Author: Frank V. Vernuccio, Jr.

Washington has again become a battleground as the President refuses to compromise with Republicans, who want to amend Mr. Obama’s signature legislative piece, the Affordable Care Act, which they maintain is a budget-breaker. But it is this just another political skirmish, or is it a philosophical battle between two sets of beliefs so fundamentally different that they cannot be reconciled?

IS THE CURRENT BUDGET COURSE SUSTAINABLE?

The President, and many in the Senate, maintain that they were elected due in part to promises made about abundant spending for entitlement programs. The Affordable Care Act alone adds about $1.8 trillion in spending by 2023.

Republicans believe that there is abundant evidence that the current course of federal budgets is unsustainable.

According to the Government Accountability Office,”GAO’s simulations lead to an overarching conclusion: current fiscal policy is unsustainable over the long term. Absent reform of federal retirement and health programs-including Social Security, Medicare, and Medicaid-federal budgetary flexibility will become increasingly constrained. Assuming no changes to projected benefits or to revenues, spending on these programs will drive increasingly large, persistent, and ultimately unsustainable federal deficits and debt as the baby boom generation retires.”

The Congressional Budget Office concurs with this worrisome analysis:

“Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing federal debt to soar. Federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product (GDP). That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007. If current laws generally remained in place, federal debt held by the public would decline slightly relative to GDP over the next several years, CBO projects. After that, however, growing deficits would ultimately push debt back above its current high level. CBO projects that federal debt held by the public would reach 100 percent of GDP in 2038, 25 years from now, even without accounting for the harmful effects that growing debt would have on the economy … Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely…

Under the extended baseline, budget deficits would rise steadily and, by 2038, would push federal debt held by the public close to the percentage of GDP seen just after World War II-even without factoring in the harm that growing debt would cause to the economy.

By 2038, CBO projects, federal spending would increase to 26 percent of GDP under the assumptions of the extended baseline, compared with 22 percent in 2012 and an average of 20½ percent over the past 40 years. That increase reflects the following projected paths for various types of federal spending if current laws generally remain in place …
• Federal spending for the major health care programs and Social Security would increase to a total of 14 percent of GDP by 2038, twice the 7 percent average of the past 40 years.
• In contrast, total spending on everything other than the major health care programs, Social Security, and net interest payments would decline to 7 percent of GDP, well below the 11 percent average of the past 40 years and a smaller share of the economy than at any time since the late 1930s.
• The federal government’s net interest payments would grow to 5 percent of GDP, compared with an average of 2 percent over the past 40 years, mainly because federal debt would be much larger…”
The National Debt is approaching $17 trillion dollars. The 2013 budget deficit is clocking in at over $800 billion.

The Federal Reserve, as noted by Forbes, has attempted to delay the drastic result of this imbalance by printing more currency ($85 billion per month, 6% of GDP annually; since 2007, the money supply has been increased by a factor of 4X!)

The annual deficits are not the result of a lack of revenue.

In the past 11 months, Washington collected $2,472,542,000,000-a record high, and an increase of $285 billion from the same time period the prior year. Nevertheless, the federal government still incurred a $755 billion deficit.

A Heritage Foundation analysis reveals that “total spending has increased 40 percent since 2002, even after inflation… Defense, however, has been slashed. Obamacare will add $1.8 trillion to federal health care spending by 2023.” The study notes that the President’s budget, which would increase spending in his second term by $335 billion, never balances, even with a $1.1 trillion tax increase stretched over a decade. Mr. Obama proposed $7 in tax increases for every $1 in spending cuts, and those cuts don’t occur until 2018, when he has already left office.

The dramatic growth in spending comes from federal programs that are not central to the traditional governance activities of the nation.

According to the American Enterprise Institute:

“The rate of entitlement growth per capita has been nearly twice as fast as per capita income growth for the last fifty years…In the 1960s, the federal government spent $2 on governing for each $1 it spent on entitlement transfers. Today that ratio has completely flipped… In 1969, government benefits accounted for 7.8% of Americans’ personal income. In 2009, government benefits accounted for nearly 18% of Americans’ income. And the regions which relied most on benefits in 1969 have become even more dependent. Nearly 50% of the U.S. population lives in a household that receives some government benefits. 31% of US households are receiving means-tested public benefits.”

“We’ve become so used to these unfathomable levels of deficits and debt-and to the once-rare concept of trillions of dollars-that we forget how new all this debt is. In 1981, after 190 years of federal spending, the national debt was “only” $1 trillion. Now, just 33 years later, it’s headed past $17 trillion. Traditionally, the national debt as a percentage of GDP rose during major wars and the Great Depression. But there’s been no major war or depression in the past 33 years; we’ve just run up $16 trillion more in spending than the country was willing to pay for.”
-CATO Institute

In Part one of this analysis, we reviewed the extraordinary financial crisis the U.S. government currently faces. The problem is not the result of a lack of revenue, which is at an all-time high. It is the product of excessive spending on entitlements.

SKYROCKETING ENTITLEMENTS,
BUT POVERTY REMAINS UNCHANGED

The Congressional Research Service
has estimated that federal welfare programs will grow almost 80% over the next decade. Already, entitlement spending, which has increased 41% since President Obama first took office, is at unaffordable levels.

This is not a pragmatic attempt to assist the poor, according to the Tax Foundation. According to that organization’s research, “Redistribution is ultimately at the heart of all tax and spending debates in Washington. But lawmakers are doing the public a great disservice if they fail to talk in honest terms about who currently pays for government programs and services, who benefits, and how new policies will change that balance.”

CATO’s new study has found that:

“…a family collecting welfare benefits from seven common programs could receive more than someone in a minimum-wage job in 35 states …roughly 60 percent of Americans receive more in government benefits than they pay in taxes… because of policies put in place by President Obama, as many as 70 percent of Americans are now net recipients of government largesse.”

Less than 40 percent of federal transfer payments-from 126 individual “anit-poverty programs” costing $688 billion annually– are actually going to those classified as “poor.” CATO concluded that “welfare spending appears to have little effect on poverty rates.”

Entitlement spending growth is shocking. A 2012 U.S. News analysis
found that entitlement spending has grown by an explosive 9.5 percent per year for 50 straight years.

“Entitlement transfer payments to individuals …have been growing twice as fast as per capita income for 20 years, totaling $2.2 trillion in 2010 alone…In 1960, entitlement spending accounted for less than a third of all federal spending; in 2010, it was just about two thirds of government outlays, with everything else-defense, justice, all the other duties of government-making up less than one third.”

A Forbes editorial provided an illustration of the explosive growth in health care costs:

“In absolute dollar terms, federal health spending in the last year of the Clinton administration was 75 percent higher than in the last year of President George H.W. Bush, while Medicare spending was two-thirds higher.”

Because of this, according to fiscal policy expert Dan Mitchell, “the long-term position of the United States is worse than either Greece or Portugal.”

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In testimony before the Congressional Budget Committee last year, Heritage researcher Robert Rector noted:

“Although the public is aware that Social Security and Medicare are large expensive programs, few are aware that for every $1.00 spent on these two program, government spends 76 cents on assistance to the poor or means-tested welfare.

“… In FY2011, federal spending on means-tested welfare came to $717 billion. State contributions into federal programs added another $201 billion, and independent state programs contributed around $9 billion. Total spending from all sources reached $927 billion.

“About half of means-tested spending is for medical care. Roughly 40 percent goes to cash, food, and housing aid. The remaining 10 to 12 percent goes what might be called “enabling” programs, programs that are intended to help poor individuals become more self-sufficient. These programs include child development, job training, targeted federal education aid and a few other minor functions.

“The total of $927 billion per year in means-tested aid is an enormous sum of money. One way to think about this figure is that $927 billion amounts to $19,082 for each American defined as “poor” by the Census. However, since some means-tested assistance goes to individuals who are low income but not poor, a more meaningful figure is that total means-tested aid equals $9,040 for each lower income American (i.e., persons in the lowest income third of the population).

“If converted to cash, means-tested welfare spending is more than sufficient to bring the income of every lower income American to 200 percent of the federal poverty level, roughly $44,000 per year for a family of four. (This calculation combines potential welfare aid with non-welfare income currently received by the poor.)…

“In the two decades before the current recession, means-tested welfare was the fastest growing component of government spending. It grew more rapidly that Social Security and Medicare and its rate of increase dwarfed that of public education and national defense. While means-tested medical benefits have been the fastest growing part of the welfare system, most other forms of welfare aid have grown rapidly as well.

“For example, spending on means-tested cash, food and housing has grown more rapidly than Social Security over the last two decades. Adjusting for inflation and population growth, the U.S. now spends 50% more on means-tested cash, food and housing than it did when Bill Clinton entered office on a promise to “end welfare as we know it”. It comes as a surprise to most to learn that the core welfare state has expanded dramatically since reform allegedly “ended welfare” in the mid 1990’s.

“Total means-tested spending on cash, food and housing programs is now twice what would be needed to lift all Americans out of poverty. Why then does the government report that over 40 million persons live in poverty each year? The answer is that, in counting the number of poor Americans, Census ignores almost the entire welfare state: Census counts only a minute fraction of means-tested cash, food and housing aid as income for purposes of determining whether a family is poor…

“Despite the fact that welfare spending was already at record levels when he took office, President Obama has increased federal means-tested welfare spending by more than a third. Some might this is a reasonable, temporary response to the recession, but Obama seeks a permanent, not a temporary, increase in the size of the welfare state…”

Facing pressure to pay for skyrocketing entitlement costs, The United States defense budget will, under current planning, be slashed by lawmakers an extra $500 billion over the next ten years, in addition to the $487 billion cut already adopted. This comes at a time when Russia and China, who are now actively participating in joint war training exercises, have sharply escalated their spending, and when their client states Iran and North Korea continue to develop significant nuclear capabilities.

State governments, as well, are having a difficult time dealing the additional burdens of unfunded mandates brought about by significantly increased entitlement programs.

STATES REBEL AGAINST UNFUNDED MANDATES FOR ENTITLEMENTS

The United States Census Bureau has reported that state government tax collections increased $34.3 billion from fiscal year 2011 to a record $794.6 billion in 2012. Forty-seven states saw an increase, led by North Dakota (47%) Alaska (27.3%) Illionois (19.1%) and Connecticut (15%.)

Despite the record haul, unfunded federal mandates for entitlements remains a clear danger to the fiscal health of the states. Nebraska’s Gov. Dave Heineman has made explicitly clear the state of Nebraska cannot afford more unfunded federal mandates from Washington, D.C. According to an Americans for Prosperity report, The Affordable Care Act is “a massive new unfunded mandate on the states in the form of medicaid expansion and new bureaucratic programs like health care exchanges.”Obamacare provides an unfunded mandate requiring higher spending by state taxpayers in order to expand Medicaid.

The American Legislative Exchange Council, has suggested the following “model resolution” for state governments:

WHEREAS, the growth in federal spending of the Medicaid and welfare entitlements are astronomical and spiraling, significantly increasing the federal budget costs, and
WHEREAS, this growth will never be controlled unless the states have autonomous management of the programs, free from Federal mandates regarding individual entitlement, eligibility groups, benefits, payment rates, and financing structures to allow most citizens of the states to benefit from the Medicaid and welfare programs, and
WHEREAS, the states will be able to design and develop innovative, efficient and productive Medicaid and welfare programs that will meet the needs of the residents within the state of {insert state}’s budget capacity, and
NOW THEREFORE BE IT RESOLVED, that the legislature of the state of {insert state} urges Congress to pass federal funds on to States via block grants to be used for public welfare and Medicaid purposes, and
BE IT FURTHER RESOLVED, that copies of this resolution will be distributed to all Governors and members of the U.S. Senate and the U.S. House of Representatives.

DEFENSE SPENDING CUT TO PAY FOR INCREASED ENTITLEMENT SPENDING

The extraordinary impact of entitlement spending can be seen most clearly when comparing it to perhaps the most basic and essential federal endeavor: national defense.

Chris Conover, has noted that “[currently] Washington spends $50 billion less on defense than the outgoing secretary of defense said was the bare minimum needed.”

