Can a nation run a 10-12 percent deficit year after year into the far future?

Obama thinks it can.

I was told there would be no math during this presidency.

The administrationÂ’s original proposal, you recall, left a persistent budget deficit of roughly 3 per cent of gross domestic product. This has nothing to do with stimulus: the gap is there 10 years out and beyond, long after the economy is assumed to have experienced a prompt, strong, and sustained recovery. Taking account of newer data, and using slightly less optimistic near-term assumptions, the Congressional Budget Office has already upped that projected deficit to 4 per cent of GDP.

Even before the budget, the countryÂ’s underlying fiscal gap, reflecting demographic and other distant pressures on public spending, had been estimated at 8 per cent of GDP. On the administrationÂ’s plans, the US economy will prepare to greet that eventual shortfall with a big structural deficit already in place.

But that is not all. One of the most expensive commitments in the budget is healthcare reform. Towards the full cost of this initiative – estimated at $1,200bn (€890bn, £810bn) or higher over 10 years – the budget merely calls for a 10-year “downpayment” of $600bn. So even that 3 per cent full employment deficit (4 per cent, according to the CBO) was a deliberate underestimate.

And still it gets worse. CongressÂ’s new versions of the budget tweak here and there, paying lip service to the need for fiscal control, but taken together point in the direction you might expect, towards even bigger long-term deficits. Both chambers have agreed to scale back spending on future financial bail-outs, and to trim relief for the alternative minimum tax (a parallel tax code originally aimed at the very rich, which is starting to affect middle-class households). These are delusional economies. More will have to be spent on bail-outs before this crisis is over, and it is the closest thing to a political certainty that the ever-encroaching AMT will continue to be pushed back, at the cost of forgone revenue, year by year.

Also bear in mind that the budgetÂ’s signature spending initiative now looks more likely to pass, whereas its signature revenue-raising initiative looks doomed.

Incidentally, this isn't even Keynesianism. Keynes championed deficit spending during downturns, not permanently.

Posted by: Ace at 12:10 PM | Add Comment
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Assassinate a president... with a knife?

Um, okay guys.

You have heard of the Secret Service, right? I don't think they sweat knives.

Obama's been very fortunate in his opponents. First John "My opponent is an honorable man" McCain, now a guy who thinks he can kill a president with a spork.

Anyway, not a lot of juice here. I guess it proves that our enemies did not suddenly become our friends just because Mr. HappyPrompter became President.

This seems to be more of an "aspirational" plot than a real one, as the MSM used to denigrate the terrorist plots Bush broke up. I'd say the media is going to play up this half-assed conspiracy more, except they're also trying to sell us on the notion that world (all of it) loves Barack. So I don't know. Pulled in both directions, they'll probably play the story about as much as it should be, which is not a lot.

Posted by: Ace at 11:06 AM | Add Comment
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It's going to take awhile to parse this all and Congress still has to weigh in but we are getting our first look at the Obama administration's defense priorities.

(Defense Secretary Bob) Gates said his $534 billion budget proposal represents a "fundamental overhaul" in defense acquisition and reflects a shift in priorities from fighting conventional wars to the newer threats U.S. forces face from insurgents in places such as Afghanistan.

The department must ensure it has the right programs and money to "fight the wars we are in today and the scenarios we are most likely to face in the years to come, while at the same time providing a hedge against other risks," Gates said as he revealed details of his budget for the next fiscal year.

...Production of the F-22 fighter jet, which cost $140 million apiece, would be halted at 187. Plans to build a new helicopter for the president and a helicopter to rescue downed pilots would be canceled. A new communications satellite would be scrapped and the program for a new Air Force transport plane would be ended.

Some of the Pentagon's most expensive programs would also be scaled back. The Army's $160 billion Future Combat Systems modernization program would lose its armored vehicles. Plans to build a shield to defend against missile attacks by rogue states would also be scaled back.

Yet some programs would grow. Gates proposed speeding up production of the F-35 fighter jet, which could end up costing $1 trillion to manufacture and maintain 2,443 planes. The military would buy more speedy ships that can operate close in to land. And more money would be spent outfitting special forces troops that can hunt down insurgents.

Closing Velocity has some information on the missile defense cuts.

Expect more details soon, especially when it comes to the Navy and its shipbuilding plans, which are problematic to say the least.

