The bank bailouts in 2008 and 2009 were controversial because wealthy bankers seemed like the last people who needed help. Now, the Federal Reserve and other central banks are rescuing one group held in even lower regard than bankers: politicians.
Financial markets cheered recently when the Fed and five other central banks took action to ease a credit crunch in Europe’s financial sector. Stocks soared, as investors expressed relief that somebody, finally, seemed able to do something decisive to improve the situation in Europe.
Yet the central bank maneuvers, meant to ease the ability of foreign banks to trade their currencies for dollars, do nothing to address the fundamental debt problem bedeviling Europe. Euro-zone nations such as Greece, Italy and Spain remain overwhelmed with debt, with no agreement in sight on how they can fix their finances and make their economies more competitive. Central banks temporarily easing the strain may even make the required fixes less likely, since it gives politicians wiggle room to stall on reforms needed to rein in profligate spending.
The bank bailouts in 2008 and 2009 stabilized the U.S. financial system, but they also added to the “moral hazard” that contributed to the problem in the first place. By making it clear that the government wouldn’t let big banks fail, the bailouts signaled that bankers can get away with risky moves, since the feds will always provide a safety net. The Federal Reserve and its compatriots in Europe and Japan are now basically creating political moral hazard, by letting elected officials know that if they can’t get the job done, the central banks will step in to prevent a full-blown disaster. It’s an invitation to further recklessness that politicians don’t need. (more…)
By Charles Krauthammer – Washington Post Writers Group
WASHINGTON
Democrats are unanimous in charging that the debt-reduction supercommittee collapsed because Republicans refused to raise taxes. Apparently, Republicans are in the thrall of one Grover Norquist, the anti-tax campaigner, whom Sen. John Kerry called “the 13th member of this committee without being there.” Senate Majority Leader Harry Reid helpfully suggested “maybe they should impeach Grover Norquist.”
With that, Norquist officially replaces the Koch brothers as the great malevolent manipulator that controls the republic by pulling unseen strings on behalf of the plutocracy.
Nice theory. Except for the following facts:
Sen. Tom Coburn last year signed on to the Simpson-Bowles tax reform that would have increased tax revenues by $1 trillion over a decade.
During the debt-ceiling talks, Speaker John Boehner agreed to an $800 billion revenue increase as part of a Grand Bargain.
Supercommittee member Pat Toomey, a Club for Growth Republican, proposed increasing tax revenues by $300 billion as part of $1.2 trillion in debt reduction. (more…)
Ending planetary exploration would leave agency adrift
by Robert Zubrin
Robert Zubrin is the president of Pioneer Astronautics and author of “The Case for Mars: The Plan to Settle the Red Planet and Why We Must” (Free Press, 2011, second edition).The Washington Times
Wednesday, October 26, 2011
Illustration: NASA by Alexander Hunter for The Washington Times
Word has leaked out that in its new budget, the Obama administration intends to terminate NASA’s planetary exploration program. The Mars Science Lab Curiosity, being readied on the pad, will be launched, as will the nearly completed small MAVEN orbiter scheduled for 2013, but that will be it. No further missions to anywhere are planned.
After 2013, America’s amazing career of planetary exploration, which ran from the Mariner probes in the 1960s through the great Pioneer, Viking, Voyager, Pathfinder, MarsGlobalSurveyor, MarsOdyssey, Spirit, Opportunity, MarsReconnaissanceOrbiter, Galileo and Cassini missions, will simply end.
Furthermore, the plan from the Office of Management and Budget (OMB) also leaves the space astronomy program adrift and headed for destruction. The now-orbiting Kepler Telescope will be turned off in midmission, stopping it before it can complete its goal of finding other Earths. Even worse, the magnificent Webb Telescope, the agency’s flagship, which promises fundamental breakthroughs in our understanding of the laws of the universe, is not sufficiently funded to allow successful completion. This guarantees further costly delays, with the ensuing budgetary overruns leading inevitably to eventual cancellation.
The administration’s decision to derail planetary exploration and space astronomy is shocking and portends the destruction of the entire American space program. As an agency, NASA is a mixed bag. It includes a large bureaucracy and wasteful, pork-driven spending. But it also includes departments that are technically superb and really deliver the goods. First and foremost among NASA’s most productive divisions are the planetary exploration and space astronomy programs. Kill those, and what is left will be indefensible. (more…)
Under the guise of addressing the debt crisis, President Obama is leaving America exposed to multi-pronged attack by myriad hostile powers. Necessities like national defense are being sacrificed on the altar of handouts to constituents. Arguably secondary entitlement programs have supplanted the primary necessity of a strong national defense capable of deterring aggression. To state the obvious, the vital security needs of the nation can not be replaced with a one-time shot of welfare utopia. What nation or civilization has ever survived that has turned inward, gratifying pleasure and consumption over the preservation of outer-defenses? Rome serves as only one pertinent example among many. Leaving America defenseless is indefensible.
