Why Congress Should Pass an Unconditional Debt-Ceiling Increase

Like most powers of the federal government, the power to borrow money belongs to Congress, but is exercised through delegation to the executive branch. In this case, Congress has delegated this power with an important condition: that no more than a specified amount can be borrowed. This amound is known as the “debt ceiling.”

The problem, of course, is that the federal budget is at least a little bit in deficit every year, and every deficit, no matter how small or large, adds to the total of the national debt — as a result, the debt ceiling is reached from time to time, usually at fairly short intervals. Thus, it is frequently necessary to raise the ceiling to allow more borrowing – in order to make it possible to carry out the activities Congress and the Presdient have already approved. If you want the government to spend less, the way to do it is to cut the budget – not to prohibit borrowing after the budget has been approved.

Almost everyone understands this, so usually the debt ceiling is increased with little controversy. This time, though, two things make it different. First, there are a number of new members of Congress, elected with Tea Party support, who don’t believe that the ceiling should be increased at all, and so will vote against it no matter what. Second, the Republican party, which now controls 1/3 of the policy-making organs of government, wants to use the ceiling as leverage to get its way on important policy issues. The Democrats, who control two of those policy-making organs, are naturally unwilling to give in: hence the standoff.

What to do? I want to make two basic points:

1. The eventual solution has to pass Congress, but it does not have to pass with strong support from the Republican Party. Last December, during the lame-duck session, the budget compromise passed the House with a lot of Republican opposition, but with Democratic support. This is bound to be the way it happens on the debt ceiling vote. Even as I write, Speaker Boehnert is unable to pass his Republican plan with Republican votes – so ultimately he is going to have to rely on a substantial number of Democratic votes.

2. Various compromises are being mooted, but the issues are tricky. Therefore, I’d suggest a simpler compromise: both parties should drop ALL of their policy goals. There should be no spending cuts in this bill, and no tax increases either. Instead, Congress should simply raise (or, better, eliminate!) the debt ceiling, let the government go on functioning, and find another venue for debating their budget preferences. Such a bill could pass in one hour or less, if Speaker Boehner would let it come to a vote.

The consequences of failure are enormous, much greater than a simple government shutdown. The whole banking system relies for its stability on buying and selling federal notes, commonly thought of as the most secure and stable of all possible investments. If the value of those notes is suddenly in question, the resulting chaos may well bring the economy to a complete halt. It is time for Congress and the President to act – and a simple, clean debt-ceiling increase is the easiest, least controversial way to end the crisis.

Is the US Returning to Cold War Standards?

I had just graduated from college when I saw my government invade the Dominican Republic to support a military dictator who had just overturned the democratically elected President, Juan Bosch. As my awareness grew, I realized that we were supporting brutal dictators in Vietnam, much of Latin America, Iran, Saudi Arabia, and in many other countries. We had overthrown democratic governments in Guatemala and Iran, as well as the Dominican Republic, and a few years later were to collaborate in the overthrow and murder of the democratically elected President of Chile, Salvador Allende, and his replacement by the brutal military dictator Pinochet.

At the same time, we supported the continuation of colonial rule, often very brutally, in Angola, Mozambique, what was then Rhodesia, and many smaller countries; and, most shamefully at all, we supported the atrocious system of apartheid in South Africa.

All of this was “justified” in the name of stopping Communism, which supposedly would take over all those countries if we let them become democratic.

Then came the collapse of the Soviet Union, the end of the Cold War, and the outbreak of the “third wave” of democratization – in Eastern Europe, Latin America, and Asia, and to some extent in Africa. With no more fear of Communism, there seemed to be no more need for the US to support dictatorships in other countries.

But what is happening today? The US government is turning a blind eye to brutal depression by the absolute monarch of Bahrain. It supported the coup against President Zelaya in Honduras, even while claiming to oppose it. It is maneuvering to keep the revolutions in Tunisia and Egypt from becoming “too” democratic. More broadly, it seems like the Cold War all over again!

This trend is appalling. Many people had hoped that President Obama would turn us in a different direction, but instead he seems to be opting for more of the same. The explanation given, when any is given at all, tends to be that terrorism is just like Communism – if we allow too much democracy, it is said, the terrorists will take over. This isn’t very credible, though – it’s just hard to envision massive electoral support for terrorists! (I mean, if they had that kind of support they wouldn’t need to resort to terrorism!)

Far more likely, in my opinion, is that support for dictatorship abroad is linked to the attack on democracy at home. The increase in economic inequality basically means that a relatively small number of people control more and more of the world’s resources. They benefit immensely from doing so, but they can only keep it up if they keep people from voting on it. Here in the US, they do so by a variety of disenfranchising devices (massive imprisonment, intimidation campaigns, cumbersome registration processes, gerrymandering, etc.) In countries like Bahrain, they don’t have to be so subtle. They just work through the monarchies of Saudi Arabia, Bahrain, and the like to arrest, torture, and shoot those who demand democracy.

