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Chapman 8 (Steven Chapman, columnist and editorial writer for the Chicago Tribune, 2/8/2008, Who’s
Still Afraid of Osama?, p. http://reason.com/news/show/124874.html)
Ever since Sept. 11, 2001, Americans have had to live with the knowledge that the next time the terrorists strike, it could be not with airplanes capable of killing thousands but atomic bombs capable of killing hundreds of thousands. The prospect has created a sense of profound vulnerability. It has shaped our view of government policies aimed at combating terrorism (filtered through Jack Bauer). It helped mobilize support for the Iraq war. Why are we worried? Bomb designs can be found on the Internet.
Fissile material may be smuggled out of Russia. Iran, a longtime sponsor of terrorist groups, is trying to acquire nuclear weapons. A layperson may figure it's only a matter of time before the unimaginable comes to pass. Harvard's Graham Allison, in his book Nuclear Terrorism: The Ultimate Preventable
Catastrophe, concludes, "On the current course, nuclear terrorism is inevitable." But remember: After
Sept. 11, 2001, we all thought more attacks were a certainty. Yet Al Qaeda and its ideological kin have proved unable to mount a second strike. Given their inability to do something simple—say, shoot up a shopping mall or set off a truck bomb—it's reasonable to ask if they have a chance at something much more ambitious. Far from being plausible, argued Ohio State University professor John Mueller in a recent presentation at the University of Chicago, "the likelihood that a terrorist group will come up
with an atomic bomb seems to be vanishingly small." (http://polisci.osu.edu/faculty/jmueller/
APSACHGO.PDF) The events required to make that happen include a multitude of herculean tasks .
First, a terrorist group has to get a bomb or fissile material, perhaps from Russia's inventory of decommissioned warheads. If that were easy, one would have already gone missing. Besides, those
devices are probably no longer a danger, since weapons that are not scrupulously maintained (as those have not been) quickly become what one expert calls "radioactive scrap metal." If terrorists were
able to steal a Pakistani bomb, they would still have to defeat the arming codes and other safeguards designed to prevent unauthorized use. As for Iran, no nuclear state has ever given a bomb to an ally— for reasons even the Iranians can grasp. Stealing some 100 pounds of bomb fuel would require help
from rogue individuals inside some government who are prepared to jeopardize their own lives. The
terrorists, notes Mueller, would then have to spirit it "hundreds of miles out of the country over
unfamiliar terrain, and probably while being pursued by security forces." Then comes the task of
building a bomb. It's not something you can gin up with spare parts and power tools in your garage. It requires millions of dollars, a safe haven and advanced equipment—plus people with specialized skills, lots of time and a willingness to die for the cause. And if Al Qaeda could make a prototype,
another obstacle would emerge: There is no guarantee it would work, and there is no way to test it.
Assuming the jihadists vault over those Himalayas, they would have to deliver the weapon onto
American soil. Sure, drug smugglers bring in contraband all the time—but seeking their help would
confront the plotters with possible exposure or extortion. This, like every other step in the entire process, means expanding the circle of people who know what's going on, multiplying the chance
someone will blab, back out or screw up . Mueller recalls that after the Irish Republican Army failed in an attempt to blow up British Prime Minister Margaret Thatcher, it said, "We only have to be lucky once.
You will have to be lucky always." Al Qaeda, he says, faces a very different challenge: For it to carry out
a nuclear attack, everything has to go right. For us to escape, only one thing has to go wrong. That has heartening implications. If Osama bin Laden embarks on the project, he has only a minuscule chance of seeing it bear fruit. Given the formidable odds, he probably won't bother. None of this means we should stop trying to minimize the risk by securing nuclear stockpiles, monitoring terrorist communications and
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Infrastructure Topic improving port screening. But it offers good reason to think that in this war, it appears, the worst eventuality is one that will never happen.
Shie 4 (Tamara Renee Shie, visiting fellow at the Pacific Forum CSIS, October 15, 2004, “Ships and
Terrorists – Thinking Beyond Port Security”, http://csis.org/files/media/csis/pubs/pac0445a.pdf)
We should applaud the Coast Guard’s efforts to protect U.S. ports from terrorists.
They have undertaken a daunting task.
However we must ask if drawing the line at our borders and in ports is sufficient to protect the U.S. against a maritime-related terrorist attack at home or abroad.
For many years the intricacies of the international maritime trading system inhibited establishment of viable security measures. With multiple actors based in several countries, the maritime trade sector was largely left to itself. However, the 2000 terrorist strike on the USS Cole and the 2002 attack on the Frenchflagged Limburg, the reports of Osama bin Laden’s alleged fleet of ships, and rising concerns over the vulnerability of maritime shipping since Sept. 11, 2001, forced governments and security specialists to focus much overdue attention on sea ports and cargo. Improving maritime security has become the 2004 security focus. This year two major port and shipping security measures received a great deal of attention – the International Maritime
Organization’s International Ship and Port Security Facility (ISPS) Code and the U.S. Customs and Border Protection Agency’s Container Security Initiative (CSI). On July 1, 2004 the ISPS Code went into effect. Crafted in late 2002, the
ISPS is designed to increase security surrounding seaports and maritime shipping from criminal use or terrorist attacks. In order to receive ISPS Code certification, shipping companies, vessels, port facilities, and contracting governments must meet a specified number of minimumsecurity requirements. The CSI stations U.S. Customs officers in participant foreign ports to identify and screen containers that pose a risk for terrorist use. By mid-2004 some 18 of the world’s largest ports, handling a majority of the world’s cargo, had signed on to the CSI.
Unfortunately, relying on these initiatives alone creates a false sense of security . They are inadequate to deter terrorists from pursuing many maritime targets
. The principal limitation of these two initiatives is their specific focus on the security of major transshipment ports. Though these are essential to international trade, securing only these ports will not protect them or a region from terrorist attacks. First, the emphasis on upgrading the security of major ports
neglects the fact that these
represent only a single link in the transportation chain. A shipping container may pass through some 15 physical locations and some two dozen individuals
and/or companies while traveling from departure point to destination.
Because containers are only searched at the major port, there is no guarantee they cannot be waylaid in route after that point
. Second, the CSI conducts security checks only on U.S.bound containers. Therefore even if a tampered container arrives at a major port, if it is destined for a port other than the U.S., it is more likely to escape notice. Containers between the major ports of Singapore and
Shenzhen or Pusan and Hong Kong are not subject to CSI requirements. Yet terrorist assaults on U.S. ships or interests can occur outside the U.S.
Third, as major ports increase security, terrorists will look for other maritime targets
or other means to target those ports.
Terrorists are increasingly aiming at soft targets. Attacking maritime targets has never been particularly easy, often requiring a greater sophistication
in planning, training, and coordination than those aimed at many land-based facilities.
This is why maritime terrorism is rather rare, and why terrorists are less likely to attack a more secure major port. Yet in considering maritime terrorist threat scenarios – using a ship to smuggle goods or weapons, sinking a vessel in a major shipping thoroughfare, using a ship as a weapon, or even targeting maritime vessels – none require access to a major port or a shipping container to carry out a strike
. There remain numerous small ports and small vessels not covered under the new security initiatives. The ISPS Code for instance only covers ships of 500 tons or more and port facilities that serve large internationalbound vessels. The Code would not have protected the USS Cole. How else might terrorists strike?
Piracy in Southeast Asia may provide a clue as to how terrorists will respond
to these new measures. In 2002, there were 161 actual and attempted pirate attacks in Southeast Asian waters. Of those, 73 percent occurred within ports. The following year, of the 187 attacks, only 37 percent occurred within ports. Between the two years, the total number of attacks increased by 26. In the first quarter of 2004, of the 41 reported attacks, only one-third were committed in ports. Also between 2002 and 2003 pirate attacks in traditionally targeted ports fell while they rose in ports where few if any attacks were previously reported. Though it may be too soon to definitively tell, it would appear that pirates are adapting to the more stringent security measures in larger ports. If pirates can do it, so can terrorists . Finally, an attack on a major port does not require terrorists to gain direct access to that port.
As pirates are capable of attempting more attacks on vessels at sea
, it is not unimaginable that terrorists will commandeer a ship at sea and steer it toward a target. The bomb, biological, chemical or radiological agents, or even nuclear materials, can be loaded onto the ship once seized. Then they head for a port or another ship.
The May 2004 collision between two cargo ships off Singapore’s Sentosa Island illustrates how easily terrorists could conduct a similar but more disastrous operation.
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Haveman and Shatz 6 (Jon D. Haveman, founding principal of Beacon Economics. Director of the
Economy Program at the Public Policy Institute of California. Howard J. Shatz, Senior Economist at the
RAND Corporation. 2006. “Protecting the Nation’s Seaports: Balancing Security and Cost”, http://www.ppic.org/content/pubs/report/r_606jhr.pdf
)
The effectiveness of port security
programs depends on two factors—whether they will be complied with and
, even if fully complied with, whether they will improve security . Compliance is the weaker link.
The Customs-Trade Partnership Against
Terrorism, for example, depends on U.S. Customs and Border Protection validation of security plans for thousands of companies. However, given a lack of enforcement mechanisms, there is no guarantee that firms, once validated, will continue to carry out their security plans and procedures
. Likewise, the
Container Security Initiative depends on the cooperation of foreign governments. In some cases, foreign governments decline to inspect containers that U.S. authorities deem high-risk
. The United States can then order the containers not to be loaded onto the ship at the foreign port or can inspect the container in its U.S. port of arrival. However, even with these options, some high-risk containers go uninspected
(U.S. Government Accountability Office, 2005b).
Even full compliance will not guarantee success. As part of the
Container Security Initiative, oceangoing ship operators must provide the manifest, or list of the contents of ship cargo, to U.S. officials in advance.
However, the carrier has no way of knowing the accuracy of the manifest, since it gets the information from the individual companies shipping the goods.
The third issue, unclear authority and priorities, reflects in part the sprint to create new security measures. Laws covering the same issues were passed but not necessarily coordinated, and agencies were tasked with quickly obeying multiple legislative mandates. Two laws cover the grants program, and at least two laws cover worker identification cards. Agencies have worked out which set of requirements to follow. However, this does not necessarily mean that the will of Congress and the president is being followed because that will is unclear.
Hank C
Jenkins-Smith 4 , PhD. Professor at the George H.W. Bush School of Government and Public
Service at Texas A&M University and Kerry G. Herron, Ph.D. Research Scientist at George H.W. Bush
School of Government and Public Service, Texas A&M University, Fall 2004
Our final contrasting set of expectations relate to the degree to which the public will support or demand retribution against terrorists and supporting states. Here our data show that support for using conventional U.S. military force to retaliate against terrorists initially averaged above midscale, but did
not reach a high level of emotional demand for military action. Initial support declined significantly
across all demographic and belief categories by the time of our survey in 2002. Furthermore, panelists both in 2001 and 2002 preferred that high levels of certainty about culpability (above 8.5 on a scale from zero to ten) be established before taking military action. Again, we find the weight of evidence supporting revisionist expectations of public opinion. Overall, these results are inconsistent with the contention that highly charged events will result in volatile and unstructured responses among mass
publics that prove problematic for policy processes. The initial response to the terrorist strikes, in the immediate aftermath of the event, demonstrated a broad and consistent shift in public assessments toward a greater perceived threat from terrorism, and greater willingness to support policies to reduce that threat. But even in the highly charged context of such a serious attack on the American
homeland, the overall public response was quite measured . On average, the public showed very little propensity to undermine speech protections, and initial willing-ness to engage in military retaliation moderated significantly over the following year.
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Mueller 9 (John E. Mueller, professor of political science and dance at Ohio State University,
06.11.2009. “Atomic Obsession: Nuclear Alarmism from Hiroshima to Al-Qaeda”, pp. 140-141
The process could be seen in action in an article published in 2008 by Michael Chertoff when he was the secretary of homeland security. He felt called upon to respond to those who observe that the number of
people who die each year from international terrorism, while tragic, is actually rather small, and that in consequence, the lifetime probability of someone living outside a war zone of being killed in an
attack is something like one in 80,000. “This fails to consider,” the secretary pointed out, “the much greater loss of life that a weapon of mass destruction could wreak on the American people.”” That is, he was justifying his entire budget—only a limited portion of which is concerned with WMD—by the WMD threat. Among other ventures, this concern has led to a rather bizarre, and highly expensive, preoccupation with port security, driven by the assumptions, apparently, 1) that after manufacturing their device at great expense and effort overseas, an atomic terrorist or desperately diabolical rogue state would supply a return address and then entrust his or her precious product to the tender mercies of the commercial delivery system, and 2) that analyst Randall Larsen is incorrect to conclude that “ anyone smart enough to obtain a nuclear device will be smart enough to put half an
inch of lead around it.” As a result, a great deal of money has been hurled in that direction to inspect
and to install radiation detectors, generating 500 false alarms daily at the Los Angeles/Long Beach port alone, triggered by such substances as kitty litter and bananas. This obsession is impressive as well because there seems to be no evidence that any terrorist has indicated any interest in , or even much
knowledge about, using transnational containers to transport much of anything . 34
de Rugy 7 (Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason
University. November 2007, “Is Port Security Funding Making Us Safer?”, http://kms1.isn.ethz.ch/serviceengine/Files/ISN/57174/ipublicationdocument_singledocument/db4cee5 f-2c31-4597-ab2d-06ccb1634bf6/en/Audit_11_07_derugy.pdf)
Besides, even if the system could detect every dangerous item, it is ineffective unless the nuclear material is brought through the fixed ports of entry where the monitors are located. With thousand of miles of unguarded borders —and no cost effective way to address the issue—smugglers can easily find positions to bring illicit goods inside the country. Consider the country’s long standing War on
Drugs and the inability to stop the flow of illegal drugs into the country. This does not mean we should not make some effort to detect material inside U.S. ports. However, we should keep in mind how risky it is to rely on port security at home: if the system fails, the nuclear material ends up inside the country or will be used to blow up a port. If a nuclear bomb blows up at the port of New York, it
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Infrastructure Topic would kill some of New York City’s eight million residents. It is a small comfort that a detector’s alarm might go off five minutes before so many people die.
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Levi, ‘7 (Michael A., Fellow for Science and Technology at the Council on Foreign Relations, “How Likely is a Nuclear Terrorist Attack on the United States?,” Council on Foreign Relations , April 13, http://www.cfr.org/publication/13097/how_likely_is_a_nuclear_terrorist_attack_on_the_united_states
.html)
A nuclear weapon requires highly enriched uranium (HEU) or plutonium, materials that don’t occur in nature and that terrorist groups cannot produce themselve s . The ease of access to materials in state stockpiles is thus one of the main factors affecting the odds of a nuclear terrorist attack. The other big factor is motivation. Most terrorist groups have little incentive to pursue nuclear terrorism, since mass
murder doesn’t serve their political ends —but for some groups, indiscriminate killing is precisely the goal. Most analysts agree that the availability of nuclear weapons and materials, and the utility to terrorist groups of successful nuclear attacks, are the two most important factors in determining the likelihood of nuclear terrorism, even if they disagree over how hard acquiring materials would be or over how many groups might expect to benefit from nuclear terrorism. So let me flag another dimension of motivation that gets too little attention. Even groups that want to and possibly can execute nuclear
attacks may decide against them. Why? Because many of the most dangerous terrorist groups hate
to fail. Brian Jenkins wrote recently
that for jihadists, “failure signals God’s disapproval .” That’s a lot of pressure to succeed. This inevitably pushes the odds of nuclear terrorism down . When we look at our defenses against nuclear terrorism, we prudently notice the holes. When terrorists look at those same
defenses, they may be fixating on whatever barriers, however limited, exist. If that’s what’s happening, nuclear terrorism may be much less likely than many expect .
Kapur ‘8 [S. Paul – Assoc Prof in Dept of Strategic Research at the US Naval War College. “Nuclear
Terrorism,” in The Long Shadow: Nuclear Weapons and Security in 21 st Century Asia . Ed.
Muthiah Alagappa. p. 324]
Before a terrorist group can attempt to use nuclear weapons, it must meet two basic requirements.
First, the group must decide that it wishes to engage in nuclear terrorism. Analysts and policy makers often assume that terrorist groups necessarily want to do so (Carter 2004; U.S. Government 2002).
However, it is not clear that terrorist organizations would necessarily covet nuclear devices . Although analysts often characterize terrorism as an irrational activity (Laqeuer 1999: 4-5), extensive empirical evidence indicates that terrorist groups in fact be- have rationally, adopting strategies designed to
achieve particular ends (Crenshaw 1995: 4; Pape 2003: 344). Thus whether terrorists would use
nuclear weapons is contingent on whether doing so is likely to further their goals. Under what circumstances could nuclear weapons fail to promote terrorists' goals? For certain types of terrorist objectives, nuclear weapons could be too de- structive. Large-scale devastation could negatively influence audiences important to the terrorist groups. Terrorists often rely on populations sympathetic to their cause for political, financial, and military support. The horrific destruction of a
nuclear explosion could alienate segments of this audience. People who otherwise would sympathize with the terrorists may conclude that in using a nuclear device terrorists had gone too far and were no
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Infrastructure Topic longer deserving of support. The catastrophic effects of nuclear weapons could also damage or destroy
the very thing that the terrorist group most values. For example, if a terrorist orga- nization were struggling with another group for control of their common home- land, the use of nuclear weapons
against the enemy group would devastate the terrorists' own home territory. Using nuclear weapons would be extremely counter- productive for the terrorists in this scenario. It is thus not obvious that all terrorist groups would use nuclear weapons. Some groups would probably not. The propensity for nuclear acquisition and use by ter- rorist groups must be assessed on a case-by-case basis.
