gang buyers. Most of the newly supplied weapons are assault weapons.
End Filibusters
The Republicans have managed to stop the wheels of government by using the Senate filibuster process on all kinds of bills that they don't like. According to Bloomberg, Common Cause is suing to stop the uncontrolled use of the filibuster. Since the Democrats took over the Senate and the Republicans lost their majority there, the use of the filibuster has gone up to 276 times in 2007-10 from 130 in 2003-06. 84 filibuster motions had been used in this Congress up until May 2012. This has effectively instituted a governing process that requires a super-majority in the Senate, and has made it difficult to the US government to function. Currently it is blocking any progress on the budget process that is leading up to the "fiscal cliff" at the end of the year, when many programs will automatically end or begin unless the Congress takes some action that is currently blocked by the filibuster rule.
Wednesday, June 27, 2012
Mortgage Deduction vs. Capital Gains Tax
I am in favor of passing Bowles-Simpson, and I would defer to them how to revise tthe tax system, but the tax system is badly out of whack and needs revising quickly and thoroughly. If people don't respect the tax code, if they perceive it as unfair, they won't pay. Everybody will be a tax cheat, as they are in many southern European countries, like Greece and Italy. That said, I wonder if it would be better to eliminate the mortgage deduction, which affects a broad portion or the population, or the capital gains tax rate, which lowers taxes mainly for the rich.
In 2006, the mortgage interest deduction cost the US $76 billion. Although it affects a broad population, most of the benefit went to the moderately or conspicuously rich. Half of the benefit went to 12% of the taxpayers, those making more than $100,000 per year. If it was eliminated, house prices would fall probably 10-15%. This article says it promoted the then-housing bubble.
Bowles-Simpson proposed replacing the current deduction with a 12% tax credit (so you don't have to itemize to benefit, since usually only the wealthy itemize). A 15% credit proposed by a GW Bush panel would have produced $388 billion from 2013 to 2019, i.e., about $65 billion/year additional revenue.
A CBO analysis points out that the capital gains tax includes a tax on any change in value due to inflation, which is not real income, but is similar to any tax on interest which does not account for inflation. On the other hand, capital gains tax is not imposed until the item is sold, which may delay taxes for years. Capital gains over time have produced between 4-7% of revenues for individuals, although they were over 10% for the latter half of the 1990s. Changes in tax rates affect behavior, but usually for a short time, a few years. If capital gains taxes are going up, people will sell assets sooner to be taxed at the lower rate, but once they are sold, the spike in selling is over. In general it is hard to predict capital gains revenues.
The conservative Heritage Foundation position is that raising capital gains will stifle the economy. It implies that rich entrepreneurs will not work if they have to pay the same taxes as plumbers or engineers. They just won't get out of bed in the morning.
A Wall Street Journal article has some specific numbers for capital gains tax receipts in fairly recent years. In 2003, receipts were $51.3 billion. In 2007 they were $137.1 billion. A rough estimate is that if these rich people (and they are almost all rich) paid at the regular tax level (35%) rather than the current capital gains level (15%) the receipts would roughly double, i.e., to $100 billion in 2003 and $250 billion in 2007. This is very rough, because rich people hold some assets for a long time, and only sell them when the capital gains tax is relatively low. If there were no special capital gains tax, sales of assets would smooth out; with they special, lower tax they tend to bunch up either just before the rate goes up, or just after it comes down. But it seems like you could estimate that the lower capital gains rate cost the US treasury about $100 billion per year during the first decade of the 2000s, or about $1 trillion over the last 10 years.
A Wall Street Journal article has some specific numbers for capital gains tax receipts in fairly recent years. In 2003, receipts were $51.3 billion. In 2007 they were $137.1 billion. A rough estimate is that if these rich people (and they are almost all rich) paid at the regular tax level (35%) rather than the current capital gains level (15%) the receipts would roughly double, i.e., to $100 billion in 2003 and $250 billion in 2007. This is very rough, because rich people hold some assets for a long time, and only sell them when the capital gains tax is relatively low. If there were no special capital gains tax, sales of assets would smooth out; with they special, lower tax they tend to bunch up either just before the rate goes up, or just after it comes down. But it seems like you could estimate that the lower capital gains rate cost the US treasury about $100 billion per year during the first decade of the 2000s, or about $1 trillion over the last 10 years.
