The New York Times published an internal memo by Colonel Timothy Reese yesterday. Colonel Reese is Chief of the Baghdad Operations Command Advisory Team, and as such has been heavily involved in the training and development of the Iraqi Security Forces (ISF).
His memorandum—never designed to be leaked to the general public—is remarkable for its unvarnished and objective look at the security situation in Iraq. Some of the remarkable statements in the memo:
• Prime Minister (PM) Maliki hailed June 30th as a “great victory,” implying the victory was over the US.
• Remaining in Iraq through the end of December 2011 will yield little in the way of improving the abilities of the ISF or the functioning of the GOI. Furthermore, in light of the GOI’s current interpretation of the limitations imposed by the 30 June milestones of the 2008 Security Agreement, the security of US forces are at risk.
• The ineffectiveness and corruption of GOI Ministries is the stuff of legend.
• The military culture of the Baathist-Soviet model under Saddam Hussein remains entrenched and will not change. The senior leadership of the ISF is incapable of change in the current environment.
a) Corruption among officers is widespread
b) Neglect and mistreatment of enlisted men is the norm
c) The unwillingness to accept a role for the NCO corps continues
d) Cronyism and nepotism are rampant in the assignment and promotion system
e) Laziness is endemic
f) Extreme centralization of C2 is the norm
g) Lack of initiative is legion
h) Unwillingness to change, do anything new blocks progress
i) Near total ineffectiveness of the Iraq Army and National Police institutional organizations and systems prevents the ISF from becoming self-sustaining
j) For every positive story about a good ISF junior officer with initiative, or an ISF commander who conducts a rehearsal or an after action review or some individual MOS training event, there are ten examples of the most basic lack of military understanding despite the massive partnership efforts by our combat forces and advisory efforts by MiTT and NPTT teams.
There is little reason to doubt this assessment: It corresponds to every other objective assessment of the situation that has been coming out of Iraq.
It’s a good time, therefore, to reflect on what has occurred:
• Iraq was invaded in 2003 under a falsified claim of possessing weapons of mass destruction and links to Al Qaeda by the Bush Administration. Every one of the pre-war claims have been proven false, in many cases even before the date of the invasion. Yet the story of aluminium tubes, Prague meetings or Niger yellowcake have been forgotten. George Bush builds his library and gives the occasional speech; Tony Blair’s name has obscenely been put forward as the next President of the European Council.
• The occupation of Iraq was blatantly misplanned, leading to thousands of American and Allied deaths, and hundreds of thousands of Iraqi deaths. Paul Bremmer was awarded the Medal of Freedom; Donald Rumsfeld has retired into obscurity, for which we are grateful.
• At this time, Iraq, is essentially divided into three statelets: The Shia-controlled centre, east and south; the Sunni-controlled west; and the Kurdish-controlled north.
• Iranian influence over the Shia statelet continues to grow. Reports of Iranian control over militias and government ministries alike has been corroborated from several sources.
• The Sunni détente that was achieved by creating the “Sons of Iraq” is in the process of unravelling, as the Shia-dominated government reneges on promises made and begins to slowly disarm and disenfranchise the Sunni militias, and withhold their pay.
• The US promise to withdraw from combat operations and urban areas has fundamentally weakened the deterent threat of US power. This in turns makes any pretense of political reconciliation impossible.
• Whatever benefits won by the “surge” have been effectively lost by the Obama Administration’s decision—which was fully consistent with pledges made by the Bush Administration—to withdraw from Iraq.
If we accept these conclusions, which I believe are objective and evidence for all to see, then the incoherence and failure of American policy is simply breath-taking:
• Iraq was invaded on patently false pretences;
• The occupation was mismanaged, at tremendous cost in blood and treasure;
• Once a new strategy—the “surge” was finally put into effect and worked—both the Bush and Obama administrations literally pulled the rug out from other the feet of the US military by ordering a phased withdrawal.
America is withdrawing, leaving a broken state, where external political interference from Iran, Syria and other anti-US powers is increasing. We leave behind us another foul dictatorship and the prospect of years of low-level warfare that will inevitably draw us into renewed conflict.
In fact, there has been one clear winner in Iraq. Iran has managed to tie down US forces and broken American political will for an attack on its nuclear facilities. It has consolidated control over its ancient enemy-Iraq, and particularly over Basra and the oil-rich east of the country. It has learned how to combat American ground and air forces, and has extended its sphere of influence in the Middle East.
There are also a number of collateral winners: China has been able to continue its military and economic build-up unimpeded. Together with Russia, it emerges strengthened as America weakens. Although Russia will never recover its greatness, it’s clear that it’s room for manoeuvre has increased as it consolidates control over economic assets and neighbouring countries.
In the meantime, American combat fatalities number over 4,000, while permanently disabled and injured veterans number over 25,000. The cost so far in direct military expenditure as well as the cost of replacing worn-down equipment is probably at the $ 1 trillion mark. Joseph Stiglitz and Linda Bilmes estimate that the true cost of the war is over $ 3 trillion.
The American public appears to have forgotten about Iraq. Lulled by the Obama Administration’s promise to withdraw, the war no longer dominates the headlines. The geostrategic implications of America’s defeat—for defeat is what we are talking about—are rarely to be seen in public fora. Instead, the American public sinks deeper into its hedonistic morass of the next big sensation, the next You Tube hit, and the next irrelevant public debate.
As the summer of 2009 draws to a close, we are confronted with a debilitating strategic failure in Iraq. This failure leaves the United States less secure economically and politically that it was in 2003, and has created new opportunities for strategic enemies.
