TSDC Spending Core - d284f45nftegze.cloudfront.netd284f45nftegze.cloudfront.net/nyeakley/TSDC...

Spending Core TSDC 2014 McDonald

TSDC Spending Core


NEG


Shell


1NCThe economy is recovering – growth is in the forecastAP 6/16 [“IMF lowers estimate of US economic growth in 2014” Boston Herald, June 16, 2014. http://bostonherald.com/business/business_markets/2014/06/imf_lowers_estimate_of_us_economic_growth_in_2014] The U.S. economy is poised to accelerate after a dismal start to the year even though the job market won't return to full employment until 2017.¶ That was the forecast offered Monday in a report by the International Monetary Fund.¶ The IMF noted that steady job gains and other recent data suggest that the economy is rebounding. Employers have added 200,000-plus jobs for four straight months, and the unemployment rate has fallen to 6.3 percent. Auto sales and factory activity are increasing.¶ Yet growth in 2014 won't likely top last year's lackluster performance, the IMF says. The Washington-based organization foresees the economy growing a modest 2 percent in 2014, below its previous estimate of 2.7 percent. That would be nearly identical to the 1.9 percent growth in 2013.¶ The IMF blames the lingering aftermath of the brutal winters and a sluggish recovery in home sales. Years of disappointing growth mean the economy might not reach full employment — which many economists say is when the unemployment rate is between 5 and 5.5 percent — for three more years.

Ocean projects create large surpluses of new spending. Little to no funding exists in the status quoCarlyle 13 [Ryan, Subsea hydraulics engineer, B.S. in Chemical Engineering, “Why Don't We Spend More On Exploring The Oceans, Rather Than On Space Exploration?” Forbes, 1/31, http://www.forbes.com/sites/quora/2013/01/31/why-dont-we-spend-more-on-exploring-the-oceans-rather-than-on-space-exploration]

So as someone whose job deals with exploring the ocean deeps — see my answer to Careers: What kinds of problems does a subsea hydraulics engineer solve? — I can tell you that the ocean is excruciatingly boring. The vast majority of the seafloor once you get >50 miles offshore is barren, featureless mud. On face, this is pretty similar to the empty expanses of outer space, but in space you can see all the way through the nothing, letting you identify targets for probes or telescopes. The goals of space exploration are visible from the Earth, so we can dream and imagine reaching into the heavens. But

in the deep oceans, visibility is less than 100 feet and travel speed is measured in single-digit knots. A simple seafloor survey to run a 100 mile pipeline costs a cool $50 million. The oceans are vast, boring, and difficult/expensive to explore — so why bother? Sure, there are beautiful and interesting features like geothermal vents and coral reefs. But throughout most of the ocean these are few and far between. This is a pretty normal view from a subsea robot: Despite the difficulty, there is actually a lot of scientific exploration going on in the oceans. Here’s a pretty good public website for a science ROV mission offshore Oregon: 2009 Pacific Northwest Expedition To reinforce my point about it being boring, here’s a blog entry from that team where they talk about how boring the sea floor is: 2009 Pacific Northwest Expedition What IS really interesting in the deep ocean is the exotic life. You see some crazy animals that are often not well-known to science. Something floats by the camera 5000 ft down, and you say “what the hell was that?” and no one knows. Usually it’s just some variety of jellyfish, but occasionally we find giant* isopods: Source: Giant isopod *This is a moderately small specimen. They have been recorded at 2.5 ft long. Or giant alien squid monsters: Unfortunately, deep-sea creatures rarely survive the trip to surface. Their bodies are acclimated to the high pressures (hundreds of atmospheres), and the decompression is usually fatal. Our ability to understand these animals is very limited, and their only connection to the surface biosphere is through a few food chain connections (like sperm whales)

that can survive diving to these depths. We’re fundamentally quite disconnected from deep ocean life. Also, there is no hope of ever establishing human habitation more than about 1000 ft deep. The pressures are too great, and no engineering or materials conceivable today would allow us to build livable-sized spaces on the deep sea floor. The two times humans have reached the deepest part of the ocean, it required a foot-thick flawless metal sphere with barely enough internal space to sit down. As far as I can tell, seafloor living is all but impossible — a habitable moon base would be vastly easier to engineer than a seafloor colony. See my answer to International Space Station: Given the actual space station ISS, would it be cheaper to build the equivalent at 3-

4-5 miles deep underwater? Why? To recap: we don’t spend more time/money exploring the ocean because it’s expensive, difficult, and uninspiring. We stare up at the stars and dream of reaching them, but few people look off the side of a boat and wish they could go down there.

Fast spending inflates debt and deteriorates the economy – this tanks growthBoccia 13[Romina, Research Coordinator in the Thomas A. Roe Institute for Economic Policy Studies at Heritage, “How the United States’ High Debt Will Weaken the Economy and Hurt Americans,” Backgrounder #2768 on Budget and Spending, 2/12, http://www.heritage.org/research/reports/2013/02/how-the-united-states-high-debt-will-weaken-the-economy-and-hurt-americans]

http://www.heritage.org/research/reports/2013/02/how-the-united-states-high-debt-will-weaken-the-economy-and-hurt-americans


The authors’ results should serve as a sobering wake-up call for policymakers. Reinhart, Reinhart, and

Rogoff discovered that the average growth rate in countries experiencing public debt overhang is 1.2 percentage points lower than in periods with debt below 90 percent of GDP.[13] These public debt

overhang episodes last an average of about 23 years. Thus, the cumulative effect of lower growth by one

percentage point or more means that national income at the end of the period would be lower by roughly one-fourth. The growth rate of countries with exceptionally high levels of debt—more than 120 percent of the economy—drops even lower, by an average of 2.3 percentage points, which is roughly two-thirds. These figures indicate just how dire the U.S. situation could become: According to the Congressional Budget

Office baseline economic forecast, U.S. GDP is projected to be $25.9 trillion in fiscal year 2023. U.S. publicly held debt is projected to reach nearly 90 percent of GDP that year. Assuming a 2.2 percent growth rate over 23 years, U.S. GDP would reach $42.7 trillion in 2046 if

there was no impact from the debt overhang. Applying the crude assumption that GDP would be reduced by 1.2 percentage points, in each

year of the assumed 23-year debt overhang period, U.S. GDP growth would be slashed by more than half to a mere 1 percent. This would reduce U.S. GDP by more than $10 trillion, to only $32.6 trillion in 2046.

The cumulative effect from the debt overhang would result in a level of GDP lower by nearly one-quarter at the end of the period.

Economic decline causes warMead 9Walter Russell. Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations. 2/4/9. http://www.tnr.com/politics/story.html?id=571cbbb9-2887-4d81-8542-92e83915f5f8&p=2.

So far, such half-hearted experiments not only have failed to work; they have left the societies that have tried them in a progressively worse position, farther behind the front-runners as time goes by. Argentina has lost ground to Chile; Russian development has fallen farther behind that of the Baltic states and Central Europe. Frequently, the crisis has weakened the power of the merchants, industrialists, financiers, and professionals who want to develop a liberal capitalist society integrated into the world. Crisis can also strengthen the hand of religious extremists, populist radicals, or authoritarian traditionalists who are determined to resist liberal capitalist society for a variety of reasons. Meanwhile, the companies and banks based in these societies are often less established and more vulnerable to the consequences of a financial crisis than more established firms in wealthier societies. As a result, developing countries and countries where capitalism has relatively recent and shallow roots tend to suffer greater economic and political damage when crisis strikes--as, inevitably, it does. And, consequently, financial crises often reinforce rather than challenge the global distribution of power and wealth. This may be happening yet again. None of which means that we can just sit back and enjoy the recession. History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic times can breed wars . Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight .


Uniqueness


Economy UpThe economy is on the road to recovery and analysts are optimistic Crutsinger 14 [Martin Crutsinger, “U.S. Economy Shrank at 1 Percent Rate in Q1” Real Clear Politics, May 29, 2014. http://www.realclearpolitics.com/articles/2014/05/29/us_economy_shrank_at_1_percent_rate_in_q1_122791.html#ixzz35WH7pYib]While one definition of a recession is two consecutive quarters of contraction in the GDP, there is no concern that a negative reading in the first quarter could be a sign the economy is about to topple into a downturn. The widespread belief among analysts is that the weakness in the first quarter was based on a variety of temporary factors that will be quickly reversed once the weather warms up.¶ Many economists estimate that the economy in the current April-June quarter is growing at an annual rate of between 3.5 percent and 4 percent as pent-up demand by consumers fuels stronger growth. Analysts are also optimistic that growth will remain above 3 percent in the second half of this year, giving the economy the kind of momentum that has been lacking for much of the first five years of recovery from the country's worst recession since the 1930s.¶ If growth does pick up, that should promote stronger hiring and help drive the unemployment rate down further. In one of the strongest signs of improvement, employers added 288,000 jobs in May, the biggest hiring surge in two years. That helped push the unemployment rate down to 6.3 percent, its lowest point since 2008.¶ The economy is facing fewer hurdles this year than last year, when government spending cuts and higher taxes trimmed growth by an estimated 1.5 percentage points.¶ A government budget truce has also lifted, at least through the rest of this year, much of the uncertainty that had been weighing on the economy over the potential threats of further government shutdowns or market-rattling battles over raising the government's borrowing limit.

The economy is expected to recover over the next few quarters – IMF agreesLee 6/22 [Don Lee, “5 years after the Great Recession: Where are we now?” LA Times, June 22, 2014. http://www.latimes.com/business/la-fi-recession-economy-20140622-story.html#page=1]Despite this winter's doldrums, the U.S. economy is expected to outpace those of other major developed nations this year, including three of the world's top five economies — Japan, Germany and France. None of them is projected to come close to matching American growth, which economists expect will be about 3% for the rest of this year and next.¶ "A meaningful rebound in U.S. economic activity is now underway, and we expect growth to exceed potential over the next few quarters," Christine Lagarde, managing director of the International Monetary Fund, said this month.¶ China is likely to keep sprinting ahead as it closes in on supplanting the U.S. as the largest economy. But it started way behind economically, so big growth spurts are not unexpected.¶ With more than three times the population of the U.S., China has an income per person that is less than one-fifth of America's $53,000. So it will be decades before the average Chinese citizen approaches a standard of living comparable to the typical American's.

The economy is on the rise – treasury drops, employment gains, rising payrolls, stable credit rating, governmental security yields, average wages, participation rateKruger 6/6 [Daniel, syndicated economics reporter, “Treasuries in Biggest Weekly Drop Since March after Jobs,” Bloomberg, 2014, http://www.bloomberg.com/news/2014-06-06/treasuries-advance-as-u-s-employment-growth-slows-in-may.html]Treasuries posted the biggest weekly drop in three months as employment gains in May pushed U.S. payrolls past their pre-recession peak and the jobless rate held at an almost six-year low. The U.S.’s AA+ credit rating was affirmed by Standard & Poor’s, which cited the resiliency and diversity

of the economy, almost three years after downgrading the nation for the first time. Yields on government securities in the euro-

area fell to record lows a day after the European Central Bank cut interest rates, sparking a global rush for bonds. Federal Reserve Chair Janet Yellen said May 7 labor-market conditions “are still far from satisfactory.” “The overall economy from a job perspective is finally trending in a good way,” Jason Rogan, managing

http://www.bloomberg.com/news/2014-06-06/treasuries-advance-as-u-s-employment-growth-slows-in-may.html


director of U.S. government trading at Guggenheim Securities, a New York-based brokerage for institutional investors. “From the Fed’s perspective, you’re starting to see very good job growth.” Benchmark 10-year yields rose less than one basis point to 2.59 percent as of 5 p.m. in New York after earlier dropping five basis points, based on Bloomberg Bond Trader prices. The price of the 2.5 percent

security due in May 2024 dropped 1/32, or 31 cents per $1,000 face value, to 99 7/32. Yields on the securities climbed 11 basis points this week, the most since the five days ended March 7, and rose as high as 2.64 percent yesterday, the most since May 13. Two-year note yields added two basis points to 0.40 percent, the highest level since May 13, gained three basis points this week for a second five-day gain. Credit Rating New York-based S&P said today in a statement that there is a less than one-in-three probability that the U.S.’s credit ranking will change in the next two years. The outlook on the rating is stable. Since the August 2011

downgrade from AAA, record budget deficits have shrunk, economic growth accelerated, the dollar rallied, stocks climbed to all-time highs and Treasuries strengthened their hold as the world’s preferred haven from turmoil. Still, S&P said a polarized policy-making environment and high general

government debt and budget deficits constrain the ratings. “After the rating of the U.S. came under pressure because of the debt ceiling and government shut down, we actually saw a better cost of funding for the government,” David Coard, head of fixed-income trading in New York at Williams Capital Group, a brokerage for institutional investors. “We’re still the safe haven everybody seeks when there’s uncertainty in the

world. I don’t think that’s changed.” ‘Continued Growth’ Two-year notes dropped as employers added 217,000 jobs last month, according to the Labor Department, after a revised 282,000 increase in April. That compared with the median forecast in a Bloomberg survey for a 215,000 employment increase. Estimates ranged from increases of

110,000 to 350,000. The unemployment rate was unchanged at 6.3 percent. May marked the fourth-straight month payrolls have increased at least 200,000, the first time that’s happened since September 1999 to January 2000.

