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Friday, June 25, 2010
Take Prudent Action to Reduce the Debt or Pay More Later
By Gretchen Hamel
Procrastination isn't one of the seven deadly sins, but if one were making a list of deadly economic behaviors, it would surely be near the top of the list.  As the U.S. heads into the G-20 meeting, it should heed the advice it will receive from other countries regarding our fiscal fiasco.
Last week the world learned that European political leaders failed to act when they first became aware of the magnitude of the debt crisis.   As early as February, officials from the U.S. government and the International Monetary Fund (IMF) warned European leaders that the debt problems in countries like Greece had the potential to impact the world economy.  European leaders stalled, hoping that Greece's problems would be contained. 
Unfortunately, their problems became more severe.  
Analysts estimate that the cost of rescuing Greece from bankruptcy would have been $35 billion if measures had been taken when initial warnings were issued. Instead, Europe’s leaders fiddled while Athens burned and now the cost of bailing out Greece is $140 billion.  That additional $105 billion is just a small portion of the total cost of the delayed response to Greece's meltdown. 
Investor confidence in European debt has been profoundly shaken by the Greek crisis, leading to a precipitous drop in the value of the Euro currency, and contributing to stock market declines worldwide.  Europe and the IMF are now creating a $1 trillion fund that can be used to stabilize countries facing potential default. 
In retrospect, it seems obvious that the Greeks ought to have made changes long ago to bring their country's accounts closer to balance.  Similarly, European nations, whose economic futures are wedded to Greece's because of their shared currency and interlocking debt relationships, should have taken action to stabilize Greece before the problem became a crisis. 
Hindsight, as they say, is 20-20, but it seems like Congress is refusing to learn from the stark example Europe has provided. 
Last year, the Congressional Budget Office offered this bleak assessment of U.S. economic prospects:  “Under current law, the federal budget is on an unsustainable path—meaning that federal debt will continue to grow much faster than the economy over the long run.... CBO’s long-term budget projections raise fundamental questions about economic sustainability.” 
President Obama has heard this grim prognosis.  At a townhall meeting last summer, the President himself said: “We can’t keep on just borrowing from China...We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”  
Congress, like Europe, has been warmed.
But they’re fiddling while Washington, and all 50 of the U.S. states, burn. Congressional leaders are currently debating another stimulus, and the debate is about whether to spend $50 billion or a $100 billion, not whether any billions are needed, or, if they are, where to find cuts to make up for the new spending. 
Congress has decided to forgo the budget preparation entirely, with Majority Leader Hoyer explaining that it would be useless to try to budget without hearing the recommendations of the fiscal commission.  Yet one hardly needs a commission to know that the first solution to debt problems is to stop overspending immediately. 
The CBO now expects our debt to reach 90 percent of GDP (more than $20 trillion) by 2020. By then, our interest payments will have quadrupled.  By 2020—that's just ten years from now, when today's first graders are getting driver's licenses—interest payments and our entitlement programs, like Social Security and Medicare, will require 9 out of every 10 dollars in the federal budget.  
Policymakers know the numbers.  They have heard the warnings.  They know our present course is unsustainable.  The question is are they going to do anything about it before it's too late?
Gretchen Hamel is the executive director of Public Notice, an independent, bipartisan, non-profit organization dedicated to providing facts and insights on the effect public policy has on Americans’ financial well being. For more information please visit www.thepublicnotice.org.
Posted at 10:36 AM By admin | Permalink | Email this Post | Comments (0)



Monday, June 21, 2010
Obama’s Blowout
By Harris Sherline

The BP oil drilling catastrophe in the Gulf of Mexico is the fault of America’s anti-drilling crowd, including president Obama, who have blocked drilling for oil in safer locales, most of which have been put off limits by their efforts to force us to develop alternative sources of energy.
 
Obama has seized on the situation as just another opportunity to push his “Cap and Trade” proposal. With Obama, it’s always about politics and the “change” he promised to bring to America, most of which the American public has rejected.
 
After essentially ignoring the oil spill for 57 days, Obama finally took to the air waves on June 15. Speaking to the nation from the Oval Office, he attempted to assure us that he had the situation under control and that he is in charge. In his effort to convince the public that he is actively dealing with the problem, Obama made his now infamous comment on the NBC Today Show, saying: “I don’t sit around just talking to experts because this is a college seminar. We talk to these folks because they potentially have the best answers, so I know whose ass to kick.”
 
What a classy guy our president is. I don’t know about anyone else, but I was personally offended by his remark. Not because I don’t fault British Petroleum for this disaster, but because I just don’t think our political leaders should make public statements about major issues using street language. I believe it demeans both the office and the individual. The president of the United States is not and should not try to be just one of the guys.
 
But, talking tough or pushing BP into creating a $20 billion slush fund, presumably to cover the cost of cleaning up the oil mess, does not solve the long-term problem of risk in deepwater drilling. Obama responded by simply declaring a moratorium on all such drilling, at least for now, as if that will accomplish anything except to make us more dependent on other countries, where many people hate us.
 
It will also drive up the cost of oil, gasoline and many other oil based products. Some sources are predicting that the price of gasoline could go as high as $7.00 a gallon. The impact of an increase of this magnitude will affect everything from food to power, manufacturing and transportation, all of which will force most people to reorder their budgets for such basics as food, heating and air conditioning, their personal use of power, driving to and from work, trucking, just about anything and everything Americans use and do. This in turn will make the U.S. less competitive in world markets and induce many businesses to relocate operations overseas, which will cost jobs in the U.S.
 