Absent a radical and fundamental re-think of US foreign, military and economic policy, we appear doomed to repeat the mistakes of the past. As our national debt skyrockets and political incoherence grips Washington, you can sense the headlines of American decline being written.
Instead of thinking, and preparing for the future, we are being drawn into another pointless conflict—that of Iraq and Pakistan—which military arms alone cannot hope to win, in which we are unaware of the true cost that will be incurred, and in which we appear to refuse to deploy the socio-economic tools are necessary for victory.
I write this post with sadness. I was opposed to the Iraq war from the start, and predicted the failure of the US occupation. Yet its failure has been beyond my grimmest forecasts. The human cost has been tremendous: the sacrifices of American troops and their families perhaps not meaningless, but certainly in vain. The economic cost is still being counted. The strategic consequences are emerging, but as yet unknown.
Napoleon Bonaparte said that “In politics, stupidity is not a handicap.” I regret that it’s never the politicians who pay for their stupidity.
Friday 31 July 2009
Thursday 30 July 2009
Dear Mr. Whitlock,
Thank you for responding to my email: I appreciate the consideration of your response.
I have re-read your article carefully in light of your comments, and you will permit me to reaffirm that the article is biased and one-sided. Taking only the final quotation of your article is a case in point:
"The Greeks are sorry that they are called Greece and not Macedonia," he said. "What else can I tell you?"
There is certainly no equivalent statement from a Greek source in the article. Given its arrogance and utter lack of relevance, it is better that there is not.
This pattern is repeated consistently in the article: inflammatory statements by FYROM officials: no rebuttal from a Greek official; no balance or disclaimer from the author of the article.
Mr. Gjorge Ivanov, is quoted as saying that "The pressure that Greece is making is destabilizing the whole region." This is not the case: the region (which I presume refers to the Balkan region) is hardly being destabilised by Greece’s stance on FYROM’s entry into NATO or the EU. In contrast, it’s support for Bulgaria’s and Romania’s entry into the EU and NATO (which have already occurred) and its support for Croatian and Turkish future entry into the EU, are matters of public record. Greece supports FYROM’s entry into NATO and EU, subject to a mutual and satisfactory resolution of the name issue. Regrettably, you do not publish a qualifier in your article, nor do you permit the Greek side to make a response which would balance this statement.
Mr Todor Petrov is quoted as accusing Greece of ‘"practicing ethnic cleansing and genocide on the Macedonian nation" for the past 100 years. "They're denying our nationality and culture and church and history and our borders," he said.’ This is certainly not the case, since there has not been a “Macedonian nation” in the past 100 years. Again, there is no response, or balance from the article.
Mr. Pavle Voskopoulos is quoted as describing Greece as a ‘“country subscribes to a myth of a "pure" Greek people who are directly descended from Alexander and others from his era. "This is all about modern Greek identity," he said. "If there is a Macedonia as an independent state, this is a great threat against Greek policy and Greek ideology.”’ This is hardly the case, but again, there is no response, or balance from the article.
I do consider these statements errata, in other words, “factual mistakes”, which contribute to a regrettably biased and unbalanced article, as I understand the meanings of these terms.
I await the day The Washington Post publishes an equivalent article expressing the Greek view of the situation.
Sincerely yours,
Philip Ammerman
Thank you for responding to my email: I appreciate the consideration of your response.
I have re-read your article carefully in light of your comments, and you will permit me to reaffirm that the article is biased and one-sided. Taking only the final quotation of your article is a case in point:
"The Greeks are sorry that they are called Greece and not Macedonia," he said. "What else can I tell you?"
There is certainly no equivalent statement from a Greek source in the article. Given its arrogance and utter lack of relevance, it is better that there is not.
This pattern is repeated consistently in the article: inflammatory statements by FYROM officials: no rebuttal from a Greek official; no balance or disclaimer from the author of the article.
Mr. Gjorge Ivanov, is quoted as saying that "The pressure that Greece is making is destabilizing the whole region." This is not the case: the region (which I presume refers to the Balkan region) is hardly being destabilised by Greece’s stance on FYROM’s entry into NATO or the EU. In contrast, it’s support for Bulgaria’s and Romania’s entry into the EU and NATO (which have already occurred) and its support for Croatian and Turkish future entry into the EU, are matters of public record. Greece supports FYROM’s entry into NATO and EU, subject to a mutual and satisfactory resolution of the name issue. Regrettably, you do not publish a qualifier in your article, nor do you permit the Greek side to make a response which would balance this statement.
Mr Todor Petrov is quoted as accusing Greece of ‘"practicing ethnic cleansing and genocide on the Macedonian nation" for the past 100 years. "They're denying our nationality and culture and church and history and our borders," he said.’ This is certainly not the case, since there has not been a “Macedonian nation” in the past 100 years. Again, there is no response, or balance from the article.
Mr. Pavle Voskopoulos is quoted as describing Greece as a ‘“country subscribes to a myth of a "pure" Greek people who are directly descended from Alexander and others from his era. "This is all about modern Greek identity," he said. "If there is a Macedonia as an independent state, this is a great threat against Greek policy and Greek ideology.”’ This is hardly the case, but again, there is no response, or balance from the article.
I do consider these statements errata, in other words, “factual mistakes”, which contribute to a regrettably biased and unbalanced article, as I understand the meanings of these terms.
I await the day The Washington Post publishes an equivalent article expressing the Greek view of the situation.