A 2012 U.S. News analysis emphasized that “government spending on entitlements not only exceeds defense spending these days, it completely overwhelms it. In 2010, America spent well over three times as much on transfer payments to individuals than it did on its entire national security budget-including on both wars in Iraq and Afghanistan. If current trends continue under President Obama, entitlement spending is set to increase by more than $700 billion over the next four years; the current national cost of all defense and security programs is roughly $700 billion as well. That means it will take only one presidential term … for the growth of entitlement spending to absorb the entire defense budget of the United States.

According to the Congressional Budget Office, because the inflation-adjusted costs of DoD’s plan will rise over time much more rapidly than the budget caps will, the reductions that DoD will have to make relative to its 2013 plan to comply with the caps will be larger in later years (see figure below). From 2018 through 2021, the caps will be about 12 percent below an extrapolation of DoD’s five-year plan and 19 percent below CBO’s projection of the cost of that plan.

The Foreign Policy Initiative notes that under current law, the defense cuts that will automatically take place will be, according to both civilian and military leaders, “devastating and high risk.”

In a CNN interview earlier this year former Secretary f Defense Leon Panetta warned of “the most serious readiness crisis” faced by the armed forces in over a decade. And a “serious disruption in defense programs and a sharp decline in military readiness.”

A Manhattan Institute study of federal budget issues found that:

“The fundamental problem in the federal budget is the relentless increase in entitlement spending. … Over the past four decades, the federal government has collected revenue that has averaged 18 percent of GDP annually. In 1972, when total spending on Social Security, Medicare and Medicaid was 4.4 percent of GDP, there was plenty of revenue left over for other priorities of government, like national security. But today, the situation is very different. [a reduction in military spending would make sense could] … only occur if a highly unusual period of tranquility suddenly materialized across the globe. If, on the other hand, the next decade in world history is more like what it has been for millennia, then it would be both financially foolish and utterly irresponsible to claim credit for a fictitious “peace dividend” in outyear budget projections. But, of course, that’s exactly what the Obama budget does to make the deficit forecast look better than it really is.”

Unlike cuts to entitlements, cuts to defense have profoundly negative impacts on the economy. Defense manufacturing produces high paid employment at a time when unemployment is rampant and well-paid jobs are increasingly scarce. According to former Navy Secretary John Lehman, quoted in a Thinkprogress article, “Defense cuts particularly hurt the economy… because defense spending creates more jobs and growth per dollar than entitlements, such as Medicare, Medicaid, and Social Security. “If your objective was to maximize jobs, you’d cut entitlement five times more than defense.”

Of course, cutting defense has implications far beyond the economy. A Reuters report quotes defense manufacturers calling the cuts “irresponsible” and “dangerous.”

CONCLUSION

The extraordinary increase in entitlement spending has not reduced poverty in America. In fact, by removing dollars from the private sector as well as other federal efforts that are more productive in producing either employment or traditional and vital services, it has set in motion a cycle of ever-increasing need addressed by ever-increasing spending. This cycle has reached a critical stage where severe harm to the prosperity and safety of the nation can occur.

A generation of American students is being indoctrinated instead of educated. The results for the future of the United States are extremely worrisome.

The indications are clear and overwhelming that far too many pupils in the United States are being deprived of basic academic instruction in the key elements of American history and civics. The problem extends from grammar school straight through college. The evidence can be discerned in statistical studies, curriculum review, the actions of university administrators, and even anecdotal reports through visits to local schools.

Consider the following:

According to the 2010 National Assessment of Education Progress, only 35% of 4thgraders know the purpose of the Declaration of Independence. Overall, only 20% of 4thgraders, 17% of 8th graders, and 12% of 12th graders were proficient in history.

A Brennan/Princeton survey of New Yorkers revealed that “New Yorkers, like most Americans, know very little about their Constitution and government.” The study indicated that only 42% of New Yorkers know basic information about the three branches of government.

According to the U.S. Education Department, “a staggering number of Americans do not know much of the basic history and traditions of our nation.… Nearly two-thirds of Americans cannot name all three branches of government. …Less than half of the public can name a single Supreme Court justice. And more than a quarter do not know who America fought in the Revolutionary War.”

The Intercollegiate Studies Institute’s (ISI) American Civil Literacy Project has conducted a survey revealing that a stunning 71.4% of those polled lack an adequate knowledge of American history and basic civics.

The problem is not limited to those without college degrees. According to the ISI, “Many Americans with bachelor’s degrees cannot answer the most basic questions about our nation’s history and founding documents. Many cannot name all three branches of government or major guarantees of the bill of rights…Students did poorly even at the most elite schools. Harvard seniors, who did best, earned an average score of only 69.56 [on basic US History and civics questions]…in 2008, in a random study of American adults, the average score was 49%; even those with college degrees scored only 57%.” Shockingly, the ISI study found that elected officials typically have less civic knowledge than the general public, scoring lower by about 5 points.”
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It’s not what isn’t being taught that’s troublesome. It’s also what is being given in place of standard instruction. “The People’s History of the United States,” a Marxist view of the US, has been used as a text in Washington, D.C. schools. In Tucson, Arizona, “Occupied America,” written by the radical Rodolfo Acuna, is among the prescribed texts. The book recommends the conversion of the Southwestern US into a “Chicano Nation” and advocates the killing of whites “if necessary.”

Last year, the National Association of Scholars prepared a report for the Regents of the University of California. It’s comments were scathing. They found that “coursework in American history and institutions have been dropped, that writing courses often stress writing far less than tendentious political topics; that prescribed books are frequently no more than journalistic presentations of a simple political message instead of the more complex writings appropriate to an academic context; and that faculty teach what to think rather how to think; that is, they demand correct attitudes and beliefs of students more than they require independent reading and thought.”

Campus activities which once would have been considered “As American as apple pie” are actively discouraged. Earlier this month, a college student, Robert Van Tuinen, passing out pamphlets containing the text of the U.S. Constitution on Constitution Day at Modesto College, was informed by campus authorities that he could only do so in a tiny restricted spot known as a “free speech zone.”

It’s not only what isn’t being taught, it’s what is being forced on youth by politically biased educators. In 2009. There were cringe-inducing reports of grammar school children being instructed to sing creepy songs in praise of President Obama, in scenes that seem wholly copied from North Korea, where youth are forced to praise their dictator with religious fervor. A New Jersey school had children singing a song worshiping Obama. It was adapted from a religious hymn called “Jesus Loves The Little Children.”

“The People’s History of the United States,” a Marxist view of the US, has been used as a text in Washington, D.C. schools. In Tucson, Arizona, “Occupied America,” written by the radical Rodolfo Acuna, is among the prescribed texts. The book recommends the conversion of the Southwestern US into a “Chicano Nation” and advocates the killing of whites “if necessary.”

The end result of all of this is the production of a generation of Americans that is alienated from and hostile to the founding principles of their own nation. They have been indoctrinated to believe that the very concepts of individual freedom, unalienable rights, and the guarantee of those virtues through a constitution is irrelevant or worse.

Americans should be deeply concerned.

Assumptions about America’s energy policy are rapidly being called into question, due to four recent or ongoing events, including:

• The potential serious disruption of oil supplies from the increasingly tumultuous middle east. Iran has repeatedly threatened to close the Straits of Hormuz to dissuade the west from taking firm action against that nation’s nuclear weapons development, as well as engaging in activities meant to interfere with Iranian allies such as Syria.
• The tepid state of the American economy, made worse by increasing energy prices. Exceptionally high unemployment is one of the prime examples of this, as is the trade deficit of $39,147 Million (as of July 2013.) The United States Balance of Trade averaged $-32,055.49 Million from 1992 until 2013.
• Recent revised climatological information (including that contained in a leaked preview of an upcoming United Nations report about global warming) which indicates that for the past two decades the problem has been overestimated; and
• A dramatic increase in discovered domestic energy resources.
These events render it necessary to take a renewed look at U.S. energy policy. Partisan views, from industry and consumers on one hand, and environmentalists on the other, make it difficult to have an objective discussion on the topic.

THE PRESIDENT’S VIEWS

The President has taken positions which have been mostly praised by environmentalists, but soundly criticized by those favoring lower prices and American energy independence. In an often quoted 2008 newspaper interview, then-candidateObama stated: “Under my plan, electricity rates would necessarily skyrocket.”

When George W. Bush left office, gasoline cost consumers $1.78 per gallon. The current average price is $3.89, according to the US Energy Information Administration.
Since 2008, the average price for electricity for individuals, commercial enterprises, and industrial users have all risen, despite a weak economy and the discovery of vast new energy resources.

The White House has been criticized for failing to open federally owned lands for energy exploitation. The U.S. government owns and manages 650 million acres of land.The White House response has been that “Domestic oil and natural gas production has increased every year President Obama has been in office. In 2012, domestic oil production climbed to the highest level in 15 years and natural gas production reached an all-time high.”

Critics respond that the increases have all come from private land outside of the federal government’s control. According to the Heritage Foundation, The President has impeded access to a treasure trove of supply on federal lands. Heritage notes: “America is one of the few nations to put known domestic supplies of oil and gas off-limits to exploration. Harsh restrictions aimed ostensibly at protecting the environment place oil, coal, and natural gas out of favor…Moreover, because of a broken regulatory process and no legitimate solution to spent fuel management, we are not building nuclear plants at the rate we could be…”

The Administration has clearly stated its opposition to the use of coal. According to an article by Nicolas Loris in the Yale Environment 360 publication,
“Phasing out coal, electricity prices would increase 20 percent and cause a family of four to lose more than $1,000 in annual income…significantly reducing coal as a source of energy would destroy more than 500,000 jobs by 2030. All of this economic pain would come with no real impact on the climate.”

Mr. Obama has come under pressure from many of his own supporters to ban hydrofracking, based on scientifically incorrect rumors of problems, mostly disproved by science (but endorsed by Hollywood.)

POLICY CHOICES BASED
ON INCORRECT ASSUMPTIONS

The President predicated his 2008 desire for fuel cost increases based on supply and environmental assumptions that have turned out to be incorrect. Dramatic increases in supply, not even counting known but untapped resources such as those in Alaska or offshore, have been discovered. Earlier this year, it was revealed that the US has three times the amount of natural gas, and twice the amount of oil, as previously thought.

According to the International Energy Agency, America has the potential become the kingpin of energy supplies, producing more than either Russia or Saudi Arabia within the next 15 years. By 2030, the United States could be exporting energy. The net boon to the economy in employment and particularly eliminating the approximately $450 billion spent on imported oil, would be vast.

However, the combined net effect of keeping resources on federal lands untapped, “waging war” on coal, implanting strict (critics say unnecessary) regulations in energy production, and limiting hydrofracking could produce a far different result.

_______________________________________________________________

THE KEYSTONE PIPELINE
In July, the President minimized the employment benefits of Keystone. His comments drew outrage from pipeline advocates, who noted that studies from his own State Department directly contradicted his comments. It is believed that the White House has decided to strategically hold the project “hostage” as a means of forcing Congress to agree to other energy-related matters.

The sweeping proposals are the result of the President’s June 25 Memorandum to EPA on “Power Sector Carbon Pollution Standards,” part of the White House’s overall enivronmental proposals. Similar to other instances which the Administration feared Congresssional dissent, Mr. Obama maintains the plans do not require Congressional approval. The President stated that he “didn’t have time for a meeting of the flat earth society.”

The President’s position has been endorsed by organizations such as the National Resources Defense Council, which maintains that “The EPA has both the authority and responsibility to reduce pollution from these plants under the Clean Air Act.”

According to the Environmental Defense Funds’ Gneral Counsel, Vickie Patton,
“The sooner we get these protections in place, the clearer the signal [will be] that new power plants must do their fair share in addressing the heavy burden of carbon pollution on human health and the environment.”

U.S. Senator Joe Manchin (D-W.Va.) condemned President Obama’s proposals, which he believes impose unreasonable restrictions that will have disastrous consequences for not only the coal industry, but also American jobs and the economy.

According to Sen. Manchin, “The regulations the President wants to force on coal are not feasible. And if it’s not feasible, it’s not reasonable. It’s clear now that the President has declared a war on coal. It’s simply unacceptable that one of the key elements of his climate change proposal places regulations on coal that are completely impossible to meet with existing technology.

“The fact is clear: our own Energy Department reports that our country will get 37 percent of our energy from coal until 2040. Removing coal from our energy mix will have disastrous consequences for our recovering economy. These policies
punish American businesses by putting them at a competitive disadvantage with our global competitors. And those competitors burn seven-eighths of the world’s coal, and they’re not going to stop using coal any time soon.