“We’ve seen continued growth within the labor market,” Sean Simko, who oversees $8 billion at SEI Investments

Co. in Oaks, Pennsylvania. “The sub-components continue to improve, but not to an extent that’s enough to shake up the bond

market.” The participation rate, which indicates the share of working-age people in the labor force, held at 62.8 percent, matching the lowest since March 1978. Average hourly earnings rose 0.2 percent to $24.38 in May from $24.33 the prior month. They were up 2.1 percent over the past 12 months.


Link


GenericOcean funding is incredibly low. Any plan will call for a substantial increase in spendingGonzalez 12 [Robert T. Gonzalez, “James Cameron says today's ocean exploration is “piss poor.” He's right.” iO9, 3/29/12. www.io9.com/oceanorgaphy/gonzalez]The lack of knowledge surrounding the oceans' depths isn't particularly surprising when you realize that funding for deep sea research has been dwindling for years. And according to Craig McClain — chief editor at Deep Sea News, and a deep sea researcher, himself — more cuts to deep sea funding are imminent. McClain says that John R. Smith, the Science Director at the Hawai'i Undersea Research Laboratory, recently sent out an email notifying the community that NOAA has zeroed out funding for the Undersea Research Program (NURP) for FY13 beginning Oct 1, 2012, and put all the centers on life support funding (or less) for the current year. Many other NOAA programs, mostly extramural ones, have been cut to some level, though it appears only NURP and another have had their funding zeroed out completely. McClain says that what's especially striking about this "is that within the FY13 NOAA Budget, the Office of Ocean Exploration [the division that contains NURP] took the second biggest cut of all programs (-16.5%). Sadly, the biggest cut came to education programs (-55.1%)."

Oceanic exploration and development costs millionsConathan 2013 [Michael, “Rockets Top Submarines: Space Exploration Dollars Dwarf Ocean Spending” American Progress, June 18, 2013. http://americanprogress.org/issues/green/news/2013/06/18/66956/rockets-top-submarines-space-exploration-dollars-dwarf-ocean-spending/]All it takes is a quick comparison of the budgets for NASA and the National Oceanic and Atmospheric Administration, or NOAA, to understand why space exploration is outpacing its ocean counterpart by such a wide margin. In fiscal year 2013 NASA’s annual exploration budget was roughly $3.8 billion. That same year, total funding for everything NOAA does—fishery management, weather and climate forecasting, ocean research and management, among many other programs—was about $5 billion, and NOAA’s Office of Exploration and Research received just $23.7 million . Something is wrong with this picture. Space travel is certainly expensive. But as Cameron proved with his dive that cost approximately $8 million , deep-sea exploration is pricey as well. And that’s not the only similarity between space and ocean travel: Both are dark, cold, and completely inhospitable to human life.

Deepwater projects are costly – Coast Guard provesPerera 2011 [David, “Deepwater too expensive, says GAO” July 29, 2011. http://www.fiercehomelandsecurity.com/story/deepwater-too-expensive-says-gao/2011-07-29]Costs for the Coast Guard's massive modernization effort, Deepwater--now in its fifteenth year--has grown past the point of likely funding, says the Government Accountability Office.¶ In a report dated July 28, the GAO says that Coast Guard officials have said they'll need $1.9 billion a year to complete all of Deepwater's planned acquisitions, but that they don't expect to receive more than $1.2 billion annually over the next several years, particularly given the current climate of austerity.

http://www.uproxx.com/gammasquad/2012/03/james-cameron-challenger-deep-mariana-trench-deep-sea-dive/

http://www.corporateservices.noaa.gov/nbo/fy14_bluebook/FINALnoaaBlueBook_2014_Web_Full.pdf

http://explore.noaa.gov/


Hadal ZonesFunding for deepwater exploration is unstable and costly. Means the plan will cause several new forms of spendingJackson, Keith II 2012Project Management Institute, June 2012, (20,000 Leagues Under the Sea)With research funding provided by philanthropists, including former Google executive Eric Schmidt's Marine Science and Technology Foundation, DOER Marine's US$40 million Deepsearch p rogram includes construction of two unlimited-depth ocean submersibles and supporting infrastructure, including glass that can withstand the crushing pressure found in deep water."With no reliable funds coming in and having to start and stop while completing other projects, this had the ability to become an unwieldy and unmanageable project. And we recognized that fairly early in the process," Ms. Taylor says. "So we modeled our project after some of the more successful U.S. Navy projects that also had financial constraints and received a lot of insight on how to handle the Rendering of DOER submarine complexities and flexibility of the project. What we're using is almost a hybrid of agile and phased waterfall, and we use those principles to guide the project."


Bio RockBiorock is costly – deployment and consistency expenses proveHeng 12 [Natalie Heng, “Tioman coral reef gets an electrical current boost” The Star Online, September 18, 2012. http://www.thestar.com.my/story.aspx/?file=%2F2012%2F9%2F18%2Flifefocus%2F11701966]Faedzul, a marine biologist by training, says it would be expensive to deploy Biorock structures in a routine manner. “But if the technology is proven to help coral regeneration, then it can be a good alternative to rescue or revive damaged reefs, such as those from ship grounding or natural disasters.”¶ It is precisely situations where the reef faces pressure from coastal development, watershed-based pollution, over-fishing and destructive fishing practices, that Biorock comes in useful. Faedzul says the time needed to establish a reef would depend on the species planted – fast-growing species could lead to faster reef formation. In some documented cases, a difference in the Biorock can be seen in six months. The electricity must be turned on all the time but the current is too weak to impact fishlife.


Energy DevelopmentOceanic energy development costs millionsRunyon 12 [Jennifer, chief editor of RenewableEnergyWorld.com. : Is Ocean Energy More Than "A Very Expensive Hobby"?” Renewable Energy World. June 22, 2012. http://www.renewableenergyworld.com/rea/blog/post/2012/06/is-ocean-energy-more-than-a-very-expensive-hobby]That was the question posed to industry experts at the EnergyOcean International conference and exhibition that took place in Danvers, Mass., this week. Referring to three levels of development — Epoch 1, 2, and 3 — Andrew Tyler, CEO of Marine Current Turbines (MCT), a company now owned by Siemens, gave a few key pointers to companies interested getting beyond the “very expensive hobby” stage of ocean energy development.¶ While his tongue-in-cheek reference to marine and tidal energy development was sarcastic, the sentiment was real. It’s a pricey endeavor. The proof-of-concept stage will run about $1 million, he said. The small-scale stage will run $2 miliion to $5 million and to get to the full-scale prototype stage, a company will need to have $15 million to $30 million at its disposal. Tyler said that for financing companies should look to venture capitalists or government because “banks won’t touch them” since the risk is just too high.


Internal Link


Debt ExtensionsFederal debt spurs sudden fiscal crisis – empirics and most recent academic researchBoccia 13 [Romina, Research Coordinator in the Thomas A. Roe Institute for Economic Policy Studies at Heritage, “How the United States’ High Debt Will Weaken the Economy and Hurt Americans,” Backgrounder #2768 on Budget and Spending, 2/12, http://www.heritage.org/research/reports/2013/02/how-the-united-states-high-debt-will-weaken-the-economy-and-hurt-americans]

America is on a dangerous budget path. Current spending and debt are dangerously high, and future spending and debt are on track to rise even higher in large part due to increasing entitlement spending. Academic research shows that advanced economies like the United States are at risk of significant and prolonged reductions in economic growth when public debt reaches levels of 90 percent of GDP. High public debt threatens to drive interest rates up, to crowd out private investment, and to raise price inflation. The implications would be severe and pronounced for all Americans, but most especially for the poor, the elderly, and the middle class. U.S. policymakers should learn from Greece and Japan and avoid a fiscal crisis and economic stagnation brought about by public debt overhang. Growing federal debt also would increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage the budget and the government would thereby lose its ability to borrow at affordable rates. Such a crisis would…probably have a very significant negative impact on the country.

Debt rise decrease growth, hiders responses and spurs collapseBoccia 13 [Romina, Research Coordinator in the Thomas A. Roe Institute for Economic Policy Studies at Heritage, “How the United States’ High Debt Will Weaken the Economy and Hurt Americans,” Backgrounder #2768 on Budget and Spending, 2/12, http://www.heritage.org/research/reports/2013/02/how-the-united-states-high-debt-will-weaken-the-economy-and-hurt-americans]

U.S. federal spending in 2013, combined with depressed receipts from a weak economy, is on track to result in a deficit of $850 billion. Publicly held debt in the United States will exceed 76 percent of gross domestic product (GDP) in 2013, and chronic deficits are projected to push U.S. debt to 87 percent of the economy in 10 years.[1] Debt is projected to grow even more rapidly after 2023. Recent economic research, especially the work of Carmen Reinhart, Vincent Reinhart, and Kenneth Rogoff, confirms that federal debt at such high levels puts the United States at risk for a number of harmful economic consequences, including slower economic growth, a weakened ability to respond to unexpected challenges, and quite possibly a debt-driven financial crisis.


InflationDebt spurs inflation – tanks economy, collapses dollar, trashes biz con and spikes poverty Boccia 13[Romina, Research Coordinator in the Thomas A. Roe Institute for Economic Policy Studies at Heritage, “How the United States’ High Debt Will Weaken the Economy and Hurt Americans,” Backgrounder #2768 on Budget and Spending, 2/12, http://www.heritage.org/research/reports/2013/02/how-the-united-states-high-debt-will-weaken-the-economy-and-hurt-americans]

Higher Inflation. The United States has, as do other countries with independent currencies, an additional option to monetize its debts: replacing a substantial portion of outstanding debt with another form of federal liability—currency. The government could, through the Federal Reserve, inflate the money supply. The resulting increase in the rate of price inflation would devalue the principal of the remaining public debt. The resulting inflation would also destabilize the private economy, increase uncertainty, increase real interest rates, and slow economic growth markedly. Inflation is particularly harmful for those Americans on fixed incomes, such as the elderly who rely on Social Security checks, pensions, and their own savings in retirement. By raising the cost of essential goods and services, like food and medical care, inflation can push seniors into poverty. Inflation and longer life expectancies can mean that some seniors run out of their savings sooner than anticipated, then becoming completely dependent on Social Security. Inflation inflicts the most pain on the poor and middle class by reducing the purchasing power of the cash savings of American families. Inflation also means that everyone has to pay more for goods and services, including essentials like food and clothing. Moreover, severe inflation could dethrone the U.S. dollar as the world’s primary reserve currency. Thus far, a major saving grace for the U.S. government has been that, in comparison with other advanced nations with major currencies, such as Europe and China, the U.S. dollar has retained its status as the best currency option for finance and commerce.[16] If Washington policies continue on their current path of ever-higher sovereign debt and a risky Federal Reserve policy, both of which lack a credible crisis coping strategy, confidence in the U.S. economy and monetary policy regime could erode. Such a development would be unprecedented in size and magnitude and the impact on Americans and the economy would be massive and severe.


Impact


Econ Decline = WarEconomic decline causes global war Royal 10 (Jedediah, Director of Cooperative Threat Reduction – U.S. Department of Defense, “Economic Integration, Economic Signaling and the Problem of Economic Crises”, Economics of War and Peace: Economic, Legal and Political Perspectives, Ed. Goldsmith and Brauer, p. 213-215)

Less intuitive is how periods of economic decline ma y increase the likelihood of external conflict . Political science

literature has contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of interdependent states. Research in this vein has been considered at systemic, dyadic and national levels. Several notable contributions follow. First, on the systemic level, Pollins (2008) advances Modelski and Thompson's

(1996) work on leadership cycle theory, finding that rhythms in the global economy are associated with the rise and fall of a pre-eminent power and the often bloody transition from one pre-eminent leader to the next. As such, exogenous shocks such as economic crises could usher in a redistribution of relative power (see

also Gilpin. 1981) that leads to uncertainty about power balances, increasing the risk of miscalculation (Feaver, 1995). Alternatively, even a relatively certain redistribution of power could lead to a permissive environment for conflict as a rising power may seek to challenge a declining power (Werner. 1999). Separately, Pollins (1996) also shows that global economic cycles combined with

parallel leadership cycles impact the likelihood of conflict among major, medium and small powers, although he suggests that the causes and connections between global economic

conditions and security conditions remain unknown. Second, on a dyadic level, Copeland's (1996, 2000) theory of trade expectations suggests that 'future expectation of trade' is a significant variable in understanding economic conditions and security behaviour of states. He argues that interdependent states are likely to gain pacific benefits from trade so long as they have an optimistic view of

future trade relations. However, if the expectations of future trade decline, particularly for difficult to replace items such as energy

resources, the likelihood for conflict increases , as states will be inclined to use force to gain access to those resources . C rises could potentially be the trigger for decreased trade expectations either on its

own or because it triggers protectionist moves by interdependent states.4 Third, others have considered the link between economic decline and external armed conflict at a national level. Blomberg and Hess (2002) find a s trong correlat ion between internal conflict and external conflict, particularly during periods of

economic downturn . They write: The linkages between internal and external conflict and prosperity are strong and mutually reinforcing. Economic conflict

tends to spawn internal conflict, which in turn returns the favour. Moreover, the presence of a recession tends to amplify the extent to which international and external conflicts self-reinforce each other. (Blomberg & Hess, 2002. p. 89)

Economic decline has also been linked with an increase in the likelihood of terrorism (Blomberg,

Hess, & Weerapana, 2004), which has the capacity to spill across borders and lead to external tensions. Furthermore, crises generally reduce the popularity of a sitting government.