Sincerely yours,
Philip Ammerman
Craig Whitlock responds
Dear Mr. Ammerman,
Thanks for the note and for taking the time to write, though of course I'm sorry you didn't like the article.
You make a good point and raise a legitimate question about why the article quoted so many people from Skopje, as opposed to sources from Greece. Please allow me to explain.
The purpose of reporting the story primarily from Skopje was to illustrate how the "name issue" is affecting politics and life in general in the Republic of Macedonia. After all, the issue in question pertains to that country's name, and their people are the ones who have been unable to join NATO and are feeling the ramifications of this. I am sure that passions regarding the "name issue" are felt just as strongly in Greece, but I sincerely doubt that the dispute has had the same effect on the Greek economy or diplomatic relations between Athens and the rest of the world.
That said, please don't misunderstand: the Post is not taking sides in the conflict. Just because I interviewed and quoted more people in Skopje than in Greece doesn't mean that I or the newspaper endorse their views.
If you or others find their comments objectionable, that's more than OK -- we like our readers to make up their own minds about an issue. For example, it's perfectly legitimate for you to question the assertions by Macedonian officials that the name issue threatens the internal stability of the country. But several people in Skopje -- on all sides of the name issue, including some who think the Alexander campaign is silly -- mentioned it as a real possibility to me. I think it would be disingenuous to ignore their viewpoints just because others might not agree.
Just because the article quoted more people from the Republic of Macedonia than from Greece does not mean that the story was unbalanced. I strongly believe that the article did present and summarize the position of the Greek government and cited its perspective on the name issue. In fact, most of the itemized points you raised in your email are, in fact, addressed in the article in some form.
In your email, you assert that the article contained "errata" and misrepresentations. It seems to me that you do not cite any specific factual mistakes, but rather just don't like how the article was written and presented. I certainly respect your opinions and understand that you may have written the article differently. But I was careful with the facts and stand behind how they were reported in my story.
With best regards,
Craig Whitlock
Berlin bureau chief
The Washington Post
Thanks for the note and for taking the time to write, though of course I'm sorry you didn't like the article.
You make a good point and raise a legitimate question about why the article quoted so many people from Skopje, as opposed to sources from Greece. Please allow me to explain.
The purpose of reporting the story primarily from Skopje was to illustrate how the "name issue" is affecting politics and life in general in the Republic of Macedonia. After all, the issue in question pertains to that country's name, and their people are the ones who have been unable to join NATO and are feeling the ramifications of this. I am sure that passions regarding the "name issue" are felt just as strongly in Greece, but I sincerely doubt that the dispute has had the same effect on the Greek economy or diplomatic relations between Athens and the rest of the world.
That said, please don't misunderstand: the Post is not taking sides in the conflict. Just because I interviewed and quoted more people in Skopje than in Greece doesn't mean that I or the newspaper endorse their views.
If you or others find their comments objectionable, that's more than OK -- we like our readers to make up their own minds about an issue. For example, it's perfectly legitimate for you to question the assertions by Macedonian officials that the name issue threatens the internal stability of the country. But several people in Skopje -- on all sides of the name issue, including some who think the Alexander campaign is silly -- mentioned it as a real possibility to me. I think it would be disingenuous to ignore their viewpoints just because others might not agree.
Just because the article quoted more people from the Republic of Macedonia than from Greece does not mean that the story was unbalanced. I strongly believe that the article did present and summarize the position of the Greek government and cited its perspective on the name issue. In fact, most of the itemized points you raised in your email are, in fact, addressed in the article in some form.
In your email, you assert that the article contained "errata" and misrepresentations. It seems to me that you do not cite any specific factual mistakes, but rather just don't like how the article was written and presented. I certainly respect your opinions and understand that you may have written the article differently. But I was careful with the facts and stand behind how they were reported in my story.
With best regards,
Craig Whitlock
Berlin bureau chief
The Washington Post
Tuesday 28 July 2009
Errata in Craig Witlock’s Article: Another Rift between Greece, Macedonia
Craig Witlock’s articles in the Washington Post, Another Rift Between Greece, Macedonia Both Lay Claim to Alexander the Great, of July 28th is hardly an objective piece of reporting.
I find it highly questionable, for instance, that Mr. Witlock refers to no less than 6 pro-FYROM sources in the article (Foreign Minister Antonio Milososki; President Gjorge Ivanov, opposition leader Menduh Tachi; Todor Petrov, president of the World Macedonian Congress; Pavle Voskopoulos, leader of the pro-“Macedonian” Rainbow Party; and Mr. Pasko Kuzman, the FYROM’s Director of Cultural Heritage), versus only only pro-Greek source: Deputy Foreign Minister Yannis Valinakis. This is hardly an objective or balanced composition of sources, and I wonder at the validity of the Washington Post’s editorial policy that allowed this.
Beyond this, there are a number of salient facts which are omitted, while other crucial misrepresentations—not to say, propaganda—are accepted as fact:
1. In contrast to the avowed peaceful intentions expressed by the FYROM side, a number of maps, textbook content and speeches in FYROM have made reference to a “Greater Macedonia.” This refers to a Slavic-speaking “Macedonian” political entity which includes parts of the Greek province of Macedonia, including the city of Thessaloniki, as well as parts of Bulgaria. While these had their origin in Tito’s Yugoslavia, and were in part a Soviet attempt to destabilise Greece during the Greek Civil War, their continuation in FYROM on a number of instances since 1991 are regrettable.