“It is only common sense to use all our domestic resources, and that includes our coal. Let’s make sure that government works as our partner, not our adversary, to create a secure and affordable energy future, and let’s invest in technology which will have the ability to burn coal with almost zero emissions.”

House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) also responded quickly.

“EPA is doubling down on its economically destructive plan to essentially end the construction of new coal-fired power plants in America. The proposed standards would require the use of expensive new technologies that are not commercially viable. We are the Saudi Arabia of coal, but this impractical rule restricts access to one of our most abundant, affordable, and dependable energy sources. The consequences will be more job losses and a weaker economy. These stringent standards will actually discourage investment and the development of innovative new technologies that can help us meet the world’s future energy and environmental challenges. The right policies should embrace our energy abundance as part of the solution. The committee will soon hold a hearing on this latest regulatory grab as part of our ongoing effort to protect Americans and jobs from unnecessary and costly red tape,” said Upton.

“President Obama and his EPA have once again moved forward with an extreme regulation that makes it illegal to build a coal-fired electricity plant in America. This move is another attempt to bankrupt the coal industry to fulfill a campaign promise to radical environmentalists. For example, the cleanest coal-fired electricity technology available is known as ultra-supercritical. EPA’s extreme regulation sets an emission limit that not even an ultra-supercritical plant can meet,” said Whitfield. “Sadly, electricity consumers will pay the price, making our economy less competitive in the global market place. Even though the president is taking these extreme steps, they do nothing to curb global greenhouse gas emissions, which even his own EPA administrator acknowledged in my hearing earlier this week. As Chairman of the Energy and Power Subcommittee, I intend to hold hearings to examine every aspect of this regulation. If it is as bad as we think it’s going to be, I, along with other Republicans and Democrats in the United States Congress, wilin the United States Congress, will take every step possible to prevent this regulation from taking effect. We simply cannot afford to place America at an economic disadvantage, particularly when CO2 energy-related emissions are at their lowest levels in 20 years.”

Senate Minority Leader Mitch McCOnnell (R-Ky) described the White House action as a “just the latest Administration salvo in its never ending War on Coal…The EPA has already stifled the permitting process for new coal mines; the agency has done this so dramatically that they have effectively shut down many coal mines through illegitimate, dilatory tactics…In the year President Obama took office there were over 18,600 employed in the coal industry in my state. But as of September 2013, the number of persons employed at Kentucky coal mines is only 13,000… And the picture is getting worse instead of better. This week, a major employer announced 525 layoffs in its eastern Kentucky mines.
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In addition to displaced workers, coal industry companies, and state governments concerned over the loss of jobs and revenue, those advocating U.S. energy independence and lower energy costs are expected to vigorously oppose the EPA proposal.
The timing is somewhat ironic, as new reports indicate that global cooling may have more of a scientific basis than global warming. In response, advocates of stricter controls on energy production have amended the phrase “global warming” to read “climate change” instead, but have not yet responded to how this significant change affects plans to cut greenhouse gases.

In what some media outlets are describing as “climategate 2,” (The original climategate involved approximately 1,000 emails from the University of East Anglia indicating that climate scientists manipulated data to boost global warming claims) United Nations scientist are attempting to explain why global warming has slowed down over the past fifteen years at the same time that greenhouse gases have been increasing.

PRIMARY ENERGY SOURCES

Far too frequently, the debate over U.S. energy policy has been one in which facts have played a second hand role. Examining how America uses each primary source of energy provides a clear picture of the challenges and opportunities that face the nation’s future.

According to the U.S. Energy Information Administration petroleum use accounts for 36% of total use; natural gas, 27%; coal, 18%; renewable energy (primarily hydropower) 9%; nuclear, 8%.

The use to which each source of primary energy is put varies widely. For example, 71% of petroleum is used for transportation purposes. 91% of coal is used to generate electricity. Along with nuclear power, which supplies 21% of all electrical power, coal and nuclear account for the lion’s share of electrical power used throughout America.

FUTURE PROSPECTS

OIL

The United States has increased oil production from 5.0 million barrels per day in 2008 to 6.5 billion barrels in 2012. This is the result of technological advances, particularly in extracting shale and other “tight” oil formations, as well as the incentive of high prices. Prices could rise even higher as world-wide events, including the possibility of a military clash in the Middle East or Chinese disruption of sea lanes in the Pacific, make an impact.

This is a significant production increase considering a number of governmental handicaps imposed. Most federal lands (Washington owns 650 million acres of land) continue to be kept off-limits for exploitation, and regulations from the Environmental Protection Agency continue to tighten.

If American oil producers are allowed to make appropriate use of domestic resources, there is a continued possibility that the United States could become a net exporter of liquid fuels.

NATURAL GAS

The United States could become a net exporter of natural gas within three years.

According to the industry publication “Energybiz,” “The revolution in drilling technology that has made fracking a household word has changed the American energy policy discussion. Just a few years ago the focus was on dwindling fossil fuels reserves. Now the U.S is debating what to do with all this extra natural gas we have laying around. According to the Associated Press, up to 40% of the U.S. production of liquefied natural gas (LNG) could be exported if all of the current energy company export requests are approved by the government.”

COAL

As the NEW YORK ANALYSIS previously described in depth, the Obama Administration continues to engage in efforts that will have the effect of sharply increasing the cost of coal use. Since the use of coal continues to be an important factor in U.S. energy production, particularly in electrical generation, costs benefits from increases in other energy sources could be offset if those policies continue, to the detriment of power consumers.

NUCLEAR

According to a 2011 assessment by the World Nuclear Association, “The USA is the world’s largest producer of nuclear power, accounting for more than 30% of worldwide nuclear generation of electricity. The country’s 104 nuclear reactors produced 821 billion kWh in 2011, over 19% of total electrical output. There are now 100 units operable and three under construction. Following a 30-year period in which few new reactors were built, it is expected that 4-6 new units may come on line by 2020, the first of those resulting from 16 license applications made since mid-2007 to build 24 new nuclear reactors.”

However, in the intervening period, much has changed. During 2013, five nuclear plants have been closed, and expansion efforts at a number of others were halted. Further, 38 older reactors may be shut down early, according to the Vermont Law School Institute for energy & the Environment. A decrease in the availability of nuclear power could have a significant effect on already high power prices, particularly for electricity. Nuclear power provides some of the least expensive energy in the U.S. Proponents note that it is environmentally friendly, providing few emissions. They also note that an ideal safety record in terms of injuries or deaths resulting from its use.

The Manhattan Institute performed a case study on the potential impact of closing the Indian Point nuclear power plant, which is located 40 miles north of New York City. In its study,The Manhattan Institute concluded that:

“… closing IPEC would increase average annual electric expenditures in New York State by $1.5 billion-$2.2 billion over the 15-year period 2016-30. For a typical residential customer, this would mean an increase in the household electric bill of $76-$112 each year. The average increase for a commercial customer would be $772-$1,132 per year. The average increase in industrial customers’ electric bills would be $16,716-$24,517. The largest increase would be for transportation customers, such as the subway system, which would see increases of $1.26-$1.85 million per year. The effects of these higher electricity costs absorbed by customers would ripple through the New York economy, leading to estimated reductions in output of $1.8 billion-$2.7 billion per year over the 15-year period 2016-30. The resulting loss of jobs in the state could range from 26,000 to 40,000 per year, depending on the alternative chosen to replace IPEC.”

Difficult federal roadblocks to the disposal of waste products continue to hamper future prospects.

RENEWABLES

To many, including President Obama, renewable energy-wind, solar, hydropower, biofuels– is the holy grail of energy production. But how much of America’s energy supply can renewables actually provide, and at what cost?

One source of renewable energy that has long been in use is hydroelectric power. According to the Institute for Energy Research,”In 2012, hydropower represented 2.8 percent of the total energy consumed in the United States-much lower than the level it reached in 2011. Hydroelectricity is dependent on amount of participation and will vary somewhat over time…In 2012, renewable energy accounted for 12 percent of the total net electricity generated in the United States Hydropower accounted for 56 percent of that total.”

It is projected that the share of American electrical production will grow, but only from the current 12% to 6% in 2040. Even that modest increase will require a significant increase in the power grid infrastructure, according to the energy collective.com site.

As Congress and the President engage in the annual battle over the federal budget, the massive subsidies given to renewable energy must again be examined. According to theHeritage Foundation “solar and wind receive subsidies of over $23 per megawatt hour compared to $1.59 for nuclear, $0.44 for conventional coal, and $0.25 for natural gas.

CONCLUSION

The United States has abundant sources of energy, sufficient to make it a net exporter within the forseeable future. However, federal regulations and environmental concerns could prevent that from ocurring, as well as keeping prices comparatively high for consumers.

“In regard to the issues of conflicting interest with its surrounding countries, including Japan, China has attempted to change the status quo by force based on its own assertion which is incompatible with the existing order of international law. The attempts have been criticized as assertive and include risky behavior that could cause contingencies. Thus, there is concern over its future direction”.
–Defense of Japan 2013

The planet’s second and third most powerful economies, China and Japan, may be on a path to conflict. The international economy could be devastated as a result.

The South China Sea is the passageway through which over 50% of the world’s merchant fleet tonnage passes. Fully one third of all seagoing traffic sails through it. In excess of six times the amount of oil that is transported through the Suez Canal and seventeen times that which goes through the Panama Canal traverses this vital body of water. It is also the potential battleground for a Sino-Japanese war.

The specific flashpoints include a variety of territorial disputes, some of which are merely points of sovereignty but in several cases also include claims to area which may have a wealth of natural resources vital to the economies of both nations.

Observers from across the globe consider the current tensions between the two nations the worst since World War Two, made even more dangerous by the immediate threat of armed conflict.

A Stratfor Global Intelligence http://www.startfor.com/weekly/understanding-china-Japan-island-conflict examination outlines the internal political dilemmas facing both nations:

“The islands dispute is occurring as China and Japan, the world’s second- and third-largest economies, are both experiencing political crises at home and facing uncertain economic paths forward. But the dispute also reflects the very different positions of the two countries in their developmental history and in East Asia’s balance of power.
“China, the emerging power in Asia, has seen decades of rapid economic growth but is now confronted with a systemic crisis, one already experienced by Japan in the early 1990s and by South Korea and the other Asian tigers later in the decade. China is reaching the limits of the debt-financed, export-driven economic model and must now deal with the economic and social consequences of this change. That this comes amid a once-in-a-decade leadership transition only exacerbates China’s political unease as it debates options for transitioning to a more sustainable economic model. But while China’s economic expansion may have plateaued, its military development is still growing.
“The Chinese military is becoming a more modern fighting force, more active in influencing Chinese foreign policy and more assertive of its role regionally.”
“Japan, by contrast, has seen two decades of economic malaise characterized by a general stagnation in growth, though not necessarily a devolution of overall economic power. Still, it took those two decades for the Chinese economy, growing at double-digit rates, to even catch the Japanese economy. Despite the malaise, there is plenty of latent strength in the Japanese economy. Japan’s main problem is its lack of economic dynamism, a concern that is beginning to be reflected in Japanese politics, where new forces are rising to challenge the political status quo. The long-dominant Liberal Democratic Party lost power to the opposition Democratic Party of Japan in 2009, and both mainstream parties are facing new challenges from independents, non-traditional candidates and the emerging regionalist parties, which espouse nationalism and call for a more aggressive foreign policy.
“Even before the rise of the regionalist parties, Japan had begun moving slowly but inexorably from its post-World War II military constraints. With China’s growing military strength, North Korea’s nuclear weapons program and even South Korean military expansion, Japan has cautiously watched as the potential threats to its maritime interests have emerged, and it has begun to take action. The United States, in part because it wants to share the burden of maintaining security with its allies, has encouraged Tokyo’s efforts to take a more active role in regional and international security, commensurate with Japan’s overall economic influence.
“Concurrent with Japan’s economic stagnation, the past two decades have seen the country quietly reform its Self-Defense Forces, expanding the allowable missions as it re-interprets the country’s constitutionally mandated restrictions on offensive activity.
“China is struggling with the new role of the military in its foreign relations, while Japan is seeing a slow re-emergence of the military as a tool of its foreign relations. China’s two-decade-plus surge in economic growth is reaching its logical limit, yet given the sheer size of China’s population and its lack of progress switching to a more consumption-based economy, Beijing still has a long way to go before it achieves any sort of equitable distribution of resources and benefits. This leaves China’s leaders facing rising social tensions with fewer new resources at their disposal. Japan, after two decades of society effectively agreeing to preserve social stability at the cost of economic restructuring and upheaval, is now reaching the limits of its patience with a bureaucratic system that is best known for its inertia.
“Both countries are seeing a rise in the acceptability of nationalism, both are envisioning an increasingly active role for their militaries, and both occupy the same strategic space. With Washington increasing its focus on the Asia-Pacific region, Beijing is worried that a resurgent Japan could assist the United States on constraining China in an echo of the Cold War containment strategy.”