Thursday, June 21, 2012
Means Testing Social Security
I am interested in the extent to which Social Security is reduced by means testing, since I am a retired US government employee who also qualifies for Social Security because of years spent working in the private sector. Because of my government retirement, my Social Security is severely reduced, by something like 2/3 or 3/4. I get less than $50 per month, which every month when I get it seems more like a joke or an insult than social "security." I will have to live a long time just to get back the money I have paid into Social Security, much less any "government money."
So, what about older rich people like Warren Buffett or T. Boone Pickens? Do they face limits on the Social Security they can collect? The Arizona Republic says Buffett collects $32,000 per year, or about $2,600 more per month than I do. I presume the government has determined that he need the "security" more than I do. Rep. Ron Paul admitted on Morning Joe that he gets Social Security, although he did not say how much he gets; I think he probably gets more than I do. In 2007 Sen. John McCain reported that he collected $23,160 in Social Security, or about $1,900 per month more than I do. It is harder to find out what Boone Pickens collects from Social Security, but this article says he and fellow Texan Ross Perot do collect it.
The main means test that rich people face now seems to be that they have to pay income tax on their Social Security. Payments are also reduced if you continue to work after you start collecting Social Security, but the limits are reduced as you get older. So, there are probably no limits on Buffett or Pickens, who are both over 80.
One article in the Huffington Post makes the argument that instead of means testing Social Security payments, the government should remove the limit on the amount of income that is subject to the payroll tax for Social Security, currently $110,100. Since the payroll tax rate is almost as high as the capital gains tax that most rich people pay on their income, eliminating the limit would substantially increase the income of the Social Security trust fund and do a lot to make Social Security self-sustaining.
For me personally, however, the lesson is that as a retired US government employee, I am subject to a much stricted means test than the richest people in America. Once again the 1% gets welfare paid by the 99%.
So, what about older rich people like Warren Buffett or T. Boone Pickens? Do they face limits on the Social Security they can collect? The Arizona Republic says Buffett collects $32,000 per year, or about $2,600 more per month than I do. I presume the government has determined that he need the "security" more than I do. Rep. Ron Paul admitted on Morning Joe that he gets Social Security, although he did not say how much he gets; I think he probably gets more than I do. In 2007 Sen. John McCain reported that he collected $23,160 in Social Security, or about $1,900 per month more than I do. It is harder to find out what Boone Pickens collects from Social Security, but this article says he and fellow Texan Ross Perot do collect it.
The main means test that rich people face now seems to be that they have to pay income tax on their Social Security. Payments are also reduced if you continue to work after you start collecting Social Security, but the limits are reduced as you get older. So, there are probably no limits on Buffett or Pickens, who are both over 80.
One article in the Huffington Post makes the argument that instead of means testing Social Security payments, the government should remove the limit on the amount of income that is subject to the payroll tax for Social Security, currently $110,100. Since the payroll tax rate is almost as high as the capital gains tax that most rich people pay on their income, eliminating the limit would substantially increase the income of the Social Security trust fund and do a lot to make Social Security self-sustaining.
For me personally, however, the lesson is that as a retired US government employee, I am subject to a much stricted means test than the richest people in America. Once again the 1% gets welfare paid by the 99%.
Bin Laden and Drones
I am not entirely happy with the way the Obama administration has handled the bin Laden killing and the frequent drone killings. I think it was okay to kill bin Laden, but it would have been better to capture him and try him, in the US or in some international court. If he had resisted arrest, the Seals could certainly have killed him. I think he was killed because the US did not know what to do with him legally. The cowardly Republicans are scared to death of bringing any terrorists in the continental US, although the chance of their escaping and harming anyone is practically nil. The only way they could get out is if they were found not guilty of terrorism, and in that case there is no justification for holding them.