2. The argument that Greece is destabilising the region by refusing FYROM entry into NATO is disingenuous, and incorrect. The conflict between the Slavic majority and the Albanian minority in FYROM is an internal matter, and stems from the government’s treatment of the Albanian minority in the recent past. It has nothing whatsoever to do with Greece, or NATO. The article neglects to mention that Greece supported the NATO peacekeeping force in FYROM, and that it has made its general support for FYROM’s entry—subject to a mutual resolution of the name issue—a matter of public record. The article also fails to note that Greece has publicly supported the candidacies of Bulgaria, Romania and other Balkan countries to both NATO and the European Union.
3. Historically speaking, Alexander the Great and his father, Philip II of Macedon, spoke a dialect of Doric Greek. There are over 6,000 inscriptions, epigraphs, coins and other artefacts in museums all over the world as well as the archaeological sites of Pella or Vergina which attest to this. The citizens of FYROM speak an entirely different language, which could be termed “Slavic”. There is absolutely no historical continuity between the Hellenic/Hellenistic culture and influence of the ancient Kingdom of Macedon, and the current state of FYROM.
4. Whether or not the government of Greece recognises the existence of ethnic minorities within its borders is besides the point. In fact, minorities are recognised in Greece, as national policies regarding the Roma or ethnic-Turkish minorities indicate. But this has literally nothing to do with the attempt to create a “Macedonian” cultural identity based on Alexander the Great that is currently taking place in FYROM, or the naturally opposing reaction of that country’s ethnic Albanian minority.
The policy of Greece is to negotiate with FYROM until a mutually-acceptable, exclusive name is found: This has been the Greek position for over 15 years now, and has been clearly and repeatedly expressed by successive governments. Greece joined NATO in 1951, and the EU in 1981, and has made major contributions to both organisations. I see no reason why both Greek policy and history should be challenged or indeed misrepresented in an article which is so biased and one-sided, unless of course the Washington Post has decided to change its long-standing journalistic and editorial policy.
I find it highly questionable, for instance, that Mr. Witlock refers to no less than 6 pro-FYROM sources in the article (Foreign Minister Antonio Milososki; President Gjorge Ivanov, opposition leader Menduh Tachi; Todor Petrov, president of the World Macedonian Congress; Pavle Voskopoulos, leader of the pro-“Macedonian” Rainbow Party; and Mr. Pasko Kuzman, the FYROM’s Director of Cultural Heritage), versus only only pro-Greek source: Deputy Foreign Minister Yannis Valinakis. This is hardly an objective or balanced composition of sources, and I wonder at the validity of the Washington Post’s editorial policy that allowed this.
Beyond this, there are a number of salient facts which are omitted, while other crucial misrepresentations—not to say, propaganda—are accepted as fact:
1. In contrast to the avowed peaceful intentions expressed by the FYROM side, a number of maps, textbook content and speeches in FYROM have made reference to a “Greater Macedonia.” This refers to a Slavic-speaking “Macedonian” political entity which includes parts of the Greek province of Macedonia, including the city of Thessaloniki, as well as parts of Bulgaria. While these had their origin in Tito’s Yugoslavia, and were in part a Soviet attempt to destabilise Greece during the Greek Civil War, their continuation in FYROM on a number of instances since 1991 are regrettable.
2. The argument that Greece is destabilising the region by refusing FYROM entry into NATO is disingenuous, and incorrect. The conflict between the Slavic majority and the Albanian minority in FYROM is an internal matter, and stems from the government’s treatment of the Albanian minority in the recent past. It has nothing whatsoever to do with Greece, or NATO. The article neglects to mention that Greece supported the NATO peacekeeping force in FYROM, and that it has made its general support for FYROM’s entry—subject to a mutual resolution of the name issue—a matter of public record. The article also fails to note that Greece has publicly supported the candidacies of Bulgaria, Romania and other Balkan countries to both NATO and the European Union.
3. Historically speaking, Alexander the Great and his father, Philip II of Macedon, spoke a dialect of Doric Greek. There are over 6,000 inscriptions, epigraphs, coins and other artefacts in museums all over the world as well as the archaeological sites of Pella or Vergina which attest to this. The citizens of FYROM speak an entirely different language, which could be termed “Slavic”. There is absolutely no historical continuity between the Hellenic/Hellenistic culture and influence of the ancient Kingdom of Macedon, and the current state of FYROM.
4. Whether or not the government of Greece recognises the existence of ethnic minorities within its borders is besides the point. In fact, minorities are recognised in Greece, as national policies regarding the Roma or ethnic-Turkish minorities indicate. But this has literally nothing to do with the attempt to create a “Macedonian” cultural identity based on Alexander the Great that is currently taking place in FYROM, or the naturally opposing reaction of that country’s ethnic Albanian minority.
The policy of Greece is to negotiate with FYROM until a mutually-acceptable, exclusive name is found: This has been the Greek position for over 15 years now, and has been clearly and repeatedly expressed by successive governments. Greece joined NATO in 1951, and the EU in 1981, and has made major contributions to both organisations. I see no reason why both Greek policy and history should be challenged or indeed misrepresented in an article which is so biased and one-sided, unless of course the Washington Post has decided to change its long-standing journalistic and editorial policy.
Tuesday 21 July 2009
Are we really worried about $ 23.9 billion per year for healthcare?
The debate over healthcare has switched from a discussion of the technical benefits of the bill (HR 3200: America's Affordable Health Choices Act of 2009), to the ways in which it can be funded.
