It seems we will ultimately not default. Just hours before the looming deadline, President signed the bill passed by both houses of congress which will allow treasury to borrow money and continue to pay its bills.
The whole spectacle forces one to wonder about the quality of our political system. If Moody's or S&P were in the business of rating political systems, they should have downgraded us to junk status.
While no one party or group came out looking good, I think following three entities especially came out diminished.
Tea party, which propelled republicans into majority in the house in the last years elections, seems to have misread their mandate. They looked irresponsible in this debate when they denied that defaulting on our debt is a big deal. They don't understand that complex problem like our debt which has been accumulated over decades requires thoughtful solution and can not be fixed overnight. They have one answer to all the problems of the world: tax-cuts.
Liberals on the other end seem to be living in a different planet where there are unlimited resources, country has no debt and more spending is the answer to all the problems. They believe in Keynesian economics and want to spend more and tax more. They blame corporations and rich people for almost everything that ails us today ignoring the fact that it is the private sector which drives our economic engine. According to them, if people are getting richer, they must be doing it on the backs of working poor.
President also came out of this debate diminished. Instead of showing true leadership on fiscal issues, in the beginning, he just offered lip service. Having taken a beating in health care debate, he could not muster the courage to take on this problem. He setup the debt commission but completely ignored its recommendations. His budget this year did nothing to address the probelm. He made a political calculation of not coming out with specific debt reduction plan of his own and in this he completely misread the mood of the country.
The real solution to our long term fiscal challenges will require entitlement reform and tax reform, not addressed in the current deal. Looking at what it took to just increase the debt ceiling, I am not very confident that we will solve this problem any time soon.
Monday, August 1, 2011
Thursday, April 7, 2011
Chairman Ryan's Budget for 2012: Path to Prosperity
House budget committee chairman unveiled his budget for 2012. His budget is the first honest attempt to address the fiscal crisis facing the country. While I don't agree with all the proposals in the budget, he actually has a serious proposal. Same can not be said of administration or democratic controlled senate.
Last year President appointed Bowles-Simposon bipartisan commission to develop a framework to address our looming fiscal crisis. Commission submitted its findings to the President who has been missing-in-action on its recommendations. His budget blue print, submitted to congress in February, made no serious attempt at tackling what some have called "most predictable fiscal crisis". We just learnt that President will address the nation this week with his own proposal for deficit reduction. He is finally coming around.
As expected, Chairman Ryan is being blamed by democrats for balancing the budget on the backs of seniors. I think it was courageous of him to submit his proposal knowing that it will be used as ammunition against him. Some have even called his proposal "suicidal". It is little disheartening to note that nobody from Republican leadership, including 2012 potential Presidential candidates, have come out in support of the plan. It is clear that his plan will not be adopted as it is. Compromises will be made. However nobody can deny that he has set the agenda for the debate and others are following.
Last year President appointed Bowles-Simposon bipartisan commission to develop a framework to address our looming fiscal crisis. Commission submitted its findings to the President who has been missing-in-action on its recommendations. His budget blue print, submitted to congress in February, made no serious attempt at tackling what some have called "most predictable fiscal crisis". We just learnt that President will address the nation this week with his own proposal for deficit reduction. He is finally coming around.
As expected, Chairman Ryan is being blamed by democrats for balancing the budget on the backs of seniors. I think it was courageous of him to submit his proposal knowing that it will be used as ammunition against him. Some have even called his proposal "suicidal". It is little disheartening to note that nobody from Republican leadership, including 2012 potential Presidential candidates, have come out in support of the plan. It is clear that his plan will not be adopted as it is. Compromises will be made. However nobody can deny that he has set the agenda for the debate and others are following.
Monday, March 14, 2011
Libyan Crisis: Should we or should we not intervene
In Libya, Col. Gadhafi is massacring its people to keep his hold on power. He has been ruling Libya for more than 40 years and seems in no hurry to leave. To say that the man is insane is an understatement. In 1975, he published "The Green Book" and made it a required reading for all Libyans. It documents his political philosophy. In here, he rejects liberal democracy, capitalism and free press and touts "Direct Democracy" being practiced in Libya where he appoints all key office holders.
One Libyan scholar, Dirk Vandewalle, has described the following passage from the book as encapsulating Gadhafi thought best:
"While it is democratically not permissible for an individual to own any information or publishing medium, all individuals have a natural right to self-expression by any means, even if such means were insane and meant to prove a person's insanity."
The question for American administration is whether to intervene militarily or not to remove Col. Gadhafi from power. It seems to me that Libyan ruler currently does not represent a clear and present danger to United States and thus obviates any need for an unilateral military intervention.
Having said that, international community can not ignore the prospect of a full-fledged civil wire in Libya and thus a co-ordinated respond by the world community makes sense. Towards that goal, Arab League, last week approved creation of a "no-fly" zone over Libya. This is the first time Arab League has recommended such a measure against one of its own members. United States should now lead the effort in UN to get a security council approval for no-fly zone and work with its NATO member nations to implement it.
President Obama is being deliberate in this matter and I fully agree with his approach. We are still paying the price for hastily invading Iraq. We can not make that mistake again.
One Libyan scholar, Dirk Vandewalle, has described the following passage from the book as encapsulating Gadhafi thought best:
"While it is democratically not permissible for an individual to own any information or publishing medium, all individuals have a natural right to self-expression by any means, even if such means were insane and meant to prove a person's insanity."
The question for American administration is whether to intervene militarily or not to remove Col. Gadhafi from power. It seems to me that Libyan ruler currently does not represent a clear and present danger to United States and thus obviates any need for an unilateral military intervention.
Having said that, international community can not ignore the prospect of a full-fledged civil wire in Libya and thus a co-ordinated respond by the world community makes sense. Towards that goal, Arab League, last week approved creation of a "no-fly" zone over Libya. This is the first time Arab League has recommended such a measure against one of its own members. United States should now lead the effort in UN to get a security council approval for no-fly zone and work with its NATO member nations to implement it.
President Obama is being deliberate in this matter and I fully agree with his approach. We are still paying the price for hastily invading Iraq. We can not make that mistake again.
Thursday, January 13, 2011
Tragedy in Tuscon
By now, a lot has been written and said about the tragedy in Tuscon last Saturday. In recent history, there have been very few incidents like this which have rallied the whole nation. Challenger disaster in 1986, Oklahoma city bombing in 1995 and September 11, 2001 come to mind. While we grieve and mourn for the dead and pray for the survivors, we also want to know why it happened and how can we stop it from happening in future.
It is very tempting to lay the blame for this tragedy on the door steps of people or policies we don't agree with. People on extreme right and left have pointed fingers at each other. This serves no purpose. Frankly, we may never know the reason. If this tragedy can help start the right debate about our policies about mental illness, gun control etc., it might serve some purpose but pointing fingers at this stage does more harm than good.
I thought President Obama struck the right tone at the memorial service on Wednesday. He was inspiring and comforting at the same time. He really rose to the occasion. It was one of the best moments of his presidency.
It is very tempting to lay the blame for this tragedy on the door steps of people or policies we don't agree with. People on extreme right and left have pointed fingers at each other. This serves no purpose. Frankly, we may never know the reason. If this tragedy can help start the right debate about our policies about mental illness, gun control etc., it might serve some purpose but pointing fingers at this stage does more harm than good.
I thought President Obama struck the right tone at the memorial service on Wednesday. He was inspiring and comforting at the same time. He really rose to the occasion. It was one of the best moments of his presidency.
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