I do not like the idea of executing terrorists by drone attack. I think it should be used very sparingly, only when there is evidence of a genuine, immediate threat to the US, and the US has to act to save lives. On the other hand, I do not want to risk the lives of American troops unnecessarily. The drone attacks certainly save the lives of some American troops. But we are fighting to preserve American values of justice, honor, and the rule of law. Destroying these values also has a significant cost. Presumably we would not kill people willy-nilly, just because they looked suspicious. So, somewhere there is a trade-off between saving the lives of American troops and destroying American values. I believe Obama has erred on the side of destroying American values in order to save troops lives.
I do not like the idea of executing terrorists by drone attack. I think it should be used very sparingly, only when there is evidence of a genuine, immediate threat to the US, and the US has to act to save lives. On the other hand, I do not want to risk the lives of American troops unnecessarily. The drone attacks certainly save the lives of some American troops. But we are fighting to preserve American values of justice, honor, and the rule of law. Destroying these values also has a significant cost. Presumably we would not kill people willy-nilly, just because they looked suspicious. So, somewhere there is a trade-off between saving the lives of American troops and destroying American values. I believe Obama has erred on the side of destroying American values in order to save troops lives.
Wednesday, June 20, 2012
Supreme Court Coup
Americans and Egyptians have been upset at what they call a coup by the Egyptian Supreme Court in ruling on presidential candidates, etc. They forget that we had our own coup in the US by our Supreme Court in deciding Bush v. Gore, and appointing George W. Bush President of the US regardless of what the actual vote was in Florida. The US survived this coup, although poorly, since Bush was one of the worst Presidents in American history. Egypt may survive its little coup, but it is much more unstable than the US was. The big issue is Islamic fundamentalism, which has been given a huge boost by America's ill-advised war in Iraq, which hugely strengthened the hand of Islamic fundamentalists in the Middle East.
Fed Still Alone
Today's announcement by the Fed that it will continue the "twist" to lower long term interest rates, since it can't reduce short term interest rates below zero, shows how isolated the Fed is because the Congress can't or won't do anything. We still have no fiscal policy, only a monetary policy. Monetary policy can't do everything. The Republicans complain that the Fed should not have an employment mandate in its duties, but Congress is doing nothing about unemployment.
The Republicans complain that the US looks like Greece in terms of incurring too much debt, and they have a point, but the US also looks like Greece because it has a dysfunctional government, in that our Parliament, Congress, does nothing.
One of the main reasons for a do-nothing Congress has been the introduction of the requirement of a 60% majority to pass any legislation, rather than 51%. I don't think the founders of the United States anticipated this outcome, although when talking about the Supreme Court, the Republicans always say we should adhere to what the founders were thinking in the 1700s. Until recently, the 60 vote requirement for cloture was only used for very important legislation where there was an actual filibuster. The Democrats are partly to blame for not forcing the Republicans to conduct an actual filibuster speaking for hours like Jimmy Steward in "Mr. Smith Goes to Washington," not just saying they are conducting a virtual filibuster.
I don't think the Fed should take actions to prop up the stock market unless there is a crisis. I guess there could be debate about whether we are currently in a crisis, but I don't think we are. Bernanke could let the Dow drop at least 1,000 points before acting as if there were a crisis. There is a crisis in Europe, but to some extent that is a good thing for US markets. The Fed should work with the IMF and its European counterparts to assure liquidity, minimize bank failures, etc., but that doesn't necessarily include propping up the stock market.
The Republicans complain that the US looks like Greece in terms of incurring too much debt, and they have a point, but the US also looks like Greece because it has a dysfunctional government, in that our Parliament, Congress, does nothing.
One of the main reasons for a do-nothing Congress has been the introduction of the requirement of a 60% majority to pass any legislation, rather than 51%. I don't think the founders of the United States anticipated this outcome, although when talking about the Supreme Court, the Republicans always say we should adhere to what the founders were thinking in the 1700s. Until recently, the 60 vote requirement for cloture was only used for very important legislation where there was an actual filibuster. The Democrats are partly to blame for not forcing the Republicans to conduct an actual filibuster speaking for hours like Jimmy Steward in "Mr. Smith Goes to Washington," not just saying they are conducting a virtual filibuster.