David Herszenhorn and Robert Pear reported in the New York Times yesterday (Democrats May Limit Tax Increases for Health Care Plan) on the question on whether a tax surcharge should be levied to pay for the bill.
Perry Bacon and Michael Fletcher reported in the Washington Post today on the republican strategy for defeating the healthcare bill (GOP Focuses Effort To Kill Health Bills) as being fundamentally guided by cost issues in a declining economy.
According to the CBO budget analysis on HR3200, which has been quoted extensively in recent days, the unfunded liabilities associated with the healthcare bill (in its present form), total $ 239 billion over 10 years. Yes, the cost is over $ 1 trillion on 10 years, but “only” $ 239 billion is unfunded.
This amounts to $ 23.9 billion per year.
This is the cost of covering 37 million additional people currently not covered, as well as improving access for people currently enrolled and making healthcare portable.
In contrast, the United States spends over $ 600 billion per year in military expenditure, of which over $ 100 billion per year are dedicated to military operations in Afghanistan and Pakistan.
Our elected leaders should stop dithering and pass the bill. The costs per year are marginal in an annual Federal budget of $ 1.4 trillion: the public benefit in productivity and improved access is unsurpassed.
David Herszenhorn and Robert Pear reported in the New York Times yesterday (Democrats May Limit Tax Increases for Health Care Plan) on the question on whether a tax surcharge should be levied to pay for the bill.
Perry Bacon and Michael Fletcher reported in the Washington Post today on the republican strategy for defeating the healthcare bill (GOP Focuses Effort To Kill Health Bills) as being fundamentally guided by cost issues in a declining economy.
According to the CBO budget analysis on HR3200, which has been quoted extensively in recent days, the unfunded liabilities associated with the healthcare bill (in its present form), total $ 239 billion over 10 years. Yes, the cost is over $ 1 trillion on 10 years, but “only” $ 239 billion is unfunded.
This amounts to $ 23.9 billion per year.
This is the cost of covering 37 million additional people currently not covered, as well as improving access for people currently enrolled and making healthcare portable.
In contrast, the United States spends over $ 600 billion per year in military expenditure, of which over $ 100 billion per year are dedicated to military operations in Afghanistan and Pakistan.
Our elected leaders should stop dithering and pass the bill. The costs per year are marginal in an annual Federal budget of $ 1.4 trillion: the public benefit in productivity and improved access is unsurpassed.
Monday 20 July 2009
Healthcare and the US Federal Debt
The immutable chasm between campaign promises made by the Obama campaign and the public finance of the United States is becoming clearer for all to see. If the United States continues along its present path, drastic tax measures will be needed to correct a rapidly-deteriorating situation.
This is not to say I am against healthcare, or against Obama: I believe in both public healthcare (and public social security in its wider sense), and voted for Obama. But it has been clear for a long time that the promises made by the campaign cannot be financed, or at least not financed easily. (See my blog post: "Yes we can" or "No, we can't afford it?" of June 22nd, 2008).
The Obama campaign has been consistently working on a baseline assumption that public healthcare would cost between $ 600 – 700 billion over 10 years to introduce. Let’s set aside the fact that there have been few public programmes which stay within funding limits, and take some simple numbers into account. Assuming $ 70 billion in new funding per year (or $ 700 billion over 10 years), and applying this to 70 million patients using the system in the same year, provides a new expenditure of $ 1,000 per patient. This is a very low number taking into account (a) Americans already on subsidised Medicare/Medicaid, who would be expected to take advantage of the programme, (some of these patients will indeed become ineligible for Medicare/Medicaid) and (b) a certain portion of uninsured Americans who would be expected to take advantage of a hitherto unavailable benefit.
The Congressional Budget Office estimates that the 10-year cost of HR 3200, or the America’s Affordable Health Choices Act of 2009, would reach $ 1,042 billion by 2019. Taking into account cost savings and added revenue foreseen by the Act (which are questionable), the net debt added to the US federal budget is $ 239 billion by 2019.
Let’s face it, this is a bargain: if the US can achieve some form of public healthcare for only $ 239 billion in total debt by 2019, it will be nothing short of a miracle. My own estimates are much more pessimistic. Healthcare costs everywhere in the OECD are rising due to older populations and a fundamentally unhealthy lifestyle: in the US, we have to add the cost of medical malpractise and sky-high salaries as well.
The CBO estimate, it should be noted, assumes that HR 3200 will extend health insurance to about 37 million non-elderly people who do not have it, leaving about 17 million (of which about one-half of which are illegal immigrants), without health care.
But if a country of over 300 million can get public healthcare for an added $ 239 billion in debt over 10 years, it’s a no-brainer: the country should go for it. In contrast, the US spends over $ 600 billion per year on defence, not counting all costs associated with the military engagements in Afghanistan and Iraq, and their legacy costs.
The problem is not so much the costs of healthcare, but the total costs (and obligations), and the revenue forecasts that underpin them:
• Both the 2009 and 2010 budgets are based on optimistic forecasts for unemployment, tax revenue and GDP growth. Most analysts forecast a far higher public deficit than currently forecast.
• Federal debt, already over $ 11 trillion, will stretch towards 85% of GDP in the next 2-3 years. Any change in interest costs, which is likely, will substantially increase the cost of financing the debt, and may cause significant problems with economic growth, as explained below.
• The federal debt number most often quoted in press reports does not include unfunded or under-funded state budgets and over-optimistic assumptions on the municipal, state and federal pension endowments. The recent budget problems in California, which is facing an annual deficit of some $ 36 billion and does not count the money already “raided” from pension funds, is a case in point.