"Diversionary theory" suggests that, when facing unpopularity arising from economic decline,

sitting governments have increased incentives to fabricate external military conflicts to create a 'rally around the flag' effect. Wang (1996), DeRouen (1995). and Blomberg, Hess, and Thacker (2006) find supporting evidence showing that economic decline

and use of force are at least indirectly correlated. Gelpi (1997), Miller (1999), and Kisangani and Pickering (2009) suggest that the tendency towards diversionary tactics are greater for democratic states than autocratic states, due to the fact that democratic leaders are generally

more susceptible to being removed from office due to lack of domestic support. DeRouen (2000) has provided evidence showing that periods of weak economic performance in the U nited S tates, and thus weak Presidential popularity, are statistically linked to an increase in the use of force. In summary, recent economic scholarship positively correlates economic integration with an increase in the frequency of economic

crises, whereas political science scholarship links economic decline with external conflict at systemic, dyadic and national levels.5 This implied connection between integration, crises and armed conflict has not featured prominently in the economic-security debate and deserves more attention.


Economic decline turns every impact and causes nuclear war. Harris and Burrows, 9 – *counselor in the National Intelligence Council, the principal drafter of Global Trends 2025, **member of the NIC’s Long Range Analysis Unit “Revisiting the Future: Geopolitical Effects of the Financial Crisis”, Washington Quarterly, http://www.twq.com/09april/docs/09apr_burrows.pdf)

Increased Potential for Global ConflictOf course, the report encompasses more than economics and indeed believes the future is likely to be the result of a number of intersecting and interlocking forces. With so many possible permutations of outcomes, each with ample opportunity for unintended consequences, there is a growing sense of insecurity. Even so, history may be more instructive than ever. While we continue to believe that the Great Depression is not likely to be repeated, the lessons to be drawn from that period include the harmful effects on fledgling democracies and multiethnic societies (think Central Europe in 1920s and 1930s) and on the sustainability of multilateral institutions (think League of Nations in the same period). There is no reason to think that this would not be true in the twenty-first as much as in the twentieth century. For that reason, the ways in which the potential for greater conflict could grow would seem to be even more apt in a constantly volatile economic environment as they would be if change would be steadier.In surveying those risks, the report stressed the likelihood that terrorism and nonproliferation will remain priorities even as resource issues move up on the international agenda. Terrorism’s appeal will decline if economic growth continues in the Middle East and youth unemployment is reduced. For those terrorist groups that remain active in 2025, however, the diffusion of technologies and scientific knowledge will place some of the world’s most dangerous capabilities within their reach. Terrorist groups in 2025 will likely be a combination of descendants of long established groupsinheriting organizational structures, command and control processes, and training procedures necessary to conduct sophisticated attacksand newly emergent collections of the angry and disenfranchised that become self-radicalized, particularly in the absence of economic outlets that would become narrower in an economic downturn.The most dangerous casualty of any economically-induced drawdown of U.S. military presence would almost certainly be the Middle East. Although Iran’s acquisition of nuclear weapons is not inevitable, worries about a nuclear-armed Iran could lead states in the region to develop new security arrangements with external powers, acquire additional weapons, and consider pursuing their own nuclear ambitions. It is not clear that the type of stable deterrent relationship that existed between the great powers for most of the Cold War would emerge naturally in the Middle East with a nuclear Iran. Episodes of low intensity conflict and terrorism taking place under a nuclear umbrella could lead to an unintended escalation and broader conflict if clear red lines between those states involved are not well established. The close proximity of potential nuclear rivals combined with underdeveloped surveillance capabilities and mobile dual-capable Iranian missile systems also will produce inherent difficulties in achieving reliable indications and warning of an impending nuclear attack. The lack of strategic depth in neighboring states like Israel, short warning and missile flight times, and uncertainty of Iranian intentions may place more focus on preemption rather than defense, potentially leading to escalating crises.Types of conflict that the world continues to experience, such as over resources, could reemerge, particularly if protectionism grows and there is a resort to neo-mercantilist practices. Perceptions of renewed energy scarcity will drive countries to take actions to assure their future access to energy supplies. In the worst case, this could result in interstate conflicts if government leaders deem assured access to energy resources, for example, to be essential for maintaining domestic stability and the survival of their regime. Even actions short of war, however, will have important geopolitical implications. Maritime security concerns are providing a rationale for naval buildups and modernization efforts, such as China’s and India’s development of blue water naval capabilities. If the fiscal stimulus focus for these countries indeed turns inward, one of the most obvious funding targets may be military. Buildup of regional naval capabilities could lead to increased tensions, rivalries, and counterbalancing moves, but it also will create opportunities for multinational cooperation in protecting critical sea lanes. With water also becoming scarcer in Asia and the Middle East, cooperation to manage changing water resources is likely to be increasingly difficult both within and between states in a more dog-eat-dog world.

Economic decline causes global nuclear war – increases tensionAuslin & Lachman 9 [Michael Auslin is a resident scholar and Desmond Lachman is a resident fellow at AEI, “The Global Economy Unravels,” March 6, http://aei.org/publications/pubID.29502,filter.all/pub_detail.asp]


What do these trends mean in the short and medium term? The Great Depression showed how social and global chaos followed hard on

economic collapse. The mere fact that parliaments across the globe, from America to Japan, are unable to make responsible, economically

sound recovery plans suggests that they do not know what to do and are simply hoping for the least disruption. Equally worrisome is the adoption of more statist economic programs around the globe, and the concurrent decline of trust in

free-market systems. The threat of instability is a pressing concern. China, until last year the world's fastest

growing economy, just reported that 20 million migrant laborers lost their jobs. Even in the flush times of recent years,

China faced upward of 70,000 labor uprisings a year. A sustained downturn poses grave and possibly immediate threats to Chinese internal stability. The regime in Beijing may be faced with a choice of repressing its own people or diverting their energies outward, leading to conflict with China's neighbors . Russia, an

oil state completely dependent on energy sales, has had to put down riots in its Far East as well as in downtown Moscow. Vladimir Putin's rule has been predicated on squeezing civil liberties while providing economic largesse. If that devil's bargain

falls apart, then wide-scale repression inside Russia, along with a continuing threatening posture toward Russia's neighbors, is likely. Even apparently stable societies face increasing risk and the threat of internal or possibly external conflict. As Japan's exports have plummeted by nearly 50%, one-third of the country's prefectures have passed emergency economic stabilization plans. Hundreds of thousands of temporary employees hired during the first part of this decade are being laid off. Spain's unemployment rate is expected to climb to nearly 20% by the end of 2010; Spanish unions are already protesting the lack of jobs, and the

specter of violence, as occurred in the 1980s, is haunting the country. Meanwhile, in Greece, workers have already taken to the streets. Europe as a whole will face dangerously increasing tensions between native citizens and immigrants, largely from poorer Muslim nations, who have increased the labor pool in the past several decades. Spain has absorbed five million immigrants since 1999, while nearly 9% of Germany's

residents have foreign citizenship, including almost 2 million Turks. The xenophobic labor strikes in the U.K. do not bode well for the rest of Europe. A prolonged global downturn, let alone a collapse, would dramatically raise tensions inside these countries. Couple that with possible protectionist legislation in the United States,

unresolved ethnic and territorial disputes in all regions of the globe and a loss of confidence that world leaders actually know what they are doing. The result may be a series of small explosions that coalesce into a big bang .

Economic decline turns every impact – collapses hegemony and creates a world of nuclear chaosFriedberg and Schoenfeld 2008 – *Professor of politics and IR at Princeton’s Woodrow Wilson School, **senior editor of Commentary and visiting scholar at the Witherspoon Institute at Princeton (10/21, Aaron and Gabriel, Wall Street Journal, “The dangers of a diminished America”, http://online.wsj.com/article/SB122455074012352571.html)

With the global financial system in serious trouble, is America's geostrategic dominance likely to diminish? If so, what would that mean? One immediate implication of the crisis that began on Wall Street and spread across the world is that the primary instruments of U.S. foreign policy will be crimped. The next president will face an entirely new and adverse fiscal position. Estimates of this year's federal budget deficit already show that it has jumped $237 billion from last year, to $407 billion. With families and businesses hurting, there will be calls for various and expensive domestic relief programs. In the face of this onrushing river of red ink, both Barack Obama and John McCain have been reluctant to lay out what portions of their programmatic wish list they might defer or delete. Only Joe Biden has suggested a possible reduction -- foreign aid. This would be one of the few popular cuts, but in budgetary terms it is a mere grain of sand. Still, Sen. Biden's comment hints at

where we may be headed: toward a major reduction in America's world role, and perhaps even a new era of financially-induced isolationism.Pressures to cut defense spending, and to dodge the cost of waging two wars, already intense before this crisis, are likely to mount. Despite the success of the surge, the war in Iraq remains deeply unpopular. Precipitous withdrawal -- attractive to a sizable swath of the electorate before the financial implosion -- might well become even more popular with

annual war bills running in the hundreds of billions. Protectionist sentiments are sure to grow stronger as jobs disappear in the coming slowdown. Even before our current woes, calls to save jobs by restricting imports had begun to gather support among many Democrats and some Republicans. In a prolonged

recession, gale-force winds of protectionism will blow. Then there are the dolorous consequences of a potential collapse of the world's financial architecture. For decades now, Americans have enjoyed the advantages of being at the center of that system. The worldwide use of the dollar, and the stability of our economy, among other things, made it easier for us to run huge budget deficits, as we counted on foreigners to pick up the tab by buying dollar-denominated assets as a safe haven. Will this be possible in the future?Meanwhile, traditional foreign-policy challenges are multiplying. The threat from al Qaeda and Islamic terrorist affiliates has not been extinguished. Iran and North Korea are continuing on their bellicose paths, while Pakistan and Afghanistan are progressing smartly down the road to chaos.


Russia's new militancy and China's seemingly relentless rise also give cause for concern. If America now tries to pull back from the world stage, it will leave a dangerous power vacuum. The stabilizing effects of our presence in Asia, our continuing commitment to Europe, and our position as defender of last resort for Middle East energy sources and supply lines could all be placed at risk. In such a scenario there are shades of the 1930s, when global trade and finance ground nearly to a halt, the peaceful democracies failed to cooperate, and aggressive powers led by the remorseless fanatics who rose up on the crest of economic disaster exploited their divisions. Today we run the risk that rogue states may choose to become ever more reckless with their nuclear toys, just at our moment of maximum vulnerability. The aftershocks of the financial crisis will almost certainly rock our principal strategic competitors even harder than they will rock us. The dramatic free fall of the Russian stock market has demonstrated the fragility of a state whose economic performance hinges on high oil prices, now driven down by the global slowdown. China is perhaps even more fragile, its economic growth depending heavily on foreign investment and access to foreign markets. Both will now be constricted, inflicting economic pain and perhaps even sparking unrest in a country where political legitimacy rests on progress in the long march to

prosperity. None of this is good news if the authoritarian leaders of these countries seek to divert attention from internal travails with external adventures. As for our democratic friends, the present crisis comes when many European nations are struggling to deal with decades of anemic growth, sclerotic governance and an impending demographic crisis. Despite its past dynamism, Japan faces similar

challenges. India is still in the early stages of its emergence as a world economic and geopolitical power. What does this all mean? There is no substitute for America on the world stage. The choice we have before us is between the potentially disastrous effects of disengagement and the stiff price tag of continued American leadership.