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Ian Bremmer 4 , president of Eurasia Group and senior fellow at the World Policy Institute, 9-13- 2004,
New Statesman
What would happen if there were a new terrorist attack inside the U nited S tates on 11 September
2004? How would it affect the presidential election campaign? The conventional wisdom is that
Americans - their patriotic defiance aroused - would rally to President George W Bush and make him an all but certain winner in November. But consider the differences between the context of the original
9/11 and that of any attack which might occur this autumn. In 2001, the public reaction was one of disbelief and incomprehension. Many Americans realised for the first time that large-scale terrorist attacks on US soil were not only conceivable; they were, perhaps, inevitable. A majority focused for the first time on the threat from al-Qaeda, on the Taliban and on the extent to which Saudis were involved in terrorism. This time, the public response would move much more quickly from shock to anger; debate over how America should respond would begin immediately. Yet it is difficult to imagine how
the Bush administration could focus its response on an external enemy . Should the US send 50,000 troops to the Afghan-Pakistani border to intensify the hunt for Osama Bin Laden and 'step up' efforts to attack the heart of al-Qaeda? Many would wonder if that wasn't what the administration pledged to do after the attacks three years ago. The president would face intensified criticism from those who have argued all along that Iraq was a distraction from 'the real war on terror'. And what if a significant number of the terrorists responsible for the pre-election attack were again Saudis? The Bush
administration could hardly take military action against the Saudi government at a time when crude-
oil prices are already more than $45 a barrel and global supply is stretched to the limit. While the Saudi royal family might support a co-ordinated attack against terrorist camps, real or imagined, near the
Yemeni border - where recent searches for al-Qaeda have concentrated - that would seem like a trivial, insufficient retaliation for an attack on the US mainland. Remember how the Republicans criticised Bill
Clinton's administration for ineffectually 'bouncing the rubble' in Afghanistan after the al-Qaeda attacks on the US embassies in Kenya and Tanzania in the 1990s. So what kind of response might be credible?
Washington's concerns about Iran are rising. The 9/11 commission report noted evidence of cooperation between Iran and al-Qaeda operatives, if not direct Iranian advance knowledge of the 9/11 hijacking plot. Over the past few weeks, US officials have been more explicit, too, in declaring Iran's nuclear programme 'unacceptable'. However, in the absence of an official Iranian claim of responsibility for this hypothetical terrorist attack, the domestic opposition to such a war and the
international outcry it would provoke would make quick action against Iran unthinkable. In short, a
decisive response from Bush could not be external. It would have to be domestic . Instead of Donald
Rumsfeld, the defence secretary, leading a war effort abroad, Tom Ridge, the homeland security secretary, and John Ashcroft, the attorney general , would pursue an anti-terror campaign at home .
Forced to use legal tools more controversial than those provided by the Patriot Act, Americans would experience stepped-up domestic surveillance and border controls, much tighter security in public places and the detention of a large number of suspects. Many Americans would undoubtedly support such moves. But concern for civil liberties and personal freedom would ensure that the government would have nowhere near the public support it enjoyed for the invasion of Afghanistan
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Dowle 5 (Mark Dowle, teaches at the Graduate School of Journalism at Berkeley, September, 2005,
California Monthly, p. http://www.alumni.berkeley.edu/Alumni/Cal_Monthly/September_2005/COVER_STORY-
_Berkeleys_Big_Bang_Project_.asp)
Because terrorists tend to be stateless and well hidden
, immediate retaliation in kind is almost impossible
. But some nuclear explosions do leave an isotopic signature, a DNA-like fingerprint that allows forensic physicists such as Naval Postgraduate School weapons systems analyst Bob Harney to possibly determine the origin of the fissile material in the bomb.
Nuclear forensics is not a precise science , Harney warns. Post-attack sites are almost certain to be contaminated with unrelated or naturally occurring radioactivity, and there are numerous
, highly enriched uranium stashes in the world with unknown signatures
. But there is no question, according to Peter Huessy, a member of the Committee on the Present Danger and consultant to the National Defense University in
Washington, D.C., that Russian forensic experts could quickly detect Russian isotopes, and that highly enriched uranium (HEU) from, say, France could readily be differentiated from American HEU. But, Huessy warns, distinguishing post-blast residues of Pakistani uranium from North Korean uranium would be more challenging, probably impossible . Because neither country is a member of the International Atomic Energy Agency,
IAEA inspectors have been unable to collect from their facilities reliable isotope samples that could be compared to post-attack residues.
Even if the uranium were traced, the source nation could claim that the material had been stolen
.
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Mueller 6 (John E. Mueller, professor of political science and dance at Ohio State University,
14.11.2006. “Overblown: How Politicians And the Terrorism Industry Inflate National Security Threats,
And Why We Believe Them”, pg. 145)
“Homeland security cannot be had on the cheap,” proclaims Senator Joseph Lieberman. The problem
is that it cannot be had on the expensive either. It is possible to make any individual target, such as the Washington Monument, more secure from terrorism. But, unless funds are infinite, society can’t
defend against every possibility . To be blunt (and obvious), it is simply not possible to protect every bus, every shop, every factory, every tunnel, every bridge, every road, every mall, every place of
assembly, every mile of railroad track. Some relevant statistics: in the United States there are 87,000 food-processing plants, 500 urban transportation systems, 80,000 dams, 66,000 chemical plants,
590,000 highway bridges, 5,000 airports, 12,800 power plants, 2 million miles of pipeline, and 2 billion
miles of cable, not to mention some 13,000 McDonald’s (at this writing). Meanwhile, the Post Office handles nearly 200 billion pieces of mail each year. Nor is it possible to secure every border or have perfect, or for that matter, semiperfect, port security— a particular vulnerability, among billions, that
has attracted the focused attention of many in the terrorism industry, if not so far of any actual terrorists. The United States can import over a billion dollars’ worth of shoes in a single month: is each
shoe box to be inspected?6 Moreover, if one tempting target becomes less vulnerable, your
inventive terrorist could simply move on to others. Thus, if the Washington Monument has become a
difficult target after years of expensive renovation, the agile terrorist might be led to cast an eye about
for other notable tall, pointy objects—the Seattle Space Needle, for example. A displacement effect might even increase casualties: the destruction of the Washington Monument might be more embarrassing than that of the Space Needle, but it would probably cost fewer lives. To simplify things, it might seem to make more sense to come up with a list of things that aren’t prospective targets. A tree
in the middle of a forest might seem a likely prospect for this list. But what about forest fires? Five
skilled terrorists, each armed with a match, could set off five of those simultaneously. They would be aided in their efforts by the Park Service’s propensity prominently to publicize which forests at any given moment are the driest and most tinderbox-like. Maybe in our determined quest to inconvenience terrorists we’d need to classify that information, hoping that campfire builders as well as smoking backpackers and motorists (but not your wandering malevolent terrorist) would have enough sense to be able to tell whether they are venturing through forested areas that are dry or not.
Larsen 5 (Randall J. Larsen, former chairman of the Department of Military Strategy and Operations at the National War College, is director of the Institute for Homeland Security, May 20, 2005, “Years After
9/11 . . .”, http://www.washingtonpost.com/wpdyn/content/article/2005/05/19/AR2005051901533.html)
Not all national security programs have this problem. One person, appointed by the defense secretary, leads the missile defense program, and an undersecretary, appointed by the president and confirmed by
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Infrastructure Topic the Senate, controls the $7.7 billion annual budget. But the most likely delivery system for biological and nuclear weapons is not intercontinental ballistic missiles. The last time the United States suffered a biological attack, the U.S. Postal Service provided the delivery vehicles, and we still don't have a return address for the sender . A small truck, boat or private jet will most likely serve to smuggle a
nuclear weapon across our 7,500 miles of borders or 95,000 miles of shoreline. Reliable means for
preventing this do not exist today and will not exist in the near future. While some funds must be spent on response and recovery capabilities, that is clearly a secondary priority. Preventing terrorists
from getting their hands on highly enriched uranium or weapons-grade plutonium must be the No. 1
nuclear defense priority. But funding and political support for such programs are lacking. The only new initiative in the president's budget calls for creation of the Domestic Nuclear Detection Office. Two problems with that name and focus: domestic and detection. If you're detecting a nuclear weapon in
the Port of Los Angeles, you're too late. We need a single person in charge of defending America against nuclear terrorism, and the focus of this effort must be overseas, in the form of Nunn-Lugar-type programs meant to keep terrorists from obtaining weapons-grade nuclear materials.
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de Rugy 7 (Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason
University. November 2007, “Is Port Security Funding Making Us Safer?”, http://kms1.isn.ethz.ch/serviceengine/Files/ISN/57174/ipublicationdocument_singledocument/db4cee5 f-2c31-4597-ab2d-06ccb1634bf6/en/Audit_11_07_derugy.pdf)
A close look at port security allocation decisions indicates that spending occurs without regard for risk
analysis let alone cost-benefit analysis, leading to a large array of misallocated spending. For instance, what should be the highest priorities—preventing terrorists from acquiring nuclear devices and material—receive less money than much less cost-effective policies such as nuclear detection in the
ports or post-disaster response activities. Because it rests mainly on domestic detection of WMD in ports—a task that is not clear could be achieved—the port security model offers almost no value to
the nation .6 Even if we could seal our ports, America wouldn’t be safe. The only effective way to prevent nuclear attacks is to deny terrorists access to weapons and material. Without nuclear materials there can be no nuclear bombs.
Fessler 8 (Pam Fessler, NPR staff writer, January 16, 2008, “Experts Challenge Homeland Security
Strategy”, http://www.npr.org/templates/story/story.php?storyId=18118652)
At Baltimore's inner harbor, schoolchildren play outside after visiting an aquarium. Most people feel pretty safe at this busy site. Millions of dollars have been spent to secure the city's ports and other facilities. But Homeland Security consultant Randy Larsen sees a major weakness. He points to the water. "Any small vessel capable of carrying a Hiroshima-size bomb could just come right up into the
harbor," Larsen said. And he says there's little chance it would be stopped. The Coast Guard is smaller than the New York City police department but has to patrol 95,000 miles of shoreline. The main way
Homeland Security protects a city like Baltimore from nuclear weapons is by checking cargo
containers at the port. Larsen thinks that focus is all wrong. "The issue must be on preventing terrorists from getting their hands on nuclear materials. That's not about X-raying and doing radiological scans
of containers," Larsen said. Larsen's recent book, Our Own Worst Enemy, bemoans what he sees as a lack of common sense when it comes to homeland security. He thinks the government spends too much on "guns, guards and gates" and not enough on intelligence and nuclear nonproliferation, which might be more effective.
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Haveman and Shatz 6 (Jon D. Haveman, founding principal of Beacon Economics. Director of the
Economy Program at the Public Policy Institute of California. Howard J. Shatz, Senior Economist at the
RAND Corporation. 2006. “Protecting the Nation’s Seaports: Balancing Security and Cost”, http://www.ppic.org/content/pubs/report/r_606jhr.pdf)
The Economic Effects of a Terrorist Attack on a Port
. The ports of
Los Angeles and Long Beach
are jurisdictionally separate but share
San Pedro Bay and effectively serve as one giant port complex (see the port map, p. xxiii). Combined, the complex is the largest port by value in the United States
and the fifth-largest container port in the world.
If terrorists wanted to wreak havoc on the U.S. economy, the Los Angeles–Long
Beach complex would certainly be a prime target for attack
. In 2004, the complex processed $243 billion worth of traded goods, just over 10 percent of all
U.S. trade, 25 percent of all waterborne trade, or an amount equal to about 2 percent of U.S. gross domestic product (GDP). Because imports constitute the vast majority of this trade, and because these imports are often used as inputs to other products, a terrorist attack on these ports could disrupt the U.S. economy. Opinions on the extent of disruption differ significantly, however. In Chapter 2, Edward E. Leamer and Christopher Thornberg argue that the actual costs of an attack on the Los Angeles–Long Beach port complex may not be as high as many fear.
For example, if a port is closed, many shippers will reroute their shipments through other ports. In addition, displaced workers will seek alternative employment.
As a result, the economy will adjust .
Some output will be lost, but it may be so small in magnitude that it will not reveal itself in data that track national or even regional macroeconomic trends. The authors provide examples of other disruptions that might have caused severe economic damage but did not, such as the terrorist attacks of September 11, 2001. Consumer spending fell
immediately after the attacks but then rebounded sharply
at the end of 2001, growing at an unprecedented
, seasonally adjusted annual rate
of 7 percent. Likewise, although retail sales fell immediately after the attacks, they returned to trend in November, only two months later. Some sectors did suffer, most notably the airline industry, which had already been in deep trouble before the end of the technology boom in early 2001. But consumer spending actually increased, suggesting that people reallocated the money that they would have spent on airline travel to other forms of consumption. Similarly, the authors argue that other disruptions such as hurricanes, earthquakes, and even labor disputes at seaports did have immediate negative economic effects but that these effects dissipated quickly as the economy adjusted.
The message in this is that most such disruptions lead to business being delayed rather than business being cancelled, which in turn results in much less economic harm than would be expected.
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AAPA 12 (American Association of Port Authorities, June 18, 2012, “U.S. Seaports, Private-Sector
Partners Plan to Invest $46 Billion By 2017 in Port Infrastructure”, U.S. Seaports, Private-Sector Partners
Plan to Invest $46 Billion By 2017 in Port Infrastructure)
In a recently completed survey that the American Association of Port Authorities (AAPA) initiated, U.S. seaport agencies and their private-sector partners plan to invest a combined $46 billion over the next five years in wide-ranging capital improvements to their marine operations and other port properties.
While port authorities and their business partners are making major investments into port facilities, studies show the intermodal links—such as roads, bridges, tunnels and federal navigation channels—
to access these facilities get scant attention by state and federal agencies responsible for their upkeep,
resulting in traffic bottlenecks that increase product costs and hamper job growth. To help remedy these problems, AAPA continues to advocate for a national freight infrastructure strategy and for the
U.S. Congress to quickly pass a reauthorized multi-year transportation bill that targets federal dollars toward economically strategic freight transportation infrastructure of national and regional significance.
“Infrastructure investments in America’s ports and their intermodal connections – both on the land and waterside – are in our nation’s best interest because they provide opportunities to bolster our
economic and employment recovery, help sustain long term prosperity, and pay annual dividends through the generation of more than $200 billion in federal, state and local tax revenue and more than
$22 billion in Customs duties,” said Kurt Nagle, AAPA president and CEO. “From a jobs standpoint,
America’s seaports support the employment of more than 13 million U.S. workers and create 15,000 domestic jobs for every $1 billion in manufactured goods that U.S. businesses export.”
Markay 11 (Lachlan Markay, staff writer for the Morning Bell, 7/11/11, “Obama vs. the Evidence:
Infrastructure Spending Is No Job Creator”, http://blog.heritage.org/2011/07/11/obama-vs-theevidence-infrastructure-spending-is-no-job-creator/)
But if the president has learned anything from the apparent failure of his policies to spur job growth, he sure didn’t show it. A central element of his proposed unemployment solution is still the creation of an “infrastructure bank
that could put construction workers to work right now rebuilding our roads and our bridges and our vital infrastructure right now.” All of this despite the preponderance of evidence showing that federal infrastructure spending is not the boon for the economy that Obama claims .
In fact, the
Congressional Budget Office, the Congressional Research Service, and the Government Accountability
Office have all concluded that such spending has at best a marginal impact on employment, and may even yield a net loss in jobs.
In a series of studies in 2000, the Department of Transportation used economic modeling to conclude that each billion dollars in infrastructure spending would create 47,576 job-years. That study was used to tout infrastructure spending
in the stimulus package, and to justify such spending thereafter.
But USDOT’s study considered federal spending in the abstract, and thus failed to account for the hidden costs of extracting money from one part of the economy and spending it elsewhere
. The Heritage Foundation’s Ronald Utt explained the flawed logic thusly:
In the real world, the additional federal borrowing or taxing needed to provide this additional $1 billion means that $1 billion less is spent or invested elsewhere and that the jobs and products
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Regardless of how the federal government raised the additional $1 billion, it would shift resources from one part of the economy to another, in this case to road building. The only way that $1 billion of new highway spending can create 47,576 new jobs is if the $1 billion appears out of nowhere as if it were manna from heaven…
Because of these inherent limitations
, [input/output] models such as the one used by USDOT should be used with great caution
, and their limitations and artificial assumptions should be clearly acknowledged.
When these conditions are considered, the jobcreation potential of any spending scheme will be found to be a small fraction of what such models initially report. Even some I/O studies have found the benefits of infrastructure spending to be negligible
. The aforementioned CRS report, for instance, used I/O models to measure the impact of such spending, and concluded (see link above for details): To the extent that financing new highways by reducing expenditures on other programs or by deficit finance and its impact on private consumption and investment, the net impact on the economy
of highway construction in terms of both output and employment could be nullified or even negative.
Unlike CRS and USDOT, the Government Accountability Office actually studied the track record of an infrastructure project – the Emergency Jobs Act of 1983 – and found similarly unimpressive results. “Funds were spent slowly and relatively few jobs were created when most needed
in the economy,” GAO found. The jobs that were created by infrastructure spending “represented less than 1 per­cent of about 5.8 million jobs created by the economy since the act was passed.”
The Congressional Budget Office
took a different approach, and conducted a review of 10 years of academic data on the relationship between federal spending and job creation
. On infrastructure spending, the CBO had this to say: The available information suggests three conclusions: some investments in public infrastructure can be justified by their bene­fits to the economy, but their supply is lim­ited; some (perhaps substantial) portion of federal spending on infrastructure displaces state and local spending; and on balance, available studies do not support the claim that increases in federal infrastructure spending would increase economic growth.
In short, a variety of studies using very different methodologies suggest that infrastructure spending is not an unemployment solution, and may even make the situation worse . So it should have come as little surprise, nearly a year after the president passed his stimulus package, that “a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry
,” as the Associated Press reported.
But President Obama continues to cling to the notion that unemployment can be solved by simply spending more federal dollars
on construction projects.
As long as he continues pursuing policies shown time and again to be ineffective, unemployment will likely remain a problem.
Ferguson 6 (Niall, MA, D.Phil., is the Laurence A. Tisch Professor of History at Harvard University. He is a resident faculty member of the Minda de Gunzburg Center for European Studies. He is also a Senior
Reseach Fellow of Jesus College, Oxford University, and a Senior Fellow of the Hoover Institution,
Stanford University, Foreign Affairs, Sept/Oct)
Nor can economic crises explain
the bloodshed
. What may be the most familiar causal chain in modern historiography links the Great Depression to
the rise of fascism and
the outbreak of
World War II. But that simple story leaves too much out.
Nazi Germany started the war
in Europe only after its economy
had recovered. Not all
the countries affected by the
Great
Depression were taken over by fascist regimes, nor did all such regimes start wars
of aggression. In fact, no general relationship between economics and conflict is discernible
for the century as a whole.