Despite historical animosity between the two great Asian powers, the level of tension now existing was not inevitable. But China’s meteoric development of military strength, fueled by its powerful economy, a newly belligerent attitude in Beijing, a desire to secure advantageous positions in trade and raw materials, and a sharply diminished American naval presence have left Tokyo vulnerable.

It was not that long ago that a far different relationship, at least temporarily, was envisioned by China’s leadership. Henry Kissinger noted in his book, On China, that in 1978, former Chinese leader Deng Xiaoping began his series of visits abroad in Japan, ratifying a treaty normalizing relations. According to Kissinger, “Deng’s strategic design required reconciliation, not merely normalization.”

At the time, China feared the Soviet Union, and felt a need for both Japanese technical knowhow and American military backing.

But the Soviet Union fell, China’s economy outperformed Japan, and the U.S. military diminished sharply. Despite a lack of serious threats in the years when Boris Yeltsin reigned in Moscow, Beijing chose to invest heavily in developing a superpower-level military capable not just fully capable of defending the homeland, but of becoming a preeminent power both in Asia and across the globe.

China has been increasingly aggressive in its assertion of territorial claims not recognized by other nations. One year ago, it boldly sailed into and occupied a resource-rich offshore region belonging to America’s longstanding ally, the Philippines. http://www.examiner.com/article/china-philippine-dispute-could-spark-major-conflict The complete lack of an appropriate reaction by White House is reminiscent of Britain and France’s failure to react forcefully to Germany’s aggression in the years leading up to the 1939 start of the European conflict.

A U.S. Naval War College study http://www.usnwc.edu/getattachment/bfa92a47-1f5f-4c23-974c-f92e1ed27be4/The-Senkaku-Diaoyu-Island-Controversy–A-Crisis-Po.aspx of the Senkaku/Diaoyu Island dispute between China and Japan controversy by Paul J. Smith illustrates the dangers in Sino-Japanese territorial disputes:

“The chances for unintentional conflict, perhaps ignited by tactical miscalculation or an accident involving patrol ships or surveillance aircraft, continue to grow. In general, because of changes in the geopolitical environment, including the relative power position of Japan vis-à-vis China, opportunities for peaceful resolution seem to be rapidly fading. The implications for the future of peace and stability in East Asia are potentially grave.
[Three factors are in play] first, the power relationship between Japan and the People’s republic of China, which drives the dynamics of this dispute, is shifting. In the 1970s and, especially, the 1980s Japan’s economic power was unrivaled in East Asia, while China was comparatively undeveloped and militarily weak. Today the situation has changed…
The second factor that negatively influences prospects for peaceful resolution of the controversy is the geographic location of the Senkaku/Diaoyu Islands within the East China Sea. As China’s naval power grows, the East China Sea is emerging as a “contested space” between China and Japan. Many American military observers believe that China’s military modernization efforts are increasingly oriented toward missions other than Taiwan—for example, defense of territorial claims in the east and south China seas. In addition to the Senkakus/Diaoyus, China and Japan have other ongoing East China sea disputes, some related to maritime boundaries and hydrocarbon resources. A 2008 agreement that would have facilitated joint exploration of hydrocarbon resources in the east China sea was essentially scuttled by the September 2010 dispute centering on the islands.

From a military perspective, Japanese defense officials appear to view China’s advances into the East China Sea with growing alarm. Japan’s 2012 defense white paper argued that China’s navy is seeking to protect and consolidate maritime interests in the east China sea: ‘It is believed that its naval vessels operated near the drilling facilities of the Kashi oil and gas fields in September 2005, partly because China tried to demonstrate [its] naval capabilities of acquiring, maintaining, and protecting its maritime rights and interests.’ The same document reported that the Chinese air force has deployed various types of aircraft (including H-6 medium range bombers and y-8 early warning aircraft) around the east China sea close to Japan’s airspace…the most important—the U.S. role in the islands controversy.

“The third underlying factor is arguably signaled to Japan, if in careful or conditional language, the applicability of article 5 of the U.S.-Japan defense treaty in a senkaku Islands military contingency. A briefing paper prepared for Henry Kissinger in 1972, for example, stated that the Mutual Security Treaty ‘could be interpreted’ to apply to the Senkakus. At various times Japanese officials sought to clarify whether the United states considered the islands within the scope of the alliance. For instance, in a March 1974 meeting between American and Japanese officials, defense agency chief Sadanori Yamanaka inquired whether the United States, notwithstanding its “neutral” position, would be willing to defend the islands on behalf of Japan under the security treaty. a U.S. defense office’ that the islands, which were administered by Japan, would indeed fall under the treaty.”

While the U.S. State Department has provided more direct assurances that its treaty obligations with Japan include these island disputes, Washington’s failure to protect the Philippines from Chinese incursions continues to worry Tokyo.

Beijing’s General Luo Yuan, in a statement issued in 2012, declared that China should prepare for “war at all costs” to take control of the strategic waterway. http://www.examiner.com/article/china-philippine-dispute-could-spark-major-conflict If it occurs, it could engulf the entire planet in a conflict on a scale not seen since World War two.

In July, China sent a fleet in the strait between Russia and Japan, a clear threat to the Tokyo government. According to Floating Steel staff writers, “Two missile destroyers, two frigates and a supply ship passed through the Soya Strait from the Sea of Japan to the Sea of Okhotsk…a fleet of 16 Russian naval ships was seen moving through the Soya Straight” as well. http://www.spacewar.com/reports/China_naval_fleet_seen_off_northern_Japan_999.html
Among various fatal diseases diabetes is one such dysfunction that can help you to get rid of unbearable penis trouble either due to weak male organ or due to excessive hand practice also online prescription viagra without cause weak erection. According levitra online india to the degree of rejection, medications are prescribed. Therefore, reducing extra pounds and bringing waistline back to the durable and strong phase where impotency can no longer be a worry in your life. raindogscine.com generic levitra online Go with canada viagra cialis and keep some money in your pocket! Ultimately, Sildenafil Citrate is one the highest-rated products for Erectile dysfunction, talk to a trusted doctor now. Overall, China’s activities include intensely provocative moves, including the violation of internationally recognized air and sea space, as well as overtly hostile acts. In January of this year, one of Beijing’s ships directed its fire-control radar at a Japanese naval vessel.

The hostilities have been directed at several nations, including the United States. Fishing boats of several countries have been shot at. In 2009, Chinese vessels intentionally obstructed an American Navy research ship.

According to the authoritative Jamestown Foundation,

“PLA generals have been up front about the possibility of using force to realize China’s oceanic aspirations. As Lieutenant General Wang Sentai, Vice Political Commissar of the PLA Navy, pointed out, ‘History has told us that when our navy is weak, our country is on a downward trend, and when out navy is strong, our country is on the rise,’ he added. Major General Luo Yuan, a hawkish PLA media commentator, reiterated that Beijing might consider the military option against the Philippines. Noting that the Philippine military capacity is among the weakest in Asia, General Luo said that ‘if [Manila] makes an advance of one inch, we will retaliate by making an advance of one foot.’ ‘The South China Sea will become a sea of peace after we have taken back the eight islets that the Philippines have [illegally] occupied,’ he recently noted (China Youth Daily, June 1; China News Service, May 13).” http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=41056&tx_ttnews%5BbackPid%5D=25&cHash=4c0f27c3f989560320958d0c44d7eb88#.UhoVaxttiDe
China has been broadly and rapidly modernizing its military forces, and has been rapidly expanding and intensifying its activities in its surrounding waters and airspace. These moves, together with the lack of transparency in its military affairs and security issues, are a matter of grave concern for the region and the international community, including Japan. It is necessary for Japan to pay utmost attention to them…The Chinese national defense budget continues to increase at a rapid pace. The nominal size of China’s announced national defense budget has approximately quadrupled in size over the past ten years, and has grown more than 33-fold over the past 25 years. –Defense of Japan 2013

China’s official military budget has been rapidly increasing, but even the official figure of a 12% increase may not reflect the vast resources available to the People’s Liberation Army (PLA.) The PLA controls a vast network of “private” enterprises, from which it can draw an almost limited amount of funds. China maintains the world’s largest military in terms of sheer numbers, and has progressed significantly to add top quality to its quantity.

China’s Philippine claims are not recognized by any nation or international body. In several cases, off-shores areas claimed and illegally occupied by Beijing are clearly within Manila’s Exclusive Economic Zone.

China recently launched its first aircraft carrier, the Liaoning, and is expected to develop others in the very near future.

China’s spending has extensively increased both the size and sophistication of its naval forces. Among the most startling developments was the successful deployment of a revolutionary new anti-ship ballistic missile, the DF-21D, http://www.nti.org/gsn/article/china-has-begun-limited-deployment-new-antiship-ballistic-missile-pentagon/ the first of its kind on the planet. This unmatched and exceptionally deadly ship-killing weapon has, according to the United States Naval Institute, quickly forced the United States Navy to change its strategy.

JAPAN

This dramatic turn of events has had a profound impact on the people of Japan, who are now debating a sharp reversal in their largely pacifist foreign policy and constitution. Sharp differences regarding territorial claims exist between China and other regional countries, and Beijing’s heavy emphasis on a show of military strength against its far weaker neighbors such as the Philippines and Japan is indicative of the hostile nature and heavy influence of China’s military.
Masahisa Sato, top defense adviser to Shinzo Abe, recently and passionately stated (as quoted in the Wall Street Journal): “we have people we want to protect. We must have the resolve to hand this nation to the next generation.” Japan has finally (after an eleven year hiatus) has finally increased its defense budget.
Japan’s recently issued defense white paper http://www.mod.go.jp/e/publ/w_paper/2013.html outlines Tokyo’s distress:

“China has attempted to change the status quo by force based on its own assertion which is incompatible with international law…China has been rapidly modernizing its military forces…it is necessary for Japan to pay attention…The nominal size of China’s announced national defense budget has approximately quadrupled in size over the past ten years, and has grown more than 33-fold over the past 25 years.”
According to Gertz, China is building two new classes of missile submarine in addition to the eight nuclear missile submarines and six attack submarines being deployed as part of an arms buildup that analysts say appears to put Beijing on a war footing.” http://freebeacon.com/red-china-power/
These developments have forced Tokyo to strongly reconsider its peace constitution. Beijing’s aggressiveness and lack of interest in negotiated settlements, and the long standing hostility between the two nations (extending as far back as the 13th Century) is seen as an existential threat to the Japanese people, forcing the nation to rearm.

Japan recently commissioned the largest warship it has developed since the end of World War 2, the Izumo, a flat-top helicopter destroyer. A purely visual analysis of the new craft suggests it may be able to support VTOL (vertical take off and landing) fighters, as well. This development “would be a departure for Japan…which has not sought to build aircraft carriers of its own because of Constitutional restrictions that limit its military forces to a defensive role,” as noted by a Sky News report. http://news.sky.com/story/1125173/japan-unveils-largest-warship-since-wwii.

Tokyo is also considering instituting a Marine Corps-like capability, as well as the use of military-class drones, according to a SpaceWar sudy. http://www.spacewar.com/reports/Japan_eyeing_Marines_drones_in_defence_paper_reports_999.html

The recent, unprecedented joint maneuvers between Russia and China in the Sea of Japan sent an unmistakable signal to the United States that a new world order was being born, one which sharply reduces American influence in a portion of the planet that is the fulcrum of international commerce. The increased confidence of Beijing and Moscow, both of which have invested heavily in the development of naval power specifically targeting the supremacy of the diminished U.S. Navy, has dire global implications.