Free TradeLoss of economic stability leads to the demise of global trade and free marketsBrustein 11 – (Joshua, Senior Producer, Business/Technology at The New York Times, The New York Times, “U.S. and China Data Highlight Weakness in Global Economy”, http://www.nytimes.com/2011/10/14/business/economy/us-and-china-data-highlight-weakness-in-global-economy.html?_r=1//AS)

The weakness in the global economy was underscored by reports published Thursday about the balance of trade in the United States and China. The United States trade deficit was essentially unchanged in August at $45.6 billion, its lowest level since April and $100 million narrower than a year earlier. Exports and imports both slipped by $100 million, to $177.6 billion and $233.2 billion, respectively. The trade deficit was slightly narrower than analysts’ expectations. The level for July was revised downward from $44.8 billion. A narrower trade deficit could lead to a slightly higher level for the gross domestic product, said Clark Yingst, the chief market analyst for the investment firm Joseph Gunnar, “but not exactly for the reasons that we’d like.” Slipping imports are a bad sign for the United States economy, since it shows weakness in consumer demand. “In an ideal world we would like to see exports and imports growing at relatively strong rates, but with exports growing even faster than imports,” said Mr. Yingst. Economists have also expressed concern that Europe’s slowing economy is leading to a reduction in demand for American exports. Alcoa, the aluminum producer, said its lower profit, reported earlier this week, was a result in part to weak demand there. The American trade deficit with China grew to $29 billion, its largest level ever, at a time when American officials have focused on the role of China’s government in the global economy. On Tuesday, the United States Senate passed a bill that would impose tariffs on certain Chinese goods if the Treasury Department determined that China was undervaluing its currency to its advantage. But trade data from China for September showed that the country’s trade surplus narrowed to $14.5 billion in September, from $17.8 billion in August. The slimmer surplus was unlikely to defuse fully the criticism of American lawmakers, who argue that Beijing is keeping its currency unfairly low against the dollar. The report from China also showed that its booming pace of export growth had begun to ease, as the global upheaval and a gradual rise in the value of the renminbi took their toll. Economists are concerned that the American economy could be further damaged if this trend continues, especially if European demand remains weak. John Canally, an economist for LPL Financial, said that Chinese officials faced a balancing act, as they weighed the dangers of inflation against concerns that tighter monetary policy in China could put further strain on a weakened economies in the United States and Europe. “China doesn’t want to see Europe collapse,” he said. “They’re kind of walking a tightrope here.” There were some bright spots in other data released Thursday, however. First-time jobless claims in the United States remained essentially unchanged this week, at 404,000, the Labor Department said. The four-week moving average, seen as a better barometer of the labor market, was down for the third consecutive week, to 408,000. Rates for 30-year mortgages increased, after dipping below 4 percent for the first time on record, according to a survey by Freddie Mac. The rate rose to 4.12 percent this week, up from 3.94 percent the week before. In a statement, Frank E. Nothaft, the vice president and chief economist of Freddie Mac, attributed the gain to last week’s employment report, which was better than expected. Economists also pointed to the stock market, which has been gaining in recent days. Low mortgage rates have not been enough to lift the anemic housing market, however, because many potential consumers cannot qualify for loans and many others do not feel comfortable making large financial commitments in such a weak labor market, said Patrick Newmark, United States economist for IHS Global Insight. “The demand out there isn’t very strong,” he said. “People aren’t applying.”The International Monetary Fund also warned Thursday that Asia could suffer “clear” financial and economic spillovers from continued problems elsewhere. The fund forecast relatively robust growth of 6.3 percent for the region this year and 6.7 percent in 2012 on average, slightly below a previous forecast of 6.8 percent for 2011 and 6.9 percent for 2012 made in April. The fund’s worries were tempered by a degree of confidence about Asian domestic demand cushioning the region from global upheaval. “Domestic demand is still resilient, and it should continue to sustain activity across the region,” the I.M.F. said.

Reduced free markets and global trade leads to terrorismFandl ‘3 – (Kevin, American University Law Review Volume 19, Issue 3, “Terrorism, Development and Trade: Winning the War on Terror without the War”, http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1169&context=auilr//AS)


Terrorism, especially of late, impacts our lives routinely and took much of the world by surprise in recent years with its effect on political and social relations. Recent terrorist attacks have been hailed as representative of a policy of hatred toward the West, hatred toward capitalism, and hatred toward globalization. Many argue that the beginnings of modem terrorism are found in poverty, religion, and envy. And like globalization, one cannot ignore terrorism. The aftermath of the September 11, 2001 events created a new atmosphere of fear and vengeance, imposed upon the world primarily by the United States and Britain. Hidden in this fear is a severe misunderstanding about the cause of terrorism, its remarkable ties to globalization , and the painfully underutilized solution to eradicating it as a means of political or social expression. In this essay, I argue that the roots of recent forms of international terrorism, primarily those based in the Middle East, are planted in an impoverished and ill-nurtured soil. By examining the market structure and economic development of countries where recent terrorist activity has greatly increased, I contend that we will uncover a region poisoned with incomplete or inadequate development, limited employment opportunities, and infrequent interaction with both people from other cultures and potential trading partners. I suggest that much of this lack of development is caused by the absence of real markets, and the inability to sustain trade with commodities other than oil and, in effect, a failure to effectively globalize.

Trade prevents war. The best and most recent research provesHegre et al 9 – Professor of Political Science @University of Oslo [Havard Hegre, John R. Oneal (Professor of Political Science @ The University of Alabama) Bruce Russett (Professor of Political Science @ Yale University) Trade Does Promote Peace: New Simultaneous Estimates of the Reciprocal Effects of Trade and Conflict, August 25, 2009, pg. http://www.yale-university.com/leitner/resources/docs/HORJune09.pdf]¶ Liberals expect economically important trade to reduce conflict because interstate violence adversely affects commerce, prospectively or contemporaneously. Keshk, Reuveny, & Pollins (2004) and Kim & Rousseau (2005) report on the basis of simultaneous analyses of these reciprocal relations that conflict impedes trade but trade does not deter conflict. Using refined measures of geographic proximity and size—the key elements in the gravity model of international interactions—reestablishes support for the liberal peace, however. Without careful specification, trade becomes a proxy for these fundamental exogenous factors, which are also important influences on dyadic conflict. KPR‘s and KR‘s results are spurious. Large, proximate states fight more and trade more. Our re-analyses show that, as liberals would expect, commerce reduces the risk of interstate conflict when proximity and size are properly modeled in both the conflict and trade equations.¶ We provided new simultaneous estimates of liberal theory using Oneal & Russett‘s (2005) data and conflict equation and a trade model derived from Long (2008). These tests confirm the pacific benefit of trade. Trade reduces the likelihood of a fatal militarized dispute, 1950–2000 in our most comprehensive analysis, as it does in the years 1984-97 when additional measures of traders‘ expectations of domestic and interstate conflict are incorporated (Long, 2008) and in the period 1885-2000. This strong support for liberal theory is consistent with Kim‘s (1998) early simultaneous estimates, Oneal, Russett & Berbaum‘s (2003) Granger-style causality tests, and recent research by Robst, Polachek & Chang (2007). Reuveny & Kang (1998) and Reuveny (2001) report mixed results. ¶ It is particularly encouraging that, when simultaneously estimated, the coefficient of trade in the conflict equation is larger in absolute value than the corresponding value in a simple probit analysis. Thus, the dozens of published articles that have addressed the endogeneity of trade by controlling for the years of peace—as virtually all have done since 1999—have not overstated the benefit of interdependence. Admittedly, our instrumental variables are not optimal. In some cases, for example, in violation of the identification rule, the creation or end of a PTA may be a casus belli. More importantly, neither of our instruments explains a large amount of variance. Thus, future research should be directed to identifying better instruments. ¶ Our confidence in the commercial peace does not depend entirely on the empirical evidence, however; it also rests on the logic of liberal theory. Our new simultaneous estimates—as well as our re-analyses of KPR and KR—indicate that fatal disputes reduce trade. Even with extensive controls for on-going domestic conflict, militarized disputes with third parties, and expert estimates of the risks of such violence, interstate conflict has an adverse contemporaneous effect on bilateral trade. This is hardly surprising (Anderton & Carter, 2001; Reuveny, 2001; Li& Sacko, 2002; Oneal, Russett & Berbaum, 2003; Glick & Taylor, 2005; Kastner, 2007; Long, 2008; Findlay & O‘Rourke, 2007; cf. Barbieri & Levy, 1999; Blomberg & Hess, 2006; and Ward & Hoff, 2007). If conflict did not impede trade, economic agents would be indifferent to risk and the maximization of profit. Because conflict is costly, trade should reduce interstate violence. Otherwise, national leaders would be insensitive to economic loss and the preferences of powerful domestic actors. Whether paid prospectively or contemporaneously, the economic cost of conflict should reduce the likelihood of military conflict, ceteris paribus, if national leaders are rational.¶ ¶


Hegemony

U.S. debt is unsustainable – continued deficit spending will lead to trade deficits, and the loss of manufacturing and U.S. hegemonyEnsinger 10 – Dustin, Reporter at The Delaware Gazette (“Huge Deficits Altering U.S. Hegemony”, Economy in Crisis, 02/02/10, http://economyincrisis.org/content/huge-deficits-altering-us-hegemony)/CP

The sun may finally be setting on the American Century, according to The New York Times, which

claims that America‘s massive and unsustainable debt will be the cause of waning influence around the world in the near future. Not only is the deficit out-of-control – expected to be 1.3

trillion in the 2011 fiscal year – but the nation’s projected long-term debt is even more unsustainable. By the end of the decade, deficits are projected to rise to over five percent of gross domestic product. “[Obama’s] budget draws a picture of a nation that like many American homeowners simply cannot get above water,” The Times writes. Even worse, much of that debt is borrowed from foreign central banks, especially Asian powers Japan and China. As of September 2009, China held $790

billion of U.S. debt while Japan held roughly $752 billion. The problem is exacerbated by the political impasse in America, in which each side is firmly entrenched in an unwavering ideological battle. Republicans refuse to even entertain the idea of any tax increase while Democrats chafe at the though of entitlement cuts. In reality, to put America back on a path of fiscal sanity and ensure that America remains a hegemony, there needs to be a combination of both. Still, others see

America’s imminent demise. An extremely low savings rate, the decline of America’s manufacturing base, unsustainable trade deficits and concerns about the strength of the dollar have all caused some experts to question America’s place in the world and suggest that American influence may be rapidly dwindling. “Unless miraculous growth, or miraculous political

compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors,” The Times writes. “Beyond that lies the possibility that the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded.”

Economic decline collapses hegemonyZakaria 2008- editor of Newsweek International (Fareed, “The Post-American World: Release 2.0,” http://books.google.com/books?id=G4U8o3FNOS4C&pg=PA197&dq=The+fundamental+point+is+that+Britain+was+undone+as+a+great&hl=en&sa=X&ei=USPmT42kKYHs8wSKmZ3HAQ&ved=0CDMQ6AEwAA#v=onepage&q=The%20fundamental%20point%20is%20that%20Britain%20was%20undone%20as%20a%20great&f=false)//KC

The fundamental point is that Britain was undone as a great global power not because of bad politics but because of bad economics. It had great global influence, but its economy was structurally weak . It had great global influence, but its economy was structurally weak. And it made matters worse by attempting ill- advised fixes—going off and on the gold standard, imposing imperial tariffs, running up huge war debts. After World War II, it adopted a socialist economic program, the Beveridge Plan, which nationalized and tightly regulated large parts of the economy. This may have been understandable as a reaction to the country's battered condition, but by the 1960s and 1970s it had condemned Britain to stagnation—until Margaret Thatcher helped turn the British economy around in the 1980s.

Economic growth is at the center – the future of hegemony balanced on the economy.Peng 2009 - Dr. Yuan Peng, Director of CICIR’s Institute for American Studies (“The Financial Crisis and US Economic Hegemony,” April 11, 2009, http://www.cicir.ac.cn/english/newsView.aspx?nid=86)


When studying US economic hegemony it is important to not only understand the current US economic situation, but also to grasp fully the US comprehensive strength and the future trend of its hegemony . If we divide the US hegemony into hegemony of military, hegemony of politics, hegemony of economy, hegemony of science and culture, the economic hegemony should be the most changeable and also the most decisive element to the future of the US. The military hegemony will stay unchallenged; the basis for its scientific hegemony is solid to a large extent; and the political hegemony, though facing great challenges, is still far from fully declination. Therefore among the four kinds of hegemony, the future of economic hegemony is the most dimmed one. If the economic hegemony is at risk, it will weaken the military hegemony and science and technological hegemony, which, combined with a declining political hegemony, will cause a decline in the comprehensive hegemony of the US; if it successfully keeps its solid economic hegemony, with the support of its strong military capacity and scientific and cultural hegemony, the US will continue to dominate the world, even if the political hegemony is challenged. All in all, how the US economic hegemony goes will greatly impact the other countries in the world.[1] People have different opinions on the current economic situation and US hegemony. The financial crocodiles George Soros and Warren Buffet, as well as Wallerstain, the master of World System Theory, believe the US is truly declining. Even before the financial crisis, they had claimed that the economic bubble would burst and reckoned that decline is an inevitable trend for the US. On the other hand, strategists like Henry Kissinger, Zbigniew Brzezinski and the Newsweek Editor- Fareed Zakaria, embrace the hope that the US still holds a card to maintain or even revitalize its hegemony, although they admit the advent of “the post-America time” (Fareed Zakaria), or “power shift” (Henry Kissinger). The conclusions come from their deep awareness of the whole international system and the law of history. People in this school have a strong ideology and argue that, given the obvious edges of the US in today’s world, the hegemony of the US is still as solid as a rock. Anne-Marie Slaughter, the former Dean of the Woodrow Wilson School of Public and International Affairs, is a typical representative of this argument.