Some wars came after periods of growth, others were the causes rather than the consequences of economic catastrophe, and some severe economic crises were not followed by wars
.
Washington Times 8 - chief political correspondent of The Washington Times (7/28/08, Donald
Lambro, The Washington Times, "Always darkest before dawn", lexis)
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The doom-and-gloomers are still with us, of course, and they will go to their graves forecasting that life as we know it is coming to an end and that we are in for years of economic depression and
recession. Last week, the New York Times ran a Page One story maintaining that Americans were saving less than ever, and that their debt burden had risen by an average of $117,951 per household. And the
London Telegraph says there are even harder times ahead, comparing today's economy to the Great
Depression of the 1930s. Wall Street economist David Malpass thinks that kind of fearmongering is filled with manipulated statistics that ignore long-term wealth creation in our country, as well as
globally. Increasingly, people are investing "for the long run - for capital gains (not counted in savings) rather than current income - in preparation for retirement," he told his clients last week. Instead of a
coming recession, "we think the U.S. is in gradual recovery after a sharp two-quarter slowdown, with consumer resilience more likely than the decades-old expectation of a consumer slump," Mr. Malpass said. "Fed data shows clearly that household savings of all types - liquid, financial and tangible - are still
close to the record levels set in September. IMF data shows U.S. households holding more net financial savings than the rest of the world combined. Consumption has repeatedly outperformed expectations
in recent quarters and year," he said. The American economy has been pounded by a lot of factors, including the housing collapse (a needed correction to bring home prices down to earth), the mortgage scandal and the meteoric rise in oil and gas prices. But this $14 trillion economy, though slowing down,
continues to grow by about 1 percent on an annualized basis, confounding the pessimists who said we were plunging into a recession, defined by negative growth over two quarters. That has not happened - yet. Call me a cockeyed optimist, but I do not think we are heading into a recession. On the contrary, I'm more bullish than ever on our economy's long-term prospects.
Fettweis 11
Christopher, Professor of Political Science @ Tulane, Dangerous Times?: The International Politics of
Great Power Peace, pg. 172-174
The primary attack on restraint, or justification of internationalism, posits that if the United States were to withdraw from the world, a variety of ills would sweep over key regions and eventually pose threats to U.S. security and/or prosperity. These problems might take three forms (besides the obvious if remarkably unlikely, direct threats to the homeland.). generalized chaos, hostile imbalances in Eurasia, and/or failed states. Historian Arthur Schlesinger was typical when he worried that restraint would mean "a chaotic, violent, and ever more dangerous planet." All of these concerns either implicitly or explicitly assume that the presence of the United States is the primary reason for international stability, and if that presence were withdrawn chaos would ensue. In other words, they depend upon hegemonicstability logic. Simply stated, the hegemonic stability theory proposes that international peace is only
possible when there is one country strong enough to make and enforce a set of rules. At the height of
Pax Romana between 27 BC and 180 AD, for example, Rome was able to bring unprecedented peace and security to the Mediterranean. The Pax Britannica of the nineteenth century brought a level of stability to the high seas. Perhaps the current era is peaceful because the United States has established a de facto Pax Americana where no power is strong enough to challenge its dominance, and because it has established a set of rules that are generally in the interests of all countries to follow. Without a benevolent hegemon, some strategists fear, instability may break out around the globe.."'. Unchecked conflicts could cause humanitarian disaster and, in today's interconnected world, economic turmoil that would ripple throughout global financial markets. If the United States were to abandon its commitments abroad, argued Art, the world would "become a more dangerous place' and, sooner or later, that would
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'redound to America's detriment."' If the massive spending that the United States engages in actually provides stability in the international political and economic systems, then perhaps internationalism is worthwhile. There are good theoretical and empirical reasons, however, to believe that U.S hegemony
is not the primary cause of the current era of stability. First of all, the hegemonic-stability argument overstates the role that the United States plays in the system. No country is strong enough to police
the world on its own. The only way there can he stability in the community of great powers is if selfpolicing occurs, if states have decided that their interests are served by peace. if no pacific normative shift had occurred among the great powers that was filtering down through the system, then no
amount of international constabulary work by the United States could maintain stability. Likewise, if it is true that such a shift has occurred, then most of what the hegemon spends to bring stability would he wasted. The 5 percent of the world's population that live in the United States simply could not
force peace upon an unwilling 95. At the risk of beating the metaphor to death, the United States maybe patrolling a neighborhood that has already rid itself of crime. Stability and unipolarity may be
simply coincidental. In order for U.S. hegemony to he the reason for global stability, the rest of the world would have to expect reward for good behavior and fear punishment for bad. Since the end of the
Cold War, the United States has not always proven to he especially eager to engage in humanitarian interventions abroad. Even rather incontrovertible evidence of genocide has not been sufficient to inspire action. Hegemonic stability can only take credit for influencing those decisions that would have
ended in war without the presence, whether physical or psychological, of the United States. Ethiopia and Eritrea are hardly the only states that could go to war without the slightest threat of U.S. intervention. Since most of the world today is free to fight without U.S. involvement, something else
must be at work. Stability exists in many places where no hegemony is present. Second, the limited empirical evidence we have suggests that there is little connection between the relative level of U.S.
activism and international stability. During the 1990s the United States cut back on its defense spending fairly substantially. By 1998 the United States was spending $100 billion less on defense in real terms than it had in 1990,72 To internationalists, defense hawks, and other believers in hegemonic stability, this irresponsible peace dividend" endangered both national and global security. "No serious analyst of American military capabilities;' argued Kristol and Kagan, 'doubts that the defense budget has been cut much too far to meet America's responsibilities to itself and to world peac&'73 If the pacific trends were due not to U.S. hegemony but a strengthening norm against interstate war, however, one would not have expected an increase in global instability and violence. The verdict from the past two decades is fairly plain: The world grew' more peaceful while the United States cut its forces. No state seemed to believe that its security was endangered by a less-capable Pentagon, or at least none took any action that would suggest such a belief. No militaries were enhanced to address power vacuums; no security dilemmas drove mistrust and arms races; no regional balancing occurred once the stabilizing presence of the U.S. military was diminished. The rest of the world acted as if the threat of international war was not a pressing concern, despite the reduction in U.S. capabilities. The incidence and magnitude of global conflict declined while the United States cut its military spending under President Clinton, and it kept declining as the Bush Administration ramped spending back up. No complex statistical analysis
should be necessary to reach the conclusion that the two are unrelated. It is also worth noting for our purposes that the United States was no less safe.
Kaplan and Kaplan 2011 – *national correspondent for The Atlantic, senior fellow at CNAS, **30-year
CIA vet, vice chairman of the National Intelligence Council (2/23, Robert and Stephen, The National
Interest, “America primed”, http://nationalinterest.org/article/america-primed-4892, WEA)
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But in spite of the seemingly inevitable and rapid diminution of U.S. eminence, to write America’s greatpower obituary is beyond premature. The United States remains a highly capable power. Iraq and
Afghanistan, as horrendous as they have proved to be—in a broad historical sense—are still relatively minor events that America can easily overcome. The eventual demise of empires like those of Ming
China and late-medieval Venice was brought about by far more pivotal blunders. Think of the Indian
Mutiny against the British in 1857 and 1858. Iraq in particular—ever so frequently touted as our turning point on the road to destruction—looks to some extent eerily similar. At the time, orientalists and other pragmatists in the British power structure (who wanted to leave traditional India as it was) lost some sway to evangelical and utilitarian reformers (who wanted to modernize and Christianize India—to make it more like England). But the attempt to bring the fruits of Western civilization to the Asian subcontinent was met with a violent revolt against imperial authority. Delhi, Lucknow and other Indian cities were besieged and captured before being retaken by colonial forces. Yet, the debacle did not signal the end of the British Empire at all, which continued on and even expanded for another century.
Instead, it signaled the transition from more of an ad hoc imperium fired by a proselytizing lust to impose its values on others to a calmer and more pragmatic empire built on international trade and technology.
1
There is no reason to believe that the fate of America need follow a more doomed course.
Yes, the mistakes made in Iraq and Afghanistan have been the United States’ own, but, though destructive, they are not fatal. If we withdraw sooner rather than later, the cost to American power can be stemmed. Leaving a stable Afghanistan behind of course requires a helpful Pakistan, but with more pressure Washington might increase Islamabad’s cooperation in relatively short order. In terms of acute threats, Iran is the only state that has exported terrorism and insurgency toward a strategic purpose, yet the country is economically fragile and politically unstable, with behind-the-scenes infighting that would make Washington partisans blanch. Even assuming Iran acquires a few nuclear devices—of uncertain quality with uncertain delivery systems—the long-term outlook for the clerical regime is itself
unclear. The administration must only avoid a war with the Islamic Republic. To be sure, America may be in decline in relative terms compared to some other powers, as well as to many countries of the former third world, but in absolute terms, particularly military ones, the United States can easily be
the first among equals for decades hence. China, India and Russia are the only major Eurasian states prepared to wield military power of consequence on their peripheries. And each, in turn, faces its own
obstacles on the road to some degree of dominance. The Chinese will have a great navy (assuming their economy does not implode) and that will enforce a certain level of bipolarity in the world system. But
Beijing will lack the alliance network Washington has, even as China and Russia will always be— because of geography—inherently distrustful of one another. China has much influence, but no credible
military allies beyond possibly North Korea, and its authoritarian regime lives in fear of internal
disruption if its economic growth rate falters. Furthermore, Chinese naval planners look out from their coastline and see South Korea and a string of islands—Japan, Taiwan and Australia—that are American allies, as are, to a lesser degree, the Philippines, Vietnam and Thailand. To balance a rising China,
Washington must only preserve its naval and air assets at their current levels. India, which has its own internal insurgency, is bedeviled by semifailed states on its borders that critically sap energy and attention from its security establishment, and especially from its land forces; in any case, India has become a de facto ally of the United States whose very rise, in and of itself, helps to balance China.
Russia will be occupied for years regaining influence in its post-Soviet near abroad, particularly in
Ukraine, whose feisty independence constitutes a fundamental challenge to the very idea of the Russian state. China checks Russia in Central Asia, as do Turkey, Iran and the West in the Caucasus. This is to say
nothing of Russia’s diminishing population and overwhelming reliance on energy exports. Given the problems of these other states, America remains fortunate indeed.
The United States is poised to tread the path of postmutiny Britain.
America might not be an empire in the formal sense, but its obligations and constellation of military bases worldwide put it in an imperial-like situation, particularly because its air and naval deployments will continue in a post-Iraq and post-Afghanistan world.
No country is in such an enviable position to keep the relative peace in
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Eurasia as is the United States
—especially if it can recover the level of enduring competence in national-security policy last seen during the administration of George H. W. Bush.
This is no small point. America has strategic advantages and can enhance its power while extricating itself from war
. But this requires leadership—not great and inspiring leadership which comes along rarely even in the healthiest of societies—but plodding competence, occasionally steely nerved and always free of illusion. AMERICA’S MACROSTRATEGIC environment is chockablock with assets unavailable to any other country.
If nothing else, the United States has an often-overlooked and oft-neglected bulwark of allies: the Anglosphere
. This is Washington’s inner circle of defense ties, and it finds no equivalent in
its competitor nations’ strategic arsenals
. The Anglosphere is perennially—and incorrectly—declared dead or in decline by the media and politicians. Nevertheless, Great Britain, Canada,
Australia and the United States remain extremely close in their military and intelligence relations and exchange vast volumes of sensitive information daily, as they have for decades. On terrorism, virtually anything and everything is shared. The National Security Agency and Britain’s Government Communications Headquarters have been nearly inextricable since World War II. The same is largely true of the CIA and Britain’s Secret Intelligence Service. The various English-speaking nations, in practical terms, even assign individual parts of the world to each other, and each worries about the others’ security equities. The linguistic and other cultural links
between the United States and these other English-speaking countries are so deep that the sharing of sensitive information
24-7 is practically an afterthought
, even as the media and politicians highlight the narcissism of comparatively small differences. Of course, the values and national purposes of the individual countries are unique, owing to different geographies and historical experiences; yet that is something America can quietly manage. Given how close the
United States is to the Anglosphere in most ways, when these allies resist what America is attempting to do, that should constitute a warning that perhaps the policy coming out of Washington is either outright wrong or needs adjustment. (Canada’s balking in the face of U.S. bullying to hop on board the Iraq War train is an obvious case in point.) The Anglosphere, in addition to everything else it provides, is a reality check that can facilitate American policy making.
With a combined
population of
420 million
, with
strategic locations off the continent of
Europe (Great Britain), near the intersection of the Indian Ocean and western Pacific sea-lanes
(Australia), and in the
Arctic and adjacent to Greenland’s oil and gas (Canada), the
Anglosphere
, if not abused or ignored, will be a substantial hardpower asset
for the United States deep into the twenty-first century.
China and Russia enjoy nothing comparable
.
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Utt 9 (Ronald D. Utt, Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in the Thomas A. Roe
Institute for Economic Policy Studies at The Heritage Foundation. February 5, 2009. “The Economic
Stimulus Package and the Limits of Infrastructure Jobs Creation”, http://www.heritage.org/research/reports/2009/02/the-economic-stimulus-package-and-the-limits-ofinfrastructure-jobs-creation)
The benefits of these infrastructure proposals appear intuitively plausible, but a review of past such efforts reveals that the promise exceeds performance. Problems arise in large part because of three
limitations: (1) the difficulty in getting such large, complicated projects up and running in a short period of time; (2) the tendency of many states to substitute federal for dedicated state money; and
(3) the shortage of skilled labor needed to build them. Both Presidents Hoover and Roosevelt implemented ambitious infrastructure programs in the aftermath of the stock market crash of late
1929, but nine years later the unemployment rate in the United States was still over 17 percent.
[1]
Following its stock market crash in the early 1990s, the Japanese government attempted to revive its
economy through several infrastructure spending initiatives. None succeeded. Instead the Japanese economy has suffered from pervasive stagnation over the past decade and a half, and economic growth averaged only 0.6 percent per year since the early 1990s.
[2]
More recently, numerous studies of post-
World War II infrastructure spending stimulus schemes have concluded that the benefits of such programs are modest at best and largely ineffective, despite the vast financial resources applied to them.
[3] While there has been considerable debate in Congress about the start-up delays common to infrastructure spending, there has been little mention of the obstacles posed by the shortage of skilled, heavy construction labor in the United States , where much of the American population manages to avoid the kind of outdoor, physical labor common to construction work. Consequently, a
significant portion of construction workers are recent immigrants, mostly from Latin America.
Increased infrastructure spending may lead to increased immigration, thereby leaving the existing domestic pool of unemployed workers unchanged.
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Larson 10 (Steve Larson, Chairman and President, Cat Logistics, and Vice President, Caterpillar, Inc.,
April 29, 2010, “Hearing Before the Subcommittee on International Trade, Customs, and Global
Competitiveness of the Committee on Finance United States Senate”, http://www.finance.senate.gov/hearings/hearing/?id=a41ba5cb-5056-a032-526f-5f3933e34f08)
Whether we are importing or exporting, goods are often moved through different transportation
modes before they ever get to a port. If we are going to be successful in growing our economy through increased exports, our entire freight movement system must be improved dramatically and work as an effective, modern, and integrated whole. Mr. Chairman, with over 90 percent of the world’s consumers living outside our borders, international trade and exports will play an increasingly crucial role in driving domestic economic growth, creating new jobs and ensuring continued U.S. leadership in the global economy. Free trade agreements have proven to be one of the most effective ways to open up foreign markets to U.S. exports. One of the most significant steps that Congress can take to spur U.S. exports, reenergize our economy, and bring people back to work would be to pass the Panama,
Columbia, and Korea free trade agreements. But whether the export opportunities are in our own hemisphere or on the other side of the world, the goods we sell must travel through a multi-modal transportation system that includes roads, rail, water, and air. The condition and integration of these various modes has a significant direct impact on our ability to move products quickly and efficiently and at the lowest possible cost. Our transportation system is the backbone of our economy. Economic opportunities are directly tied to the efficiency and reliability of this system. Unfortunately, our
transportation network is aging and under-funded. Our Nation’s highways, bridges, and tunnels are deteriorating rapidly, while congestion is increasing . Compounding the congestion and deteriorating infrastructure are the various and often conflicting State regulations and permitting requirements with which we must comply when moving freight. Our Nation’s rail network is increasingly seen as a
cost-efficient way to help alleviate growing freight congestion on our roads, yet there are serious questions about the ability of the existing system to handle increased volumes, and the capacity and
design of the current railroad infrastructure limits Caterpillar’s transportation options. Like our road and rail networks, our ports are also posing significant challenges for exporters and logistics professionals. Lack of capacity at U.S. ports and inadequate mode integration are impeding the flow of both imports and exports through the U.S. port system. Capacity constraints at major ports are forcing shippers to disperse their shipments through multiple ports or divert shipments altogether through
Canadian or Mexican ports. Caterpillar has come to increasingly utilize Canadian ports for both import and export containers due to improved transit times and costs. Approximately 40 percent of Caterpillar’s imports and exports now move through Canadian ports, with 50 percent of our European imports arriving at Halifax. Mr. Chairman, if we are going to be successful in growing our economy through a doubling of our exports, our entire intermodal transportation system must be improved dramatically and begin to work as an effective, modern, and integrated whole . We can no longer view any transportation mode in isolation , but rather must look at our freight movement system comprehensively and in its entirety. Nothing short of our global competitiveness is at stake , and it is clearly a time for action.