The CBO Budget and Economic Outlook, 2009-2019, published in 2009, includes an estimate of gross federal debt and GDP growth. These forecasts were released before the full impact of the credit crisis was known, and without a full accounting for the stimulus packages and healthcare costs which have since been allocated, or are in the process of allocation.
In this forecast, debt rises to $ 12.9 trillion in 2011, versus a nominal GDP of $ 15.14 trillion, for a debt-to-GDP ratio of 85%. Under CBO forecasts, the debt-to-GDP ratio steadily falls reaching 72% in 2019. This scenario, while hopeful, is certainly over-optimistic barring a sudden change in taxation or expenditure. To put it bluntly, a major change would have to come to the Washington policy-making system to see the debt fall to these levels.
The CBO clearly points out the problems inherent in expanding public expenditure:
Under current law, the federal budget is on an unsustainable path—meaning that federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds longterm fiscal projections, rising costs for health care and the aging of the U.S. population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits and accumulating debt. Keeping deficits and debt from reaching levels that would cause substantial harm to the economy would require increasing revenues significantly as a percentage of gross domestic product (GDP), decreasing projected spending sharply, or some combination of the two. CBO: The Long Term Budget Outlook. June 2009.
Remarkably, the CBO forecast does not include liabilities incurred by Freddie Mac and Fannie Mae: it appears to assume that these are long-term liabilities that will be repaid. I am not wholly convinced of this viewpoint: provisions should be made for mortgage losses and credit write-downs. Similarly, TARP funding has been costed based on cash flow, rather than total allocation. Although some income should derive from both Freddie/Fannie and TARP as obligations are repaid, it is clear that counting this on the debt balance sheet would greatly (if temporarily) increase total Federal Debt.
So what does our political crystal ball read?
• By 2011, President Barack Obama will be facing a re-election campaign with a debt-to-GDP ratio of at least 90%.
• High annual deficits and a high total debt will cause interest rates on Treasury Bills to rise. The cost of debt service will rise commensurately: rather than being available for investment, US investor money will be increasingly put into government debt. The CBO uses a 10-year T-bill benchmark rate of 4.8% in 2011: I estimate this at 5.2-5.5%.
• I doubt the trade deficit will have changed much in underlying terms. Given high annual budget deficits, high public debt and a continuing trade deficit, the US dollar will likely continue its devaluation. A USD:EUR rate of 1.6-1.7 is likely.
The US economy can continue to function with debt-to-GDP at 90%. But eventually, the costs of debt service will become prohibitive, and serious cuts in public expenditure will be needed, together with a broadening of the tax base. Taxes on high-income individuals and companies will have to increase.
Serious reform is needed: the sooner it starts, the better. Unfortunately, I do not expect any serious moves in this direction until after the 2010 Congressional elections, but which time it may be too late.
This is not to say I am against healthcare, or against Obama: I believe in both public healthcare (and public social security in its wider sense), and voted for Obama. But it has been clear for a long time that the promises made by the campaign cannot be financed, or at least not financed easily. (See my blog post: "Yes we can" or "No, we can't afford it?" of June 22nd, 2008).
The Obama campaign has been consistently working on a baseline assumption that public healthcare would cost between $ 600 – 700 billion over 10 years to introduce. Let’s set aside the fact that there have been few public programmes which stay within funding limits, and take some simple numbers into account. Assuming $ 70 billion in new funding per year (or $ 700 billion over 10 years), and applying this to 70 million patients using the system in the same year, provides a new expenditure of $ 1,000 per patient. This is a very low number taking into account (a) Americans already on subsidised Medicare/Medicaid, who would be expected to take advantage of the programme, (some of these patients will indeed become ineligible for Medicare/Medicaid) and (b) a certain portion of uninsured Americans who would be expected to take advantage of a hitherto unavailable benefit.
The Congressional Budget Office estimates that the 10-year cost of HR 3200, or the America’s Affordable Health Choices Act of 2009, would reach $ 1,042 billion by 2019. Taking into account cost savings and added revenue foreseen by the Act (which are questionable), the net debt added to the US federal budget is $ 239 billion by 2019.
Let’s face it, this is a bargain: if the US can achieve some form of public healthcare for only $ 239 billion in total debt by 2019, it will be nothing short of a miracle. My own estimates are much more pessimistic. Healthcare costs everywhere in the OECD are rising due to older populations and a fundamentally unhealthy lifestyle: in the US, we have to add the cost of medical malpractise and sky-high salaries as well.
The CBO estimate, it should be noted, assumes that HR 3200 will extend health insurance to about 37 million non-elderly people who do not have it, leaving about 17 million (of which about one-half of which are illegal immigrants), without health care.
But if a country of over 300 million can get public healthcare for an added $ 239 billion in debt over 10 years, it’s a no-brainer: the country should go for it. In contrast, the US spends over $ 600 billion per year on defence, not counting all costs associated with the military engagements in Afghanistan and Iraq, and their legacy costs.
The problem is not so much the costs of healthcare, but the total costs (and obligations), and the revenue forecasts that underpin them:
• Both the 2009 and 2010 budgets are based on optimistic forecasts for unemployment, tax revenue and GDP growth. Most analysts forecast a far higher public deficit than currently forecast.
• Federal debt, already over $ 11 trillion, will stretch towards 85% of GDP in the next 2-3 years. Any change in interest costs, which is likely, will substantially increase the cost of financing the debt, and may cause significant problems with economic growth, as explained below.