After the bitter experience of World War II, it would be natural to assume that Asian-Pacific nations would be wary of any move by Tokyo towards rearmament. But the threat from China is so significant that the opposite is true.

Defense expert Seth Cropsey, in his recent book, Mayday: The Decline of American Naval Supremacy, notes:

“Alberto del Rosario, the Foreign Affairs Secretary of the Philippines, a nation that imperial Japan ravaged in World War II, said publicly in December 2012 that he ‘would welcome very much’ the rearmament of Japan as a counterpoise to China.’ This startling about-face in a region where memories are long shows how seriously regional powers regard China’s unchecked rising military. American seapwer needs the resources to assure allies, control the seas if necessary, and restrict a potential conflict to the seas t\rather than risk its expansion to the Asian land mass.”

The mainland of the United States, while clear across the vast Pacific Ocean, is not so remote that it beyond the reach of China’s military expansion. According to the Washington Free Beacon, http://www.washingtontimes.com/news/2013/jun/7/china-encircles-us-arming-western-hemisphere-state/?page=all “China has been quietly taking steps to encircle the United States by arming Western Hemisphere states, seeking closer military, economic, and diplomatic ties to U.S. neighbors, and sailing warships into U.S. maritime zone s.” http://www.examiner.com/article/china-a-major-factor-latin-america

In addition to Chinese investments on either side of the Panama Canal, giving Beijing a strategic point from which to counter the American Navy, Nicaragua, led by the Marxist-Leninist Daniel Ortega, has given China a “100 year concession” to build its own alternative to the Panama Canal, according to a report by The Guardian newspaper http://www.theguardian.com/world/2013/jun/o6/nicaragua-china-panama-canal

China’s President Xi visited Latin America in June in an effort to bolster Beijing’s arms sales to the region. Mexico, Venezuela, Bolivia, and Ecuador are recent regional purchasers of Chinese weapons, according to Bill Gertz writing in the Washington Free Beacon.

The sharply weakened American navy, less than half the size of its 1990 peak and the smallest since the First World War, combined with an unprecedented lack of support for American allies, renders this threat from China on a par equal to that faced by France and Britain during the rise of the Third Reich.

The extraordinary irony surrounding President Obama’s Rose Garden message concerning Syria should not be overlooked by the public.
Mr. Obama vehemently critiqued former President George W. Bush’s 2003 war that resulted in the downfall of Iraqi dictator Saddam Hussein.

Like Syria’s Bashar al-Assad, Saddam Hussein used banned weaponry to murder members of his own citizenry, and committed numerous other crimes against humanity. Obama criticized Bush for his efforts that successfully toppled the illegitimate Iraqi regime.

Along with many other Democrats, Obama falsely stated that Bush was, essentially, acting without international approval. Largely ignored was the 49-member “Coalition of the Willing” that joined with the United States in an effort that was a model of international cooperation. In sharp contrast, Mr. Obama has failed to convince even America’s most steadfast ally, the United Kingdom, to provide assistance.

Rewriting history, many in Mr. Obama’s camp alleged that the Bush Administration acted without the support of the rest of the nation. Conveniently forgotten was the Authorization for Use of Military Force Against Iraq Resolution of 2002, overwhelmingly supported by Democrats and Republicans. Again in sharp contrast, only after suffering humiliating rejection by both the U.N. and our allies did President Obama mention going to Congress for approval.

This alternative is really extremely safe and Click Here cheap viagra effective. Kamagra helps in fighting both temporary and permanent impotency. discount tadalafil from canada The good thing about web chemists is that they work greatly for viagra price uk men who have ED due to sleep deficiency or lifestyle change can also take kamagra tablets. Read the reviews carefully, note the ingredients in the drugs, make sure they are FDA approved and be certain to inform your doctor about viagra pfizer 25mg taking the drugs. Indeed, not only has Mr. Obama failed to win international support, but he faces vehement and potentially armed opposition from Russia, Iran, and possibly China. These powers now act with greater confidence against the West thanks to Obama’s continued defunding of the American military and his pointless concessions to Moscow in the New Start nuclear arms treaty.

Perhaps the most crushing irony of all was the charge that one of the several causes of the Iraqi War of 2003, the necessity of removing banned weapons such as the material used to gas Iraqi civilians, did not exist. Now, there is sufficient evidence to conclude that these forbidden items did exist and were moved to Syria before Coalition forces could intercept them.

Unlike toppling Saddam Hussein’s regime, the rationale for the Iraqi War of 2003, Mr. Obama’s proposed course of action, launching a limited number of cruise missiles at Syria not to depose Bashar al-Assad, and not to totally destroy his military, but to simply express America’s displeasure, seems unfocused.
The Bush toppling of Saddam Hussein opened up a new era both for the Iraqi people and the Middle East as a whole. Scenes of proud citizens holding up “purple fingers” proving they had voted in that nation’s first free election ouster seemed to foretell a potential new breath of freedom for the entire region. But that accomplishment was all but destroyed by Mr. Obama’s premature withdrawal of American troops from Iraq, which, in their absence, has fallen prey to extremists and now sits in Iran’s orbit.

Bashar al-Assad’s use of banned weaponry against his own civilians could not be a more blatant violation of United Nations standards. Yet that organization, which Mr. Obama has often deferred to during his tenure, has completely failed to live up to the tenets of its own charter.

The long-delayed western intervention in Syria may well be the most complicated Middle Eastern venture to date.

Unlike prior actions in Iraq or Libya, strong international interests, predominately from Russia and China, are arrayed against humanitarian action, and the regime of Syrian strongman Bashar al-Assad has shown no reluctance to employ weapons of mass destruction. Indeed, British news sources have reported that Assad’s forces have even fired on U.N. observers. An emboldened Iran could also become a major player.

A number of factors are in play. American credibility is at an all-time low following the Obama Administration’s failure to respond to the murder of its ambassador in Benghazi. The diminished size of the U.S. military, and the White House’s premature withdrawal from Iraq and the announced departure from Afghanistan portray an administration that is allergic to confrontation.

Assad may have a more significant arsenal at this disposal than prior regional adversaries. Israel’s Mossad has reported that Saddam Hussein’s weapons of mass destruction were evacuated to Syria before the second Gulf War deposed the dictator.

Most worrisome, however, are China and Russia’s steadfast opposition to western action. Both have used their influence at the United Nations. Unusually strong language, including the phrase “catastrophic,” have been employed by Moscow to describe what they believe would be the result of western attempts to intervene on behalf of the Syrian opposition to halt Assad’s internationally banned use of poison gas against his own populace.
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Russia’s opposition is clearly motivated by its direct military self-interest. Moscow has a key naval base at the Syrian port of Tartus. The facility service Russian naval vessels in the Mediterranean, an area that has once again become an active area of contention between Moscow and the West.

President Putin has been strongly dedicated to restoring and enhancing his nation’s oceanic prowess, returning to bases employed by the Soviet Union before it collapsed, and committing vast resources to modernizing and expanding its naval force. The Kremlin announced an unprecedented $700 billion programfor that purpose.
China, which has established close military ties to Russia, has had the most dramatic naval armament program of all. In addition to establishing key elements of blue-water navy such as an aircraft carrier, it has developed sophisticated ship-killing missiles that have no equal anyplace in the world.
The Chinese economy requires vast supplies of oil, and coming to the assistance of the Syrian regime may give it influence to secure supplies.
It is not an exaggeration to state that the possibility of a wider conflict arising out of this situation is a very real danger.

Largely ignored by the media, Coptic Christians, who have been targeted by the former Egyptian President Morsi’s Moslem Brotherhood, marched on the White House on August 22 to protest what they describe as President Obama’s support of that terrorist group.

According to the Coptic Solidarity organization,

“Houses of worship and Coptic-owned property have been systematically targeted and the geographic scope of the attacks has spread to several villages and districts within single governorates; the resulting damage is unprecedented.

“At least 45 churches came under simultaneous attack in various governorates as soon as procedures to clear the two sit-ins began, resulting in the death of 7 citizens, the torching of 25 churches, the looting and destruction of 7 churches and the partial destruction of 5 more churches. This is in addition to assaults on numerous schools, civic associations and church-affiliated social services buildings.” Other reports note that Christian nuns have been paraded through the streets of Cairo as “prisoners of war.”

This was not a reaction to any western influence. Coptics are native to Egypt, and actually constituted the majority religion of the nation as far back as 400 A.D. Even after the Moslem conquests, Coptics remained the majority for hundreds of years. After centuries of Moslem rule, they still represent a significant minority of the population. Both Catholic and Protestant sects of the religion exist.

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Morsi’s rule was marked by administrative chaos and attempts to impose strict Sharia, the harsh Moslem religious-based law. Widespread dissatisfaction with both governmental miscues as well as the attempts to impose Islamic law led to his downfall.

Following Mr. Morsi’s subsequent overthrow by the Egyptian military, the U.S. continued aid, despite federal legal prohibitions against assisting governments formed under those circumstances. In the aftermath of Morsi’s overthrow, however, his Moslem Brotherhood supporters, many of whom were well armed, initiated violent actions against the new government of interim president Adly Mansour. At the same time, the Brotherhood increased its campaign of violence against Coptic Christians.

The Mansour government reacted to the violence by deploying the Egyptian army to contain it. In the ensuing fighting, a number of Moslem Brotherhood fighters were killed. This apparently prompted the White House to cutoff assistance to Egypt. Coptic Christians believe that President Obama’s action encouraged the Moslem Brotherhood.

“Detroit can no longer be ignored…Americans are swimming in debt…Go ahead and laugh at Detroit. Because you are laughing at yourself…at the end of the day, the Detroiter may be the most important American there is because no one knows better than he that we’re all standing at the edge of the shaft.”

–Charlie LeDuff, author of Detroit, An American Autopsy.

THE COLLAPSE

With an annual budget deficit of $380 million and $18 billion in debt, Detroit’s fiscal position had become untenable. It had no reasonable expectation of repayment; indeed, some borrowed funds have been utilized for operating expenses. The unemployment rate, which has almost tripled in the past thirteen years, is over 18% and its population has dived from 1,850,000 in 1950 to a mere 710,000 currently.Since the advent of the 21st century, over a quarter of its population fled .

The descent of what was once one of the world’s most prosperous cities wasn’t inevitable. “Detroit and its adjacent cities were to the early 20th century what California’s Silicon Valley is today,” notes the Wall Street Journal. “Today, 40,000 structures of land parcels sit vacant or empty…36% of Detroiters [live] below the poverty level…in 2012 Detroit had the highest violent crime rate for a city with more than 200,000.”

It’s cultural grip on the American imagination is significant. Once the fourth largest U.S. city, and one of the most prosperous, in the nation, It had the potential to continue its significant and healthy position within the pantheon of the nation’s great urban centers. Now, it may not be able to even keep its commitments to its 20,000 muncipal retirees.

WHAT HAPPENED

The simplistic reason for The Motor City’s financial demise is the reduced presence of the auto industry. But that industry shrunk its footprint for very real and substantial reasons. Its withdrawal was not unique. Even Motown Records has left.

With the reduced spending on defense, government contracts could not provide even a minor fallback to the loss of auto manufacturing. A plant building tanks for the U.S. armed forces was closed under President Clinton in 1996.

The United Auto Workers has been extremely successful in its representation of its members. But in driving salaries up to $70 an hour in wages and benefits, along with onerous work rules, it made American auto manufacturing in Detroit uncompetitive. Manufacturers had every incentive to move out.

Municipal services in Detroit have been abysmal. A Heritage report notes that it takes the police an hour to respond to calls. Rampant crime (The Washington Post notes that it has the highest crime rate of violent crime among the nation’s big cities) has chased many of the city’s most productive citizens out, as have schools that cater more to union members at the expense of the students. Uncollected trash abounds. 40% of its streetlights don’t work.

According to a Fox News analysis, the high labor cost, combined with inadequate service has added $15 billion to the city’s unfunded liabilities.

While services are extremely low, Detroit’s taxes are excessive. The CATO Institute notes that of the 50 largest U.S. cities in 2011, Detroit had the highest property taxes on homes, apartment buikdings, commericial buildings, and industrial buildings.

THE ROLE OF BAD GOVERNMENT

For over half a century, Detroit has been subjected to one party rule. More than just the fact that Democrats have dominated the government for that extraordinary stretch of time is the fact that the individuals elected have followed an economically radical path that clearly dissuaded businesses from investing in the once prosperous municipality.