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Davidson 12 (Paul Davidson, staff writer USA Today, 5/20/12, “USA's creaking infrastructure holds back economy”, http://www.usatoday.com/money/economy/story/2012-05-20/creakinginfrastructure/55096396/1)
Inland waterways quietly keep the nation's economy flowing as they transport $180 billion of coal, steel, chemicals and other goods each year — a sixth of U.S. freight — across 38 states. Yet, an
antiquated system of locks and dams threatens the timely delivery of those goods daily. Locks and dams raise or lower barges from one water level to the next, but breakdowns are frequent. For example, the main chamber at a lock on the Ohio River near Warsaw, Ky., is being fixed. Maneuvering
15-barge tows into a much smaller backup chamber has increased the average delay at the lock from 40 minutes to 20 hours, including waiting time. The outage, which began last July and is expected to end in
August, will cost American Electric Power and its customers $5.5 million as the utility ferries coal and other supplies along the river for itself and other businesses, says AEP senior manager Marty Hettel. As the economy picks up, the nation's creaking infrastructure will increasingly struggle to handle the load. That will make products more expensive as businesses pay more for shipping or maneuver around roadblocks, and it will cause the nation to lose exports to other countries — both of which are
expected to hamper the recovery. "The good news is, the economy is turning," says Dan Murray, vice president of the American Transportation Research Institute. "The bad news is, we expect congestion to skyrocket." The ancient lock-and-dam system is perhaps the most egregious example of aging or congested transportation systems that are being outstripped by demand. Fourteen locks are
expected to fail by 2020, costing the economy billions of dollars. Meanwhile, seaports can't accommodate larger container ships, slowing exports and imports. Highways are too narrow. Bridges
are overtaxed. Effects 'sneaking up' The shortcomings were partly masked during the recession as
fewer Americans worked and less freight was shipped, easing traffic on transportation corridors. But interviews with shippers and logistics companies show delays are starting to lengthen along with the moderately growing economy. "I call this a stealth attack on our economy ," says Janet Kavinoky,
executive director of transportation and infrastructure for the U.S. Chamber of Commerce. "It's not like an immediate crisis. It's something that's sneaking up on us." Freight bottlenecks and other congestion
cost about $200 billion a year, or 1.6% of U.S. economic output, according to a report last year by
Building America's Future Educational Fund, a bipartisan coalition of elected officials. The chamber of commerce estimates such costs are as high as $1 trillion annually, or 7% of the economy. Yet, there's little prospect for more infrastructure investment as a divided Congress battles about how to cut the
$1.3 trillion federal deficit, and state and local governments face their own budget shortfalls.
Government investment in highways, bridges, water systems, schools and other projects has fallen each year since 2008. IHS Global Insight expects such outlays to drop 4.4% this year and 3% in 2013. The U.S. is spending about half of the $2.2 trillion that it should over a five-year period to repair and expand overburdened infrastructure, says Andrew Herrmann, president of the American Society of Civil
Engineers. Inland waterways, for example, carry coal to power plants, iron ore to steel mills and grain
to export terminals. But inadequate investment led to nearly 80,000 hours of lock outages in fiscal
2010, four times more than in fiscal 2000. Most of the nation's 200 or so locks are past their 50-year
design life. A prime example is an 83-year-old lock on the Ohio River near Olmsted, Ill. Congress set aside $775 million to replace it and another nearby lock in 1988. The project began in 1993 and was scheduled to be finished by 2000 but still isn't complete, in part because of engineering modifications
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Infrastructure Topic intended to save $60 million. Now, the cost has ballooned to $3.1 billion, and the new lock won't be ready until 2020 or later. The cost overrun leaves little money for other projects. About $8 billion is
needed to replace 25 locks and dams in the next 20 years, says Michael Toohey, president of the
Waterways Council, an advocacy group. But Congress allocates only about $170 million a year, with the government and a 20-cent-a-gallon tax on tow operators each funding half. Toohey says $385 million a year is required to fund all the work. "We're the silent industry" because waterways are less visible, he says.
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The question may be reformulated. Do wars spring from a popular reaction to a sudden economic crisis that exacerbates poverty and growing disparities in wealth and incomes? Perhaps one could argue, as some scholars do, that it is some dramatic event or sequence of such events leading to the exacerbation of poverty that, in turn, leads to this deplorable denouement. This exogenous factor might act as a catalyst for a violent reaction on the part of the people or on the part of the political leadership who would then possibly be tempted to seek a diversion by finding or, if need be, fabricating an enemy and setting in train the process leading to war. According to a study undertaken by Minxin Pei and Ariel
Adesnik of the Carnegie endowment for International Peace, there would not appear to be any merit
in this hypothesis. After studying ninety-three episodes of economic crisis in twenty-two countries in
Latin America and Asia in the years since the Second World War they concluded that: Much of the
conventional wisdom about the political impact of economic crises may be wrong…The severity of
economic crisis – as measured in terms of inflation and negative growth – bore no relationship to the
collapse of regimes…(or, in democratic states, rarely) to an outbreak of violence…In the cases of dictatorships and semi-democracies, the ruling elites responded to crises by increasing repression
(thereby using one form of violence to abort another).
Poverty wars. In a second scenario, declining living standards first cause internal turmoil, then war. If groups at all levels of affluence protect their standard of living by pushing deprivation on other groups, class war and revolutionary upheavals could result. Faced with these pressures, liberal democracy and free market systems could increasingly be replaced by authoritarian systems capable of maintaining minimum order. If authoritarian regimes are more war-prone because they lack democratic control, and if revolutionary regimes are war-prone because of their ideological fervor and isolation, then the world is likely to become more violent. The record of previous depressions supports the proposition that widespread economic stagnation and unmet economic expectations contribute to international
conflict. Although initially compelling, this scenario has major flaws. One is that it is arguably based on
unsound economic theory. Wealth is formed not so much by the availability of cheap natural resources as by capital formation through savings and more efficient production. Many resource-poor countries, like Japan, are very wealthy, while many countries with more extensive resources are poor.
Environmental constraints require an end to economic growth based on growing use of raw materials, but not necessarily an end to growth in the production of goods and services. In addition, economic
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decline does not necessarily produce conflict. How societies respond to economic decline may largely depend upon the rate at which such declines occur. And as people get poorer, they may become less
willing to spend scarce resources for military forces. As Bernard Brodie observed about the modern era, “The predisposing factors to military aggression are full bellies, not empty ones.” The experience of economic depressions over the last two centuries may be irrelevant, because such depressions were characterized by under-utilized production capacity and falling resource prices. In the 1930's, increased military spending stimulated economies, but if economic growth is retarded by
environmental constraints, military spending will exacerbate the problem.
Sherden 98 (William, business consultant, The Fortune Sellers)
Today it is the generally perceived poor track record of economists that has caused the nickname to stick. Consider a 1995
Business Week
article, entitled “A D+ for Dismal Scientists? Even the Fed’s Gurus Often
Goof,” and a 1996
Forbes
article, “Dismal Days for the Dismal Science.” Economic forecasters have routinely failed to foresee turning points in the economy: the coming of severe recessions, the start of
recoveries, and periods of rapid increases or decreases in inflation. It is jokingly said that economists
have forecast nine of the last five recessions. In fact, they have failed to predict the past four most severe recessions and most of them predicted growth instead for these periods. After the October
1987 stock market crash, most economists predicted a severe downturn in the economy similar to
what happened after the 1929 stock market crash, yet during the last quarter of 1987, the economy
continued expanding vigorously. Like all other types of forecasters, economists’ vision of the future is
clearly clouded with situational bias.
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Christopher, Professor of Political Science @ Tulane, Dangerous Times?: The International Politics of
Great Power Peace, pg. 168
Today’s security debate seems driven less by actual threats than by vague, unnamed dangers
. Former Secretary of Defense Donald Rumsfeld warned about “unknown unknowns,” which are the threats that “we don’t know we don’t know,” which “tend to be the difficult ones.”
Kagan and Kristol worry that if the United States fails to remain highly engaged, the system “is likely to yield very real external dangers
, as threatening in their own way as the Soviet Union was a quarter century ago.”
What exactly these dangers would be is left open to interpretation. In the absence of identifiable threats, the unknown can provide us with an enemy, one whose power and danger is limited only by the imagination. It is what Friedman and Sapolsky call
“the threat of no threats” and is perhaps the most frightening of all
. Even if, as everyone schooled in folk wisdom knows, “anything is possible,” it is not true that everything is plausible. There is no limit on the potential dangers that the human mind can manufacture, but there are very definite limits on the specific threats that system contains. “To make anything very terrible, obscurity seems in general to be necessary,” noted Edmund Burke. “When we know the full extent of any danger, when we can accustom our eyes to it, a great deal of apprehension vanishes.” The full extent of today’s dangers is not only knowable, but relatively minor.
Threat exaggeration has been one of the favorite tools used by opponents of restraint
, from Wilson to Roosevelt to Bush. Since self-defense is one of the few justifications for international activism that is uncomplicated by questions of morality, once foreign events are linked to the security of the
Untied States intervention becomes an easier sell.
Exaggerating threats is a traditional weapon in the domestic politics arsenal of the internationalists, inspiring a variety of actions conceived to address threats more imagined than real
. When Robert noted that "security concerns are greatly reduced for the unipole," he was guilty of understatement. If they were honest, those who actively or passively favor internationalism would admit that very few of our foreign adventures have been necessary to secure the country
. The United States is no more and no less secure after having replaced Saddam with chaos, for instance.
Simply put, the United States is not compelled to play an active role in world affairs in order to address its basic security, since that security is already all but assured.
The benefits of activist strategies must therefore manifestly outweigh the costs, since the United States could easily survive inaction, no matter how dire the situation may appear. In U.S. foreign policy, necessity is an illusion
. Choices always exist, especially for the strongest country in the history of the world. What are often sold to the public as necessary actions are almost always matters of choice; rather than emergency operations, U.S. interventions are in reality elective surgery. And elective surgery, as everyone knows, often makes problems worse.
Friedman 10—research fellow in defense and homeland security, Cato. PhD candidate in pol sci, MIT
(Ben, Military Restraint and Defense Savings, 20 July 2010, http://www.cato.org/testimony/ct-bf-
07202010.html, AMiles)
Another argument for high military spending is that U.S. military hegemony underlies global stability.
Our forces and alliance commitments dampen
conflict between potential rivals like China and Japan, we are told
, preventing them from fighting wars that would disrupt trade and cost us more than the military spending that would have prevented war.
The theoretical and empirical foundation for this claim is weak. It overestimates both the American military's contribution to international stability and the danger that instability abroad poses to Americans. In Western Europe, U.S. forces now contribute little
to peace, at best making the tiny odds of war among states there slightly more so.7
Even in Asia, where there is more tension, the history of international relations suggests that without
U.S. military deployments potential rivals,
especially those separated by sea like Japan and China, will generally achieve a stable balance of power
rather than fight. In other cases, as with our bases in Saudi Arabia between the Iraq wars, U.S. forces probably create more unrest than they prevent.
Our force deployments can also generate instability by prompting states to develop nuclear weapons. Even when wars occur, their economic impact is likely to be limited here.8 By linking markets, globalization provides supply alternatives
for the goods we consume, including oil.
If political upheaval disrupts supply in one location, suppliers elsewhere will take our orders
. Prices may increase, but markets adjust. That makes
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American consumers less dependent on any particular supply source, undermining the claim that we need to use force to prevent unrest in supplier nations or secure trade routes.9 Part of the confusion about
the value of hegemony comes from misunderstanding the
Cold War. People tend to assume, falsely, that our activist foreign policy
, with troops forward supporting allies, not only caused the Soviet Union's collapse but is obviously a good thing even without such a rival.
Forgotten is the sensible notion that alliances are a necessary evil occasionally tolerated
to balance a particularly threatening enemy.
The main justification for creating our Cold War alliances was the fear that Communist nations could conquer or capture by insurrection the industrial centers in Western Europe and Japan and then harness enough of that wealth to threaten us — either directly or by forcing us to become a garrison state at ruinous cost. We kept troops in South Korea after 1953 for fear that the North would otherwise overrun it. But these alliances outlasted the conditions that caused them. During the Cold War, Japan, Western Europe and South Korea grew wealthy enough to defend themselves. We should let them. These alliances heighten our force requirements and threaten to drag us into wars, while providing no obvious benefit.
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Wohlforth 7 (Olin Fellow in International Security Studies at Yale and Associate Professor in the
Department of Government at Dartmouth, “Unipolar Stability,” Harvard International Review, Spring, http://hir.harvard.edu/articles/print.php?article=1611)
The problem with this argument is that it fails to distinguish between actual and latent power
.
One must be careful to take into account both the level of resources that can be mobilized and the degree to which a government actually tries to mobilize them
. And how much a government asks of its public is partly a function of the severity of the challenges that it faces. Indeed, one can never know for sure what a state is capable of until it has been seriously challenged
. Yale historian Paul
Kennedy coined the term
“imperial overstretch” to describe the situation in which a state’s actual and latent capabilities cannot possibly match its foreign policy commitments
.
This
situation should be contrasted with
what might be termed “ self-inflicted overstretch
”—a situation in which a state lacks the sufficient resources to meet its current foreign policy commitments in the short term, but has untapped latent power and readily available policy choices that it can use to draw on this power . This is arguably the situation that the United States is in today. But the US government has not attempted to extract more resources from its population to meet its
foreign policy commitments
.
Instead, it has moved strongly in the opposite direction by
slashing personal and corporate tax rates
.
Although it is fighting wars in
Afghanistan and Iraq and
claims to be fighting a global “war” on terrorism, the United States is not acting like a country under intense international pressure
. Aside from the volunteer servicemen and women and their families, US citizens have not been asked to make sacrifices for the sake of national prosperity and security.
The country could clearly devote a greater proportion of its economy to military spending: today it spends only about 4 percent of its GDP on the military, as compared to
7 to
14 percent during the peak
years of the Cold War
. It could also spend its military budget more efficiently, shifting resources from expensive weapons systems to boots on the ground.
Even more radically, it could reinstitute military conscription
, shifting resources from pay and benefits to training and equipping more soldiers.
On the economic front, it could raise taxes
in a number of ways, notably on fossil fuels, to put its fiscal house back in order
. No one knows for sure what would happen if a US president undertook such drastic measures, but there is nothing in economics, political science, or history to suggest that such policies would be any less likely to succeed than China is to continue to grow rapidly for decades. Most of those who study US politics would argue that the likelihood and potential success of such power-generating policies depends on public support
, which is a function of the public’s perception of a threat.
And
as unnerving as terrorism is, there is nothing like the threat of another hostile power rising up in opposition to the
United
States for mobilizing public support
.
With latent power in the picture, it becomes clear that unipolarity might have more built-in self-reinforcing mechanisms than many analysts realize
. It is often noted that the rise of a peer competitor to the
United States might be thwarted by the counterbalancing actions of neighboring powers .
(Carla, America’s Global Advantage: US Hegemony and International Cooperation, pg 3-4, ldg)
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We have seen erroneous predictions of American decline before. In the 1970s, the combination of high inflation, high interest rates, high unemployment, the Vietnam War, political and military challenges from China and the Soviet Union, and the economic rise of Japan led to eerily similar
forecasts. Pessimists then, as today, underestimated the longevit y of American power. The main reason the
United States has continued to occupy a unique place in the international system is because a sufficient number of major and lesser powers have a strong interest in maintaining America at the top of the hierarchy. To bring America down would take a deliberate, coordinated strategy on the part of others and this is simply not plausible . As much as the United States benefits from the space it has carved out for itself in the current world order, its ability to reap unequal gains will remain unless and until allies start to incur heavy losses under American dominance.
Even that, by itself, will not be sufficient to sink American hegemony. A strong alternative to American rule will have to come into view for things to fundamentally change . At present, no credible alternative is in sight. The United States is not invincible but its dominance is currently steady. Those who are inclined to think that American hegemony will persist - at least for a while - tend to dwell on the claim that the United States is providing a range of public goods to the benefit of all at its own expense. This is a chimera. The United States is self-interested, not altruistic. The illusion of benevolence has meant that very little attention has been given to uncovering the mechanism through which the United
States gains disproportionately from supplying a large open market, the world's reserve currency, and a military machine capable of stoking or foiling deadly disputes . This book exposes the mechanism through which the United States reaps unequal gains and shows that the current world system, and the distribution of power that supports it, has built-in stabilizers that strengthen American power following bouts of decline. Although all dominant powers must eventually decline, I will show that the downward progression need not be linear when mutually reinforcing tendencies across various power dimensions are at play. Specifically, I will demonstrate how the United States' reserve currency status produces disproportionate commercial gains; how commercial power gives added flexibility in monetary affairs; and, finally, how military preponderance creates advantages in both monetary and trade affairs.
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There are very few economists who really buy into Keynesian theory anymore. Instead, the idea of
“rational expectations” has taken its place. The difference between the two approaches is essential to understanding why Obama’s stimulus package won’t work. Keynes felt that people would react automatically to a few dollars in their hands. Consumers would run out and buy new products, and
businessmen, seeing the uptick in sales, would rush to open new plants and hire new workers who would, in turn, generate more demand. But that’s not the real world. In reality, consumers, knowing
there are hard times ahead, save any money they get either by salting it away or by paying down their debts and bills. That’s why the personal saving rate in the last quarter of 2008 was the highest in six
years and spending on residential construction was down 22 percent over the past year. And the savings rate rose from 2.8 percent in November 2008 to 3.6 percent in December as the storm clouds grew grayer. And, in the real world, banks hang onto their money for fear of making bad loans, no matter
how many bailouts or stimulus packages Washington passes. According to the Federal Reserve Board of St. Louis, the Fed is now holding upwards of $1.7 trillion for American banks, more than twice what it had in its vaults at the start of 2008. How did the Fed get the money? Congress voted the Troubled Asset
Relief Program (TARP) package of bailout funds. The Fed purchased bank assets to get liquidity onto their balance sheets. What did the banks do with the money? They gave it right back to the Fed to hold in its vaults. They didn’t lend it out. They didn’t use it to stimulate the economy. They are using it for a nest egg to tap when times improve. Just like the theory of rational expectations says they would. If banks, suddenly awash in capital, don’t decide all is fine and rush to lend money; and consumers, given a tax cut or a pay raise, don’t rush to buy a flat-screen TV, then what good will the stimulus package do?
Not much. It is not until there is evidence that the underlying problem — massive personal and corporate debt — is being solved that any degree of confidence will return. And, without confidence, the rational expectation theory means people sit on their money. But the package will do a whole lot of harm by piling up capital that people won’t spend, banks won’t lend and businesses won’t invest. When confidence rises and the money comes out of hiding, watch out for the massive inflationary pressures
all that extra cash will unleash. Obama’s stimulus package won’t stimulate much except inflation
down the road, which will, in turn, mean the onset of another round of high interest rates and
renewed recession to check the inflation.