Economic decline leads to loss of hegemonyDu Boff ‘3 – (Richard, Professor of Economics at Bryn Mawr College, “US Hegemony Continuing Decline Enduring Danger”, The Monthly Review, http://monthlyreview.org/2003/12/01/u-s-hegemony-continuing-decline-enduring-danger//AS)

Ongoing trouble for the U.S. economy comes from the attack on the federal government, starting with the Reagan administration in the 1980s and reaching unprecedented ferocity in the reign of Bush II. Three tax cuts since 2001, loaded toward the rich, have helped to eliminate the federal budget surpluses of 1998–2001 and produce deficits of $374 billion for 2003 and upwards of $450 billion for 2004–2006. The problem is not the deficits themselves: were they spent on education, transportation, the environment, and health care they would not only produce a stronger and more stable economy but vastly improve the well-being of the bottom four-fifths of the income scale. But these are precisely what Bush and company want to destroy: the tax cuts are aimed at starving the federal government of resources and forcing it to slash spending on everything except the military. These policies are feeding into a “perfect fiscal storm.” The exploding budget deficits reduce national saving, deepening the country’s international deficit and increasing its dependence on foreign capital to pay for domestic consumption and investment. The damage at home comes from the fiscal squeeze on state and local government (SLG), the worst since the 1930s. Cutbacks in federal aid to SLGs, on the heels of the end of revenue-sharing in 1986, have come at a time when the federal government is dumping heavier fiscal responsibilities on SLGs, chiefly for Medicaid, Social Security Insurance for low-income households, and new domestic security measures in the wake of 9/11. State governments now face deficits totaling $60 to $85 billion over the next year—13 to 18 percent of state expenditures. Since all states except Vermont are required by constitution or statute to run balanced budgets, the deficits are forcing SLGs to make deep cuts in spending on education, public safety, libraries, and parks and hike taxes in the face of recession—the opposite of what the doctor ordered. Thus, discordant, even contradictory policies are adopted by the different levels of government, resulting in impairment of the functioning of the economic system as a whole. If hegemony runs on economic efficiency, the American system of government leaves something to be desired, and the manipulation of it by the radical right-wing oligarchy now in power amounts to “lunacy,” as one voice of global capital, the Financial Times, calls it.

http://monthlyreview.org/2003/12/01/u-s-hegemony-continuing-decline-enduring-danger//AS


AFF


Uniqueness


General Econ LowThe economy is down now – IMF is losing confidenceYUKHANANOV 6/16 [Anna Ykhananov, “IMF cuts U.S. growth outlook, says full employment years off” Reuters, 6/16/14. http://www.reuters.com/article/2014/06/16/us-imf-usa-idUSKBN0ER1IH20140616]The International Monetary Fund cut its growth forecast for the United States on Monday and said the economy would not reach full employment until the end of 2017, allowing interest rates to be held near zero for longer than financial markets expect. ¶ In its annual health check of the U.S. economy, the IMF cut its 2014 forecast to 2 percent from the 2.8 percent it predicted in April, due to a weak first quarter. It kept its 2015 forecast unchanged at 3 percent, as job creation picks up after a harsh winter.¶ "Recent data ... suggest a meaningful rebound in activity is now underway and growth for the remainder of this year and 2015 should well exceed potential," the IMF said.¶ Yet the country's potential growth should only be around 2 percent going forward, below historical averages, as the population ages and productivity growth slows, it added.¶ To help support the economy and fight persistently high poverty, the IMF urged the United States to boost the minimum wage. The federal minimum wage is now at 38 percent of the median wage, below most international standards, it said.¶ The IMF said its forecasts show the economy would only return to full employment by the end of 2017, with inflation remaining low. "If true, (Fed) policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets ," it said.¶ At the same time, the IMF warned that financial markets could be too complacent about possible volatility as U.S. rates rise, with the Fund's managing director, Christine Lagarde, citing a "halo of uncertainty" around the outlook.

The US economy is in shamblesKurtz 6/16 [Annalyn Kurtz, “U.S. Economy: Not Looking So Good.” CNN Money June 16, 2014. http://money.cnn.com/2014/06/16/news/economy/imf-us-forecast/] Here's how bad the first quarter was: The data already show the economy contracted in the first quarter, but now it looks like that contraction was the deepest decline since the Great Recession. The housing market slowed, businesses invested less money in new equipment and buildings, and exports of American goods declined .¶ Economists still believe the first quarter downturn

is a one-time blip, caused mostly by brutal winter. Snowstorms put new home construction on hold, slowed shipments of goods, and dissuaded people from going out to car lots to buy new cars.¶ The one bright spot supposedly came from consumers spending more of their money, particularly on services like health care. With Obamacare coming into effect, the Commerce Department assumed health care spending rose dramatically in the first quarter. Now, it looks like that assumption was flawed.¶ Friday shows health care spending was far weaker than expected in the first quarter. As a result, economists are now forecasting the economy contracted at an annual rate of 1.5% to 2.4% in the first three months of the year, even weaker than the 1% contraction already reported by the Commerce Department. (The

Commerce Department will revise its GDP numbers next week).¶ If that's the case, achieving 3% growth for 2014 overall will be next to impossible . The economy would have to grow at around a 4.6% annual pace for the next three quarters in a row.

The housing economy is down – this prevents future growthElboghdady 5/28 [Dina, syndicated reporter covering consumer advocacy and the housing market, “Freddie Mac: Many of the Nation’s Housing Markets are Stalling,” 2014, Washington Post, http://www.washingtonpost.com/blogs/wonkblog/wp/2014/05/28/freddie-mac-many-of-the-nations-housing-markets-are-stalling]

The bad news keeps piling up on the housing front, this time with glum statistics from mortgage giant Freddie Mac, which declared Wednesday that many of the nation’s housing markets are stalling. The third installment of Freddie’s “Multi-Indicator Market Index” (or MiMi), which sizes up homebuying activity and other factors, found that only 10 states and the District of Columbia fall in the “stable” range, as do four of the 50 metro areas included in the index – San Antonio, New Orleans, Austin and Houston. The outlook for

http://money.cnn.com/2014/05/29/investing/gdp-economy/?iid=EL

http://www.reuters.com/finance/markets?lc=int_mb_1001

http://www.reuters.com/finance/markets?lc=int_mb_1001

http://www.reuters.com/finance/economy?lc=int_mb_1001


the rest of the housing market looks bleak. “Less than half of the housing markets MiMi covers are showing an improving trend, whereas at this time last year more than 90 percent of these same markets were headed in the right direction,” Frank Nothaft, Freddie’s chief economist, said in a statement. The index draws from various data sources, including Freddie’s own business with more than 2,000 mortgage lenders across the country, to assess the health of the single-family housing market. The company said it benchmarks a market’s performance against that market’s historical norm, taking into account home purchase applications, employment, mortgage delinquencies and other factors. It then averages the weighted indicators to pull together a composite value, with a score of zero indicating a stable market. Based on the index, Freddie labels a market “weak” when its value falls below a negative 2 or “elevated” when it ranks above 2. It does not factor in cash-only sales, which make up roughly 40 percent of home sales today, or loans that do not meet Freddie Mac criteria. The national value of the index stood at -3.06 points in March, with a three-month flat trend in housing activity. Freddie crunched numbers going back to 2001, and found that the all-time low was -4.49 in November 2010, during the depths of the housing crisis. North Dakota was the highest-ranked “stable” state, with Wyoming, the District of Columbia, Alaska and Louisiana among the top of the list of 10 states that are considered to be in balance. Even before the index came out, Freddie had revised its forecast for the housing market downward. Earlier this month, Nothaft said there are “various imbalances” holding it back, most notably the job market. “Housing needs stronger, and just as important, sustained levels of job creation to get the housing engine firing on all cylinders,” he said. Other industry gauges show that sales of existing homes were down nearly 7 percent from the same time a year ago, home prices are starting to moderate, and builders still lack confidence in the housing market.


Link


No LinkObama is pushing for ocean funding – makes your impacts inevitable and no links the disadWoglom 14[“Obama Pushes for Needed Boost in Ocean Funding” Emily Woglom- Vice President, Conservation Policy and Programs, for Ocean Conservancy, March 4, 2014, http://blog.oceanconservancy.org/2014/03/04/obama-pushes-for-needed-boost-in-ocean-funding/]

The White House released President Obama’s budget proposal for fiscal year 2015 today. The proposal appears to be good news for the ocean and a great first step toward strong funding for ocean-health programs next year. Of course, the budget documents that the administration released today are only part of the picture. They detail the big-picture, top-level budget numbers with only a small number of details, and individual program budgets won’t be released until later. So what can we tell from what has been released so far? Last year, we focused on some key questions to help decide how the ocean is faring in the federal budget process. In particular, we asked whether the National Oceanic and Atmospheric Administration’s (NOAA) top-line budget number is sufficient, and whether

there was appropriate balance between NOAA’s “wet” ocean and “dry” non-ocean missions. When it comes to NOAA’s overall budget numbers, things

look pretty good. Regarding the balance between wet and dry missions, the single biggest increase goes to the satellite line office, but the National Ocean Service and the National Marine Fisheries Service both see healthy increases as well. We will not know details until additional numbers are released, but we do not see any red flags to

suggest that things are way out of balance. Here are some key takeaways based on what we know today: Overall NOAA Funding Looks Strong: The White House demonstrated support for increased funding at NOAA. NOAA programs lead

cutting-edge research on ocean health and support smart ocean management. NOAA is also the central agency tasked with ending overfishing. While NOAA’s FY

2014 funding level is an improvement over FY 2013’s abysmal sequestration level, the proposal from the White House shows how far we still have to go: It calls for a $174 million increase over FY 2014, recommending $5.5 billion in funding for NOAA in FY 2015.

A Slew of programs just got new fundingWatters 6/6/14 [Four Ways the Senate Supports Ocean Investments” June 6, 2014 by Jeff Watters- Acting Director of Government Relations for Ocean Conservancy, http://blog.oceanconservancy.org/2014/06/06/four-ways-the-senate-supports-ocean-investments/#more-8450] Just a week after the House of Representatives passed its proposed budget for the National Oceanic and Atmospheric Administration (NOAA), the Senate Appropriations Committee unanimously approved its NOAA proposal, funding research and activities that influence the health and strength of our ocean economy and coastal communities. The Senate proposal takes a cue from President Obama’s request, and would invest in several key ocean programs. It would: Fund ocean acidification research at $11 million, recognizing our need to understand how acidification will impact businesses and ecoystems, as well as the need to develop tools to mitigate its impacts. Although this proposal is still $4 million less than the President’s request, the Senate level is a strong step towards protecting marine environments and the communities that depend on them. Provide at least $5 million for competitive Regional Coastal Resilience Grants, which will help communities prepare for changes to marine ecosystems, climate impacts, and economic shifts. These grants will bring together partners on a regional scale to promote resilience and address shared risks. Increase Climate Research funding by $2.19 million to support the Arctic Research Program. Temperatures in the Arctic are warming at twice the rate of the global average and seasonal sea ice is diminishing rapidly. Funding to expand and improve NOAA’s Arctic Observing Network is critical to track and understand these profound changes and provide products that support our ability to adapt. Provide the requested $6 million for NOAA’s Marine Debris program, which supports existing monitoring and research efforts to better understand accumulation rates of debris and debris sources. The program catalyzes scientific research efforts to quantify the direct and indirect economic impacts caused by marine debris on coastal communities and economies that rely on them.


Link Shield – SQ SpendingThe aff is just a drop in the bucket – the government spends over $10 billion per dayDavies 12 [Antony Davies, “Funding Government by the Minute” Learn Liberty.Org, 3/28/12. http://www.learnliberty.org/videos/funding-government-minute/]In 2011, the federal government received $2.2 trillion from all revenue sources and spent 3.8 trillion, resulting in a $1.6 trillion deficit. To put federal government spending in perspective, economics professor Antony Davies shows how long it takes the government to run out of money and how much the government needs to cut to make it through the end of the year.¶ Suppose that on January 1 the government received its revenue of $2.2 trillion and began spending. To spend $3.8 trillion in one year means the government spends at the rate of $434 million an hour, or more than $10 billion a day.¶ With $2.2 trillion to spend, spending at a rate of $434 million an hour, the federal government runs out of money at 11:59 p.m. on July 31. To eliminate the deficit the government needs to cut five months’ worth of spending. Professor Davies shows that perhaps just cutting programs is not going to be enough to balance the budget.