It’s time we got more democracy at home, and used it to support democracy in other countries.

What’s Behind the Bin Laden Assassination?

The  big question about Bin Laden – and I’m surprised more people are not asking it – is, why kill him? It’s pretty clear by now that those were the orders (I heard it from a guy being interviewed on NPR with CIA ties, and there’s further documentation in The Atlantic. But why?

Let’s leave aside the morality and look at the practical issues. Wouldn’t you think that Osama Bin Laden was what they call a “high-value target” – i.e., someone with valuable information? Isn’t it possible that he actually knew something about what’s left of al-Qa’eda? If this was really about fighting terrorism, wouldn’t they want to question him?

Someone else on that NPR show (I was listening in the car, and didn’t get further specifics to cite the broadcast) said that one of Osama’s bodyguards who’d been captured had orders to kill Osama rather than let him be taken alive. So why have the Seals do the work for him? It doesn’t make sense to me.

Second, why wouldn’t we want to put him on trial? Surely there would be no better way to destroy any last trace of sympathy for the man and his network than be exposing their repugnant deeds in open court. The Israelis knew that when they captured Eichmann, and brought him back to be tried, at considerable difficulty to themselves. All we would have had to do would have been to bring him along in the helicopter, which we did with his body anyway.

Moreover, a trial would have shown the world that we are a country of laws and individual rights, rather than a country that kills without trial. Here I’m verging back to the moral argument, but this one does have a practical side: it would make people respect the US more.

Legally, bringing Bin Laden out alive would have been kidnapping, and Pakistan didn’t like it. But they liked the assassination even less.

So I’m just asking, why were the orders to kill him no matter what? Anybody have an explanation?

President Obama on Situation in Bahrain

I recently wrote to President Barack Obama to ask him to speak up against the death sentences for some of those protesting for democracy in Bahrain. (This was before the Bahrain monarchist government threatened to prosecute some doctors and nurses for the deaths of patients they treated, or I would have written about that, as well). I just got a response and wanted to share it with you, so here it is. I have to say, it’s pitiful:

The White House, Washington


May 4, 2011

Dear Friend:


Thank you for taking the time to share your thoughts with me.  I value your comments and inquiries.


I greatly appreciate the outpouring of messages from Americans across the country and around the world.  Some comments are supportive, others are critical, but all reflect the desire of Americans to participate in a dialogue about our common concerns and challenges.


To learn more about my Administration or to contact me in the future, please visit:  www.WhiteHouse.gov.  Thank you, again, for writing.



Barack Obama

Visit WhiteHouse.gov

Medicare, the Deficit, and Political Playacting

No doubt you know by now that the Chair of the House Budget Committee, Representative Paul Ryan (R-WI), has proposed to reduce the federal budget deficit by eliminating Medicare for everyone younger than 55. Here is a link to the proposal. The House of Representatives has actually passed this proposal with every Democrat and 4 Republicans voting No. It is going nowhere. The Senate will not pass it, and President Obama singled it out for criticism in his speech on the budget last week. Medicare is extremely popular, and Republicans who voted for it drew criticism in their town meetings during their recent town meetings.

Nevertheless, the Republicans have accomplished one of their goals. They now have everyone thinking that Medicare has something to do with the deficit. It does not! The basic parts of Medicare, covering physicians services and hospitalization, are paid for out of the trust fund with money from the Medicare tax we all pay. That money cannot be used for anything else, only for Medicare. Right now  that fund is in surplus.

Now there is a sense in which you can add up all federal expenditures and federal revenues, including both Medicare and Social Security, and call the result a deficit or a surplus. However, that is just an accounting trick. If those part of the budget that are not either Medicare or Social Security (or a few other, much smaller trust funds, like the one you contribute to if you buy a duck stamp) are in deficit, the government will still have to borrow to pay for them.

So if we want to reduce the deficit, we have to look elsewhere. And there are really only two places to look: stopping all these wars, and ending the Bush tax cuts. Other cuts can be made, but there is not enough money there to have an impact on the deficit.

As I’ve said in other posts, I think a deficit that creates jobs would actually be good right now, but that means the money has to be spent productively. Giving it to the super-rich doesn’t provide any stimulus at all, since they do not increase their consumption, they just invest it to make even more money. So ending the Bush tax cuts for the rich today would not hurt the economy.