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Beyond all this, though, I believe there's a fundamental reason why we have not faced global collapse in the last year. It is the same reason that we weathered the stock-market crash of 1987, the recession of 1992, the Asian crisis of 1997, the Russian default of 1998, and the tech-bubble collapse of 2000.
The current global economic system is inherently more resilient than we think. The world today is characterized by three major forces for stability, each reinforcing the other and each historical in nature.The first is the spread of great-power peace. Since the end of the Cold War, the world's major powers have not competed with each other in geomilitary terms. There have been some political tensions, but measured by historical standards the globe today is stunningly free of friction between the mightiest nations. This lack of conflict is extremely rare in history. You would have to go back at least
175 years, if not 400, to find any prolonged period like the one we are living in. The number of people who have died as a result of wars, civil conflicts, and terrorism over the last 30 years has declined sharply (despite what you might think on the basis of overhyped fears about terrorism). And no wonder—three decades ago, the Soviet Union was still funding militias, governments, and guerrillas in dozens of countries around the world. And the United States was backing the other side in every one of those places. That clash of superpower proxies caused enormous bloodshed and instability: recall that 3 million people died in Indochina alone during the 1970s. Nothing like that is happening today. Peace is like oxygen, Harvard's Joseph Nye has written. When you don't have it, it's all you can think about, but when you do, you don't appreciate your good fortune. Peace allows for the possibility of a stable economic life and trade. The peace that flowed from the end of the Cold War had a much larger effect because it was accompanied by the discrediting of socialism. The world was left with a sole superpower but also a single workable economic model—capitalism—albeit with many variants from Sweden to
Hong Kong. This consensus enabled the expansion of the global economy; in fact, it created for the first time a single world economy in which almost all countries across the globe were participants. That means everyone is invested in the same system. Today, while the nations of Eastern Europe might face an economic crisis, no one is suggesting that they abandon free-market capitalism and return to communism. In fact, around the world you see the opposite: even in the midst of this downturn, there have been few successful electoral appeals for a turn to socialism or a rejection of the current framework of political economy. Center-right parties have instead prospered in recent elections throughout the West. The second force for stability is the victory—after a decades-long struggle—over
the cancer of inflation. Thirty-five years ago, much of the world was plagued by high inflation, with deep social and political consequences. Severe inflation can be far more disruptive than a recession, because while recessions rob you of better jobs and wages that you might have had in the future, inflation robs you of what you have now by destroying your savings. In many countries in the 1970s, hyperinflation led to the destruction of the middle class, which was the background condition for
many of the political dramas of the era—coups in Latin America, the suspension of democracy in
India, the overthrow of the shah in Iran. But then in 1979, the tide began to turn when Paul Volcker took over the U.S. Federal Reserve and waged war against inflation. Over two decades, central banks managed to decisively beat down the beast. At this point, only one country in the world suffers from hyperinflation: Zimbabwe. Low inflation allows people, businesses, and governments to plan for the
future, a key precondition for stability. Political and economic stability have each reinforced the other.
And the third force that has underpinned the resilience of the global system is technological
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[“NO SIGN OF INFLATION. SO WHY WORRY?” Lexis, 6/3]
Inflation's still not a risk but arguably neither is deflation.
We're not quite ready to officially claim that the D risk has been vanquished, but we're close. As it turns out, we're not alone.
The bond market is increasingly inclined to turn the page on the fear that a deflationary spiral may threaten
. But if the deflation risk is passing, as it seems to be, the change doesn't mean that inflation is back. There's no switch that turns one off and the other on as cleanly as flicking on a light.
The ebb and flow of the economy is a process, an evolution.
What we're seeing now, or so it appears, is a transition from a heightened risk of deflation to the absence of that risk, which isn't to be confused with inflation
. At least not yet. There's no law that says inflation must quickly follow deflation. But neither is there any force that prevents one from turning into the other. Much depends on what the central bank does; not today but next month, next year and beyond.
Inflation, when it does bite, tends to creep up on you, slowly, quietly, working its way into the economy virtually unseen. It doesn't suddenly arrive one day with fanfare and press releases.
More typically, the crowd wakes up one day and realizes that inflation is back. The good news is that there are usually early warning signs. Interest rates, money supply, commodity prices, and so on. The challenge is figuring out in real time what constitutes a legitimate warning vs. noise.
For the moment, the market's telling us that deflation's a fading hazard.
As the chart below shows, t he implied inflation rate in the bond market (based on the yield spread between the nominal 10-year and inflation indexed Treasuries) was just under 2% as of last night's close. That's still comfortably below the 2.5% rate that prevailed before the financial system ran amuck
starting last September. But it's also up sharply from the near-zero levels of
December and January. That's not necessarily surprising or even troublesome. Fearing the worst last fall, the Fed quickly dropped short rates to near zero. The medicine appears to be working, which is to say that Bernanke and company are engineering higher prices. But it's the momentum we fear. Not necessarily today, but down the road
. Some commentators say that all the talk of inflation is premature and perhaps misguided. In his last week in The New York Times, Paul Krugman advises readers that "when it comes to inflation, the only thing we have to fear is inflation fear itself." That's a reassuring thought, but unfortunately it runs contrary to the historical record. Maybe this time is different, but we don't know. But the past is certainly clear. Except for a few extraordinary examples to the contrary, inflation has been the norm. For the most part, it's been manageable, although sometimes it spins out of control, as it did in the 1970s and early 1980s. Recessions, of course, have a habit of pounding inflation back into the ground. Even after the current downturn ends, its after-effects are likely to put a lid on pricing pressures and so there's reason to be sanguine about future inflation threats. The ever-trenchant Martin Wolf advises in his FT column today that there's no economic basis to fear inflation, at least not now. "The jump in bond rates is a desirable normalisation after a panic," he writes. "Investors rushed into the dollar and government bonds. Now they are rushing out again." The question, of course, is when is it safe to start worrying about inflation? The implied inflation rate for the next 10 years is roughly 2%. That's low by historical standards and if it stayed there for the next generation the central bank could claim a welldeserved victory in maintaining price stability, at least by the standards of the 20th century. But no one knows if inflation will rise to, say, 2% and stay there or keep climbing
. Again, much depends on what the central banks do from here on out
. One can make an economic case that exploding government debt and massive liquidity injections aren't destined to raise inflation pressures, as Wolf and others explain. That's a reasonable view, but if you're charged with protecting assets, such claims that all's well aren't entirely persuasive. The bond market, along with the gold and forex markets, are discounting the future and all its risks and they're telling us that the risk of higher inflation is on the march. It's quite possible that the markets are wrong and so inflation will remain a shadow of its former self. Let's hope so. But there's no way of knowing for sure. Strategic-minded investors should hedge their bets. Inflation may remain benign, but it may not. The markets are struggling to put a price on this uncertainty. In any case, it's the trend rather than the absolute levels that worry investors
. Estimating the true rate of inflation is always a contentious subject. But while we can all argue over the numbers, the trend is less obscure, and it's the trend that has some of us worried. Taking out a bit of insurance, then, seems reasonable. Should we bet that house on higher inflation? Of course not. But neither should we discount it entirely. It may be different this time, but 300 years of central banking keeps us wary on buying into yet another argument that a new era has arrived.
– senior fellow, economic studies, Pathways Magazine (Ron, Brookings, “Economic Stimulus
Act: Hard to Kill Two Birds with One Stone”, http://www.brookings.edu/papers/2008/summer_stimulus_package_haskins.aspx, WEA)
Thus, policymakers have long responded to evidence of an approaching recession by increasing government spending in ways designed to increase consumer spending
. In fact, programs
like unemployment insurance, food stamps, cash welfare, and a number of others are said to be automatically countercyclical because as a recession sets in people lose jobs and qualify for unemployment insurance and welfare
. As a result, they have more money than they would have had without the government benefits and they are
—given their financial condition— likely to spend it, thereby achieving the desired end of increasing economic activity. On those unfortunate occasions when Congress is looking for ways to spend additional money to stimulate the economy and avoid recession, advocates concerned with the rise of inequality in America over the past two or three decades might wonder whether it would be possible to design a stimulus package that would also have the long-term effect of reducing inequality or— the other side of the same coin—increasing economic mobility. Personally, I’m skeptical about whether a stimulus package, even the stimulus package passed on a bipartisan basis in February, will achieve its major goal of getting the economy back on track, let alone killing two birds with one stone by simultaneously having an impact on inequality.
Sending a $150 billion stimulus package out to boost a $14 trillion economy strikes me as tantamount to sending a tugboat into a hurricane to rescue an ocean liner
. Even so, let’s ignore whether a stimulus package might actually stimulate something other than the federal deficit, and reflect on how stimulus packages differ from reforms designed to reduce inequality and promote mobility. According to Doug Elmendorf and Jason Furman of the Brookings Institution, there is substantial agreement among economists that a good stimulus plan must be timely, targeted, and temporary. Timeliness is difficult to gauge.
Policymakers want to boost the economy just as it is about to nosedive by boosting spending and consumption. But if we think we’re entering a recession and we’re not, stimulating the economy is inflationary
. So the emergency spending both adds to the deficit and boosts inflation.
But if
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Infrastructure Topic policymakers wait too long, the spending package could come after the recession is already well under way or nearing its end. In either case, policymakers’ attempt to help the economy could increase both inflation and the deficit without producing much good.
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Hyperinflation is a devastating phenomenon . It wipes out the middle class by destroying the value of
cash, savings, bonds and other paper instruments. But, how does it affect stock markets? With the
Federal government just having added $5.2 trillion in Fannie/Freddie liabilities of which about $600 billion will likely default, the Federal Reserve having now polluted its balance sheet by some $700 billion worth of toxic mortgage bonds with a 41.6% default rate ($291 billion in likely defaults), an $85 billion bailout for AIG, and, now, the Administration asking for some $700 billion more to bail out financial firms, it seems clear that the winds of hyperinflation are upon us. What will be the comparative effect of hyperinflation upon index funds, like DIA, QQQ, and SPY, versus bonds and cash? Hyperinflation is not a particularly uncommon episode in human history. It has occurred in the following countries in the following countries, in the last 150 years. Weimar Republic of Germany 1920 – 23 (1/466 billionth of starting value), Zimbabwe 2003 - Now (6 quadrillionth of the starting value and continuing to fall),
Former Soviet Union 1993 – 2002 (1/14th of starting value), Argentina 1975 – 1983 (1/1,000th of starting value), Austria 1921 – 23 (about ¼ of starting value), Bolivia 1984 - 86 (1/1,000 of starting value); Bosnia-Herzegovina 1992 – 93 (1/100,000th of starting value), Brazil 1960 – 94 (1 trillionth of starting value), Chile 1971 – 73 (1/3rd of starting value), China 1947 – 55 (1/10,000th of starting value),
Greece 1943 – 53 (1/50 trillionth of starting value), Hungary 1945 – 46 (100 quintillionth of the starting value), Hungary 1922 – 23 (1/4 of starting value), Israel 1976 – 86 (1/16th of starting value), Japan 1934
– 51 (1/362nd of starting value), Poland 1990 – 94 (1/10,000th of starting value), U.S.A. (Confederate
States of America) 1861 – 65 (1/90th of starting value, and then, by the end of the Civil War, the
Confederate Dollar depreciated to zero). It also happened in the ancient Roman Empire, when the silver and gold coinage of that day was progressively debased with base metals, in order to fund wars, giveaways to the Plebeians, and various other adventures. There are many additional examples that I have not bothered to cover here. The most studied hyperinflation episode was the early 1920s, in the
Weimar Republic of Germany. At the end of the First World War, the mark to dollar ratio was trading at
9:1. By July 1921 the ratio had risen to 77:1, and prices more than doubled again by January 1922, as the ratio of marks to the dollar climbed to 192:1. By the time that the Weimar government introduced the
Rentenmark in November 1923, which replaced the deflated mark, the exchange rate had risen to 4.2 trillion marks to the dollar. Germany’s economic situation in the early 1920s, except for being a defeated combatant in World War I, is frighteningly similar to our own economic situation, today. We
can trace the road to hyperinflation, step by step, and compare Germany’s path to the path that is
now being travelled by the U.S. Germany abandoned the gold standard in 1914. America abandoned the gold standard, 60 years later, in 1974. Back in 1914, the German government did not expect World
War I to last very long, and the war wasn’t properly budgeted, and, instead, it was financed by deficit
spending. Similarly, in 2003, the Iraq War was not expected to last very long, and was financed by deficit spending. However, in comparison to the size of the German economy in 1914 and the U.S. economy in 2003, the Iraq War is a somewhat cheaper war. After WWI, Germany suffered a severe current account deficit, just like the current account deficit we now have in the USA. About 1/3rd of their deficit was generated by the need to pay gold to European allied governments as war
“reparations”. But, the rest was due to economic mismanagement, and 2/3rd of the German current account deficit was composed of non-war related spending. Back then, other than for war reparations,
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America was Germany’s biggest creditor, with American financial institutions, particularly J.P. Morgan,
Jr., arranging for consortium loans to the Weimar government, its businesses and industries. News accounts, from that time, indicate that the Weimar German government, like the American
government now, was far more concerned with avoiding recession, lowering the unemployment rate, and stimulating business activity than it was about inflation. German economists in the 1920s thought, just as American economists think now, that a cheaper currency helps stimulate export activity and industrial production. Germany needed exports to buy raw materials, just as the U.S. needs them, now, to buy oil and Asian made consumer goods. Back then, however, the United States was a net creditor nation. It played that role in relation to Germany, similar to the role played by Asian nations, including
China and Japan, toward the USA, except that, instead of exporting consumer goods, the 1920s USA exported mostly raw materials to Germany. United States financial firms, in the early 1920s had great faith in Germany, and were buying German government bonds, and supplying loans to facilitate purchase of American commodities. These loans offset the German trade imbalance, just as Chinese
Treasury bill and bond buying now offsets the U.S. current account deficit. When financiers like JP
Morgan, Jr., however, finally decided that Germany was no longer a good credit risk, they cut off funds.
After that, everything fell apart very quickly. By 1923, you needed a trillion marks to buy one dollar. The
German financial class managed, to some extent, to avoid some of the losses, by purchasing large quantities of gold and other hard assets. The German middle class, however, lost everything. This led to a deep resentment of Jews, who dominated the German financial industry, and, later, it gave birth to
the Nazi movement and the murder of millions of innocent Jewish people. All factories, houses and buildings were still standing, before, during and after 1920s German hyperinflation, just as they will be in 2011 America. Germany in the roaring 20’s was still a potentially rich nation, just as America will be
in 2011. But, the stored work product of a generation, represented by the symbols of stored wealth, in the form of cash, savings, stocks, bonds and other paper instruments, became essentially worthless,
almost overnight. The same may happen here.
The trouble is that mild inflation can become significant inflation faster than central banks can act.
And significant inflation can match deflation blow for blow. In the 1970s, inflation coexisted with slow
growth or outright shrinkage of the economy. Those who don't think about inflation also didn't think about the first half of 1980, when West Coast mortgage rates rose to 17.5 percent. That meant people could afford less house than today. The U.S. homeownership rate dropped below 65 percent and did not come back until 1996. The German hyperinflation of the early 1920s lives in memory as a black-andwhite visual of men with caps pushing around wheelbarrows of cash. This cartoon obscures bitter reality. Hyperinflation isn't the opposite of depression. It's a kind of depression. The effects of
Germany's hyperinflation were worse than the effect of our Great Depression. Like a deflation, the
German hyperinflation ruined the lives of good people, many of whom were not rich. How? By making
fixed incomes -- pensions, government salaries -- worthless.
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Tsur 2009 [By Doron Tsur, CEO of Compass Map Mutual Funds, “Economic world war ahead? Let's learn the lesson of Pearl Harbor” Israel News, 6/23 http://www.haaretz.com/hasen/spages/1094917.html]
Last week representatives of the BRIC nations - Russia, China, India and Brazil - met and discussed
creating an international currency as an alternative to the dollar. They also talked about investing
their currency reserves with one another rather than in the dollar, and about purchasing each others' bonds instead of American bonds. Ostensibly, it's an economic issue, pure and simple. These countries have accumulated large foreign currency surpluses, mostly in dollars, which are cycled back into the
U.S. economy through loans to the government or other American institutions. In light of what is
happening in the U.S. economy - massive printing of money, gargantuan government deficits - the desire to wind down dependence on the dollar as the world's sole reserve currency is quite
understandable. Erosion in the dollar's status could exact a high price from Americans. Up until 1970, the higher standard of living in the United States was due to higher output and productivity levels. The
United States was an industrial giant with lots of natural resources and a steady stream of motivated immigrants.
Combined with a successful economic system, a great deal of technological know-how and a good infrastructure that had not been destroyed in wars, America enjoyed a significant competitive advantage, which could be seen through its residents' standard of living. Through the 1960s, the United
States was able to meet all its own needs - including oil - based on its own resources, without depending on other countries. However, many of these competitive advantages eroded over the years. The dependence on foreign oil increased dramatically, production was transferred overseas to reduce costs, and America's competitors stopped fighting one another and focused their resources on building production capability and economic infrastructure, instead of on increasing their military strength. It would have been natural for the gap between the American standard of living and that of other countries to decrease. This did not happen - in any case, not to the extent that could have been expected. Americans have been able to maintain this standard of living largely because the American dollar is the international reserve currency and the United States has the most stable government in the world. These factors have given it an unequaled standing. As long as the world is prepared to accept your currency as a global currency, and to lend your government money, you can keep on living on more than you produce. Of course, citizens of other countries do not have this privilege of consuming raw materials and oil as if there were no tomorrow, and of being the world's biggest purchasers of consumer goods. If the BRIC countries' initiative - which still seems far off - gains momentum, the United State's advantage may disappear, severly damaging its citizens' standard of living. And this already looks like an economic attack, which would most probably elicit a counter-attack. In a somewhat simplistic nutshell, it could be said that for several years, there has been an imbalance whereby U.S. citizens buy finished products from countries like China or Japan in exchange for dollars. Some of these dollars are transferred to countries like Russia or Brazil in exchange for raw materials or food, and the remainder is accumulating as reserves. The Americans are living far better than their trading partners. This is what is good about being the world's cashier - you control the means of payment. However, when these countries conclude that they have enough greenbacks in storage, and that they want something else in exchange for their goods, this whole distorted arrangement will collapse. Who needs the USA? It would seem that the big losers would be U.S. citizens, who would no longer enjoy their preferential position of cashier. China, after all, can sell finished products to Brazil and Russia, and buy raw materials from them.