Any link to the DA is shot – debt quadrupling by 2024Jeffrey 5/7/14 [“Fed Chair: ‘Deficits Will Rise to Unsustainable Levels’” Terence P. Jeffrey, May 7, 2014 http://www.cnsnews.com/news/article/terence-p-jeffrey/fed-chair-deficits-will-rise-unsustainable-levels]

Federal Reserve Chairman Janet Yellen, referencing the Congressional Budget Office's long-term budget projections, told the Joint Economic Committee of Congress today that under current policies the federal government’s deficits “will rise to unsustainable levels.” In the 10-year budget projections it released in April, the CBO estimated that the federal government will run $7.618 trillion in deficits from 2015 through 2024. At the same time, the CBO projected that the federal government’s debt held by the public would rise from $11.983 trillion at the end of fiscal 2013 to $20.947 trillion by the end of 2024. The debt held by the public is the part of the U.S. government debt that is not held by the federal government itself. It primarily consists of marketable Treasury securities, including bills, notes and bonds. It does not include what the government calls “intragovernmental debt," which is the money the Treasury has borrowed out of the Social Security Trust Fund and other government trust funds to pay current expenses. The total debt of the federal government at the end of fiscal 2013--including both the debt held by the public and the intragovernmental debt--was $16.719 trillion. The CBO estimates that by 2024, the total debt of the federal government will be $27.159 trillion—of which $20.947 trillion will be debt held by the public. If that projection holds up, the federal debt held by the public in 2024 would be more than four times the $5.035 trillion federal debt held by the public at the end of 2007.


Link TurnsSpending stimulates the economy – budget surpluses proveNP 2014 [National Priorities Project, Budget 101: “Fighting for a U.S. Federal Budget That Works for All Americans” https://www.nationalpriorities.org/about/mission/]There is an ongoing debate as to whether the government should limit its ability to borrow. Some consider deficit spending to be a hindrance to the government and the economy, arguing that a deficit only shifts the burden to future generations because it must be paid for eventually, just like any other loan.¶ Others see deficits as a crucial way for the government to stimulate the economy during an economic downturn. Proponents of this view believe that the role of government is not only to provide services that the private sector won’t, but also to stimulate the economy during economic crises. They argue that deficits are necessary in times of economic hardship, but that during economic booms, budget surpluses should be used to pay down the debt .

Spending stimulates the economy-The Week 2009 [How Spending Stimulates the Economy, The Week, http://theweek.com/article/index/93614/how-spending-stimulates) 2/24/09]will the Obama deficit-spending plan work? Will throwing $800 billion—$500 billion in extra government spending, and $300 billion in tax cuts—at the economy produce a world in which production and employment are higher and unemployment lower than would otherwise have been the case? The short answer is yes. The short reason is that spending works—eras in which some group or other gets excited about future prospects and starts madly spending money are eras in which production and employment are high and unemployment is low. And the government, in this respect, is just like any other group of starry-eyed optimists whose eagerness to spend pulls the economy into a high-employment, high-pressure boom. Consider the engines of previous boosts to production and employment. Between 2003 and 2005 the assembled investors of the world discovered the American housing market. Low interest rates produced by the Federal Reserve allowed them to borrow and leverage up cheaply—and the promise of financial engineering that would greatly help them diversify risk made them think investing in new construction and new homeowners’ moves into new construction was a profit opportunity. Spending on home construction rose. And the adult civilian employment to population ratio rose from 62 percent to 63.5 percent while the unemployment rate fell from 6.0 percent to 4.8 percent. Between 1996 and 1998 the assembled investors of America discovered the Internet and spent enormous sums to exploit and expand it. And the adult civilian employment to population ratio rose from 63 percent to nearly 65 percent as the unemployment rate fell 5.6 percent to 4.3 percent. In August, 1982, Paul Volcker’s Federal Reserve released the interest-rate chokehold it had been using to strangle the economy. Lower interest rates induced homebuilders to spend massively, since for the first time in nearly half a decade they could obtain financing for construction. At the same time, the Reagan administration ramped up defense spending for the second cold war, and luxury spending rose as the Reagan tax cuts gave money back to America’s rich. The adult employment-to-population ratio rocketed up from 57.2 percent to 59.9 percent in the short order of two years while the unemployment rate fell from 10.8 percent to 7.3 percent. These are just three examples of a general principle: each major business-cycle expansion we have seen has been driven by a leading wave of spending—by some group that became enthusiastic about their prospects and decided to greatly increase its spending. And that pulled employment and production up. Now we are attempting to do the same thing once again—but this time with the government as the leading spender. Obama’s stimulus spending increases are bigger, as a share of the economy, than Reagan’s defense increases were, while Obama’s tax cuts are smaller. Unlike 1983, when the Fed cut interest rates to help Reagan’s economic recovery, it cannot do so to help Obama. The Fed has done all the cutting it can. Still, a boost to spending by the government should have the same effects as boosts to spending by luxury consumers and the defense department and homebuilders in the early 1980s, by the high-tech sector in the late 1990s, and by homebuilders in the mid-2000s. The government’s money, after all, is as good as anybody else’s. So there is little question about the likely impact of the Obama deficit-spending program: production and employment are going to be higher than they would have been otherwise. As Greg Mankiw, the former chief economic adviser to George W. Bush, said back in 1983: “There is nothing novel about this. It is very conventional short-run stabilization policy: You can find it in all of the leading textbooks.”¶

Spending key to economic growth-Ezra Klein columnist at the Washington Post, as well as a contributor to MSNBC-January 2013 (Government is hurting the economy — by spending too little, The Washington Post, http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/30/government-is-hurting-the-economy-by-spending-too-little/) SYou’ve heard this before: The government is holding the economy back. And it’s true. The newly released numbers for economic growth in the fourth quarter, which show the economy shrinking at an 0.1 percent annual rate, prove that. But exactly what the

https://www.nationalpriorities.org/budget-basics/federal-budget-101/glossary/#debt

https://www.nationalpriorities.org/budget-basics/federal-budget-101/glossary/#deficit


government is doing to hold the economy back might surprise you.¶ Typically, when people say the government is hurting the recovery, they mean that deficits are too high and uncertainty over future policy is scaring businesses. But there’s little evidence of that.¶ The main reason to worry about deficits is that they’ll hike interest rates, as government borrowing crowds out private borrowing, and that makes it harder for businesses to grow and individuals to invest. But interest rates are about as low as they’ve ever been. After accounting for inflation, the federal government has been able to borrow at an unprecedented negative inflation-adjusted rate — so, the market is, essentially, paying us to keep their money safe — since 2011.¶ As such, most deficit hawks warn that the problem with our deficits is that markets might, at some point in the future, move unpredictably and swiftly to punish us for our deficits. Perhaps that’s true. But implicit in that argument is that there’s no real evidence that deficits are hurting the economy now.¶ Nor is there strong evidence that businesses are holding back on investment for any reason save lack of demand. The general factoid you hear in support of this argument is that corporations are sitting on more than $2.5 trillion in cash, with the implication being that they’d be spending that cash if not for the paralyzing effects of federal policy.But the build-up of cash reserves — or, to be more technical (and more accurate), “liquid assets” — is a long-term trend that hasn’t accelerated since the recession. The Federal Reserve keeps data on liquid assets held by non-financial corporations, and the build-up was faster from 1997 to 2000 than it was from 2008 to 2011. Why corporations are holding so much more cash is an interesting mystery, but it’s not one that began with the passage of Obamacare.¶ A big reason for this is cutbacks on the state and local level, which have been much larger than cutbacks at the federal level. In 2010, for instance, federal spending took 0.23 percentage points off GDP, while state and local spending took 0.43 percentage points off. As such, Washington often misses the overall contraction in government spending, as the bulk of that contraction has been at the state and local levels. But federal spending has been contracting too.Another way of looking at this data is to compare the contribution of private spending and public spending to economic growth. Here are those numbers since 2009: Economists expect that to continue. Mark Zandi of Moody’s Analytics projects the sequester alone will cut 0.5 percentage points off growth in 2013 if it’s allowed to go into effect. Add that to the expiration of the payroll tax cut and assorted other belt-tightening measures at the federal level and total fiscal drag, he says, is likely to be more than one percentage point of GDP in 2013 — a significant hit when total GDP growth isn’t expected to be above three percentage points.¶ These numbers, by the way, only measure the most direct contribution of government spending. They don’t measure indirect contributions, as when a defense contractor uses money from his federal contract to buy a house. His house purchase would’ve shown up in private investment, not public investment, but its absence doesn’t show up anywhere at all.So yes, the government is hurting the recovery. But it’s not because of deficits or uncertainty, or at least, it’s hard to find evidence for either theory. The real, provable damage the government has done to economic growth in recent years has been in cutting back on spending and investment since 2010.


Farm Bill ThumperFarm bill should’ve triggered the linkTCS 14 [Taxpayers for Common Sense, “Sacred Cows Come Home to Roost,” 2/7, http://www.taxpayer.net/library/weekly-wastebasket/article/sacred-cows-come-home-to-roost]

The President’s signing of the farm bill today marks a monumental defeat for taxpayers and victory for the old Washington spending bulls. Like shepherds guarding their flock, for nearly three years the Chairmen and

Ranking Members of the House and Senate Agriculture Committees opposed nearly every common sense effort to rein in spending on the already highly profitable agriculture sector. With the signing of this bill, special interests wolves have been set free to devour taxpayer dollars while the ordinary taxpayer is about to be fleeced. The Agricultural Act of 2014 (H.R. 2642) is the product of a long, non-transparent journey with unfortunately more downs than ups. Ever since the four Agriculture Committee leaders tried to jam a trillion dollar backroom-written farm bill into the failed Super Committee on deficit reduction,

they’ve tried to keep the public, and even their own committees, from influencing the bill. When the Super Committee crumbled, they painted their already crafted trillion-dollar bill as an “emergency” response to the 2012 drought. Then they tried to sell their paltry projected savings as a part of the fiscal cliff deal. Anything that moved was an opportunity to hitch onto. And even when the bills did make it to the House and Senate floors, the bulk of taxpayer-friendly amendments were never even given a chance. In fact, just 15 out of the 259 submitted were even allowed a vote in the Senate. And after the House bill was defeated in June of 2013, it was rushed back up three weeks later amongst a cloud of misinformation and without any further amendments or

debate. When you hide the work of Congress you get something like this bill – a Grade-A example of bipartisan binging. One wasteful program that sent out checks no matter what

(direct payments) is replaced with three new entitlement programs designed to send checks for “shallow” (their words, not ours) dips in income. The counter-cyclical program of government-set minimum prices for crops is eliminated and replaced with… a program of government-set minimum (but much higher than before) prices

called “Price Loss Coverage.” And tucked into page 312 is a section prohibiting the Obama Administration from saving money by renegotiating the sweetheart deal crop insurance companies receive for participating in the highly subsidized federal crop insurance program. In 2010, the Administration reduced the guaranteed rate of return for insurance companies (i.e., profit) from 17 percent to a more “reasonable” industry average level of 13 percent, saving taxpayers $6 billion, but the Ag Committees refuse to ever let such sane policymaking repeat itself.

The farm bill is also a classic example of a committee dominated by parochial interests thwarting the will of the majority. In hashing out the differences between the two, a task monopolized yet again by the four leaders, a number of interesting decisions were made. Floor amendments that added to the cost of the bill—for example adding crop insurance policies for pennycress (a weed used in biofuels), alfalfa (cheap hay), and losses due to food recalls—made it into the final legislation. Cost-savings amendments that would cap overall spending on new shallow loss entitlements, eliminate the U.S. Department of Agriculture’s duplicative catfish inspection office (we already have one in the FDA), deny farm subsidies to city dwellers, and trim crop insurance subsidies for

millionaires (an amendment that passed the Senate twice) were all abandoned. Oh, and a requirement that lawmakers and Cabinet Secretaries publicly disclose

their crop insurance subsidies? Yeah they just couldn’t make that fit. When given the choice between bowing to special interests or fighting for taxpayers, they said no to no one except those wanting to save taxpayer dollars. Legislation that sets our nation’s agriculture policies for the next five to ten years is too important to be left to a handful of folks working behind

closed doors. If President Obama followed his own FY14 budget priorities, he would veto this expensive, status quo piece of legislation. Taxpayers deserve a more cost-effective, accountable, responsive, and transparent farm safety net, not yet another farm bill that spares the sacred cows by sheering taxpayers.