Almost every nation throughout the world will continue drilling for oil, such as (in no particular order): 17 nations in Africa; Australia; New Zealand; 15 nations in Europe (including the UK, Norway, Netherlands, Denmark, Germany and Russia); the Middle East (Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates and Yemen); 31 of the 50 U.S. states; Canada and Mexico; 15 South American countries, including Brazil (which the U.S. recently helped finance).
 
You can be sure none of these countries will stop offshore or deepwater drilling simply because the U.S. has shut down any or all of its own drilling activity. Furthermore, none of them regulate oil drilling nearly as strictly as the U.S. So, what we will get for this trade-off will be far more pollution in other parts of the world, much of which will drift to other areas, to say nothing of the loss of some $6 billion in annual revenue to the U.S. Treasury from oil drilling royalties that are currently being paid by the oil companies. 
 
Obama can talk as tough as he wants, threaten or cajole BP and the other oil companies, but his statements are more about PR than accomplishing anything, other than using the situation as another opportunity to push for something he wants, which in this case is to have Congress pass his Cap and Trade bill. Once again, Obama followed the admonition of his chief-of-staff, Rham Emanuel, that “a crisis is a terrible thing to waste.”
 
Never mind that Americans overwhelmingly oppose this legislation, Obama pressed on, suggesting that passage of Cap and Trade would take us to “a new future that will benefit us all.”
 
Obama wants Americans to end their “addiction” to oil, and offers to replace it with wind and solar power, along with other embryonic technologies, none of which are anywhere close to being developed to the point where they are not only practical but economically feasible, including automobiles that will run on electricity.
 
For Obama, the blowout is about more than oil, it’s about his ability to lead. And, once again he has chosen to play politics rather than lead.
 
© 2010 Harris R. Sherline, All Rights Reserved
 
 
Read more of Harris Sherline’s commentaries on his blog at
www.opinionfest.com
Posted at 15:34 PM By admin | Permalink | Email this Post | Comments (0)



Wednesday, June 9, 2010
Apology Not Accepted

by Harris R. Sherline

People misspeak all the time, then try to retract or modify their statements because their comments cause a public furor that puts them in an unfavorable light. And, sometimes, as in the case of politicians, it can kill their chances of being elected, or reelected.  

So, just how effective is it to try to retract or modify some foot-in-the mouth misstatement?  

The latest example of a well known person offending a particular individual or group is journalist Helen Thomas who, when she was asked by Rabbi David Nesenoff of RabbiLive.com if she had “any comments on Israel,” the Hearst Newspapers columnist said (on camera), “Tell them to get the hell out of Palestine,” adding that the Palestinians “are occupied and it’s their land” and that Israelis should “go home” to Poland, Germany, America “and everywhere else.” 

Elan Steinberg, executive director of the World Jewish Congress, said: "Shame on Helen Thomas. She is certainly old enough to remember the Holocaust and the Second World War. She owes an apology to all victims of the Nazis…"  

Ms. Thomas subsequently apologized on her personal Web site, posting: "I deeply regret my comments I made last week regarding the Israelis and the Palestinians. They do not reflect my heartfelt belief that peace will come to the Middle East only when all parties recognize the need for mutual respect and tolerance. May that day come soon." 

However, her original remarks not only revealed her biased mindset but also exposed an abysmal ignorance of history in general and of the Jews in particular. 

For Helen Thomas to think that the Jews in the Middle East originally came from Poland, Germany and America is beyond belief, especially for someone who, given her age (89), was obviously around during WWII and the Holocaust. Does she think Hitler was right and that the Jews should have been exterminated at Auschwitz? Or that the Poles should have succeeded in keeping them in the Ghettos and turning them all over to Hitler? Or that the Arabs should have wiped them out when they attacked Israel on the first day the new nation was formed? It appears that she does. 

It’s important to keep in mind the fact that there are only about five million Jews in Israel and around 250 million Arabs in 22 states, all clamoring for the destruction of Israel. Yet, in spite of such overwhelming odds, Israel has managed to survive since it became the Jewish state in 1948. 

Thomas obviously believes the territory that is now called Palestine belongs to the Palestinians, without any understanding of the fact that Israel was the home of the Jews and was called Palestine for two thousand years. Before the 1967 war, Gaza was owned by Egypt, the West Bank was owned by Jordan, and there were no “Palestinians.” 

Helen Thomas’ prejudice is clearly based on blind adherence to the propaganda of Hamas, which is openly and implacably dedicated to the destruction of Israel and “driving the Jews into the sea.” 

So, Helen Thomas’ attempt to extricate her foot from her mouth is not acceptable. She meant what she said, and no amount of backtracking can obliterate her words or cover her bigotry. 

That’s OK with me. As a matter of fact, I probably prefer it. At least I know where she stands, no ifs, ands or buts, and I can deal with that. 

It has been said that if the Jews laid down their arms tomorrow, Israel would cease to exist, whereas, if the Arabs were to give up their arms, there would be peace. 

One final point: As Dennis Miller commented, “Can anyone picture the Jews strapping belts of razor blades and dynamite to themselves?...Or marshaling every fiber and force at their disposal for generations to drive a tiny Arab State into the sea?...Or dancing for joy at the murder of innocents?...Or spreading and believing horrible lies about the Arabs baking their bread with the blood of children?...No, as you know, left to themselves in a world of peace, the worst Jews would ever do to people is debate them to death.” 

Think about it. 

Helen Thomas’ apology is not accepted, at least not by me. Not now, not ever. 

© 2010 Harris R. Sherline, All Rights Reserved 

Read more of Harris Sherline’s commentaries on his blog at www.opinionfest.com

Posted at 09:19 AM By admin | Permalink | Email this Post | Comments (0)



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