Why does it need the cashier with the greenbacks, who takes his slice and lives like a king?
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The problem is that if you decrease the demand of the hedonistic cashier, China will find itself with a tremendous production surplus that Brazilians and Russians cannot fill, and millions of Chinese will find themselves unemployed. This will drive down global demand for raw materials, and Brazil and
Russia will be stuck with excess production capacity. It's a real trap, this business with the cashier.
Such an attack on the cashier and his status could, as Yamamoto feared in 1941, wake the sleeping giant. "If we don't have the privilege of being the cashier, then we won't play this international economic game, even if we wind up with a lower standard of living as a result," the Americans may say.
"Apart from oil, which we can use more sparingly, we can meet most of our needs ourselves. And what exactly are you going to do with all the factories you have built and the hundreds of millions of inhabitants you need to feed?" Will we be seeing an economic war between blocs? It clearly runs contrary to the interests of all sides, but as we have seen, that is not enough to prevent it from coming to be.
Landy 2007 [Ben Landy, Director of Research and Strategy at the Atlantic Media Company, publisher of the Atlantic Monthly, National Journal, and Government Executive magazines April 3, 2007, http://chinaredux.com/2007/04/03/protectionism-and-war/#comments,]
The greatest threat for the 21st century is that these economic flare-ups between the US and China
will not be contained, but might spill over into the realm of military aggression between these two world powers. Economic conflict breeds military conflict. The stakes of trade override the ideological power of the Taiwan issue. China’s ability to continue growing at a rapid rate takes precedence, since there can be no sovereignty for China without economic growth. The United States’ role as the
world’s superpower is dependent on its ability to lead economically. As many of you will know from reading this blog, I do not believe that war between the US and China is imminent, or a foregone conclusion in the future. I certainly do not hope for war. But I have little doubt that protectionist policies on both sides greatly increase the likelihood of conflict–far more than increases in military budgets and anti-satellite tests.
Scobell 2009 (Dr. Andrew, Professor of International Affairs and Director of the China Certificate
Program – Texas A&M University, “Is There a Civil-Military Gap in China’s Peaceful Rise?”, Parameters,
Summer, http://www.carlisle.army.mil/usawc/parameters/09summer/scobell.pdf)
The actions suggest a lack of civilian control, although after the fact they have been explained as acts of deterrence. The reins of civilian control over the PLA seem to be quite loose. At the very least there is poor communication and coordination with key civilian entities, including the Ministry of Foreign Affairs.
The result appears to be a roguish PLA that makes crisis management all the more difficult and
heightens the potential for worrisome misunderstandings and misperceptions.
While these explanations may help one to make sense of the words and deeds of the Chinese military, they do not provide much relief or reassurance. First, the risk of miscalculation between the United
States and China may be higher than many assume. It is dangerous for American policymakers and
analysts to consider US resolve in isolation. This strategy presumes that China’s perception of the strength of US resolve in and of itself will be enough to deter Beijing from military action.50 The logic is flawed. For China, US resolve on the question of Taiwan is viewed as limited, especially in comparison to other issues, and smaller than China’s own unshakeable resolve. For Chinese analysts, accurately
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Infrastructure Topic assessing US resolve is tricky. While Beijing can have a high degree of confidence in its own degree of resolve, it is much harder to judge Washington’s.
Second, once a crisis or confrontation develops, the potential for unintended escalation is significant.
The militaries of the United States and China continue to think about and plan for a possible conflict
over Taiwan. This does not mean that a war is inevitable, but it does mean that in a crisis, escalation
might be rapid and difficult to control.51 At least there is improved communication between the two militaries; a hotline linking the Pentagon with the Central Military Commission was established in early
2008.
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Mulligan 11 (Casey Mulligan, economics professor @ U Chicago, 2011 (Exceptions to Keynesian Theory, http://economix.blogs.nytimes.com/2011/08/17/exceptions-to-keynesian-theory/ )
There is
still no evidence to confirm the fundamental Keynesian proposition that supply doesn’t matter
.Rather than completely discard that proposition, Professor
Krugman has recently formulated a theory of exceptions to the
Keynesian theory, which he believes can help explain some of my findings:Here’s the question
: why do patterns of employment over time that are,
in fact, normally supply-driven continue to be visible even during a demand-side slump
? And here’s the answer: businesses make long-term decisions that influence hiring patterns over time, and those decisions continue to shape their behavior even when there is a surplus of labor
.In other words,
Keynesian theory has exceptions that have to do with business’s long-term hiring decisions.
For example, businesses have lived through enough seasonal cycles to know that they can normally make more money when their hiring patterns are responsive to the seasonal availability of people to work, so businesses continue to be responsive to the seasonal pattern of labor supply
even during a deep recession when there are plenty of workers available throughout the year.I don’t understand how
Professor Krugman explains that the nonresidential construction industry took advantage of the plentiful supply of home builders after housing crashed (he also has no explanation for my minimum wage findings, Christmas seasonal findings or elderly employment findings). He also fails to explain why some business hiring patterns survive the recession intact, while other practices are completely different (e.g., businesses used to think they needed 138 million payroll employees, but by 2009 they got by with fewer than 130 million).But even if
Professor
Krugman were correct that the ghost of labor supplies past haunts the recession through business’s long-term decisions, how can he be so sure that the labor-supply effects of government spending programs would not also have the same effects they did in the past
?For example, employers found that people were more difficult to hire and retain when a generous safety net was available
. In this way, unemployment insurance would continue to reduce employment even after the recession began because employers have learned that the more generous the safety net, the more they must get by with fewer workers
.Would Keynesian stimulus spending work only when it came as a surprise? Or only when the spending was outside the range of prior business experience? Keynesian economists have not even begun to answer these questions. For now,
Keynesian theory has so many exceptions that we might as well discard it.
Barro 11 (Professor Barro, economics prof @ Harvard and senior fellow @ Stanford Hoover Institution,
2011 (Keynesian Economics vs. Regular Economics, http://online.wsj.com/article/SB10001424053111903596904576516412073445854.html?mod=googlen ews_wsj)
Theorizing aside,
Keynesian policy conclusions
, such as the wisdom of additional stimulus geared to money transfers, should come down to empirical evidence
. And there is zero evidence that deficit-financed transfers raise GDP and employment—not to mention evidence for a multiplier of two
.Gathering evidence is challenging.
In the data, transfers are higher than normal during recessions
but mainly because of the automatic increases in welfare programs
, such as food stamps and unemployment benefits. To figure out the economic effects of transfers one needs "experiments" in which the government changes transfers in an unusual way—while other factors stay the same—but these events are rare.Ironically, the administration created one informative data point by dramatically raising unemployment insurance eligibility to 99 weeks
in 2009— a much bigger expansion than in previous recessions.
Interestingly, the fraction of the unemployed who are long term
(more than 26 weeks) has jumped since 2009—to over 44% today
, whereas the previous peak had been only 26
% during the 1982-83 recession.
This pattern suggests that the dramatically longer unemployment-insurance eligibility period adversely affected the labor market
. All we need now to get reliable estimates are a hundred more of these experiments.
The administration found the evidence it wanted—multipliers around two—by consulting some large-scale macro-econometric models, which substitute assumptions for identification
. These models were undoubtedly the source of Mr. Vilsack's claim that a dollar more of food stamps led to an extra $1.84 of GDP.
This multiplier is nonsense
, but one
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Infrastructure Topic has to admire the precision in the number.There are two ways to view Keynesian stimulus through transfer programs. It's either a divine miracle
—where one gets back more than one puts in— or else it's the macroeconomic equivalent of bloodletting
.
Obviously,
I lean toward the latter position, but I am still hoping for more empirical evidence.
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Zegart 6 (Amy B. Zegart, associate professor of public policy at UCLA, Los Angeles, 2006. “Protecting the
Nation’s Seaports: Balancing Security and Cost”, http://www.ppic.org/content/pubs/report/r_606jhr.pdf)
The second constraint is related to the first: Political incentives to take action in port security are weak.
From a politician’s point of view, port security emergency response planning is the worst of all worlds : It requires extremely high up-front costs for benefits that will be realized only in the future—
most likely when the official is already out of office—or perhaps never. In addition, making homeland
security policy requires making tough choices about where to dedicate limited resources. These are
exactly the kinds of choices many politicians try to avoid. When such choices cannot be avoided, longer-term planning usually takes a back seat to shorter-term gains. Consider, for example, a mayor who must decide whether to dedicate additional police officers to lowering the crime rate or
enhancing counterterrorism surveillance at the port. Any politician with a reasonably developed
sense of self-preservation focuses on crime and leaves port security for another day. Moreover, even within the area of homeland security, electoral incentives create sub-optimal policy outcomes. The
natural impulse of any elected official is to focus on issues of greatest concern to constituents. This sounds good in theory. The problem is that it works poorly in practice. Most California citizens are concerned about terrorism, but few have visited the port complex or worry about its security, and fewer still pay close attention to the details of how elected officials handle the arcane details of CERT
training or cross-agency coordination. Instead, since the September 11 attacks, the public and the press have focused their concern on higher-visibility targets such as LAX and the security of local drinking water supplies.
Newman 3 (David Newman Associate Professor Public Policy Programme National University of
Singapore and Jay H. Walder Visiting Professor Public Policy Programme National University of Singapore and Lecturer Kennedy School of Government Harvard University, 2003, “A Federal Ports Policy”, http://www.spp.nus.edu.sg/docs/wp/wp01.pdf)
By design, this paper does not offer an analysis of the relative merits of a national port plan or other proposals to modify the institutional framework under which the nation plans, finances and undertakes port investments. Indeed, we are inclined to argue for a market solution to the problem and to urge
the removal of government subsidies that distort otherwise rational investment decisions. In the absence of that outcome, a periodic reassessment of the federal role in the planning and development
of maritime infrastructure certainly seems appropriate, a review which is somewhat stymied by the assertion or belief that the absence of a federal ports policy is grounded in the federal constitution .
We have seen dramatic changes in the past twenty years as the nation abandoned a long-standing regulated environment for railroads, trucking, airlines and ocean shipping. 20 The rapid changes in the freight industry, coupled with increasing levels of public investment in port infrastructure and related
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Infrastructure Topic waterways investment, raise the need to periodically reappraise the “hands-off” policy related to the federal involvement in landside ports infrastructure. Any arguments to modify the existing locally based decision-making structure for port infrastructure investments would undoubtedly be
extremely controversial. If the government decides to undertake this reappraisal, it should not feel unduly constrained by perceived constitutional limitations on federal actions related to port facilities.
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Hindery and Gerard 12 (Leo Hindery, Jr. and Leo W. Gerard are co-chairs of The Task Force on Jobs
Creation. Hindery is also founder of Jobs First 2012 and a member of the Council on Foreign Relations.
Gerard is international president of the United Steelworkers and a member of the executive council of the AFL-CIO. 05/15/2012, “Re Jobs, Pick the Low Hanging Fruit (Part 2)”, http://www.huffingtonpost.com/leo-hindery-jr/job-creation_b_1517730.html)
2. Infrastructure Investment. After years of under-investing in public infrastructure, America faces an infrastructure deficit of $3 trillion that is impeding economic growth and undermining our economy's
efficiency. We need to spend $2.2 trillion just to meet America's core infrastructure needs, according to the American Society of Civil Engineers. The administration and Congress should commit to at least $2 trillion of infrastructure spending over the next 10 to 15 years using the resources of a new National
Infrastructure Bank that would be an independent financial institution owned by the government and supported by a soft federal guarantee on the order of $200 billion. This federal guarantee, appropriately structured, would not need to be 'scored' for budget purposes given the numerous layers of investment above it. In turn, the Bank should be able to invite private investment, notably including state and local government pension plan investments, aggregating about $1.8 trillion. Each $1 billion of infrastructure spending funded by the Bank would create around 25,000 permanent jobs. Two trillion dollars of such spending could equate, over the years, to as many as 50 million new jobs. 3. Credit for Small and
Medium-Sized Business. Congress should authorize Federal Reserve-related incentives to accelerate commercial bank lending to small and medium sized enterprises, especially those in the manufacturing sector. As it is, such lending, albeit hard to determine precisely, appears to be down on the order of 20%
(or more) from its 2007 level before the Recession began. Such incentives could, most easily, simply include an appropriate reduction in the amount of required Tier 1 bank capital. 4. Trade with China. We need to reform our trading with China, as follows: Enact the Currency Reform for Fair Trade Act (HR 639 and S. 328), which would begin to normalize China's grossly undervalued currency, which (according to the esteemed economist Peter Morici just yesterday (May 14)) remains as much 40% undervalued. The
House Republican leaders especially are the naysayers on this issue, notably out of step as they are with the Senate leadership and the currency policies of their own presidential candidate, Governor Romney.
Stop the U.S. government from entering into a bilateral investment treaty with China until China makes
WTO-compliant its Indigenous Innovation Production Accreditation Program. Go after all of China's illegal subsidies, not just its currency manipulation. Put a halt to China's persistent theft of America's valuable intellectual property, which the U.S. International Trade Commission has estimated would immediately create up to 2.1 million new direct private-sector jobs. Case in point: Microsoft, one of the real gems of American ingenuity, recently sold to a large commercial customer in China one unit of its advanced business software, for several hundred dollars; however, when it sent out an upgrade to the software, the upgrade was downloaded thirty million (30,000,000!) times, which is why Microsoft's profits from sales in China, with its 1.3 billion population, are no greater than its profits in The
Netherlands, with its population of only 16.7 million. The fundamental problem back in September when we last urged Congress to take the actions set forth above and the one which persists today is
simple economic arithmetic: we need to create more than 18 million jobs in order to be at full employment in real terms, and every month that we delay we need to create at least 150,000 more new jobs just to keep up with population growth. Yet traditional jobs programs -- whether training or tax breaks or credits -- are by nature 'smallish' and can create at most thousands of jobs and certainly not
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Infrastructure Topic the millions we need. With the largely jobless recovery continuing -- only 115,000 new jobs created in
April - it's far past time for both Houses of Congress to work with the Obama administration to get really serious about large-scale job creation. Specifically with Congress, President Obama needs to spend his
political capital in moving initiatives forward -- initiatives that will be central to his reelection campaign and top priority items during the rest of this Congressional year including the lame duck session.
Freemark ’12 (Yonah – Master of Science in Transportation from the Massachusetts Institute of
Technology; Bachelor of Arts in Architecture, Department of Civil and Environmental Engineering, Yale
University with Distinction. Also a freelance journalist who has been published in Planning Magazine;
Next American City Magazine; Dissent; The Atlantic Cities; Next American City Online; and The
Infrastructurist – He created and continues to write for the website The Transport Politic – The
Transport Politic – “On Infrastructure, Hopes for Progress This Year Look Glum” – January 25th, 2012 – http://www.thetransportpolitic.com/2012/01/25/on-infrastructure-hopes-for-progress-this-year-lookglum/)
President Obama barely mentions the need for improvements in the nation’s capital stock in his State of the Union. The contributions of the Obama Administration to the investment in improved
transportation alternatives have been significant, but it was clear from the President’s State of the
Union address last night that 2012 will be a year of diminished expectations in the face of a general
election and a tough Congressional opposition. Mr. Obama’s address, whatever its merits from a populist perspective, nonetheless failed to propose dramatic reforms to encourage new spending on
transportation projects, in contrast to previous years. While the Administration has in some ways radically reformed the way Washington goes about selecting capital improvements, bringing a new emphasis on livability and underdeveloped modes like high-speed rail, there was little indication in the speech of an effort to expand such policy choices. All that we heard was a rather meek suggestion to transform a part of the money made available from the pullout from the Afghanistan and Iraq conflicts
— a sort of war dividend whose size is undefined — to “do some nation-building right here at home.” If
these suggestions fell flat for the pro-investment audience, they were reflective of the reality of
working in the context of a deeply divided political system in which such once-universally supported
policies as increased roads funding have become practically impossible to pursue. Mr. Obama pushed
hard, we shouldn’t forget, for a huge, transformational transportation bill in early 2011, only to be
rebuffed by intransigence in the GOP-led House of Representatives and only wavering support in the
Democratic Senate. For the first term at least, the Administration’s transportation initiatives appear to have been pushed aside. Even so, it remains to be seen how the Administration will approach the development of a transportation reauthorization program. Such legislation remains on the
Congressional agenda after three years of delays (the law expires on March 31st). There is so far no long-term solution to the continued inability of fuel tax revenues to cover the growing national need for upgraded or expanded mobility infrastructure. But if it were to pass, a new multi-year transportation bill would be the most significant single piece of legislation passed by the Congress in 2012. The prospect of
agreement between the two parties on this issue, however, seems far-fetched. That is, if we are to assume that the goal is to complete a new and improved spending bill, rather than simply further
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Infrastructure Topic extensions of the existing legislation. The House could consider this month a bill that would fund new highways and transit for several more years by expanding domestic production of heavily carbonemitting fossil fuels, a terrible plan that would produce few new revenues and encourage more ecological destruction. Members of the Senate, meanwhile, have for months been claiming they were
“looking” for the missing $12 or 13 billion to complete its new transportation package but have so far come up with bupkis. The near-term thus likely consists of either continued extensions of the current law or a bipartisan bargain that fails to do much more than replicate the existing law, perhaps with a few bureaucratic reforms.
drilling
district politics
tea party
Johnson ‘12
Fawn Johnson is a correspondent for National Journal, covering a range of issues including immigration, transportation and education. Johnson is a long-time student of Washington policymaking, previously reporting for Dow Jones Newswires and the Wall Street Journal. She has an M.A. from the Annenberg
School for Communication at University of Pennsylvania and a B.A. from Bates College. National Journal
Daily AM – March 13, 2012 – lexis
Bipartisanship, investment, job creation: What's not to love about the two-year surface-transportation
bill that the Senate is poised to pass on Wednesday? Maybe that it's not going anywhere. Despite threatening, there is no indication that House Speaker John Boehner, R-Ohio, will actually bring the
Senate-passed version to the floor when the House returns next week. House GOP leaders are still
hammering out a five-year bill akin to the speaker's original plan that would streamline transportation programs and tie additional highway funding to domestic oil drilling. They can't count on any
Democratic votes, so Republican leaders face the task of appeasing their own caucus. House Republicans don't like the idea of passing a Senate bill. It's just not clear whether they can agree on anything else.