• The federal debt number most often quoted in press reports does not include unfunded or under-funded state budgets and over-optimistic assumptions on the municipal, state and federal pension endowments. The recent budget problems in California, which is facing an annual deficit of some $ 36 billion and does not count the money already “raided” from pension funds, is a case in point.
The CBO Budget and Economic Outlook, 2009-2019, published in 2009, includes an estimate of gross federal debt and GDP growth. These forecasts were released before the full impact of the credit crisis was known, and without a full accounting for the stimulus packages and healthcare costs which have since been allocated, or are in the process of allocation.
In this forecast, debt rises to $ 12.9 trillion in 2011, versus a nominal GDP of $ 15.14 trillion, for a debt-to-GDP ratio of 85%. Under CBO forecasts, the debt-to-GDP ratio steadily falls reaching 72% in 2019. This scenario, while hopeful, is certainly over-optimistic barring a sudden change in taxation or expenditure. To put it bluntly, a major change would have to come to the Washington policy-making system to see the debt fall to these levels.
The CBO clearly points out the problems inherent in expanding public expenditure:
Under current law, the federal budget is on an unsustainable path—meaning that federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds longterm fiscal projections, rising costs for health care and the aging of the U.S. population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits and accumulating debt. Keeping deficits and debt from reaching levels that would cause substantial harm to the economy would require increasing revenues significantly as a percentage of gross domestic product (GDP), decreasing projected spending sharply, or some combination of the two. CBO: The Long Term Budget Outlook. June 2009.
Remarkably, the CBO forecast does not include liabilities incurred by Freddie Mac and Fannie Mae: it appears to assume that these are long-term liabilities that will be repaid. I am not wholly convinced of this viewpoint: provisions should be made for mortgage losses and credit write-downs. Similarly, TARP funding has been costed based on cash flow, rather than total allocation. Although some income should derive from both Freddie/Fannie and TARP as obligations are repaid, it is clear that counting this on the debt balance sheet would greatly (if temporarily) increase total Federal Debt.
So what does our political crystal ball read?
• By 2011, President Barack Obama will be facing a re-election campaign with a debt-to-GDP ratio of at least 90%.
• High annual deficits and a high total debt will cause interest rates on Treasury Bills to rise. The cost of debt service will rise commensurately: rather than being available for investment, US investor money will be increasingly put into government debt. The CBO uses a 10-year T-bill benchmark rate of 4.8% in 2011: I estimate this at 5.2-5.5%.
• I doubt the trade deficit will have changed much in underlying terms. Given high annual budget deficits, high public debt and a continuing trade deficit, the US dollar will likely continue its devaluation. A USD:EUR rate of 1.6-1.7 is likely.
The US economy can continue to function with debt-to-GDP at 90%. But eventually, the costs of debt service will become prohibitive, and serious cuts in public expenditure will be needed, together with a broadening of the tax base. Taxes on high-income individuals and companies will have to increase.
Serious reform is needed: the sooner it starts, the better. Unfortunately, I do not expect any serious moves in this direction until after the 2010 Congressional elections, but which time it may be too late.
Friday 17 July 2009
Turkey’s Strategy in the Aegean Sea
Stavros Lygeros published an excellent opinion letter, Dangerous Precedents, in the English version of the Kathimerini today. He recounts that:
"Turkish provocations are not circumstantial but rather reflect long-term strategic plans. On 29 January, 1996, Turkey included the above three islands (as well as Pserimos) in the same category as the Imia islets. A few days later, then Prime Minister Tansu Ciller said that she would raise the issue of some 1,000 islets. “So far, Turkey subconsciously accepted that these islands practically belong to Greece. We are going to change that,” she told Hurriyet at the time."
We can expect further tensions between Turkey, Greece and Cyprus this year:
a. The negotiations between the government of the Republic of Cyprus and the Turkish-Cypriot authorities representing the occupied part of Cyprus are likely to reach some form of preliminary conclusion if the process is to be continued.
b. By December, Turkey will have to open its national ports and airports to Cypriot-flagged vessels and airplanes under its terms of the Accession negotiations with the European Union. So far, it has been in blatant violation of the basic terms of Accession: not only does it discriminate against EU member states, but it is occupying nearly 40% of the territory of one of them.
c. The domestic political scene continues to evolve, with the AK party seeking to consolidate power, and the armed forces responding in the face of the highly embarrassing Ergenekon coup network. It remains to be seen what information will still see the light of day.
d. The Turkish economic situation is declining rapidly, yet the government is delaying negotiations with the IMF and delaying a quick adjustment to the situation. A significant share of the population is feeling the impact of the credit crisis and the fall in tourism and construction, as well as the declining job markets in the EU, where many Turkish migrant workers are based. The AK party is not reacting as well as it perhaps should to the crisis: on the other hand, there are few credible political alternatives.
In the midst of this contradictory policy, Turkey seeks to convince the world it is a peaceful partner. Its actual record in terms of foreign policy suggests something entirely different. Greece has to take urgent measures, supported by the entire Hellenic diaspora, to affirm Greek sovereignty over its territory. This issue cannot be swept under the rug of wishful thinking: it will only grow with time, until the crisis point is reached.
"Turkish provocations are not circumstantial but rather reflect long-term strategic plans. On 29 January, 1996, Turkey included the above three islands (as well as Pserimos) in the same category as the Imia islets. A few days later, then Prime Minister Tansu Ciller said that she would raise the issue of some 1,000 islets. “So far, Turkey subconsciously accepted that these islands practically belong to Greece. We are going to change that,” she told Hurriyet at the time."