In reality these budgets numbers shouldn't be looked at in isolation. DoD is going to be undertaking a Quadrennial Defense Review this year and balancing resources with strategy is important. Remember Rumsfeld made a lot of waves (and enemies) by eliminating outdated systems such as the Crusader artillery system before 9/11 so cutting big dollar programs isn't just an Obama thing (I imagine that would have been renamed had it survived).

Gates is trying to balance the force to face current challenges with the resources he has and F-22's and such don't help in Afghanistan. The problem is, no one really knows what's next. Those Raptors could come in handy some day.

That said, if he can do something about the procurement system to make it more responsive and effective (think the Navy's DD(x) and the Air Force's tanker acquisition problems), that would be huge. Of course, the odds of that happening aren't great, are they?

*XBradTC points out in the comments that the defense budget is going up overall. These are program cuts. I updated the headline to reflect that. Smart military blog and all. Check out his site for some further thoughts.

Posted by: DrewM at 10:05 AM | Comments (1)
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Via Hot Air's headlines, this piece about the US military's interest in the Israel-Hezballah war.

A big reason that the 34-day war is drawing such fevered attention is that it highlights a rift among military leaders: Some want to change the U.S. military so that it is better prepared for wars like the ones it is fighting in Iraq and Afghanistan, while others worry that such a shift would leave the United States vulnerable to a more conventional foe.

...

U.S. military experts were stunned by the destruction that Hezbollah forces, using sophisticated antitank guided missiles, were able to wreak on Israeli armor columns. Unlike the guerrilla forces in Iraq and Afghanistan, who employed mostly hit-and-run tactics, the Hezbollah fighters held their ground against Israeli forces in battles that stretched as long as 12 hours. They were able to eavesdrop on Israeli communications and even struck an Israeli ship with a cruise missile.

"From 2000 to 2006 Hezbollah embraced a new doctrine, transforming itself from a predominantly guerrilla force into a quasi-conventional fighting force," a study by the Army's Combat Studies Institute concluded last year. Another Pentagon report warned that Hezbollah forces were "extremely well trained, especially in the uses of antitank weapons and rockets" and added: "They well understood the vulnerabilities of Israeli armor."

Many top Army officials refer to the short battle almost as a morality play that illustrates the price of focusing too much on counterinsurgency wars at the expense of conventional combat. These officers note that, before the Lebanon war, Israeli forces had been heavily involved in occupation duty in the Palestinian territories.

"The real takeaway is that you have to find the time to train for major combat operations, even if you are fighting counterinsurgency wars," said one senior military analyst who studied the Lebanon war for the Center for Army Lessons Learned at Fort Leavenworth, Kan. Currently, the deployments to Iraq and Afghanistan have prevented Army units from conducting such training.

I'm sure Obama will figure it out. He spends long hours pondering military policy.

Posted by: Ace at 09:16 AM | Add Comment
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John Bolton's mustache gives the administration's response a major thumbs-down.

Prior to North Korea's launch yesterday of a Taepodong-2 ballistic missile, President Barack Obama declared that such an action would be "provocative." This public statement was an attempt to reinforce the administration's private efforts to urge the Democratic Peoples' Republic of Korea (DPRK) not to fire the missile.

That effort failed, as have countless other attempts to deal softly with Pyongyang. Incredibly, U.S. Special Envoy for North Korea Stephen Bosworth revealed -- just a few days before the launch -- that he was ready to visit Pyongyang and resume the six-party talks once the "dust from the missiles settles." It is no wonder the North fired away.

Once the missile shot was complete, the administration's answer was hand-wringing, more rhetoric and, oh yes, the obligatory trip to the U.N. Security Council so that it could scold the defiant DPRK. Beyond whatever happens in the Security Council, Mr. Obama seems to have no plan whatever.

Posted by: Slublog at 08:01 AM | Add Comment
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The missile did not go as far as planned, but it went far.

But the Obama Administration says almost nothing about it, and the press follows his lead.

The president has an awesome power not expressly mentioned in the constitution: the power to declare a crisis, and by so doing, focus the country's attention on an issue.

Or, in the negative, to not talk about a crisis at all, and by so doing, allow the citizens to easily ignore it.