A report by the Better Government Association has ranked Michigan 48th out of 50 in key areas or governance.

A collection of crooked and politically extreme politicians has abused and defrauded the people of this once prosperous city. Former mayor Coleman Young, who many believed exacerbated the issue, expended political capital defending his police chief, William L. Hart, who eventually was convicted of stealing $2.6 million from the city’s taxpayers.

The career of former mayor Kwame Malik Kilpatrick, widely known as the “Hip-Hop Mayor,” symbolizes this sad legacy. Kilpatrick’s reign was brought to a close after convictions for perjury and obstruction of justice in 2010. In March of this year, he was convicted of violating his parole, and in May he was convicted of 24 counts of mail fraud, wire fraud, and racketeering.

____________________________________________________________

“Kwame Kilpatrick wasn’t the first Detroit politician to milk the city. It had been going on for a hundred years. And it wasn’t just the politicians. It was union bosses and contractors and industrialists and receptionists who were nieces of the connected. Evrybody got their piece and that was all right when Detroit was rolling in money. There was always enough grease to hide the flaws.”

–Charlie LeDuff, “Detroit, An American Autopsy”
__________________________________________________________

During his trial, federal officials noted that Detroit suffered from an environment of extortion, bribery, and fraud. Indeed, it is not inappropriate to suggest that the government of Motown has been more an exercise in organized crime than civic leadership in the past half century. Is it any wonder that it fell into bankruptcy? In response to these charges, the city’s leaders scream racism. But how does that account for the fact that middle income blacks move out of Detroit–a city solidly under the control of black politicians– as fast as they can?

An emphasis by Detroit civic leaders on exploiting racial divisiveness rather than cooperation has been deadly. Former Mayor Kwame Kilpatrick has strongly emphasized racial issues.

A Daily Caller http://dailycaller.com/2013/08/24/in-detroit-racial-rhetoric-concealed-corruption/article noted:
“Playing on people’s sensitivities and fears distracts attention from holding elected leaders accountable. Detroit’s political class understand this, and regularly delivers racial division rather than doing the hard work of attracting investment in the city.”

A journalist for Forbes of India visited Detroit, and reported that he was shocked at the state of disrepair in the once great metropolis. “A wrong turn around 10pm had us in a typical Detroit neighbourhood. The streets were pitch dark and potholed. The only lights were from the headlights of our car. It seemed like the zombie apocalypse had finally arrived–we couldn’t get out of there fast enough.”

$18 billion dollars of liabilities have mandated the move to Chapter 9 bankruptcy of what was one of the world’s most prsoperous cities. Chapter 9 is a form of bankruptcy under federal law reserved for municipalities, established by Congress in 1937. The Pew Center notes that its core purpose is to insure that basic civic functions are maintained even during a severe fiscal crisis. In Detroit’s case, that bears a touch of irony, since it can reasonably be argued that those services were already largely absent.

Permission from the state government is required for the move. Since the legislation became law eight decades ago, over 620 municipalities have sought its protection, including Orange County, California and Jefferson County, Alabama. But the trend is accelerating, and Detroit’s failure is unprcedented.

Both the White House and Detroit have pursued the expansion of social programs at the expense of creating an environment in which private sector jobs can be maintained and created. It’s a suicidal course that has already led to disaster. Michigan’s Mackinac Center’s Director of Labor Policy calls it the “Detroitization of America.”

Major Garrett, writing in the National Journal, notes that “Detroit’s failings are many and its debts staggering. Obama did not cause them. But his economic remedies and intervention have achieved little.” Obama’s extensive bailouts to the auto industry only served to strengthen the unions without delivering any improvements to the city’s dire condition.

It’s not as though Michigan hasn’t provided assistance. Reuters reports that multiple state programs and tax provisions aide Detroit. “Revenue from special levies add $164 million annually to Detroit revenues…Michigan Treasury Department data show that for fiscal 2013 Detroit was slated to receive nearly $260 per person from the state, several times what other cities in the state receive..”

Analysts note that Detroit’s policies closely resemble those implemented or sought to be implemented by President Obama. According to Michael Tanner, writing in Bloomberg.com, “A few years ago, the nonpartisan Bay Area Center for Voting Research rated Detroit as the most liberal city in America. The city’s own choices…are really responsible for Detroit’s failure.”

It’s a trend that leaves observers puzzled but that closely resembles current White House policy. While Detroiters are desperate for employment and the city itself urgently needs business, the muncipal government, notes Tanner, engages in a pattern of anti-enterprise taxes and regulations. It also imposes stiff “Living Wage” rules that sharply discourage hiring.

From The Michigan Governor’s Office:
The Facts on Detroit’s Bankruptcy

Q. 1: Why was it necessary for Detroit to use a Chapter 9 bankruptcy filing to address its financial problems?

A.: Detroit is in a financial crisis. Without major changes, the city is expected to run out of cash by December 2013. The city can’t borrow any more money, as it has for nearly a decade, to pay its bills. It can’t raise taxes, since its tax rates are already at the legal maximums. The city has an obligation to provide for the safety and welfare of its residents and without a comprehensive restructuring of its obligations, the city’s ability to do that is compromised. That situation must change to improve the quality of life for Detroit’s 700,000 residents and to attract new businesses and jobs to the city. Six decades of mismanagement and ignoring financial realities have brought us to this point. It’s time to fix the problem. Negotiations with creditors weren’t successful, so a bankruptcy filing was the last viable option to fix the city’s finances and start to provide Detroit’s 700,000 people the basic public services they need and deserve. Bankruptcy is the quickest way to get Detroit on a sound financial footing so it can meet the needs of its residents and be able to grow and prosper in the future.

Q. 2: Why didn’t the negotiations work?

A.: Fixing the city’s finances will require sacrifices from investors and many others. We had hoped those sacrifices would be worked out in good faith negotiations. Unfortunately, it became clear that those negotiations wouldn’t be successful for a number of reasons. There was no guarantee all the parties would agree. There was strong disagreement about the restructuring plan. Detroit is in a crisis and we’ve got to get going on the solution. A bankruptcy filing was the last viable option to fix the city’s finances and start to provide Detroit’s 700,000 people with the basic public services they need and deserve.
Q. 3: What does Chapter 9 bankruptcy mean?

A.: A court-supervised Chapter 9 restructuring gives the city an opportunity to resolve its financial crisis by providing additional tools that are not available outside of a federal court process. It provides a breathing spell during which the city can focus on restructuring and begin the process of sorely needed reinvestment. In addition, it allows the city to continue to work toward agreements with its vast and fragmented creditor groups. In the absence of agreements, the bankruptcy process can be used to bind non-consenting creditors. Detroit will continue to pay its employees and its vendors for essential services. It will continue to provide essential services to its 700,000 residents.
Q. 4: Why couldn’t the city solve its financial issues on its own? How can a judge decide what is the best for Detroit?

A.: A court-supervised process is the best and most efficient way to secure a strong, viable future for Detroit. Financial mismanagement, a shrinking population, a dwindling tax base and other factors over the past six decades have brought Detroit to the brink of ruin, both financially and operationally. All other options to fix Detroit’s finances have been exhausted. Detroit and its residents deserve better and we think a court-supervised restructuring is the best way forward. In this process, the city still will be the entity to propose its own restructuring plan and negotiate that plan.
Q. 5: How long will the city be in bankruptcy?

A.: That is hard to predict because the process can be affected by a variety of factors. Kevyn Orr and his team remain committed to moving forward with the speed, discipline, and efficiency of a corporate restructuring.
Q. 6: How could the city file so soon after just presenting its plan a month ago? Was that enough time to negotiate in good faith?

A.: We have held a series of meetings and negotiations and exchanged a significant amount of information. It quickly became clear that the city could not achieve consensual savings from its major creditors outside of a court-supervised process for a variety of reasons. First, there are large groups of creditors, including retirees and bond holders, that are unorganized and unrepresented. Having a forum in which to organize those creditors so that negotiations may ensue and binding solutions be developed is necessary for the restructuring to conclude. Second, some of the creditors with whom the city has met have refused to consider any changes to the city’s obligations. Resolutions with those creditors would have to be supervised by a court.
Q. 7: Does this mean the city won’t pay creditors or contribute to pensions any more?

A.: Chapter 9 bankruptcy allows the city time to focus on restructuring and revitalizations. These obligations will be addressed as part of the restructuring process.
Q. 8: Will the city continue to pay employees, retirees and vendors?

A.: Current employees will continue to receive their paychecks without interruption and will maintain their medical benefits and vacation privileges. The city will maintain current vendor contracts for essential goods and services and expects to continue to pay suppliers of such goods and services during the bankruptcy proceedings on a regular basis.
Q. 9: What does this mean for union contracts?

A.: The city will work with its various unions to address employee issues as part of its restructuring so that the city has an affordable long-term cost structure.
Q. 10: Will the city continue to provide essential services (police, fire, trash pickup) to residents?

A.: Yes, it will. There will be no change in services. In fact, over time, as the process of reinvestment begins, we expect to provide an improved service, which Detroit’s residents deserve.
Q. 11: Will the city begin selling certain assets, such as Belle Isle or the art in the DIA?

A.: The city continues to evaluate all legal options to maximize creditor recoveries and to provide funds to reinvest in the city and regain its place among America’s great and vibrant cities.
Q. 12: Will Detroit’s bankruptcy filing impact the creditworthiness of other Michigan municipalities and the state itself?

A.: Detroit’s situation is unique and it should not affect other cities or the state.
Q. 13: What happens next?
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A.: Most importantly, the city intends to begin investing in its operational initiatives to improve services to Detroit’s residents and businesses. In addition, the city will continue to hold discussions with its creditor groups to seek consensual resolutions to obligations where possible.
Q. 14: What are the emergency manager and his team proposing?

A.: Kevyn Orr and his team presented a restructuring proposal to the city’s creditors on June 14. That proposal remains the basis for the city’s negotiations with creditors.
Q. 15: Won’t Detroit’s Chapter 9 filing have a negative impact on the city’s creditworthiness and reputation that will further impede Detroit’s ability to secure a strong, viable future?

A.: The filing was a decision we did not take lightly. However, it is the only viable option to secure a strong future for the city and its residents. The city had exhausted all other options. Detroit’s situation is well known and reasonable observers will recognize that the city had no other choice but to file for Chapter 9 protection. Longer term, we expect to have the processes and protocols in place to ensure that the reforms we make today will continue well into the future. In time, the short-term challenges we face today will yield to a brighter, more stable future for Detroit.
Q. 16: Wasn’t PA 436 and the process leading up to declaring a financial emergency just a pretense for filing Chapter 9. Wasn’t bankruptcy the goal all along?

A.: The goal is to create a strong, viable Detroit that can deliver basic essential services to its 700,000 people. That was the point of the consent agreement between the city and the state of Michigan that was entered into more than a year ago and which the city never implemented. That was the point for declaring a financial emergency in March. That was the reason an emergency manager was appointed and why a comprehensive city restructuring plan was proposed in June. The goal is a strong and viable Detroit. If this can be done in a negotiated way with creditors and stakeholders, the city will take that path. If not, then it will use other legal means to accomplish the goal. A bankruptcy filing was the last viable option to fix the city’s finances and start to provide basic public services to Detroiters.
Q. 17: Why the rush to file? Why not give more time for negotiations?

A.: It would be irresponsible not to file at this time. Detroit residents can’t wait for better services and safer neighborhoods. The emergency manager and the city’s restructuring team have worked for months to create a path to solvency. Together, they have held more than 100 meetings with stakeholders and negotiated in good faith with its creditors and unions. Those meetings have not put the city closer to a restructuring deal and it simply doesn’t have the financial resources to continue them without the structure provided by the Chapter 9 protection. Chapter 9 provides a process that can bring all of the city’s 43 unions, 53 creditors and other stakeholders to the table to arrive at a fair solution in an efficient and timely manner. At this point, without Chapter 9 protection, there is no likelihood that the city can reach a negotiated solution with its creditors and stakeholders.
Q. 18: This is the largest municipal bankruptcy in U.S. history and there has been speculation that it will have a big effect on the capital markets, especially on lending to public entities in Michigan. Did those factors have any influence on this decision?