The new super-committee is taking the heat for its proposed defense cuts, but the super-committee is just a cover for an agenda that has spanned the entirety of the Obama Presidency thus far. Since President Obama took office, he has taken consistent aim at the military, seeking, for example, drastic cuts in the Navy which would require an over-reliance on allies to prosecute wars and even provide for basic contingencies against potential adversaries. As early as 2007, Adm. Mike Mullens was already glibly accepting the prospect of a “fleet-in-being” to supplant current American naval dominance with an effective coalition of “freedom-loving” states.
Such a dangerous proposition, of course, rests on the continued allegiance of said “freedom-loving” states. And as has been observed in the naval decline of other formerly great powers, e.g. Great Britain, naval dominance once lost is rarely reclaimed, and almost always sinks further beneath the waves into even greater decay. The US Navy is already stretched to the breaking point with global commitments that, according to naval insiders, exceed current naval capacity. Why then would President Obama seek more cuts to this most precious American enterprise?
The answer may be revealed in yet other suspicious actions the sitting US President has carried out in relation to the US military. (more…)
Democrats were unwilling to agree to anything less than $1 trillion in tax hikes, and unwilling to offer meaningful reforms for health-care entitlement spending.
All now know that the Joint Select Committee on Deficit Reduction has failed to reach an agreement. While there will still be $1.2 trillion of spending cuts as guaranteed under the Budget Control Act, we regrettably missed a historic opportunity to lift the burden of debt and help spur economic growth and job creation. Americans deserve an explanation.
President Obama summed up our debt crisis best when he told Republican members of the House in January 2010 that “The major driver of our long-term liabilities . . . is Medicare and Medicaid and our health-care spending.” A few months later, however, Mr. Obama and his party’s leaders in Congress added trillions of dollars in new health-care spending to the government’s balance sheet.
Democrats on the committee made it clear that the new spending called for in the president’s health law was off the table. Still, committee Republicans offered to negotiate a plan on the other two health-care entitlements—Medicare and Medicaid—based upon the reforms included in the budget the House passed earlier this year.
The Medicare reforms would make no changes for those in or near retirement. Beginning in 2022, beneficiaries would be guaranteed a choice of Medicare-approved private health coverage options and guaranteed a premium-support payment to help pay for the plan they choose.
Democrats rejected this approach but assured us on numerous occasions they would offer a “structural” or “architectural” Medicare reform plan of their own. While I do not question their good faith effort to do so, they never did. (more…)
Despite bipartisan promises to cut spending after the 2010 elections, Washington politicians are still voting to make the government even bigger and more expensive than ever.
Don’t believe me?
Even though the federal government is nearly $15 trillion in debt, it’s spending at record-high levels. Federal spending has gone up 5 percent in the first nine months of this year alone.
Just last week, Democrats and Republicans in the Senate passed three new spending bills to increase 2012 funding above 2011 funding levels. The bills will increase spending for the Department of Agriculture by $6.4 billion; for the Departments of Transportation and Housing and Urban Development by more than $2 billion; and for the Commerce, Justice, and State departments by more than $694 million.
While Obama readies an ugly campaign, Paul Ryan gives a serious account of what ails America.
By PEGGY NOONAN
EXCERPT FROM THIS ARTICLE:
Which gets us to Rep. Paul Ryan. Mr. Ryan receives much praise, but I don’t think his role in the current moment has been fully recognized. He is doing something unique in national politics. He thinks. He studies. He reads. Then he comes forward to speak, calmly and at some length, about what he believes to be true. He defines a problem and offers solutions, often providing the intellectual and philosophical rationale behind them. Conservatives naturally like him—they agree with him—but liberals and journalists inclined to disagree with him take him seriously and treat him with respect.
This week he spoke on “The American Idea” at the Heritage Foundation in Washington. He scored the president as too small for the moment, as “petty” in his arguments and avoidant of the decisions entailed in leadership. At times like this, he said, “the temptation to exploit fear and envy returns.” Politicians divide in order to “evade responsibility for their failures” and to advance their interests.
People are increasingly fearing the divisions within, even the potential coming apart of, our country. Rich/poor, black/white, young/old, red/blue: The things that divide us are not new, yet there’s a sense now that the glue that held us together for more than two centuries has thinned and cracked with age. That it was allowed to thin and crack, that the modern era wore it out.
What was the glue? A love of country based on a shared knowledge of how and why it began; a broad feeling among our citizens that there was something providential in our beginnings; a gratitude that left us with a sense that we should comport ourselves in a way unlike the other nations of the world, that more was expected of us, and not unjustly—
“To whom much is given much is expected”; a general understanding that we were something new in history, a nation founded on ideals and aspirations—liberty, equality—and not mere grunting tribal wants. We were from Europe but would not be European: No formal class structure here, no limits, from the time you touched ground all roads would lead forward. You would be treated not as your father was but as you deserved. That’s from “The Killer Angels,” a historical novel about the Civil War fought to right a wrong the Founders didn’t right. We did in time, and at great cost. What a country. (more…)
Illustration: NASA by Alexander Hunter for The Washington Times