Boehner spokesman Michael Steel said House members are "actively pursuing" a "better alternative."
Another staffer called the Senate bill "a crap sandwich that we're going to have to eat" if members can't agree on a different transportation bill. This week, House leaders, Transportation and Infrastructure
Chairman John Mica, R-Fla., and other committee members are doing a lot of explaining about how
Mica's surface-transportation bill would affect the federal government or their districts. One member sought adjustments already contained in the bill, according to an aide. Committee Republicans also are
inserting minor tweaks into the bill when they can. For example, some rural members wanted to change a provision pertaining to horse trailers. But the real persuasion game comes from beating up
the White House . Some rank-and-file members worry that in passing the Senate's two-year bill, they would hand President Obama another political win, according to another aide. Two years is extremely short in terms of highway planning and construction funding, and going with a short-term measure could give Obama another crack at enacting an ambitious highway package if he's reelected. Reversing themselves now could be a dicey bit of jockeying for some of the new, hard-line House GOP members, since they protested the most about Boehner's original plan. But they may have no choice. The idea that
Obama would write the next bill is likely to irk the tea party, and that's exactly whose support Boehner needs to pass his version. The Transportation Department has no problem advocating for big increases
in infrastructure investment, precisely the opposite of tea party dogma. In his 2013 budget proposal, the president proposed $476 billion for a six-year surface-transportation mechanism, which is about
$200 billion more than House Republicans are proposing, and at least $150 billion more than current infrastructure spending. Members also are getting pressure in their districts. With so many new
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members of Congress, it's hard for some freshmen to grasp the (albeit wonky) importance of a fairly unwieldy government program. On its face, the federal transportation system runs counter to their
ideology. So committee members and staff have told the transportation industry to target members at home during recess and explain the need for a long-term bill.
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Feigenbaum 12 (Baruch Feigenbaum is a transportation policy analyst at Reason Foundation, February
13, 2012, “Government Bureaucracy Is Sinking Port Deepening Projects”, http://reason.org/news/show/government-bureaucracy-is-sinking-p)
Public-Private Partnerships The U.S. needs another way to permanently deepen harbors. One solution
is public-private partnerships. Currently, transportation PPPs in the U.S. are limited to highways (both new and existing facilities) and transit (building new facilities). Port PPPs would deliver needed infrastructure, raise new sources of capital, shift risks to investors, provide a business-like approach, and encourage innovations . How would a PPP process work at US ports? The private company would pay for and perform the initial deepening and future maintenance of the harbor. To recoup this investment, the company would likely operate the port. Often times, the private company would rent
the port from the state via a fixed annual payment to the state, a variable payment or a partial lease.
For example, Maryland has signed a 50-year lease with Ports America to operate the Port of
Baltimore. Ports America will invest $500 million in the project and provide $140 million to the state to fund highway, bridge, and tunnel projects near the port. The state received an upfront payment of $105 million and gets annual lease payments of $3.2 million. Maryland has the right to cancel the agreement
if certain performance metrics, such as the construction of berth IV at a depth of 50 feet, are not met.
Ports America agreed to build/expand berth IV and operate and maintain the Seagirt marine terminal for 50 years. Public-private partnerships (PPPs) can bring much-needed money to ports at this critical juncture . Busy ports, like Charleston, South Carolina and Galveston, Texas would likely attract a lot of interest from private companies willing to finance expansion and improvement projects. The PPP would also eliminate many of the steps in the current process, including the wait for an appropriation.
Additionally PPPs could lead to the most appropriate ports being dredged first. Currently, the most
powerful congressman can determine how many ports will be funded in a particular year guaranteeing their port makes the cut. PPPs could be further encouraged in the future by changing several parts of the process. Ports, or the private partner, could contribute more than 50 percent of the funding for the
feasibility study-perhaps 80-100 percent allowing the corps to complete the study in a timely manner. If the port deepening project is approved, the federal government could refund the extra funds above
the 50 percent benchmark for the feasibility study. Other processes such as the Environmental Impact
Study could be shortened. Duplicate studies by state and local governments could be conducted at the
same time as federal studies or could be eliminated. With the deepening of the Panama Canal, East
Coast ports cannot afford to sit around and wait for the current appropriations process. The canal's expansion is going to bring great economic benefits to the ports capable of handling larger ships. Yet, as it stands, most American ports won't be able to take advantage of the opportunities.
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Feigenbaum 12 (Baruch Feigenbaum is a transportation policy analyst at Reason Foundation, April 2,
2012, “New deepening option vital”, http://www.ajc.com/opinion/new-deepening-option-vital-
1405159.html)
The Port of Savannah needs hundreds of millions of dollars to deepen its harbor and take advantage of the Panama Canal expansion. That expansion is expected to double its capacity and accommodate ships carrying three times as much cargo. Bigger cargo ships will help businesses move goods more
quickly, especially from China, and could lower the prices that consumers pay. But with the federal debt and deficit soaring, there is little taxpayer money available for harbor deepening at American
ports. Deepening the Port of Savannah is expected to cost $650 million. The state is contributing $252 million and hopes the federal government will pay the rest. But Georgia’s leaders need to be realistic
about the funding shortfalls. The port netted just $600,000 in President Barack Obama’s budget last year, $2.5 million in supplemental 2012 funds, and the president just proposed giving $2.8 million to the port in his 2013 budget. At this rate, it will take decades to finish the deepening project. Georgia needs another way to permanently deepen harbors. One solution is public-private partnerships, which deliver needed infrastructure including ports, raise new sources of capital for modernization, shift risks away from taxpayers and onto investors, and encourage innovation. The Port of Savannah could team with a private company, which would pay for and perform the initial deepening and future maintenance of the channel. To recoup this investment, the company would manage the port and generate revenue
from the shipping companies that use it. Three possible rental-lease types include a fixed annual payment to the state, a variable payment or a partial lease. Maryland is showing how successful these partnerships can be. In 2010, the state signed a 50-year lease with Ports America to operate the Port
of Baltimore. The company, Ports America, will invest $500 million in the project and provide another
$140 million to fund highway, bridge and tunnel improvement projects near the port. The state received a $105 million payment upfront and gets annual lease payments of $3.2 million. Maryland also can cancel the agreement if certain performance metrics related to the construction and management of the port aren’t met. Could this type of lease work in Savannah? Yes. Savannah’s deepening involves a river channel, not a port berth, but the potential partners and the process are the same. Savannah is a
bigger, busier port, so the lease likely would be more attractive financially. The process of getting and approving bids for the project should take Georgia about a year. The private sector’s construction efficiency could have the port deepened and ready by mid-2013. Leasing the port also would provide other benefits. First, Georgia would be free to use the $240 million it plans to spend on the port on other construction projects instead. Second, the port operator in Maryland provided the state $120 million to pay for infrastructure improvements near the port. Contrast this with Georgia, where
taxpayers through gas taxes are funding the $73 million Jimmy Deloach Parkway Connector connecting the port of Savannah and I-95. With a public-private partnership, the port operator, not
Georgia taxpayers, could pay the bill for these needed infrastructure improvements. Third, many public-private partnership agreements have annual lease payments. These go to the state and could help pay for construction and maintenance of infrastructure projects that lack funding. The deepening of the Panama Canal is going to bring great economic benefits to ports capable of handling larger
ships. Will those benefits go to Miami, Jacksonville or Charleston? Or will the Port of Savannah be able
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Infrastructure Topic to take advantage of the opportunity and bring the economic rewards to Georgia? Instead of sitting
and hoping for the deficit-riddled federal government to find hundreds of millions of dollars for the deepening project, Georgia needs to pursue a public-private partnership deal that can move the project forward right now and benefit everyone in the region.
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Ybarra 9 (Shirley Ybarra is a senior transportation policy analyst at Reason Foundation, April 23, 2009,
“Port Privatization Trend Growing”, http://reason.org/news/show/1007402.html)
Efficient trade depends on the capacity of our nation's transportation infrastructure, making ongoing
infrastructure maintenance and modernization projects crucial to the long-term success of the economy. With the economy in recession and the nearly every state facing budget deficits, legislators and local officials are being forced to consider better ways to pay for infrastructure improvements. Like
America's highways and railroads, ports are an integral part of the nation's transportation system.
Today, many ports must update their facilities to accommodate for changing vessel sizes, fluctuating
trends in world trade, and escalating global port security standards . According to the American
Association of Port Authorities (AAPA), United States ports invested more than $31.2 billion to improve their facilities between 1946 and 2006, nearly a quarter of which was invested after 2001. Between
2007 and 2011, 35 of the 85 ports surveyed by the AAPA are committed to investing approximately $9.4 billion in infrastructure improvements. Unlike highways and the highway trust fund, ports do not have
a dedicated source of federal funds. Historically, ports have relied on the revenues generated from operations, bonds supported by those revenues and a few government grants to keep their facilities up to date. Some state and local governments appropriate money from their budgets to support port improvements. Generally, however, ports are left to fund themselves. Recently, more and more ports have been turning to third-party investors to finance infrastructure modernization projects through
public-private partnerships (PPPs). This change is due to both a lack of overall funding available given the demand for facility improvements and a growing number of private investors who see great potential for future returns on their investments in the nation's ports. As managing partner of the private infrastructure investment firm Highstar Capital, Christopher Lee puts it: "Ports are going to be one of the first lines of the economy to turn when the environment improves. We want to be ahead of
the competition." In my previous commentary, I noted that the Virginia Port Authority received an unsolicited public-private partnership proposal from the investment firm, CenterPoint Properties Trust.
Although the proposal was initially met with skepticism from legislators and members of the media, it is now posted on the Port Authority's website and is undergoing review for approval according to the process prescribed by Virginia's Public Private Partnership Act of 1995. This time-tested process has previously been used to bring successful PPPs to fruition in Virginia, such as the High-Occupancy Toll
(HOT) lanes now under construction on the Beltway in Northern Virginia and the completed Pocahontas
Parkway. Competing proposals for operating Virginia's ports are due in July, and as I previously advised, authorities in the Commonwealth of Virginia should carefully consider the PPP proposals, given Virginia's past success with public-private partnership infrastructure projects. And the trend is continuing. In recent weeks, public-private partnership proposals for ports have appeared in two other states,
Maryland and Alabama. Maryland On April 15, 2009, the Maryland Port Authority (MPA) issued a request for a private investor to lease and operate the Port of Baltimore's Seagirt Marine Terminal. The
MPA would like to partner with a private investor to fund a new 50-foot berth and increase the capacity of Seagirt Marine Terminal's waterborne containers. According to the terms of the proposed deal, the
MPA would lease the 200-acre Seagirt Marine Terminal exclusively to the private investor. The private investor would be required to invest in a new berth, cranes and other necessary infrastructure, while providing a revenue stream to the MPA and meeting a minimum annual cargo guarantee. The
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Infrastructure Topic government would continue to own the port, but would award the private investor with the port's business that is currently under contract with the MPA/Maryland International Terminals. The full request is available here. The MPA hopes to close a deal on the public-private partnership in 2010.
Alabama The Alabama State Port Authority recently solicited a request for a private partner to invest in the development and operation of the 74-acre Garrows Bend Intermodal Container Traffic Facility (ICTF) in Mobile, Alabama. The ICTF would handle both domestic and international traffic for multiple rail carriers and steamship lines and would finance its own operations. According to the ASPA, the facility would benefit the local economy by creating jobs, improving the ASPA's competitive position, and reducing highway congestion in the region. According to Jimmy Lyons, director and CEO of the ASPA,
"This is the first step in the process by the Port Authority to initiate efforts to identify a private sector partner for development of the intermodal facility and is a continuation of the Choctaw Point project that started in early 2000. From the beginning, we have envisioned this project as a true public private partnership." Potential private investors must submit a formal expression of interest by May 22, 2009
(more information is available here). Public-private partnerships are becoming increasingly popular because port authorities can no longer rely on just their own revenues and the limited amount of funding available from state and local governments to fill in funding gaps, and because private investors are confident that ports will be at the forefront of the economy when global economic
conditions begin to improve. One of the forces driving investor confidence in ports is the opening of the expanded Panama Canal, which is scheduled for 2014 or 2015. Once the Panama Canal is expanded, mega-ships, which cannot fit through the Canal in its current condition, will be able to
reduce their transit times by cutting through the canal en route from China to East and Gulf Coast ports in the United States. Private investors that put their money down now are likely to receive generous
returns from the lucrative container trade from China, which will be able to arrive on the East Coast faster through the Panama Canal than it could moving inland by cargo or rail from West Coast ports in the U.S. Public-private partnerships are a natural extension of the business model for ports, and we are sure to see more port authorities following the examples of Virginia, Maryland, and Alabama in the future. This is because, unlike traditional highway transportation departments, port authorities have always had to compete with other ports to maintain a customer base. Port authorities that capitalize on the port's natural ability to operate in a business climate by seeking capital from public-private partnerships will be well positioned when the expanded Panama Canal ushers in a new and improved
world of shipping.
Abbott 10 (Paul Scott Abbott, Editor, AAPA Seaports Magazine, SUMMER 2010, “Future port infrastructure growth tied to federal funds, private sector”, http://www.aapaseaports.com/article.cgi?id=19005)
Private interest increases Interest of private enterprise in ports is now extending beyond that of ocean carriers and terminal operators - such as Ports America and its concessions for Port of Oakland
and Port of Baltimore berths and, most recently, the agreement of Philippines-based International
Container Terminal Services Inc. to operate Terminal 6 of the Port of Portland, Ore. - to encompass entities not traditionally associated with seaports. CenterPoint Properties Trust's executive vice president for infrastructure and transportation, Neil Doyle, told Tampa workshop attendees that he
sees integrated intermodal centers driving port volumes, with, for example, multimodal facilities his firm has in Illinois directly spurring Virginia port volume growth. Enhanced rail corridors, on which
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Infrastructure Topic railroads are spending billions of dollars, with an added boost from state and federal sources, will provide swifter links and allow moves of double-stacked containers from ports to inland centers.
Oakbrook, Ill.-based CenterPoint has been so enthusiastic, even amid the recession, that it last year made a $3.5 billion concession offer for Virginia Port Authority container facilities - an offer succeeded
by a similarly unsolicited proposal from a Washington-based private equity firm, the Carlyle Group.
VPA officials are still mulling the offers. In April, CenterPoint, which largely is owned by the California
Public Retirement System, made a $3.5 billion offer to enter into a 60-year partnership with the Port
of Galveston, a bid that that port's director, Steven M. Cernak, said would be carefully considered. And other ports are actively seeking private investment, including the efforts of the Commonwealth of
Pennsylvania soliciting a private partner for the Philadelphia Regional Port Authority's new Southport marine terminal. That initiative was announced May 12, the same day the Port of Portland signed its
25-year lease with ICTSI.
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Newman 3 (David Newman Associate Professor Public Policy Programme National University of
Singapore and Jay H. Walder Visiting Professor Public Policy Programme National University of Singapore and Lecturer Kennedy School of Government Harvard University, 2003, “A Federal Ports Policy”, http://www.spp.nus.edu.sg/docs/wp/wp01.pdf)
In a recent assessment of the U.S. marine transportation system, the Department of Transportation noted both the complexity and the degree of decentralization of the nation’s maritime system. The report went on to state that the general framework of investment decisions, which rests responsibility
for the development and operation of landside infrastructure with State and local governments and the private sector, “ was established in the U.S. Constitution and through long-standing practice .”
(USDOT 1999). While not specifically cited, the Department of Transportation was apparently referring
to the port preference clause of the Constitution (Article 1, Section 9, Clause 6) which provides that
[n]o tax or duty shall be laid on articles exported from any state. No preference shall be given by any
regulation or revenue to the ports of one state over those of another; nor shall vessels bound to or from one state, be obliged to enter, clear, or pay duties in another. The Department of Transportation is not alone in drawing on the port preference clause as a key factor in the development of the
nation’s maritime infrastructure. Fleming (1983: 207) interprets this clause to mean that “[f]ederal favouritism, whether directed to states or their seaports, was prohibited.” Ircha (1995) argues that
the separation of the federal government from port policy stems from this clause in the Constitution
(emphasis added). He goes on to suggest that there is actually an affirmative obligation on federal policy makers to avoid discrimination, by arguing that: Given the Constitution’s requirement to avoid discriminating among ports, the impact of various federal actions have to be considered as these actions can affect the competitive balance among ports. Federal expenditures for channel dredging or port facility financing may aid one port to the detriment of another (1995: 285).
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Halberstam and Hills 1 - *assistant professor law at the University of Michigan Law School specializing in U.S. constitutional law and **professor of law at the University of Michigan Law School, specializing in
U.S. constitutional law, local government law, the law of federalism and intergovernmental relations
(Daniel and Roderick M, The American Academy of Political and Social Science, “State Autonomy in
Germany and the United States,” March, Lexis)
The states may exploit this power to initiate programs as a practical means to counteract Congress's constitutional authority to federalize policy areas. For example, before Congress generates enough political will to legislate in any given area, states may step into the field with their own policy proposals
. O ne result is that state policy initiatives may be quite influential in the federal lawmaking process by providing the
initial impetus and sometimes even blueprint for federal action
(Elliot, Ackerman, and Millian 1985). To bypass or overrule the states, not only must Congress often demonstrate that its proposed regulatory scheme is politically desirable, but it must do so by arguing specifically against the continued existence of active state regulation.
Foster 09 (Lauren, freelance journalist based in New York. She was a full-time correspondent for The
Financial Times for nine years, most recently focusing on the nonprofit sector, “Charitable Relations”,
The American Prospect, 5/4, http://www.prospect.org/cs/articles?article=charitable_relations)
Since the election, foundations and nonprofits have sought to define their relationship with the new
president. Many in the sector see him as a natural ally.