We can expect further tensions between Turkey, Greece and Cyprus this year:
a. The negotiations between the government of the Republic of Cyprus and the Turkish-Cypriot authorities representing the occupied part of Cyprus are likely to reach some form of preliminary conclusion if the process is to be continued.
b. By December, Turkey will have to open its national ports and airports to Cypriot-flagged vessels and airplanes under its terms of the Accession negotiations with the European Union. So far, it has been in blatant violation of the basic terms of Accession: not only does it discriminate against EU member states, but it is occupying nearly 40% of the territory of one of them.
c. The domestic political scene continues to evolve, with the AK party seeking to consolidate power, and the armed forces responding in the face of the highly embarrassing Ergenekon coup network. It remains to be seen what information will still see the light of day.
d. The Turkish economic situation is declining rapidly, yet the government is delaying negotiations with the IMF and delaying a quick adjustment to the situation. A significant share of the population is feeling the impact of the credit crisis and the fall in tourism and construction, as well as the declining job markets in the EU, where many Turkish migrant workers are based. The AK party is not reacting as well as it perhaps should to the crisis: on the other hand, there are few credible political alternatives.
In the midst of this contradictory policy, Turkey seeks to convince the world it is a peaceful partner. Its actual record in terms of foreign policy suggests something entirely different. Greece has to take urgent measures, supported by the entire Hellenic diaspora, to affirm Greek sovereignty over its territory. This issue cannot be swept under the rug of wishful thinking: it will only grow with time, until the crisis point is reached.
Wednesday 1 July 2009
Visiting the New Acropolis Museum
The Parthenon FloorThe new Acropolis Museum in stunning. I can't remember being in a museum which links the interior space (the exhibits) with the outer space so uniquely. The Propylea is magnificent. It recreates the sense of grandeur and anticipation that the original must have to anyone entering it 2,450 years ago.
The Propylea, viewed from the Caryatid Porch
The Archaic Hall is impressive, but needs more contextual work: There are many exhibits, remarkably within touching distance, but background information and some kind of context is needed. The exhibits are, of course, amazing, as is the setting: a sunlit room facing the Acropolis.
Exhibits, Archaic FloorThe Parthenon Hall is incredible, but surprisingly the impact of the frieze, metope and pediments is limited. While the space is astounding, the fragments are difficult to piece together, to envision as a whole. There is simply too much for the human eye/brain to take in and process. Certainly, you can’t absorb it in the first visit: more time, more experience is needed.
Unless you really understand something of Greek mythology, the artistic ambition of the original monument is difficult to grasp. I have a feeling that seeing it up close in this way will inspire a totally new approach to the way history is taught.
The Parthenon Floor
On the other hand, you can clearly see the scale of the monument. The Parthenon floor is built around a display at the scale of the actual building. Apart from the Pergamon Museum (specifically the Market Gate of Miletus or the Pergamon Altar) or the Met's Temple of Dendur, I can’t think of an equivalent installation. And, of course, the exhibits in Berlin or New York mentioned are thousands of kilometres from their original settings.
The Caryatid porch has been discretely reproduced on a quiet balcony overlooking the Propylea. I remember falling in love with the Caryatids in the old Acropolis Museum. The impact here is somehow more limited: the perspective is different; the visitor’s eye is overshadowed by the Propylea itself. Perhaps this recreates the impact of the original monument?
At the old museum, I recall thinking that these were the most graceful figures of women every sculpted by human hand. Here, in the new museum, I felt they were closer, and the weathering were much more apparent. This does not in any way detract from them, of course, but the closeness or proximity of these masterpieces requires the eye to see them in a fundamentally new way, compared to their older setting. Does familiarity indeed breed contempt?
Entering the Propylea. The glass floor allows viewing of the sub-terranean antiquities excavated during the construction of the museum.
The effect of splitting the collection between Athens, the British Museum and other locations (or of lost fragments) is well illustrated. I can’t think of a better reason for returning the “Elgin marbles” from the British Museum to the Acropolis Museum. Any visitor needs to see as much of this monument in its entirety as possible. The arguments given by the British Museum – that this permits a comparison with other great world cultures, or that it is more accessible in London – are rendered invalid by the unique setting and the need to maintain the cohesiveness of the exhibit. I won’t even get into the supposed legal justification for Lord Elgin’s removal of the piece. The marbles should come home to Athens – now.
The Parthenon, viewed from the Herod Atticus Theatre
I enjoyed the short multimedia exhibition, which does so much to explain the Acropolis’ history. This could usefully be supplemented by more detailed multimedia exhibit on touch screens elsewhere in the museum. In particular, the Propylea and the Erectheion, which don’t receive the attention they should.
The indoor and outdoor café is an excellent idea: you can drink coffee or something stronger looking out at the Acropolis. The grounds are immaculate. Unlike many other museums, this one has room to wander in.
The Parthenon, viewed from the Museum roof cafe
One thing I really appreciated: the exhibits are literally a finger’s touch away. They are immediate, proximate. In the old museum, they were typically behind glass, or raised on pedestals. Here, they are literally right next to you. Beware the impact of changing perspective: I’ve gotten so used to seeing them in the old museum, that a totally new approach is needed for seeing them in the present, new one.
I strongly recommend anyone visiting Athens visit the new Acropolis Museum. It’s an architectural masterpiece in terms of its functionality of linking the exhibits to the monument itself, and making the exhibits accessible.
Date of Visit: Friday, 26 June 2009
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