There is a problem with Medicare. The trust fund is in surplus now, but it is declining; present estimates are that it will run out in 2029. That gives us some time to find solutions, but there is no need to end the program. Obama’s health care plan, which goes into full effect in less than 3 years, saves some money already. In addition, we can get big savings by allowing the government to negotiate prescription prices. (Everyone knows that prescriptions are cheaper in Canada, but sometimes we forget why: it’s because Canada makes the big drug companies sell at the lowest price that lets them make money, while Congress requires Medicare and Medicaid to pay them their asking price. Go figure!) We also need to reduce health-care profiteering radically. There’s a good reason why more and more non-profit hospitals are being taken over by profit-making corporations: there is a lot of money to be made.

There are many other ideas out there, and they are all worth considering. My point is not that I have the answer, just that we can solve the Medicare cost problem without ending the program. And let’s be clear about that. Ryan’s proposal does end Medicare. He claims he is trying to save it, but he’s not. He wants to end it and replace with something completely different – instead of paying your medical bills, with the usual deductibles and copayments, the new “Medicare” would give you a coupon for a fixed amount, good for the purchase of health insurance. If health insurance costs more than your coupon, you have to pay the rest yourself.

Moreover, the value of each year’s coupon increases at a set rate that is less than the annual increase in the cost of the insurance – so every year either you have to pay more yourself, or you have to switch to a plan with poorer coverage. That’s noe Medicare.

Even though people are rejecting Ryan’s plan, if we end up believing that Medicare is a big part of the deficit, we will think it has to be cut. That’s the sneaky victory that Ryan is putting across on the public.

Why the US Should Care about Democracy in Bahrain

If you follow me on Twitter (@jcberg) or read my Facebook page, you probably have noticed that I have been posting a lot of news stories about Bahrain, and maybe you wondered why. I want to explain my reasons for doing this.

When the massive pro-democracy protests in Bahrain broke out February 14, I knew very little about that country – just that it was small and located somewhere on the Arabian Peninsula. I didn’t even know that it was an island, or that it was the home to the US Fifth Fleet.

However, as I learned more, I came to think that we Americans have a special responsibility for what happens in Bahrain, for several reasons:

  • Because, as mentioned, it is the headquarters of the US Fifth Fleet. That means that the overwhelming military presence on the island is the US; anything they do, they do with the tacit approval of our government.
  • Because both the king of Bahrain and his patron, the king of Saudi Arabia, are completely dependent on the US for survival. We sell them almost all their weapons; without those, as absolutist rulers of small states, they would be swept away in an instant.
  • Because successive US governments, including the current one, have endorsed brutal despotism in Bahrain (and in Saudi Arabia) so that the profits of the oil companies will not be threatened.

Most Americans are like me – knowing nothing about Bahrain – so I felt obligated to try to spread the information around. In particular, I try to reenforce a few points:

  1. Bahrain is not a “moderate” country; when people say that, they just mean that it is friendly to Israel (and Israel is not moderate at all!) It is an absolute monarchy (there is a parliament, but the king appoints most members and can dismiss it at any time), and rules by violence and brutality. The king hires foreign mercenaries from Pakistan and other countries, so the troops will have less compunction about shooting down Bahrainis.
  2. This is not a sectarian conflict between Sunni and Shia. The royal family and the elite are Sunni, while a big majority of the people are Shia, and Shia do face a lot of discrimination – but a persistent sign and chant in the protests has been “No Sunni, No Shia, Only Bahrainis.” Some Sunni have been taking part, as well. However, the press in Bahrain is very tightl controlled by the king, and they have convinced many Sunni that the protesters are Shia Islamist fanatics controlled from the outside (see next point).
  3. Iran and Hezbollah have nothing to do with it. The government of Iran has been making statements about Bahrain, but these statements are condemned by the protesters whenever they make them.
  4. The goal of the protesters is democracy, not a religious state. Most want a constitutional monarchy, though a few have been so angered by the king’s brutality that they now want a republic.
  5. The King and other monarchists are out of touch with reality. They like to play that they are real royalty (the king proclaimed himself a king about 30 years ago). Right now their main concern is to bring a Grand Prix auto race, canceled because of the protests, back to Bahrain. The king likes to socialize with the royalty of Europe, and is making big plans for the royal wedding in England, to which he has been invited. (British activists are demanding that the invitation to this butcher be revoked).

There has been a near-blackout of the repression in Bahrain, which is very severe right now. Bloggers and twitter-users are being arrested and tortured; doctors and nurses are arrested if they try to treat people wounded in protests; and everyone is living in fear. This may be starting to change. There was a front-page story in the New York Times today, and a strong op-ed by Amy Goodman in the Guardian. We need to keep this up! Obama’s policy on Bahrain has been pretty cynical; there’s even a rumor that he told the king of Saudi Arabia that he would accept their invasion of Bahrain (they now have over 1,000 troops there) in return for Saudi acceptance of the intervention in Libya.

But Americans do believe in democracy, and if the current situation in Bahrain gets enough public attention, Obama will have to change his position. He could probably end the repression with a phone call; let’s make him lift the phone.