I don't think the Fed should take actions to prop up the stock market unless there is a crisis. I guess there could be debate about whether we are currently in a crisis, but I don't think we are. Bernanke could let the Dow drop at least 1,000 points before acting as if there were a crisis. There is a crisis in Europe, but to some extent that is a good thing for US markets. The Fed should work with the IMF and its European counterparts to assure liquidity, minimize bank failures, etc., but that doesn't necessarily include propping up the stock market.
Wednesday, June 13, 2012
Iraq and Iran
Arianna Huffington is right in her blog about the Iraq-Iran partnership made in America. The US war in Iraq vastly strengthened Iran's role in the Middle East. The strengthened Iran already has consequences in today's Middle East because of its support for Syria's President Assad in addition to other trouble-making groups such as Hezbollah.
Wednesday, May 30, 2012
Polish Death Camps
Poland has objected to Obama's reference to a "Polish death camp" while honoring a Pole who helped make the world aware of the Holocaust taking place in Nazi death camps in Poland. The Polish objection shows their sensitivity on this issue, but certainly what Obama meant was that this was a death camp in Poland, not a death camp run by the Polish government.
Nevertheless, when I lived in Poland I was struck by the fact that they almost always referred to atrocities of the the World War II era as having been carried out by the Nazis, not by the Germans. The Germans are still here and still next door neighbors of Poland, but the Nazi government is long gone. So, the Poles live up to the standard that they are demanding from Obama.
Nevertheless, when I lived in Poland I was struck by the fact that they almost always referred to atrocities of the the World War II era as having been carried out by the Nazis, not by the Germans. The Germans are still here and still next door neighbors of Poland, but the Nazi government is long gone. So, the Poles live up to the standard that they are demanding from Obama.
Sunday, May 27, 2012
Memorial Day Rembrance
Just for the record on Memorial Day, I want to remember the two men in my unit, A Battery 2/94th Artillery, who were killed at Firebase Barbara and whose names are on the Vietnam Memorial wall:
Paul Kosanke, and
Willie Austin, Jr.
Paul Kosanke, and
Willie Austin, Jr.
Friday, May 11, 2012
Congressional Letter re Finance
I sent the following to my two Colorado Senators:
Please support Sen. Sherrod Brown's SAFE Banking Act of 2012 to rein in "too big to fail" banks. JP Morgan's $2 billion loss announced yesterday shows how seriously out of control our banking industry is, only a few years after the 2008 Lehman debacle. Although JP Morgan claims that its "hedging" was not in violation of the Volker rule, I think that it likely was. JP Morgan was just gambling with its depositors' money, trying to make a quick buck, which was almost riskless, because the US taxpayers are still guaranteeing the assets of the "too big to fail" banks.
Simon Johnson of MIT and the IMF has called for Jamie Dimon to resign.
You are just throwing away America's money guaranteeing the foolish bets of fat cats on Wall Street. I can't tell you how disappointed I am that President Obama threw Elizabeth Warren under the bus after all she did to establish the Consumer Financial Protection Bureau. She was the only one in Washington speaking out for the middle class, and now she is gone.
I don't have much hope. The US Congress is largely dysfunctional. We have no fiscal policy. Ben Bernanke has so far saved us from disaster with monetary policy, but he can't singlehandedly save the world. You could give him a little help.
Two of the most important additional things the Congress could do are
-- Put the Bowles-Simpson proposals back on the table to address our financial crisis. They were reasonable; they addressed the most important issue facing the US, and they have been ignored by the Congress.
-- Reinstate the Glass-Steagall Act. The repeal of Glass-Steagall, led in Congress by Republican Phil Gramm and signed by President Bill Clinton, was responsible for the financial crash of 2008 and the current rogue activities of the big banks. Banks should be banks, not gambling casinos.
War Didn't Help
In today's NYT, Paul Krugman talks about how World War II pulled the US out of the Depression, although people back then also said that stimulus would not work.