After all, he was a board member of The Joyce Foundation and Woods Fund in Chicago, chaired the city's Annenberg Challenge, and his mother at one time worked for the Ford Foundation in Indonesia. Moreover, Valerie Jarrett, who also served on the board of The Joyce Foundation, is now senior adviser and assistant to the president for intergovernmental affairs and public liaison. In an op-ed in the San Francisco Chronicle in January, Jane Wales, co-founder of the Global Philanthropy Forum and vice president at the Aspen Institute,
says the administration, "strapped for resources, yet charged with large responsibilities," has reached out to the social sector in a variety of ways. "[Obama] has signaled the kind of partner this government
hopes to be," she writes. The notion of government as a "partner" can mean many different things.
What most foundations hope for when they partner with government, be it at the local, state, or federal level, is that the additional financial resources will allow successful programs to be sustained, replicated, and made available to more communities.
Other foundations are looking for ideological support--an administration whose policies are broadly in line with their own. The Robert Wood Johnson Foundation was an ardent backer of the Clinton health-care plan. In 1994, RWJF paid
$1.5 million for the broadcast time and an additional $1 million to promote and advertise a two-hour program on the need for health-care reform, which featured
Hillary Clinton. Many in the public sector view partnership as foundations not only kicking in some cash to get a new program started but stepping in where government resources have dried up--say, to save a homeless shelter that has lost funding and faces the threat of closure. Other partnerships can come in the form of the government financing projects or using research that foundations have been working on for years. As Joel Fleishman notes in his book, The Foundation: A
Great American Secret; How Private Wealth is Changing the World, while the national Earned Income Tax Credit (EITC) program "was not developed by foundations, it was a foundation-created and -supported organization, the Center on Budget and Policy Priorities, a nonprofit think tank, that led the way in extending the EITC to the states."
For the Council on Foundations, a partnership with the new administration means considering ways to jointly address challenges. "President Obama has signaled he understands the importance of
philanthropy in finding solutions," said Steve Gunderson, the council's president and chief executive, in a February address to a group of funders who had gathered in Indianapolis. "He believes in the power of partnership, and he wants philanthropy to step forward."
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Robinson 7
- Yale Law School, J.D. 2006. Currently Fox Fellow at Jawaharlal Nehru University, New Delhi (Nick Robinson 2007 Akron Law
Review “Citizens Not Subjects: U.S. Foreign Relations Law and the Decentralization of Foreign Policy” Lexis)
State and local governments are arguably seen as representing the U.S. government abroad in a more official capacity than U.S. non-state actors. The governments of these localities are democratically elected and so it is more likely that they will be seen as acting on behalf of the American people
.
Additionally, the federal government generally has a greater ability to control the actions of these localities than non-state actors. Therefore, there is a greater chance that nonintervention by the federal government to stop offensive activity will be seen as federal endorsement of such activity. Such logic though should caution against court intervention in these cases rather than encourage it. If localities' actions damage U.S. foreign policy interests, the federal government can easily preempt the state or local policies in question.
Further, with the world's increased interconnectedness, it is more likely that if a foreign government takes offense to a locality's policy it can discriminate between the policy of the locality and the policy of the federal government.
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Rivlin 92
Pg. 126-127)
(Alice, an economist, a former U.S. Cabinet official, and an expert on the budget, “Reviving the American Dream”; Brookings Institute
I have argued that the states should have clear responsibility for a specific set of services, including education and other public investments needed to increase the productivity of the American economy. States are better able to experiment and adapt to the special needs and strengths of their areas
. They are more apt to command citizen loyalty and participation than faraway Washington. Anyone who advocates increased reliance on states to improve public services, however, must address the question: Where will the states get the money?
State governments have been struggling to meet the rising cost of public programs and have often encountered strenuous public resistance to tax increases
. Budgetary stress in state capitals reached crisis proportions in the recession of 1990-92, when a large number of states were forced to cut spending and raise taxes in the face of mounting deficits. Even in good times, states face two obstacles in raising the revenue needed to provide high-quality public services; First, states have unequal resources, and the poorer ones would have trouble financing adequate services even if their tax rates were high.
Second, states compete with each other. They are reluctant to let their taxes get out of line with those of other states, especially neighboring states, for fear of losing businesses, sales, or people across the state line.
A new proposal that I call "common shared taxes" could mitigate both problems. A simple example would be a common sales tax shared by all the states. The tax rate would be identical in each state and would apply to the same types of sales.
No one would have an incentive to shop in another state in order to avoid the tax.
If the revenue were divided on the basis of state population-each state receiving the same amount per residentpoorer states would get back somewhat more than their own collections,
because their per capita sales are below average. WHERE
THE MONEY COMES FROM In 1990 state and local revenue totaled $740 billion-about 14 percent of GNP.! About 18 percent of state and local revenue came from the federal government. Property, sales, and income taxes accounted for most of the rest (figure 8-l). State and local funding also comes from an astonishing variety of other sources, such as lotteries, parking meters, fishing licenses, liquor store profits, water sales, bridge tolls, and university tuition.
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Rivlin 92
(Alice, an economist, a former U.S. Cabinet official, and an expert on the budget, “Reviving the American Dream”; Brookings Institute Pg. 152)
Interest in reducing the diversity of tax systems is growing around the world as economies become more interdependent and taxpayers move more easily across borders. The countries of the European Community are making their taxes more uniform as they eliminate trade barriers among themselves.
The American states, by contrast, have never made serious efforts to harmonize their taxes, although they have been part of a common market for more than 200 years.
The most frequently voiced objection to the idea of common shared taxes in the United States is political infeasibility.
Skeptics allege that Congress would not enact a major tax whose proceeds would be spent by other levels of government and that states do not have the tradition of cooperation that would permit them to form an interstate compact to share one or more common taxes. Even if they cooperated to the extent of putting a common tax into operation, the rich states would certainly want to retain all the revenue generated in their jurisdiction and not share it with less affluent states. These objections may well be valid, but many policies initially labeled "politically infeasible" have eventually come to pass.
The need for additional state revenue is great, even without devolution of federal functions, and states are increasingly conscious of the need to find a way of taxing growth sectors of the economy, especially services. They are also increasingly aware of the mobility of taxpayers and tax sources across borders
in an increasingly interlinked national and global economy
. Cooperation on common taxes might start in a small way-say with catalog sales or professional services-and then spread to a larger portion of the tax base
. Acceptance of a formula for dividing revenues, such as by population, would have the appeal of simplicity, even if it involved some redistribution. Moreover, redistribution is easier to swallow if the whole revenue pie is growing, as it would be if common taxation allowed the states to tax sources that are now escaping taxation altogether by moving, or threatening to move, across borders.
Rivlin 92
(Alice, an economist, a former U.S. Cabinet official, and an expert on the budget, “Reviving the American Dream”; Brookings Institute Pg. 142)
States might provide higher-quality services if they shared some taxes and did not have to worry so much about losing businesses to neighboring states with lower tax rates. They would then have more incentives to compete on the basis of the excellence of their services. They would have to attract businesses and residents with good schools, parks, and transportation, rather than with tax breaks. The common taxes would also simplify the tax structure and lower the compliance costs facing companies that operate in many states, as well as reducing the enforcement costs of the tax collectors. Joint action, of course, might not look so attractive to the taxpayer who could no longer escape across the border to a low-tax state)
Rivlin 92 (Alice, an economist, a former U.S. Cabinet official, and an expert on the budget, “Reviving the American Dream”; Brookings Institute Pg. 145)
The federal government taxes corporate income, as do most states. Because state corporate income taxes differ widely in rate and definition of income, multistate corporations have to file different tax returns in each state in which they operate.
Corporate tax accountants try to find ways of allocating the corporation's total income in a way that minimizes the tax paid.
States, for their part, try to get as much as possible. Corporations allege that they are paying tax on the same income in more than one jurisdiction. The evidence
, however, indicates that some corporate income escapes any taxation at the state level.
14 A common shared corporate income tax would reduce compliance and enforcement costs and tax corporate income fairly and only once.
The common shared state tax could be separate from the federal corporate income tax or combined with it. A single national tax shared by the federal government with the states (the German model) has some appeal.)
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Rivlin 92 (Alice, an economist, a former U.S. Cabinet official, and an expert on the budget, “Reviving the American Dream”; Brookings Institute Pg. 147-8)
Implementing a common shared tax requires some mechanism for deciding the initial rate and the
base of the tax (for example, 6 percent on retail sales except food and medicine); by whom the tax is to be collected; by what formula the revenues are to be divided; and how future changes in the rate or the base of the distribution formula are to be arrived at. One possibility is for the federal government to enact the tax and distribute it to the states. Another
is for the states-groups of contiguous states or all fifty-to work out the problems themselves
by interstate compact. Still another is a federal tax credit for uniform state taxes. All approaches would have advantages and disadvantages.)
Rivlin 92
(Alice, an economist, a former U.S. Cabinet official, and an expert on the budget, “Reviving the American Dream”; Brookings Institute Pg. 149)
Alternatively, states could negotiate an interstate compact to levy and share a common tax. Interstate compacts require the approval of the federal government
, but except for giving its formal blessing the federal government need not be involved, either in the decisions or in the implementation of the compact.
An interstate compact establishing a common shared tax would be complicated. The compact would have to describe the tax to be levied, define the base, and set the initial tax rate or schedule of rates. It would have to define a formula for dividing the revenues and set up a mechanism for collecting the tax and distributing the proceeds. It would also have to define procedures for repealing or altering the initial agreement. For example, all states that were parties to the compact could agree to adopt any change ratified by three-quarters of the states.
The interstate compact approach would dramatize the fact that the common shared tax is a state tax, not a federal one. The federal government would not have an easy way of imposing conditions on how the money was spent, nor could Congress simply repeal the tax as it did with revenue sharing. The interstate compact method is cumbersome, however. It would be nearly impossible to get all fifty states to agree to the same tax. The existence of even a few holdouts might cause other states to worry about losing sales or jobs to the nonparticipating states. For the states to corner to an agreement on such a complicated and politically charged arrangement would take strong leadership by a substantially number of governors and a new level of cooperation among the states to solve their common fiscal problems.
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(“THE CASE FOR INFRASTRUCTURE & REFORM: Why and How the Federal Government Should Continue to Fund Vital Infrastructure in the New Age of Public Austerity” – THE ASSOCIATED GENERAL
CONTRACTORS OF AMERICA – AGC’s Case for Infrastructure & Reform in based in large part on comments from leaders, including those who participated in a March 2, 2011 panel discussion hosted by the association and The Weekly Standard, including Reason Foundation’s Robert Poole, Virginia
Secretary of Transportation Sean Connaughton, Oklahoma Congressman James Lankford and the U.S.
Chamber of Commerce’s Bruce Josten. May 19 th – http://www.agc.org/galleries/news/Case-for-
Infrastructure-Reform.pdf)
Give State and Local Officials More Flexibility Federal infrastructure programs have become overly
prescriptive and insistent on one-size fits-all solutions. This limits the ability of state and local officials
to create projects that meet federal needs while accommodating often unique situations. Aside from setting minimum safety standards and ensuring high levels of design and construction quality, federal
infrastructure programs should eliminate the high cost of accepting federal funds by eliminating uniform requirements, including Buy America provisions, and the tremendous amount of paperwork
that comes with those requirements.
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long-term
(Robert Puentes – Senior Fellow @ Brooking’s Metropolitan Policy Program – Congressional Testimony –
Hearing on Infrastructure Banks – May 13, 2010 – http://www.brookings.edu/research/testimony/2010/05/13-infrastructure-puentes)
The federal government spends about $65 billion each year on infrastructure—transportation, energy, water and environmental protection [1]. While the figure is not negligible, the investment in
infrastructure is only 2.2 percent of total federal spending. More than three-quarters of this spending consists of transportation grants to state and local governments ($50.4 billion) [2]. While most of the attention has been on increasing funding for projects, there are also renewed calls to improve the way
the federal government invests in infrastructure. Today, the federal government generally does not select projects on a merit basis, is biased against maintenance, and involves little long term planning.
In this context, there is interest in a new federal entity for funding and financing infrastructure projects through a national infrastructure bank.
Brown and Corbett 97 - * PhD, director of research at Child Trends, a nonprofit organization that provides science-based information to improve programs, and policies ** PhD, Associate Director Institute for Research on Poverty University of Wisconsin Madison (Brett Brown and
Thomas Corbett, Institute for Research on Poverty, “Social Indicators and Public Policy in the Age of Devolution,” July 1997, http://www.irp.wisc.edu/publications/sr/pdfs/sr71.pdf)
Devolution is giving states new responsibilities for policy development and service delivery, and new opportunities to reinvent the ways in which they deliver those services.
Social indicators play a prominent role in many of the activities required to pursue these new responsibilities and opportunities including monitoring for planning, goals tracking to focus and coordinate services across agencies, outcomes accountability to increase flexibility in how services are delivered, and evaluation to learn what works. States differ substantially on the extent to which they are currently pursuing these techniques of governance. Though we expect their use to increase generally as devolution proceeds, each state will develop its own unique path. The individual states will need to understand and make provision for the new data requirements they are generating, and for the training required to develop the requisite skills to use social indicators effectively. Both data development and skills training will cost money at a time when budgets are expected to be tight. The pressures to underinvest
in these activities will be strong
when funds are needed to support basic services. The ultimate cost of underinvestment in these areas, however, will be ineffectiveness and possible failure. Although each state
will follow its own path, it need not—and in fact, should not— go alone
.
States can only benefit by forging links with other states
, with the federal government, and with research institutions. Under devolution, the diffusion of knowledge and the promotion of cooperative relationships across states will come less from the top down, and more from horizontal links among the states themselves . States have much to gain by creating these links themselves
. For example, a new consortium of
seven Midwestern states
(Illinois,
Indiana, Iowa, Michigan, Minnesota, Ohio, and Wisconsin) is meeting regularly to discuss welfare reform in order to learn from each other and, possibly, to coordinate activities across states .
They have identified as a top priority discussions on how to define and measure success under welfare reform.
Carter and Miller 1
*attorney and **Professor at the University of Oklahoma College of Law and Chair of the Executive Committee of the National Conference of Commissioners on Uniform State Laws
(NCCUSL) (Truman Carter and Fred H. Miller, American Indian Law Review, “Uniform Laws and tribal legislation; one tribe’s perspective,” 2001/2002, Lexis)
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One hundred and ten years ago, what was to become the National Conference of Commissioners on Uniform State Laws (NCCUSL or Conference) held its first meeting in Saratoga Springs, New York. Today,
NCCUSL has representatives from every state,
the District of Columbia, the U.S. Virgin Islands, and
Puerto Rico. It is responsible for hundreds of statutes that have been enacted by the jurisdictions that comprise it, including the
Uniform
Commercial Code and other equally important statutes in the areas of business law, family law, trust and estates law, civil procedure, and other legal areas.
NCCUSL is an organization peculiar to the federal system of government, and is unique in American law. "American law" of course actually consists of fifty separate, and potentially differing, bodies of state law, coexisting with, and overlaid by, federal law.
The federal Constitution reserves to the states
"powers not delegated to the
United States by the Constitution, nor prohibited by it to the states
." Because of this limitation, nearly all private law - contracts, negotiable instruments, business organizations, marriage and divorce, for example - and most areas of criminal law, are left for definition and regulation by the legislatures and courts of the several states. As the United States developed a modern economy national in scope, the need for a common, predictable, nationwide legal system became crucial. There were at least two methods for unifying the legal systems of the states. First, state law could be preempted by the Federal Government through repeal of the Tenth Amendment, or by an expansive interpretation of the commerce clause and other express powers delegated to Congress (which, of course, was what ultimately happened to a degree). Alternatively, the states could create a forum and a vehicle by which they could voluntarily agree to develop, and then separately adopt, uniform legislation on important subjects of common concern.
That was the path chosen in 1891 when NCCUSL was conceived; [*90] it remains a viable approach
even today notwithstanding the expansion of federal authority because uniform acts
, like Congressional acts, must fit into the overall body of American law, and that body of law for the most part is state law. Thus uniform state law is more easily adapted than uniform federal law
.
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A.G.C. ’11 (“THE CASE FOR INFRASTRUCTURE & REFORM: Why and How the Federal Government
Should Continue to Fund Vital Infrastructure in the New Age of Public Austerity” – THE ASSOCIATED
GENERAL CONTRACTORS OF AMERICA – AGC’s Case for Infrastructure & Reform in based in large part on comments from leaders, including those who participated in a March 2, 2011 panel discussion hosted by the association and The Weekly Standard, including Reason Foundation’s Robert Poole, Virginia
Secretary of Transportation Sean Connaughton, Oklahoma Congressman James Lankford and the U.S.
Chamber of Commerce’s Bruce Josten. May 19 th – http://www.agc.org/galleries/news/Case-for-
Infrastructure-Reform.pdf)
Given the essential role the federal government clearly must play in investing in the nation’s infrastructure, as well as the significant problems with our current approach, it is clear that we need to
rethink and reform virtually every aspect of our approach to infrastructure. That is why the Associated
General Contractors of America has undertaken an exhaustive review of the many ideas currently
being offered for reforming infrastructure. We’ve met with leading policy thinkers and former members of the President’s Council of Economic Advisors, reviewed reports from two Congressionally-
chartered study commissions, and even convened, in cooperation with The Weekly Standard, our own policy panel to discuss the best way to reform our approach to infrastructure. The association compiled
those many reform proposals and has selected many of the most promising ones. In addition, we crafted new proposals based on many of the insights and observations others have made about our current infrastructure approach. In assembling and crafting these recommendations, we wanted to
make sure that our proposed changes also help refocus the federal role exclusively on areas and
projects that are clearly in the federal interest, and get the federal government out of other
potentially worthwhile undertakings that should more suitably be handled at the state or local levels.
Our recommendations include: Eliminate Transportation Spending Programs that Are Not Truly Federal
Since the completion of much of the Interstate Highway System in the 1980’s, the federal surface transportation program has lost focus. Too many politicians have diverted gas tax revenue away from highway maintenance and expansions and instead use them to fund personal priorities. As a result, gas tax payers are being forced to fund programs designed to encourage children to walk to school, to preserve covered bridges that handle little to no interstate commerce, and to finance fitness and recreational facilities. As a result, less than 70 percent of Highway Trust Fund dollars go to road maintenance or capacity projects of any kind. Congress and the Administration should either eliminate
these programs that are not truly federal and/or devolve them to state and local governments where
they would be more appropriate.
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