A.: This decision was based on what’s best for the 700,000 people of Detroit and the state of Michigan. Filing for bankruptcy is the only viable option to provide the people of Detroit with the essential services that they need and deserve in a timely manner and to restore Detroit. Michigan can’t become a great state unless its largest city is healthy and strong. This filing puts Detroit on a path to have a solid financial footing. We won’t speculate about how the financial markets will react to this filing.
Q. 19: About 20,000 retirees from the city of Detroit are worried about their pensions and health care coverage. Can you give them any assurance that they’ll be protected in bankruptcy court?

A.: There’s the bankruptcy filing and other pending litigation against the state on this issue. Because of that pending litigation, it wouldn’t be appropriate to comment on that. We’re sensitive to the concerns of the retirees. While the pension funds do have assets, the challenge is that they have been underfunded and mismanaged. We are confident that all of the city’s creditors will be treated fairly in this process.
Q. 20. What about the claim from the retirees that the Michigan constitution protects their pensions? Do you agree with them?

A.: That’s a legal question that will have to be decided in the courts. Given that it’s already in the courts, it wouldn’t be appropriate to comment on it at this time.
Q. 21: What about a state bailout for the city or for the retiree pensions?

A.: The answer to that is “no.” That’s not an option. We don’t want to reward mismanagement. Keep in mind that we didn’t create this crisis. Sixty years of decline created this crisis. We’re making the tough decision to fix this problem so the 700,000 people of the city of Detroit get the basic public services they need and deserve and we can start to make Detroit great again.
Q. 22. So the state isn’t going to do anything to help Detroit and its 700,000 residents?

A.: The state has done a great deal to help Detroit and its people. There’s long list of things that the state has done to help Detroit over the past few years. Those include:
• Blight elimination. Detroit is one of five Michigan cities that will share in $100 million in federal funds to demolish abandoned properties.
• Economic development.
o Last year, the governor signed legislation to allow the 163-acre State Fairgrounds property to be used for economic development.
o Governor signed a bill that supports the development of a $650 million event center in downtown Detroit to be the new home of the Red Wings.
o The state is an active partner in revitalizing the Eastern Market, the Globe Building and the riverfront.
• Belle Isle offer: The state offered to lease Detroit’s treasured Belle Isle Park and handle restoration and maintenance, while allowing the city to retain ownership.
• Transportation
o The governor signed an agreement with Canada to build the New International Trade Crossing in southwest Detroit. That will generate 12,000 direct jobs.
o The state helped develop a regional transit authority to allow Wayne, Oakland, Macomb and Washtenaw counties to integrate all modes of public transportation.
o The state is partnering with community leaders to launch the M1 Rail, a proposed 3.3-mile rail line on Woodward Avenue that will benefit commuters, job providers, and help attract visitors.
• Children/Education
o In February 2013, the Michigan State Police and the Michigan Big Brothers Big Sisters Alliance formed a partnership to serve at-risk youth in Detroit and other urban areas.
o The Education Achievement Authority was created to provide a bold, innovative system of public schools that focus on the progress of each student.
 The system opened in September 2012 with 15 of Detroit’s lowest-achieving schools.
Q. 23: What would you tell a Detroit retiree who’s barely getting by today and is worried about seeing a big cut in their monthly pension?

A.: We’re not going to speculate about what might happen with pensions, because this legal process is just starting. We’re sensitive to the concerns of the retirees. While the pension funds do have assets, the challenge is that they have been underfunded and mismanaged. We are confident that all of the city’s creditors will be treated fairly in this process.
Q. 24: How do you think Detroiters will react to this bankruptcy?

A.: We won’t speculate on how people will react. What they should remember is that their needs have been secondary in the city for too many years. That the focus was on gimmicks and tricks to kick the financial can down the road and not on making sure the police or fire department would come when people called or that their garbage would be picked up or that their streetlights would be on at night to improve their safety. They should remember that the emergency manager has a plan to invest $1.25 billion in the city services over the next 10 years. They also should remember that this process will give Detroit a fresh start, so it can grow and prosper in the future.
Q. 25: What is your response to municipal bond market experts who say that Kevyn Orr’s restructuring plan to treat holders of general obligation bonds the same as holders of riskier securities breaks the long-standing “faith and credit” assumption for municipal bonds in the market and if implemented could have major repercussions?

A.: We’re not going to speculate about that. Obviously, the bankruptcy judge will make the final determination.
Q. 26: There have been some reports about the city having to pay $100 million or more for the attorneys and consultants handling this for the city. Couldn’t those dollars be used for pensions or something else?

A.: This is a very complicated matter and it needs to be done right. The city and Kevyn and his team have brought in some of the top experts in the country to work on this and they’ve gotten discounts on fees. This is not a do-it-yourself project. These experts are working to solve a financial crisis 60 years in the making. They’re doing their best to put the city on a sound financial footing and position it to grow and prosper in the future.
Q. 27: Attorney General Schuette has issued an opinion that the art at the Detroit Institute of Arts can’t be sold off to help the city out of its financial problem. Do you agree with that or do you think art lovers should be worried about losing the DIA art?

A.: That’s a complicated issue. The city continues to evaluate all options to maximize creditor recoveries and to provide funds to reinvest in the city and regain its place among America’s great and vibrant cities. Since this is all in the courts than that.

MISGUIDED PRIORITIES

For over half a century, the “Motor City” has solidly adhered to a pattern of emphasizing public assistance at the expense of basic services. Despite this politically-motivated “generosity,” little was gained for the people of Detroit. The police force dwindled, fire trucks went unrepaired, and even fire hydrants were left to rot.

Misguided funding priorities, combined with high taxes, (residents endure one of the highest big city property taxes in the U.S.) the undue influence of union leaders, and a continuously scandal-plagued government made the downfall of this once great metropolis inevitable. The dramatically reduced presence of auto makers (whose departures, most argue, were due to those practices) certainly presented an enormous fiscal challenge. However, the reality is that no amount of funding would be adequate to make up for the misguided programs and outright theft that characterized the municipal administration.

Irrationally, as Detroit desperately needed more jobs and a larger tax base, it imposed regulations and taxes that drove those two vital commodities out of town. In the same manner, Washington has been hiking taxes and enacting copious amounts of new regulations.

National Review notes that “Detroit is evidence for the fact that the economic limitations on tax increases sometimes kick in before the political limitations do. The relationship between tax rates, tax revenue, economic incentives, growth, and investment is complex, to say the least, and deeply dependent on the historical and economic facts of particular places at particular times. We have theories of growth, but no blueprint. But Detroit was not reduced to its present wretched circumstances by historical inevitabilities or the impersonal tides of economics. It did not have to end this way, but it did, and understanding why it did is essential if we are to avoid repeating Detroit’s municipal tragedy on a national scale.”

DETROIT’S FALL NOT INEVITABLE

Detroit’s fall was not inevitable. Michael D. LaFaive of Michigan’s prestigiousMackinac Center notes that thirteen years ago, he warned city leaders that excess expenditures and pension obligations would bring the city down. He recommended:

1. The city should contract out for the operation of its busing system. Possible savings: $60 million annually. (Through 2010 the operating subsidy ranged from $70 million to $75 million).
2. Sell Detroit’s electrical power system to an investor-owned utility. Estimated revenue from private sale in 2000: $301 million to $501 million.
3. Sell Cobo Conference/Exhibition Center. When we published our 2000 MPR, Cobo was receiving operating subsidies exceeding $15 million. A 1991 issue of Detroiter magazine – 20 years ago – estimated a sales price of $50 million. At that price a private owner might pay $1.9 million in property taxes each year.
4. Sell the water system for between $1.775 billion and $2.285 billion or just contract out for its management ($47.2 million in annual savings).
5. Contract out for garbage collection. Savings: $6.4 million annually.
6. Privatize inspections for mechanical, electrical, plumbing or building permits and licenses. We estimated in 2000 that the possible savings for privatizing these positions could top $5.1 million.
7. Sell Bell Isle: $370 million in one-time revenue and up to $13.8 million in new revenue. In addition, the city would be relieved of its [then] annual appropriation to Island care of $6.6 million.
Similarly, the White House has dramatically expanded programs such as food stamps at the expense of national security and other vital areas of federal responsibility. Just as basic municipal services were allowed to diminish in that once great urban center, Washington now discusses cuts in basic services across the nation. Just one example: while more and more giveaway programs emanate from the White House, the federal government can barely afford to deliver the mail six days a week.
_____________________________________________
“Having led us on the way up, Detroit now seems to be leading us in the way down. Once the richest city in America, Detroit is now Ameria’s poorest. Once the vanguard of America’s machine age–mass production, blue-collar jobs, and automobiles–Detroit is now America’s capital for unemployment, illiteracy, dropouts, and foreclosures. It is an eerie and angry place of deserted factories and abandoned homes and forgotten people. Trees and switchgrass and wild animals have come back to reclaim their rightful places. Coyotes are here. The pigeons have left. A city the size of San Francisco or Manhattan could neatly fit into Detroit’s vacant lots.”
–From Detroit: An American Autopsy by Charlie LeDuff
___________________________________________________________

Despite Detroit’s ominous example, the federal government over the past four and a half years has also trod the path of escalating taxes, undue union influence, and an increasingly nontransparent administration.

Union Influence Trumps Citizen Needs

Both the White House and Detroit’s municipal government have redirected spending from basic services to an emphasis favoring unions, which contribute heavily to the campaigns of those favoring ever-expanding government, and those dependent on government programs, who overwhelmingly favor big government candidates. Detroit has not had a Republican mayor since 1961; in the last election, 96% of its voters favored President Obama.

The city’s public schools point to the problems of emphasizing union influence over the needs of the people. Michigan’s Capitol Confidential reports that despite some of the nation’s highest per capita expenditures on students, the city’s pupils have among the worst scores in the entire state. In 2003, a philanthropist’s offer of $200 million to develop charter schools was rejected because union chieftains were angered that these institutions would not be unionized.

Like Detroit, the USA is falling deeper and deeper into debt. Similar to Motown politicians for the past 50 years, the president and his allies are deeply indebted to union chieftains who care little about imposing strains on the general economy as long as they can look good to their members–even if those temporary gains mean that their membership eventually will lose their jobs. The New York Observer notes that “In Detroit, the policies of candidates who posed as ‘friends of the unions’ have now bought enormous pain and fiscal woe to the very pensioners who trusted them. Killing the goose that laid the golden egg is not being a friend–it’s madness.”

Corruption, Incompetence, & Excuses

The collection of corrupt and incompetent politicians who have run what was once one of the world’s most prosperous cities into the ground continuously provide ridiculous and insupportable excuses. They point to the reduced presence of the automakers. What they fail to admit, however, is that their policies drove those automakers out of town.

They scream racism. But how does that account for the fact that the government of Motown has been solidly African American for decades, and that middle income blacks move out of Detroit as fast as they can?

Again, the similarities with the practices of the current White House are ominous. Attention to scandals including the failure to rescue America’s ambassador to Libya, the transfer of weapons in the “fast & furious” scandal, the abuse of the IRS to attack political opponents, the refusal to prosecute election misdeeds, and the surveillance of reporters is deflected by making a racial incident of the Trayvon Martin case.

New York’s Michael Bloomberg, The mayor of America’s largest city, noted that his constituents should pay particular attention to the lessons of Detroit. The policies that ruined Detroit are not isolated to that city–they are a harbinger of the end result of a course now being implemented on the national level.

“Detroit can no longer be ignored…Americans are swimming in debt…Go ahead and laugh at Detroit. Because you are laughing at yourself…at the end of the day, the Detroiter may be the most important American there is because no one knows better than he that we’re all standing at the edge of the shaft.”

–Charlie LeDuff, author of Detroit, An American Autopsy.

THE COLLAPSE

With an annual budget deficit of $380 million and $18 billion in debt, Detroit’s fiscal position had become untenable. It had no reasonable expectation of repayment; indeed, some borrowed funds have been utilized for operating expenses. The unemployment rate, which has almost tripled in the past thirteen years, is over 18% and its population has dived from 1,850,000 in 1950 to a mere 710,000 currently.Since the advent of the 21st century, over a quarter of its population fled .