It reminded me of the difference between World War II and the Iraq and Afghanistan wars. First Roosevelt in WW II called on all of America to pay for the war, although it still ran up enormous deficits. Bush said, "Go shopping," to support the Iraq war; you don't need to pay taxes. If Bush had attempted to pay for the Iraq war, we probably would have had fairer, more equitable taxes, which would have done something to mitigate the perception that the current US tax system is seriously unjust. We grew up hearing about the merits of the American progressive tax system that taxed the rich more than the poor, and now we find that we have a regressive tax system that taxes the poor more than the rich. The Republicans argue that the rich still pay the bulk of the taxes, which is true, but only because they earn the bulk of the income. Also, defenders of the current system seldom bring payroll taxes into the discussion, because if they did, the disparity would be even worse. It's true that many very poor people don't pay income tax, but many more of them pay payroll taxes for Social Security and Medicare.
The other disparity between the rich and the poor that the war widened is between those who defend America and those who stay home and make money while the soldiers fight. In the old days, especially when there was a draft, the stay-at-homes were shamed as "war profiteers," but today they are hailed as "entrepreneurs." In WW II almost everybody who was healthy fought; today almost all soldiers come from the lower classes, and disproportionately from small towns and rural areas, where there is still some feeling of patriotism. Ironically, the 9/11 attack on the twin towers was directed at America's richest 1%, but the 1% by and large didn't fight back, it hired the 99% to fight and die for them. Now when those soldiers come home seeking jobs, the 1% that owns everything usually turns its back on them.
The US has regressed so far back toward the old feudal system that we don't need new laws or an updated Constitution, we need a new Magna Carta. Welcome to the 13th century!
It reminded me of the difference between World War II and the Iraq and Afghanistan wars. First Roosevelt in WW II called on all of America to pay for the war, although it still ran up enormous deficits. Bush said, "Go shopping," to support the Iraq war; you don't need to pay taxes. If Bush had attempted to pay for the Iraq war, we probably would have had fairer, more equitable taxes, which would have done something to mitigate the perception that the current US tax system is seriously unjust. We grew up hearing about the merits of the American progressive tax system that taxed the rich more than the poor, and now we find that we have a regressive tax system that taxes the poor more than the rich. The Republicans argue that the rich still pay the bulk of the taxes, which is true, but only because they earn the bulk of the income. Also, defenders of the current system seldom bring payroll taxes into the discussion, because if they did, the disparity would be even worse. It's true that many very poor people don't pay income tax, but many more of them pay payroll taxes for Social Security and Medicare.
The other disparity between the rich and the poor that the war widened is between those who defend America and those who stay home and make money while the soldiers fight. In the old days, especially when there was a draft, the stay-at-homes were shamed as "war profiteers," but today they are hailed as "entrepreneurs." In WW II almost everybody who was healthy fought; today almost all soldiers come from the lower classes, and disproportionately from small towns and rural areas, where there is still some feeling of patriotism. Ironically, the 9/11 attack on the twin towers was directed at America's richest 1%, but the 1% by and large didn't fight back, it hired the 99% to fight and die for them. Now when those soldiers come home seeking jobs, the 1% that owns everything usually turns its back on them.
The US has regressed so far back toward the old feudal system that we don't need new laws or an updated Constitution, we need a new Magna Carta. Welcome to the 13th century!
Tuesday, May 08, 2012
Guantanamo Trials Are Legal Failure
The "trial" of the 9/11 terrorists in Guantanamo signals a significant failure of the American legal system. The victims of 9/11 deserve better, because no one will believe that justice will have been done. The prisoners may be guilty, but many victims of lynchings and other mob violence over the years have also been guilty. The sign of civilization would be a fair trial, but Congress and the Obama administration have balked at allowing a fair rial. The military lawyers in Guantanamo will do their best, but they have been put in an impossible situation.
Tuesday, April 17, 2012
25th Anniversary of MTCR
The following is a press release from the US Department of State:
Formed by the (then) G-7 industrialized countries in 1987, the Missile
Technology Control Regime (MTCR) is an informal political understanding among
states that seek to limit the proliferation of missiles and related technology;
it is not a treaty. Since its creation, 27 additional countries have joined the
MTCR, and many other countries have adhered unilaterally to the MTCR Guidelines
or otherwise control exports of MTCR Annex items.
