Monthly Archives: June 2011
This graph shows that $9.2 Trillion of the $12 Trillion supply-sider increase in national debt is considered problematic by economists. They say it is fine to increase the debt in step with national income. Republicans say the whole $12 Trillion is a problem.
The green line shows what would have happened if Reagan and the Bushes had just kept the debt growing at the same rate as the economy. That would make their parts flat. Many conservatives claim Congress increased Reagan’s budgets, but this is not the case as you can see documented here.
WWII caused the debt to shoot up, starting in 1942, and reach 30% higher relative to the country’s wealth than it is today. The economic stimulus of that government spending pulled us out of the great depression and into high gear to win the war.
The green line in the graph shows what would have happened if Reagan had proposed budgets that let the debt increase in step with inflation and the economy—if he had kept it at a constant fraction of GDP. That’s not much to ask of a president who said he’d do far better than those before him, since every previous post-war president had actually reduced the debt as a fraction of GDP.
By the end of the Reagan-Bush 12-year “revolution,” the extra debt they had piled on the country was costing the country an extra 2.6% of GDP in interest—$300 million a day. Without that interest working against him, Clinton would have paid down the debt a bit faster. That helps the green-line goes down in the Clinton years. That’s what would have happened without the Reagan-Bush interest burden.
Now if W. Bush had held the line as all non-supply side presidents had done, the national debt would have been only 21% of GDP, and the country would have been ready to pull itself out of the Great Recession with ease. In fact when W. Bush’s last budget year ended we would have had $9 Trillion less in debt.
So how did Reagan, the great debt-slasher, go so far wrong? Partly it was his belief in supply-side “economics.” This “theory” claims that when the government cuts taxes, especially taxes on corporations and the rich, it makes them so happy to keep more of their money that they work much harder, get richer, and pay even more taxes than before the tax cut. So the lower the tax rate, the more money the government collects to pay down the debt! Believe that happy talk, and you can run up quite debt.
Of course the rich loved this “theory” and fed the press many stories about the wonders of the new supply-side “economics” (cooked up by Laffer, as a graduate student). Money talks, and a lot of people listened. It’s time to rethink what radical conservatives have done and are doing to our country. The Reagan-Bushes National Debt now totals $9.2 trillion. That’s the lions share of our present debt.
By Paul Richter, Los Angeles Times
13 June 11
US Defense officials still cannot say what happened to $6.6 billion, sent by the planeload in cash and intended for Iraq’s reconstruction after the start of the war.
fter the US-led invasion of Iraq in March 2003, the George W. Bush administration flooded the conquered country with so much cash to pay for reconstruction and other projects in the first year that a new unit of measurement was born.
Pentagon officials determined that one giant C-130 Hercules cargo plane could carry $2.4 billion in shrink-wrapped bricks of $100 bills. They sent an initial full planeload of cash, followed by 20 other flights to Iraq by May 2004 in a $12-billion haul that US officials believe to be the biggest international cash airlift of all time.
This month, the Pentagon and the Iraqi government are finally closing the books on the program that handled all those Benjamins. But despite years of audits and investigations, US Defense officials still cannot say what happened to $6.6 billion in cash – enough to run the Los Angeles Unified School District or the Chicago Public Schools for a year, among many other things.
For the first time, federal auditors are suggesting that some or all of the cash may have been stolen, not just mislaid in an accounting error. Stuart Bowen, special inspector general for Iraq reconstruction, an office created by Congress, said the missing $6.6 billion may be “the largest theft of funds in national history.”
The mystery is a growing embarrassment to the Pentagon, and an irritant to Washington’s relations with Baghdad. Iraqi officials are threatening to go to court to reclaim the money, which came from Iraqi oil sales, seized Iraqi assets and surplus funds from the United Nations’ oil-for-food program.
It’s fair to say that Congress, which has already shelled out $61 billion of US taxpayer money for similar reconstruction and development projects in Iraq, is none too thrilled either.
“Congress is not looking forward to having to spend billions of our money to make up for billions of their money that we can’t account for, and can’t seem to find,” said Rep. Henry A. Waxman (D-Beverly Hills), who presided over hearings on waste, fraud and abuse in Iraq six years ago when he headed the House Government Reform Committee.
Theft of such a staggering sum might seem unlikely, but US officials aren’t ruling it out. Some US contractors were accused of siphoning off tens of millions in kickbacks and graft during the post-invasion period, especially in its chaotic early days. But Iraqi officials were viewed as prime offenders.
The US cash airlift was a desperation measure, organized when the Bush administration was eager to restore government services and a shattered economy to give Iraqis confidence that the new order would be a drastic improvement on Saddam Hussein’s Iraq.
The White House decided to use the money in the so-called Development Fund for Iraq, which was created by the Federal Reserve Bank of New York to hold money amassed during the years when Hussein’s regime was under crippling economic and trade sanctions.
The cash was carried by tractor-trailer trucks from the fortress-like Federal Reserve currency repository in East Rutherford, NJ, to Andrews Air Force Base in Maryland, then flown to Baghdad. US officials there stored the hoard in a basement vault at one of Hussein’s former palaces, and at US military bases, and eventually distributed the money to Iraqi ministries and contractors.
But US officials often didn’t have time or staff to keep strict financial controls. Millions of dollars were stuffed in gunnysacks and hauled on pickups to Iraqi agencies or contractors, officials have testified.
House Government Reform Committee investigators charged in 2005 that US officials “used virtually no financial controls to account for these enormous cash withdrawals once they arrived in Iraq, and there is evidence of substantial waste, fraud and abuse in the actual spending and disbursement of the Iraqi funds.”
Pentagon officials have contended for the last six years that they could account for the money if given enough time to track down the records. But repeated attempts to find the documentation, or better yet the cash, were fruitless.
Iraqi officials argue that the US government was supposed to safeguard the stash under a 2004 legal agreement it signed with Iraq. That makes Washington responsible, they say.
Abdul Basit Turki Saeed, Iraq’s chief auditor and president of the Iraqi Board of Supreme Audit, has warned US officials that his government will go to court if necessary to recoup the missing money.
“Clearly Iraq has an interest in looking after its assets and protecting them,” said Samir Sumaidaie, Iraq’s ambassador to the United States.
$18,000,000,000 is $6,000 from each of the 3,000,000 Americans, children included.
$18,000,000,000 is $6,000 from each of the 3,000,000 Americans, children included.
Some links for more on the story:
In my novel ‘The World Revealed’, Hamish (the main character) has a living Whitestone ship that forms herself into the most efficient sailing vessel possible. She flies above the water on the tips of her claws on her outstretched arms, and her tail.
When Hamish attempts to tack The Goddess for the first time the seas are rather large, and he stalls her halfway. The Goddess then begins to drift backwards down a steep, breaking wave and flips over her stern quarter – since her floats don’t extent far enough aft to go backwards.
The Goddess manages to extent her back-legs, and join her feet to her hands, so she then has floats as long as her main hull, and looks more like Sodebo, below – but still with the foils of l’Hydroptere.