The descent of what was once one of the world’s most prosperous cities wasn’t inevitable. “Detroit and its adjacent cities were to the early 20th century what California’s Silicon Valley is today,” notes the Wall Street Journal. “Today, 40,000 structures of land parcels sit vacant or empty…36% of Detroiters [live] below the poverty level…in 2012 Detroit had the highest violent crime rate for a city with more than 200,000.”

It’s cultural grip on the American imagination is significant. Once the fourth largest U.S. city, and one of the most prosperous, in the nation, It had the potential to continue its significant and healthy position within the pantheon of the nation’s great urban centers. Now, it may not be able to even keep its commitments to its 20,000 muncipal retirees.

WHAT HAPPENED

The simplistic reason for The Motor City’s financial demise is the reduced presence of the auto industry. But that industry shrunk its footprint for very real and substantial reasons. Its withdrawal was not unique. Even Motown Records has left.

With the reduced spending on defense, government contracts could not provide even a minor fallback to the loss of auto manufacturing. A plant building tanks for the U.S. armed forces was closed under President Clinton in 1996.

The United Auto Workers has been extremely successful in its representation of its members. But in driving salaries up to $70 an hour in wages and benefits, along with onerous work rules, it made American auto manufacturing in Detroit uncompetitive. Manufacturers had every incentive to move out.

Municipal services in Detroit have been abysmal. A Heritage report notes that it takes the police an hour to respond to calls. Rampant crime (The Washington Post notes that it has the highest crime rate of violent crime among the nation’s big cities) has chased many of the city’s most productive citizens out, as have schools that cater more to union members at the expense of the students. Uncollected trash abounds. 40% of its streetlights don’t work.

According to a Fox News analysis, the high labor cost, combined with inadequate service has added $15 billion to the city’s unfunded liabilities.

While services are extremely low, Detroit’s taxes are excessive. The CATO Institute notes that of the 50 largest U.S. cities in 2011, Detroit had the highest property taxes on homes, apartment buikdings, commericial buildings, and industrial buildings.

THE ROLE OF BAD GOVERNMENT

For over half a century, Detroit has been subjected to one party rule. More than just the fact that Democrats have dominated the government for that extraordinary stretch of time is the fact that the individuals elected have followed an economically radical path that clearly dissuaded businesses from investing in the once prosperous municipality.

A report by the Better Government Association has ranked Michigan 48th out of 50 in key areas or governance.

A collection of crooked and politically extreme politicians has abused and defrauded the people of this once prosperous city. Former mayor Coleman Young, who many believed exacerbated the issue, expended political capital defending his police chief, William L. Hart, who eventually was convicted of stealing $2.6 million from the city’s taxpayers.

The career of former mayor Kwame Malik Kilpatrick, widely known as the “Hip-Hop Mayor,” symbolizes this sad legacy. Kilpatrick’s reign was brought to a close after convictions for perjury and obstruction of justice in 2010. In March of this year, he was convicted of violating his parole, and in May he was convicted of 24 counts of mail fraud, wire fraud, and racketeering.

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“Kwame Kilpatrick wasn’t the first Detroit politician to milk the city. It had been going on for a hundred years. And it wasn’t just the politicians. It was union bosses and contractors and industrialists and receptionists who were nieces of the connected. Evrybody got their piece and that was all right when Detroit was rolling in money. There was always enough grease to hide the flaws.”

–Charlie LeDuff, “Detroit, An American Autopsy”
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During his trial, federal officials noted that Detroit suffered from an environment of extortion, bribery, and fraud. Indeed, it is not inappropriate to suggest that the government of Motown has been more an exercise in organized crime than civic leadership in the past half century. Is it any wonder that it fell into bankruptcy? In response to these charges, the city’s leaders scream racism. But how does that account for the fact that middle income blacks move out of Detroit–a city solidly under the control of black politicians– as fast as they can?

An emphasis by Detroit civic leaders on exploiting racial divisiveness rather than cooperation has been deadly. Former Mayor Kwame Kilpatrick has strongly emphasized racial issues.

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Is America is following the very policies
that have driven Detroit into bankruptcy?

Both the White House and Detroit have pursued the expansion of social programs at the expense of creating an environment in which private sector jobs can be maintained and created. It’s a suicidal course that has already led to disaster. Michigan’s Mackinac Center’s Director of Labor Policy calls it the “Detroitization of America.”

Analysts note that Detroit’s policies closely resemble those implemented or sought to be implemented by President Obama. According to Michael Tanner, writing in Bloomberg.com, “A few years ago, the nonpartisan Bay Area Center for Voting Research rated Detroit as the most liberal city in America. The city’s own choices…are really responsible for Detroit’s failure.”

It’s a trend that leaves observers puzzled but that closely resembles current White House policy. While Detroiters are desperate for employment and the city itself urgently needs business, the muncipal government, notes Tanner, engages in a pattern of anti-enterprise taxes and regulations. It also imposes stiff “Living Wage” rules that sharply discourage hiring.

Benefits vs. Essential Services

For over half a century, the “Motor City” has solidly adhered to a pattern of emphasizing public assistance at the expense of basic services. Despite this politically-motivated “generosity,” little was gained for the people of Detroit. The police force dwindled, fire trucks went unrepaired, and even fire hydrants were left to rot.

Misguided funding priorities, combined with high taxes, (residents endure one of the highest big city property taxes in the U.S.) the undue influence of union leaders, and a continuously scandal-plagued government made the downfall of this once great metropolis inevitable. The dramatically reduced presence of auto makers (whose departures, most argue, were due to those practices) certainly presented an enormous fiscal challenge. However, the reality is that no amount of funding would be adequate to make up for the misguided programs and outright theft that characterized the municipal administration.

Irrationally, as Detroit desperately needed more jobs and a larger tax base, it imposed regulations and taxes that drove those two vital commodities out of town. In the same manner, Washington has been hiking taxes and enacting copious amounts of new regulations.

Similarly, the White House has dramatically expanded programs such as food stamps at the expense of national security and other vital areas of federal responsibility. Just as basic municipal services were allowed to diminish in that once great urban center, Washington now discusses cuts in basic services across the nation. Just one example: while more and more giveaway programs emanate from the White House, the federal government can barely afford to deliver the mail six days a week. Both the White House and Detroit have pursued the expansion of social welfare programs at the expense of creating an environment in which private sector jobs can be maintained and created.

_____________________________________________
“Having led us on the way up, Detroit now seems to be leading us in the way down. Once the richest city in America, Detroit is now Ameria’s poorest. Once the vanguard of America’s machine age–mass production, blue-collar jobs, and automobiles–Detroit is now America’s capital for unemployment, illiteracy, dropouts, and foreclosures. It is an eerie and angry place of deserted factories and abandoned homes and forgotten people. Trees and switchgrass and wild animals have come back to reclaim their rightful places. Coyotes are here. The pigeons have left. A city the size of San Francisco or Manhattan could neatly fit into Detroit’s vacant lots.”
–From Detroit: An American Autopsy by Charlie LeDuff
___________________________________________________________

Despite Detroit’s ominous example, the federal government over the past four and a half years has also trod the path of escalating taxes, undue union influence, and an increasingly nontransparent administration.

Union Influence Trumps Citizen Needs

Both the White House and Detroit’s municipal government have redirected spending from basic services to an emphasis favoring unions, which contribute heavily to the campaigns of those favoring ever-expanding government, and those dependent on government programs, who overwhelmingly favor big government candidates. Detroit has not had a Republican mayor since 1961; in the last election, 96% of its voters favored President Obama.

The city’s public schools point to the problems of emphasizing union influence over the needs of the people. Michigan’s Capitol Confidential reports that despite some of the nation’s highest per capita expenditures on students, the city’s pupils have among the worst scores in the entire state. In 2003, a philanthropist’s offer of $200 million to develop charter schools was rejected because union chieftains were angered that these institutions would not be unionized.

Like Detroit, the USA is falling deeper and deeper into debt. Like Motown politicians for the past 50 years, the president and his allies are deeply indebted to union chieftains who care little about imposing strains on the general economy as long as they can look good to their members–even if those temporary gains mean that their membership eventually will lose their jobs.

Corruption, Incompetence, & Excuses

The collection of corrupt and incompetent politicians who have run what was once one of the world’s most prosperous cities into the ground continuously provide ridiculous and insupportable excuses. They point to the reduced presence of the automakers. What they fail to admit, however, is that their policies drove those automakers out of town.

They scream racism. But how does that account for the fact that the government of Motown has been solidly African American for decades, and that middle income blacks move out of Detroit as fast as they can?

Again, the similarities with the practices of the current White House are ominous. Attention to scandals including the failure to rescue America’s ambassador to Libya, the transfer of weapons in the “fast & furious” scandal, the abuse of the IRS to attack political opponents, the refusal to prosecute election misdeeds, and the surveillance of reporters is deflected by making a racial incident of the Trayvon Martin case.

New York’s Michael Bloomberg, The mayor of America’s largest city, noted that his constituents should pay particular attention to the lessons of Detroit. The policies that ruined Detroit are not isolated to that city–they are a harbinger of the end result of a course now being implemented on the national level.

Both Barack Obama and Alex Rodriguez have had remarkably similar life stories and career arcs, differentiated only by the way each has been treated by the media.

The biographical facts set the stage for their roughly parallel careers.

Each man lived at least a small portion of their childhood abroad. Both were the product of parents that parted, and each was raised by their mother. They were apparently recognized early on as having exceptional potential. Both do possess extraordinary talent, enabling them to reach the pinnacle of their respective professions. Each has, at some point in their lives, admitted to the use of banned substances. They both have two daughters.

Both have been known to bend the rules. Rodriguez has been criticized for a variety on-field antics, such as attempting to distract an infielder; the President has been an ardent practitioner of “The Chicago Way.” As noted in National Review, “The [Chicago Democrat] machine’s core principle, laid out in an illuminating Chicago Independent Examinerprimer on “the Chicago Way,” is that at all times elections are too important to be left to chance.

Both blame others for their own questionable actions. Rodriguez has alleged that the New York Yankees are attempting to save dollars on their monumental contract obligations to him, now that his abilities have been depreciated by injury and age. The President blames the Republicans.

If it were not for the existence of scandals, both would have established a legacy for the ages. Rodriguez’s accomplishments on the ball field would have placed him in the very top tier of athletes. Barack Obama’s place in history doesn’t come from any particular accomplishment in office, but from his role as the first African-American president.

Both, however, have been irreparably scarred by scandals. But this is where the similarity ends.

A-Rod’s misdeeds are headline news throughout all the sports pages, and beyond. He has been subjected to scathing criticism by journalists, broadcast on every possible medium.

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These scandals began instantly upon taking office, when his Justice Department refused to prosecute overt cases of voter intimidation in Philadelphia. They continued with the inept transfer of weapons into the hands of Mexican drug cartels in the “Fast & Furious” debacle. Obama’s Attorney General, Eric Holder, was cited for contempt of Congress for his refusal to appropriately cooperate in investigations.

The misdeeds continued with revelations that the regulatory machinery of the Obama Administration, in true compliance with its “Chicago Way” roots, has been extensively and illegally employed to harass and intimidate political opponents. The abuses by the IRS and other federal agencies have no precedents, in terms of scale and seriousness, in U.S. history.

The White House’s failure to respond to the Benghazi assault resulted in the death of an American ambassador and others; the ludicrous attempt to blame the disaster on an unknown video was an amateurish move that was almost instantly disproved by experts.

Despite the dire seriousness of these misdeeds, however, the media has not subjected President Obama to the scathing criticism it has delivered over Alex Rodriguez’s actions. The reasons offer a fascinating insight into the inner workings of the American news establishment.

Beginning in the 1960s, the traditional concept of reporting—an objective description of the “who, what, when, where and why” of news stories, was replaced by what been called “the new journalism.” Under this formula, which now forms the dominant basis of current journalism, the actual facts are considered secondary to advocating a particular point of view, to the detriment of allowing the public access to the facts necessary to make their own decisions.

It is that concept that has helped the President, and worked against A-Rod. Journalists have been largely unhappy with the massive contract dollars given to the world’s most famous third baseman. On the other hand, they have been overtly supportive of President Obama’s policies, and provided him with mostly laudatory coverage both as a candidate and while in office.

The two men have similar biographies and career successes. Both have injured what could have been extraordinary legacies thanks to their misdeeds. But in their treatment by the media, their stories could not be more different.