Internal Link


No Internal – GeneralNo set threshold where debt impacts GDPPescatori 14 [Andrea, Economist at the Research Department of the IMF, former fellow at the Bank of Italy and Economist at the Federal Reserve Bank of Cleveland, Ph.D. in economics (Universitat Pompeu Fabra in Barcelona, Spain), this report was coauthored by Damiano Sandri and John Simon (1st is an economist at the IMF and has an M.A. and PhD in Economics from the Johns Hopkins University + 2nd has a PhD from MIT and is a Senior Economist at the IMF), “Debt and Growth: Is There a Magic Threshold?” WP/14/34, 2014, IMF, http://www.imf.org/external/pubs/ft/wp/2014/wp1434.pdf]

Is there a particular threshold in the level government debt above which the medium-term growth prospects are dramatically compromised? The answer to this question is of critical importance given the historically high level of public debt in most advanced economies. Yet there is currently no agreement on the answer and it is the subject of heated academic and political debate. One camp has argued that high levels of debt are associated with particularly large negative effects on growth. For example, an influential series of papers by Reinhart and Rogoff (2010, 2012) argues that there is a threshold effect whereby debt above 90 percent of GDP is associated with dramatically worse growth outcomes. An opposing perspective is advanced by those who dispute the notion that there is a clear debt threshold above which debt sharply reduces growth and raise endogeneity concerns whereby weak growth is the cause of particularly high levels of debt. Thus, according to this view, the priority should be increasing growth rather than reducing debt and, consequently, that much less short-term fiscal austerity is appropriate. This paper makes a contribution to the debate by presenting new empirical evidence based on a different way of analyzing the data and a sizeable dataset. Our methodology is based on the analysis of the relation between debt and growth over longer periods of time that has the potential to attenuate the concerns of reverse causality from growth to debt. Our results do not identify any clear debt threshold above which medium-term growth prospects are dramatically compromised. On the contrary, the association between debt and medium-term growth becomes rather weak at high levels of debt, especially when controlling for the average growth performance of country peers. We also find evidence that the debt trajectory can be just as important, and possibly more important, than the level of debt in understanding future growth prospects. Indeed, countries with high but declining levels of debt have historically grown just as fast as their peers. We also find, however, that high levels of debt are weakly associated with higher output volatility. This suggests that high levels of debt may still be associated with market pressure or fiscal and monetary policy actions that, even if they do not have particularly large negative effects on medium-term growth, destabilize it.


A2 Boccia I/L (1NC Shell)Study massively flawed – trashes validity of austerity supportersHerndon 13 [Thomas, Graduate student in economics UMass Amherst, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Political Economy Research Institute, April, http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf]

We replicate Reinhart and Rogoff (2010a and 2010b) and find that coding errors, selective exclusion of available data, and unconventional weighting of summary statistics lead to serious errors that inaccurately represent the relationship between public debt and GDP growth among 20 advanced economies in the post-war period. Our finding is that when properly calculated, the average real GDP growth rate for countries carrying a public-debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as published in Reinhart and Rogoff. That is, contrary to RR, average GDP growth at public debt/GDP ratios over 90 percent is not dramatically different than when debt/GDP ratios are lower. We also show how the relationship between public debt and GDP growth varies significantly by time period and country. Overall, the evidence we review contradicts Reinhart and Rogoff's claim to have identified an important stylized fact, that public debt loads greater than 90 percent of GDP consistently reduce GDP growth.

RR’s permeation into austerity defenders means you reject all their evidence – forms the basis for all other authors’ assumptionsHerndon 13 [Thomas, Graduate student in economics UMass Amherst, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Political Economy Research Institute, April, http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf]

According to Reinhart's and Rogoff's website,1 the findings reported in the two 2010 papers formed the basis for testimony before the Senate Budget Committee (Reinhart, February 9, 2010) and a Financial Times opinion piece \Why We Should Expect Low Growth amid Debt"(Reinhart and Rogo , January 28, 2010). The key tables and figures have been reprinted in additional Reinhart and Rogo publications and presentations of Centre for Economic Policy Research and the Peter G. Peterson Institute for International Economics. A Google Scholar search for the publication excluding pieces by the authors themselves finds more than 500 results.2 The key findings have also been widely cited in popular media. Reinhart's and Rogoff's website lists 76 high-profile features, including The Economist, Wall Street Journal, New York Times, Washington Post, Fox News, National Public Radio, and MSNBC, as well as many international publications and broadcasts. Furthermore, RR 2010a is the only evidence cited in the \Paul Ryan Budget" on the consequences of high public debt for economic growth. Representative Ryan's \Path to Prosperity" reports A well-known study completed by economists Ken Rogoff and Carmen Reinhart con forms this common-sense conclusion. The study found conclusive empirical evidence that gross debt (meaning all debt that a government owes, including debt held in government trust funds) exceeding 90 percent of the economy has a significant negative effect on economic growth. (Ryan 2013 p. 78) RR have clearly exerted a major influence in recent years on public policy debates over the management of government debt and fiscal policy more broadly. Their findings have provided significant support for the austerity agenda that has been ascendant in Europe and the United States since 2010

Their errors are enough to flaw public policy and demand rejection of austerityHerndon 13 [Thomas, Graduate student in economics UMass Amherst, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Political Economy Research Institute, April, http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf]

The influence of RR's findings comes from its straightforward, intuitive use of data to construct a stylized fact characterizing the relationship between public debt and GDP growth for a range of national economies. However, this


laudable effort at clarity notwithstanding, RR has made significant errors in reaching the conclusion that countries facing public debt to GDP ratios above 90 percent will experience a major decline in GDP growth.9 The key identified errors in RR, including spreadsheet errors, omission of available data, weighting, and transcription, reduced the measured average GDP growth of countries in the high public debt category. The full extent of those errors transforms the reality of modestly diminished average GDP growth rates for countries carrying high levels of public debt into a false image that high public debt ratios inevitably entail sharp declines in GDP growth. Moreover, as we show, there is a wide range of GDP growth performances at every level of public debt among the 20 advanced economies that RR survey. RR's incorrect stylized fact has contributed substantially to ensuring that \traditional debt management issues should be at the forefront of public policy concerns" (RR 2010a p. 578). Specifically, RR's findings have served as an intellectual bulwark in support of austerity politics. The fact that RR's findings are wrong should therefore lead us to reassess the austerity agenda itself in both Europe and the United States


Impact


Decline Doesn’t Cause WarDense economic linkages make conflict impossibleJervis 11 – Professor of Political Science @ ColumbiaRobert, Professor in the Department of Political Science and School of International and Public Affairs at Columbia University, December 2011, “Force in Our Times,” Survival, Vol. 25, No. 4, p. 403-425

Even if war is still seen as evil, the security community could be dissolved if severe conflicts of interest were to arise. Could the more peaceful world generate new interests that would bring the members of the community into sharp disputes? 45 A zero-sum sense of status would be one example, perhaps linked to a steep rise in nationalism. More likely would be a worsening of the current economic difficulties, which could itself produce greater nationalism, undermine democracy and bring back old-fashioned beggar-my-neighbor economic policies. While these dangers are real, it is hard to believe that the conflicts could be great enough to lead the members of the community to contemplate fighting each other. It is not so much that economic interdependence has proceeded to the point where it could not be reversed – states that were more internally interdependent than anything seen internationally have fought bloody civil wars. Rather it is that even if the more extreme versions of free trade and economic liberalism become discredited, it is hard to see how without building on a preexisting high level of political conflict leaders and mass opinion would come to believe that their countries could prosper by impoverishing or even attacking others. Is it possible that problems will not only become severe, but that people will entertain the thought that they have to be solved by war? While a pessimist could note that this argument does not appear as outlandish as it did before the financial crisis, an optimist could reply (correctly, in my view) that the very fact that we have seen such a sharp economic down-turn without anyone suggesting that force of arms is the solution shows that even if bad times bring about greater economic conflict, it will not make war thinkable .

Empirical studies show no causal relationship between economic decline and warMiller 1 – prof of economicsMorris Miller 2001, Professor of Economics, Poverty: A Cause of War?, http://archive.peacemagazine.org/v17n1p08.htm

Library shelves are heavy with studies focused on the correlates and causes of war. Some of the leading scholars in that field suggest that we drop the concept of causality, since it can rarely be demonstrated. Nevertheless, it may be helpful to look at the motives of war-prone political leaders and the ways they have gained and maintained power, even to the point of leading their nations to war. Poverty: The Prime Causal Factor? Poverty is most often named as the prime causal factor. Therefore we approach the question by asking whether poverty is characteristic of the nations or groups that have engaged in wars. As we shall see, poverty has never been as significant a factor as one would imagine. Largely this is because of the traits of the poor as a group - particularly their tendency to tolerate their suffering in silence and/or be deterred by the force of repressive regimes. Their voicelessness and powerlessness translate into passivity. Also, because of their illiteracy and ignorance of worldly affairs, the poor become susceptible to the messages of war-bent demagogues and often willing to become cannon fodder. The situations conductive to war involve political repression of dissidents, tight control over media that stir up chauvinism and ethnic prejudices, religious fervor, and sentiments of revenge. The poor succumb to leaders who have the power to create such conditions for their own self-serving purposes. Desperately poor people in poor nations cannot organize wars, which are exceptionally costly. The statistics speak eloquently on this point. In the last 40 years the global arms trade has been about $1500 billion, of which two-thirds were the purchases of developing countries. That is an amount roughly equal to the foreign capital they obtained through official development aid (ODA). Since ODA does not finance arms purchases (except insofar as money that is not spent by a government on aid-financed roads is available for other purposes such as military procurement) financing is also required to control the media and communicate with the populace to convince them to support the war. Large-scale armed conflict is so expensive that


governments must resort to exceptional sources, such as drug dealing, diamond smuggling, brigandry, or deal-making with other countries. The reliance on illicit operations is well documented in a recent World Bank report that studied 47 civil wars that took place between 1960 and 1999, the main conclusion of which is that the key factor is the availability of commodities to plunder. For greed to yield war, there must be financial opportunities. Only affluent political leaders and elites can amass such weaponry, diverting funds to the military even when this runs contrary to the interests of the population. In most inter-state wars the antagonists were wealthy enough to build up their armaments and propagandize or repress to gain acceptance for their policies. Economic Crises? Some scholars have argued that it is not poverty, as such, that contributes to the support for armed conflict, but rather some catalyst, such as an economic crisis. However, a study by Minxin Pei and Ariel Adesnik shows that this hypothesis lacks merit. After studying 93 episodes of economic crisis in 22 countries in Latin American and Asia since World War II, they concluded that much of the conventional thinking about the political impact of economic crisis is 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)."

Economic decline does not cause warBoehmer 7 – associate prof of poly sci @ UT-El PasoCharles Boehmer, Associate Professor, Dept. of Political Science @ University of Texas at El Paso. “The Effects of Economic Crisis, Domestic Discord, and State Efficacy on the Decision to Initiate Interstate Conflict”. Politics and Policy. Volume 35, Issue 4, Pages 774-809. Wiley InterScience. December 7, 2007.

Scholars such as MacFie (1938) and Blainey (1988) have nevertheless questioned the validity of the diversionary thesis. As noted by Levy (1989), this perspective is rarely formulated as a cohesive and comprehensive theory, and there has been little or no knowledge cumulation. Later analyses do not necessarily build on past studies and the discrepancies between inquiries are often difficult to unravel. "Studies have used a variety of research designs, different dependent variables (uses of force, major uses of force, militarized disputes), different estimation techniques, and different data sets covering different time periods and different states" (Bennett and Nordstrom 2000, 39). To these problems, we should add a lack of theoretical precision and incomplete model specification. By a lack of theoretical precision, I am referring to the linkages between economic conditions and domestic strife that remain unclear in some studies (Miller 1995; Russett 1990). Consequently, extant studies are to a degree incommensurate; they offer a step in the right direction but do not provide robust cross-national explanations and tests of economic growth and interstate conflict.

Economic decline empirically doesn’t cause great power wars – global integration checksBarnett, senior managing director of Enterra Solutions, 9[Thomas P.M., August 24, World Politics Review, “The New Rules: Security Remains Stable Amid Financial Crisis,” http://www.worldpoliticsreview.com/articles/4213/the-new-rules-security-remains-stable-amid-financial-crisis, accessed 7-13-13, UR]

Can we say that the world has suffered a distinct shift to political radicalism as a result of the economic crisis? ¶ Indeed, no. The world's major economies remain governed by center-left or center-right political factions that remain decidedly friendly to both markets and trade. In the short run, there were attempts across the board to insulate economies from immediate damage (in effect, as much protectionism as allowed under current trade rules), but there was no great slide into "trade wars." Instead, the World Trade Organization is functioning as it was designed to function, and regional efforts toward free-trade agreements have not slowed. ¶ Can we say Islamic radicalism was inflamed by the economic crisis? ¶ If it was, that shift was clearly overwhelmed by the Islamic world's growing disenchantment with the brutality displayed by violent extremist groups such as al-Qaida. And looking forward, austere economic times are just as likely to breed connecting evangelicalism as disconnecting fundamentalism. ¶ At the end of the day, the economic crisis did not prove to be sufficiently frightening to provoke major economies into

http://www.worldpoliticsreview.com/articles/4213/the-new-rules-security-remains-stable-amid-financial-crisis

http://www.worldpoliticsreview.com/articles/4213/the-new-rules-security-remains-stable-amid-financial-crisis


establishing global regulatory schemes, even as it has sparked a spirited -- and much needed, as I argued last week -- discussion of the continuing viability of the U.S. dollar as the world's primary reserve currency. Naturally, plenty of experts and pundits have attached great significance to this debate, seeing in it the beginning of "economic warfare" and the like between "fading" America and "rising" China. And yet, in a world of globally integrated production chains and interconnected financial markets, such "diverging interests" hardly constitute signposts for wars up ahead. Frankly, I don't welcome a world in which America's fiscal profligacy goes undisciplined, so bring it on -- please!