When Bush was confronted with North Korea's nuclear experimentation, the Administration stepped up and made a great issue of it. The country paid attention. Ultimately Bush's attempt to thwart the North Koreans diplomatically failed -- again -- and he paid the political price for that. Liberals neener-neenered him for his failure. Conservatives were demoralized by his inability to resolve the issue.

Obama is taking a different tact. Apparently he's going to avoid losing political stature by pretending that crises he can't solve aren't in fact real crises at all, so that he isn't expected to do anything at all about them, and won't be blamed for failure. After all, there was apparently no problem that needed fixing in the first place.

But the fact that he can easily avoid the political fallout from noting a foreign policy crisis doesn't mean that the crisis doesn't exist, nor that the country's security is diminished as he dithers and distracts.

A lot of issues can be won, or at least not lost -- at least politically -- by simply disregarding them and pretending they don't exist. The press corps is lazy, and, especially with their Magic Boyfriend in office, eager to play along and stay quiet.

And this will be a pattern throughout his Administration. He won't avoid the "weak on security" label by actually being strong when America's security is threatened. He'll seek to avoid that label by simply pretending America's security is not threatened, and so no action needs to be taken at all. So we can't fault him for not taking that action.

A large number of threats are either going to be withheld from the public entirely, as the national security apparatus clamps down on embarrassing leaks about unaddressed and worsening problems, or will trickle out to the public, at which point they'll be promptly ignored by the press, and therefore by 80% of the public.

Just Because Obama's Such an Awesomely Awesome Swell Feller Doesn't Mean the Norks or Iranians Give a Fig: The liberal media should remember that not everyone shares their undying love.

Posted by: Ace at 07:58 AM | Add Comment
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Jim Treacher made the mistake of publicly declaring he might be interested in renaming his blog.

I'll kick it off:

This Site May Harm Your Computer

Posted by: LauraW at 06:43 AM | Add Comment
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Last night there were reports that former Denmark PM and soon to be Secretary General of NATO Anders Fogh Rasmussen was going to apologize for his previous support of the Danish newspaper that ran the cartoons.

Today in Istanbul he didn't specifically apologize but did address the controversy that won't go away.

"I was deeply distressed that the cartoons were seen by many Muslims as an attempt by Denmark to mark and insult or behave disrespectfully toward Islam or the Prophet Mohammad. Nothing could be further from my mind," he said

"I respect Islam as one of the world's major religions as well as its religious symbols," he said during a panel discussion at the conference aimed at building bridges between the Muslim world and the West.

The row over his appointment, which threatened the image of unity at NATO's 60th anniversary summit, was resolved after Obama guaranteed Turkish commanders would be present at the alliance's command and that one of Rasmussen's deputies would be a Turk.

Rasmussen previously defended publication of the cartoons, which caused protests in the Muslim world, on the grounds of free speech and refused to apologize to Muslim countries.

"During my tenure as the secretary-general of NATO I will pay close attention to the religious and cultural sensibilities of the different communities that populate our increasingly pluralistic and globalized world," Rasmussen said.

So he didn't exactly apologizes but honestly the fact that he even had to address this is still troubling. I get that we don't need to go poking Muslims in the eye just for sport but we also don't need to be defensive about our civilization and values.

I see an awful lot of talk about the sensitivities of the Islamic world but where's the full throated defense of free speech? Last I checked that was a cornerstone of our values, the kind of thing NATO was created to protect. Where's the Islamic leadership meeting us halfway by saying, 'no, we don't like these cartoons but we understand that's just how you discuss things'.

Funny how that never seems to happen, isn't it? And by funny I mean pathetic.

Posted by: DrewM at 06:27 AM | Add Comment
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Posted by: Gabriel Malor at 04:01 AM | Add Comment
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From “oLDE gUY” comes an article from Mark Steyn regarding the continuation of western culture circling the drain of political correctness.

The gist of the article is that the U.K. may be poised to ban and perhaps criminalize “ghey jokes.” It’s a very long article, but some good nuggets in there (and some really bad jokes…at least in the sense they’re not all that funny.) And Steyn has also had some well-publicized run-ins with the Commonwealth authorities regarding issues of free speech. All your background are belong to here if you weren’t following it.

So for now, at least, go give your bedside copy of the U.S. Constitution a hug for protecting you from bullshit like this. For the moment.

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Posted by: Open Blog at 07:48 PM | Comments (1)
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