Originally focused on restricting exports of nuclear-capable ballistic missiles and related technology, the Regime expanded its scope in 1993 to cover unmanned delivery systems capable of carrying all types of weapons of mass destruction (WMD) -- chemical, biological, and nuclear. In 2002, the MTCR Partners (members) made terrorism an explicit focus of the Regime. Both of those steps were in direct support of the WMD nonproliferation objectives of the Biological Weapons Convention, Chemical Weapons Convention, and Nuclear Nonproliferation Treaty.
The MTCR seeks to limit the risks of proliferation of WMD by controlling transfers that could make a contribution to delivery systems (other than manned aircraft) for such weapons. More broadly, the MTCR Guidelines (export control policies) and Annex (list of export-controlled items) have become the international standard for responsible missile-related export behavior. The MTCR and its Annex were implicitly endorsed in UN Security Council Resolution (UNSCR) 1540 of 2004, which affirms that the proliferation of WMD delivery means constitutes a threat to international peace and security and requires all UN Member States to establish domestic controls against such proliferation. The MTCR Annex also forms the basis of the list of missile-related items prohibited from being transferred to Iran under UNSCRs 1737 and 1929, and to North Korea under UNSCR 1718.
Over the course of the Regime’s 25-year history, the efforts of MTCR member countries have reduced the number of countries possessing missiles capable of delivering WMD, the global inventory of such missiles, and the number of countries interested in acquiring such missiles. The establishment by MTCR member and adherent countries of missile-related export controls has significantly reduced the availability to proliferators of support from the countries possessing the most and best technology. The export controls, information-sharing, and patterns of cooperation fostered by the MTCR also have resulted in the interdiction of numerous shipments of equipment intended for missile programs of concern. All of these measures have made it more difficult, time-consuming, and costly for proliferators to produce or acquire WMD capable missiles.
As it has done since 1987, the United States will continue to work through the MTCR to reduce the global missile proliferation threat by restraining the missile-related exports of an expanding number of countries and by increasing the pressure on proliferators to abandon their missile programs. The United States continues to encourage all non-member countries to support the MTCR’s efforts and to unilaterally abide by MTCR standards in the interest of international peace and security.
The MTCR currently has 34 members: Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Ireland, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Republic of Korea, the Russian Federation, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom, and the United States.
Originally focused on restricting exports of nuclear-capable ballistic missiles and related technology, the Regime expanded its scope in 1993 to cover unmanned delivery systems capable of carrying all types of weapons of mass destruction (WMD) -- chemical, biological, and nuclear. In 2002, the MTCR Partners (members) made terrorism an explicit focus of the Regime. Both of those steps were in direct support of the WMD nonproliferation objectives of the Biological Weapons Convention, Chemical Weapons Convention, and Nuclear Nonproliferation Treaty.
The MTCR seeks to limit the risks of proliferation of WMD by controlling transfers that could make a contribution to delivery systems (other than manned aircraft) for such weapons. More broadly, the MTCR Guidelines (export control policies) and Annex (list of export-controlled items) have become the international standard for responsible missile-related export behavior. The MTCR and its Annex were implicitly endorsed in UN Security Council Resolution (UNSCR) 1540 of 2004, which affirms that the proliferation of WMD delivery means constitutes a threat to international peace and security and requires all UN Member States to establish domestic controls against such proliferation. The MTCR Annex also forms the basis of the list of missile-related items prohibited from being transferred to Iran under UNSCRs 1737 and 1929, and to North Korea under UNSCR 1718.
Over the course of the Regime’s 25-year history, the efforts of MTCR member countries have reduced the number of countries possessing missiles capable of delivering WMD, the global inventory of such missiles, and the number of countries interested in acquiring such missiles. The establishment by MTCR member and adherent countries of missile-related export controls has significantly reduced the availability to proliferators of support from the countries possessing the most and best technology. The export controls, information-sharing, and patterns of cooperation fostered by the MTCR also have resulted in the interdiction of numerous shipments of equipment intended for missile programs of concern. All of these measures have made it more difficult, time-consuming, and costly for proliferators to produce or acquire WMD capable missiles.