Causal chains that link economic decline to great power war are factually and empirically untrueFerguson, Harvard University Laurence A. Tisch History Professor, 6[Niall, Senior Fellow at the Hoover Institution at Stanford University, September/October 2006, Council on Foreign Relations, Foreign Affairs vol. 85 issue 5, pp. 62-63, “The Next War of the World,” accessed 7-13-13, UR]

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.¶ Many trace responsibility for the butchery to extreme ideologies. The Marxist historian Eric Hobsbawm calls the years between 1914 and 1991 "an era of religious wars" but argues that "the most militant and bloodthirsty religions were secular ideologies." At the other end of the political spectrum, the conservative historian Paul Johnson blames the violence on "the rise of moral relativism, the decline of personal responsibility [and] the repudiation of Judeo-Christian values." But the rise of new ideologies or the decline of old values cannot be regarded as causes of violence in their own right. Extreme belief systems, such as anti-Semitism, have existed for most of modern history, but only at certain times and in certain places have they been widely embraced and translated into violence.


Free Trade DefenseTrade conflicts won’t escalateJoseph Nye 96, Dean of the Kennedy School of Government – Harvard University, Washington QuarterlyThe low likelihood of direct great power clashes does not mean that there will be no tensions between them. Disagreements are likely to continue over regional conflicts, like those that have arisen over how to deal with the conflict in the former Yugoslavia. Efforts to stop the spread of weapons of mass destruction and means of their delivery are another source of friction, as is the case over Russian and Chinese nuclear cooperation with Iran, which the United States steadfastly opposes. The sharing of burdens and responsibilities for maintaining international security and protecting the natural environment are a further subject of debate among the great powers. Furthermore, in contrast to the views of classical

Liberals, increased trade and economic interdependence can increase as well as decrease conflict and competition among trading partners. The main point, however, is that such disagreements are very unlikely to escalate to military conflicts.

No trade war impactIan Fletcher 8/29/11 Ian Fletcher is Senior Economist of the Coalition for a Prosperous America, former Research Fellow at the U.S. Business and Industry Council M.A. and B.A. from Columbia and U Chicago, "Avoid Trade War? We're Already In One!" [www.huffingtonpost.com/ian-fletcher/avoid-trade-war-were-alre_b_939967.html ]

The curious thing about the concept of trade war is that, unlike actual shooting war, it has no historical precedent. In fact, there has never been a significant trade war, "significant" in the sense of having done serious economic damage. All history records are minor skirmishes at best.¶ Go ahead. Try and name a trade war. The Great Trade War of 1834? Nope. The Great Trade War of 1921? Nope Again. There isn't one.¶ The standard example free traders give is that America's Smoot-Hawley tariff of 1930 either caused the Great Depression or made it spread around the world. But this canard does not survive serious examination, and has actually been denied by almost every economist who has actually researched the question in depth -- a group ranging from Paul Krugman on the left to Milton Friedman on the right.¶ The Depression's cause was monetary. The Fed allowed the money supply to balloon during the late 1920s, piling up in the stock market as a bubble. It then panicked, miscalculated, and let it collapse by a third by 1933, depriving the economy of the liquidity it needed to breathe. Trade had nothing to do with it.¶ As for the charge that Smoot caused the Depression to spread worldwide: it was too small a change to have plausibly so large an effect. For a start, it only applied to about one-third of America's trade: about 1.3 percent of our GDP. Our average tariff on dutiable goods went from 44.6 to 53.2 percent -- not a terribly big jump. Tariffs were higher in almost every year from 1821 to 1914. Our tariff went up in 1861, 1864, 1890, and 1922 without producing global depressions, and the recessions of 1873 and 1893 managed to spread worldwide without tariff increases.¶ As the economic historian (and free trader!) William Bernstein puts it in his book A Splendid Exchange: How Trade Shaped the World,¶ Between 1929 and 1932, real GDP fell 17 percent worldwide, and by 26 percent in the United States, but most economic historians now believe that only a miniscule part of that huge loss of both world GDP and the United States' GDP can be ascribed to the tariff wars. .. At the time of Smoot-Hawley's passage, trade volume accounted for only about 9 percent of world economic output. Had all international trade been eliminated, and had no domestic use for the previously exported goods been found, world GDP would have fallen by the same amount -- 9 percent. Between 1930 and 1933, worldwide trade volume fell off by one-third to one-half. Depending on how the falloff is measured, this computes to 3 to 5 percent of world GDP, and these losses were partially made up by more expensive domestic goods. Thus, the damage done could not possibly have exceeded 1 or 2 percent of world GDP -- nowhere near the 17 percent falloff seen during the Great Depression... The inescapable conclusion: contrary to public perception, Smoot-Hawley did not cause, or even significantly deepen, the Great Depression.¶ The oft-bandied idea that Smoot-Hawley started a global trade war of endless cycles of tit-for-tat retaliation is also mythical. According to the official State Department report on this very question in 1931:¶ With the exception of discriminations in France, the extent of discrimination against American commerce is very slight...By far the largest number of countries do not discriminate against the commerce of the United States in any way.¶ That is to say, foreign nations did indeed raise their tariffs after the passage of Smoot, but this was a broad-brush response to the Depression itself, aimed at all other foreign nations without distinction, not a retaliation against the U.S. for its own tariff. The doom-loop of spiraling tit-for-tat retaliation between trading partners that paralyzes free traders with fear today simply did not happen.¶ "Notorious" Smoot-Hawley is a deliberately fabricated myth, plain and simple. We should not allow this myth to paralyze our policy-making in the present day.¶ There is a basic unresolved paradox at the bottom of the very concept of trade war. If, as free traders insist, free trade is beneficial whether or not one's trading partners reciprocate, then why would any rational nation start one, no matter how provoked? The only way to explain this is to assume that major national governments like the Chinese and the U.S. -- governments which, whatever bad things they may have done, have managed to hold nuclear weapons for decades without nuking each other over

http://www.huffingtonpost.com/ian-fletcher/avoid-trade-war-were-alre_b_939967.html


trivial spats -- are not players of realpolitik, but schoolchildren.¶ When the moneymen in Beijing, Tokyo, Berlin, and the other nations currently running trade surpluses against the U.S. start to ponder the financial realpolitik of exaggerated retaliation against the U.S. for any measures we may employ to bring our trade back into balance, they will discover the advantage is with us, not them. Because they are the ones with trade surpluses to lose, not us.¶ So our present position of weakness is, paradoxically, actually a position of strength.¶ Likewise, China can supposedly suddenly stop buying our Treasury Debt if we rock the boat. But this would immediately reduce the value of the trillion or so they already hold -- not to mention destroying, by making their hostility overt, the fragile (and desperately-tended) delusion in the U.S. that America and China are still benign economic "partners" in a win-win economic relationship.¶ At the end of the day, China cannot force us to do anything economically that we don't choose to. America is still a nuclear power. We can -- an irresponsible but not impossible scenario -- repudiate our debt to them (or stop paying the interest) as the ultimate counter-move to anything they might contemplate. More plausibly, we might simply restore the tax on the interest on foreign-held bonds that was repealed in 1984 thanks to Treasury Secretary Donald Regan.¶ Thus a certain amount of back-and-forth token retaliation (and loud squealing) is indeed likely if America starts defending its interests in trade as diligently as our trading partners have been defending theirs, but that's it. The rest of the world engages in these struggles all the time without doing much harm; it will be no different if we join the party.


Hegemony DefenseEconomic decline won’t kill heg --

Their internal link takes out their impact—if the world economy collapses, other countries will suffer too—the U.S. may be absolutely weaker, but it will still be relatively stronger—economic collapse would prevent other countries from militarizing to challenge us

Economic crisis makes heg sustainable.Mead 9(Walter Russell, Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations, 2/4, www.freerepublic.com/focus/news/2169866/posts, AD: 6/20/10)

Even before the Panic of 2008 sent financial markets into turmoil and launched what looks like the worst global recession in decades,

talk of American decline was omnipresent. In the long term, the United States faces the rise of Asia and the looming fiscal problems posed by Medicare and other entitlement programs. In the short term, there is a sense that, after eight years of George W. Bush, the world, full of disdain for our way of life, seems to be spinning out of our--and perhaps anybody's--control. The financial panic simply brought all that simmering anxiety to a boil, and the consensus now seems to be that the United States isn't just in danger of decline, but in the full throes of it--

the beginning of a "post-American" world. Perhaps--but the long history of capitalism suggests another possibility . After all, capitalism has seen a steady procession of economic crises and panics, from the seventeenth-century Tulip Bubble in the Netherlands and the Stop of the Exchequer under Charles II in England through the Mississippi and South Sea bubbles of the early eighteenth century, on through the crises associated with the Napoleonic wars and the spectacular economic crashes that repeatedly wrought havoc and devastation to millions throughout the nineteenth century. The panics of 1837, 1857, 1873, 1893, and 1907 were especially severe, culminating in the Great Crash of 1929, which set off a depression that would not end until World War II. The series of crises continued after the war, and the last generation has seen the Penn Central bankruptcy in 1970, the first Arab oil crisis of 1973, the Third World debt crisis of 1982, the S&L crisis, the Asian crisis of 1997, the bursting of the dot-com bubble in 2001, and today's global financial meltdown. And yet, this relentless series of crises has not disrupted the rise of a global capitalist system, centered first on the power of the United Kingdom and then, since World War II, on the power of the United States. After more than 300 years, it seems reasonable to conclude that financial and economic crises do not, by themselves, threaten either the international capitalist system or the special role within it of leading capitalist powers like the United Kingdom and the United States. If anything, the opposite

seems true--that financial crises in some way sustain Anglophone power and capitalist development. Indeed, many critics of both capitalism and the "Anglo-Saxons" who practice it so aggressively have pointed to what seems to be a perverse relationship between such crises and the consolidation of the "core" capitalist economies against the impoverished periphery. Marx noted that financial crises remorselessly crushed weaker companies, allowing the most successful and ruthless capitalists to cement their domination of the

system. For dependency theorists like Raul Prebisch, crises served a similar function in the international system, help ing stronger countries marginalize and impoverish developing ones. Setting aside the flaws in both these overarching theories of capitalism, this analysis of economic crises is fundamentally sound--and especially relevant to the current meltdown. Cataloguing the early losses from the financial crisis, it's hard not to conclude that the central capitalist nations will weather the storm far better than those not so central. Emerging markets have been hit harder by the financial crisis than developed ones as investors around the world seek the safe haven provided by U.S. Treasury bills, and commodity-producing economies have suffered extraordinary shocks as commodity prices crashed from their

record, boom-time highs. Countries like Russia, Venezuela, and Iran, which hoped to use oil revenue to mount a serious political challenge to American power and the existing world order, face serious new constraints. Vladimir Putin, Hugo Chavez, and Mahmoud Ahmadinejad must now spend less time planning big international moves and think a little bit harder about domestic stability . Far from being the last nail in

America's coffin, the financial crisis may actually resuscitate U.S. power relative to its rivals

Deterrence solves the impact—econ collapse will have no effect

Deudney, ’99 (Daniel, Asst Prof of Poli Sci at Johns Hopkins, Contested Grounds: Security and Conflict in the New Environmental Politics)

Part of the reason for this loosening of the link between economic and military power has been the nuclear revolution, which has made it relatively cheap for the leading states to deploy staggering levels of violence capacity. Given that the major states field massively oversufficient nuclear forces at the cost of a few percent of their GDP, environmentally induced economic decline would have to be extreme before their ability to field a minimum nuclear deterrent would


be jeopardized. A stark example of this new pattern is the fact that the precipitious decline in Russia's economy and defense spending in the 1990s has not diminished Russia's ability to deter great power attack.

TSDC Spending Core - d284f45nftegze.cloudfront.netd284f45nftegze.cloudfront.net/nyeakley/TSDC...

Documents

Transcript of TSDC Spending Core - d284f45nftegze.cloudfront.netd284f45nftegze.cloudfront.net/nyeakley/TSDC...