As it has done since 1987, the United States will continue to work through the MTCR to reduce the global missile proliferation threat by restraining the missile-related exports of an expanding number of countries and by increasing the pressure on proliferators to abandon their missile programs. The United States continues to encourage all non-member countries to support the MTCR’s efforts and to unilaterally abide by MTCR standards in the interest of international peace and security.
The MTCR currently has 34 members: Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Ireland, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Republic of Korea, the Russian Federation, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom, and the United States.
Sunday, April 15, 2012
Liberal Education Still Important
With all the talk today about education, no one talks about the importance of a liberal education. Despite the Conservative hatred of the word liberal, it means "free." It is the education that free men should have in order to be able to govern themselves. In the old days, when voting was limited to white men who owned land, they were the only ones who needed a liberal education. Now that everybody can vote, everybody needs a liberal education. We were close to that goal in the 1960's with the rise of cheap state universities and community colleges, but as governments have gone bankrupt, that ideal has disappeared.
Instead of seeing education as a resource that should be widely available, it is a commercial enterprise that is expensive, even for no-name colleges and universities. Thus it has become all about money, not about learning. All the students and the professors care about are salable skills. Universities have become trade schools rather than centers of learning.
The Denver Post ran a front page article on higher education Sunday, but it was all about money -- funding for education. Doing a search of the page, I did not find a single reference to the liberal arts, which was the most important role of a university a few decades ago, and certainly a hundred years ago. Higher education has changed, and not for the better. The "bottom line" was that it's looking more and more like the State of Colorado will soon quit funding higher education entirely.
Instead of seeing education as a resource that should be widely available, it is a commercial enterprise that is expensive, even for no-name colleges and universities. Thus it has become all about money, not about learning. All the students and the professors care about are salable skills. Universities have become trade schools rather than centers of learning.
The Denver Post ran a front page article on higher education Sunday, but it was all about money -- funding for education. Doing a search of the page, I did not find a single reference to the liberal arts, which was the most important role of a university a few decades ago, and certainly a hundred years ago. Higher education has changed, and not for the better. The "bottom line" was that it's looking more and more like the State of Colorado will soon quit funding higher education entirely.
Romney VP Hopefuls Are Fiscal Failures
Two frequently discussed vice presidential hopefuls for presidential candidate Mitt Romney are Rob Portman and Mitch Daniels. Both were the principle budget strategists for George W. Bush as heads of his Office of Management and Budget (OMB). Indiana Governor Mitch Daniels was head of OMB from 2001 to 2003; Ohio Senator Portman was OMB director from 2006 to 2007.
Daniels oversaw the post-9/11 invasions of Afghanistan and Iraq without raising taxes. He publicly estimated the cost of the Iraq war at $50 to $60 billion. A recent Brown University study has estimated the direct cost of the Iraq war at around $750 billion. Wikipedia says that on Daniels' watch, the US went from a budget surplus of $236 billion to a deficit of $400 billion. Wikipedia says that on Portman's watch the US public debt increased by $469 billion.
Both of these Republican budget directors follow in the footsteps of David Stockman, Reagan's OMB chief from 1981 to 1985. Stockman successfully led the fight for Reagan's huge tax cuts, but after cutting revenues, he was unsuccessful in cutting federal expenditures, thus beginning the series of huge budget deficits that persist to this day. Stockman doubled the national debt from $1 trillion to $2 trillion during his tenure. The current national debt is about $15.5 trillion.
Daniels oversaw the post-9/11 invasions of Afghanistan and Iraq without raising taxes. He publicly estimated the cost of the Iraq war at $50 to $60 billion. A recent Brown University study has estimated the direct cost of the Iraq war at around $750 billion. Wikipedia says that on Daniels' watch, the US went from a budget surplus of $236 billion to a deficit of $400 billion. Wikipedia says that on Portman's watch the US public debt increased by $469 billion.
Both of these Republican budget directors follow in the footsteps of David Stockman, Reagan's OMB chief from 1981 to 1985. Stockman successfully led the fight for Reagan's huge tax cuts, but after cutting revenues, he was unsuccessful in cutting federal expenditures, thus beginning the series of huge budget deficits that persist to this day. Stockman doubled the national debt from $1 trillion to $2 trillion during his tenure. The current national debt is about $15.5 trillion.
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