Download spending disad – 2011 adi - maria

2011 Arizona Debate Institutes
spending disad – 2011 adi - maria
Spending Disad
1nc ........................................................................................................................................................................... 3
***Neg Uniqueness ..................................................................................................................... 4
2nc uniqueness ....................................................................................................................................................... 5
at: obama veto ......................................................................................................................................................... 6
at: military spending outweighs ..............................................................................................................................7
at: funding demo assistance now ............................................................................................................................ 8
--xt: republican factionism ..................................................................................................................................... 9
--xt: civil society .....................................................................................................................................................10
--xt: egypt ............................................................................................................................................................... 11
at: no credit downgrade ......................................................................................................................................... 12
at: econ low ............................................................................................................................................................ 13
***Neg Links ............................................................................................................................. 13
generic .................................................................................................................................................................... 14
demo assistance ..................................................................................................................................................... 15
civil society ............................................................................................................................................................. 17
civil society/rule of law ..........................................................................................................................................18
internet assistance ................................................................................................................................................. 19
usaid ...................................................................................................................................................................... 20
ned ......................................................................................................................................................................... 21
***Neg Internal Links ................................................................................................................ 21
deficit reduction key ............................................................................................................................................. 22
fiscal discipline key ............................................................................................................................................... 23
deficit reduction and fiscal discipline key............................................................................................................. 24
deficit plan key to solve credit downgrade ........................................................................................................... 25
credit downgrade --> econ collapse ...................................................................................................................... 27
gridlock --> econ collapse ..................................................................................................................................... 28
***Neg Impacts......................................................................................................................... 28
dollar collapse --> collapse heg............................................................................................................................. 29
dollar collapse --> econ collapse ........................................................................................................................... 30
dollar collapse --> trade wars ................................................................................................................................ 31
xt: econ collapse --> war ....................................................................................................................................... 32
econ turns all impacts ........................................................................................................................................... 33
econ turns democracy ........................................................................................................................................... 34
econ turns heg ....................................................................................................................................................... 35
***Aff Answers .......................................................................................................................... 35
econ low ................................................................................................................................................................ 36
no spending cuts ................................................................................................................................................... 38
no spending cuts – obama veto ............................................................................................................................ 40
spending now – generic ......................................................................................................................................... 41
spending now – democracy assistance ................................................................................................................. 42
spending now – internet assistance...................................................................................................................... 44
spending now – egypt ........................................................................................................................................... 45
spending now – yemen ......................................................................................................................................... 46
link non-unique – lots of spending now ............................................................................................................... 47
no link ................................................................................................................................................................... 48
plan saves money/link turn .................................................................................................................................. 49
deficit spending good ............................................................................................................................................ 50
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2011 Arizona Debate Institutes
Spending Disad
spending cuts bad .................................................................................................................................................. 51
deal not key to econ .............................................................................................................................................. 52
econ resilient – US ................................................................................................................................................ 53
econ resilient - world ............................................................................................................................................ 54
at: credit downgrade ............................................................................................................................................. 55
at: dollar collapse .................................................................................................................................................. 56
no impact – econ collapse ..................................................................................................................................... 58
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2011 Arizona Debate Institutes
1nc
Spending Disad
Deficit spending will be reduced now as a part of an agreement to raise the debt ceiling—this is
key to preserving the US’ “AAA” credit rating
Bloomberg June 21, 2011 (“Fitch Says U.S. ‘Very Likely’ to Resolve Debt Ceiling Limit Before Aug. 2,”
http://www.bloomberg.com/news/2011-06-21/fitch-says-u-s-very-likely-to-resolve-debt-ceiling-limit-before-aug-2.html, MCL)
Fitch Ratings said U.S. lawmakers are “very likely” to raise the debt ceiling limit before Aug. 2, even as it reiterated that failure
to do so would result in the country being placed on rating watch negative. “The
U.S. Treasury is saying that if the debt ceiling is not
raised by Aug. 2, then they can’t guarantee that they will remain current on their obligations ,” Andrew Colquhoun,
head of Fitch’s Asia-Pacific Sovereigns team, said in an interview in Singapore today. “If the debt ceiling has not been raised by then,
then we would put the U.S. sovereign ratings on rating watch negative. We think it’s very likely that the debt
ceiling will be raised in good time.” Treasury Secretary Timothy F. Geithner has warned that a failure to increase the $14.3
trillion debt ceiling by Aug. 2, the date he projects borrowing authority would be exhausted, may have
catastrophic effects on the U.S. economy by sharply raising borrowing costs. Republicans are using the
debt-ceiling talks to press for cuts in government spending. Fitch rates U.S. sovereign debt AAA, the highest
investment grade. Moody’s Investors Service said on June 2 that it expects to place the U.S. government’s top credit
rating under review for a possible downgrade if there’s no progress on increasing the debt limit by mid-July. In
April, Standard & Poor’s put the U.S. government on notice that it risks losing its AAA credit
rating unless policy makers agree on a plan by 2013 to reduce budget deficits and the national debt.
[INSERT LINK – PLAN SPENDS LOTS OF MONEY]
Absent spending cuts, a credit downgrade would occur – this cripples the U.S. economy and
tanks the dollar’s status as the world’s reserve currency
Washington Post April 19, 2011 (“U.S. credit rating downgrade: the Armageddon scenario,” Apr 14, 2011,
http://www.washingtonpost.com/blogs/political-economy/post/us-ratings-downgrade-the-armageddon-scenario/2011/04/19/AFnE0n5D_blog.html)
A credit rating downgrade for the United States would spell even more financial trouble for the U.S.
government, hampering its ability to borrow money as investors demand higher yields to make up for the
increased risk. That would cause its national debt to balloon further and increase the need to hike taxes or make
even more painful cuts in spending. But the real Armageddon scenario would occur when the impact of a
sovereign downgrade hit the rest of the U.S. economy. The U.S. “risks eroding its standing at the core of the
global monetary system,” Mohamed El-Erian, chief executive and co-chief investment officer at PIMCO, wrote in a commentary piece for
the Financial Times. Pension funds and investment trusts that are bound by covenant to invest only in AAA-rated debt could be forced to dump
U.S. holdings. Banks that do the bulk of their business in the U.S. could themselves face downgrades. Eventually, the
dollar could lose its status as the world’s reserve currency. The ripple effects of Standard & Poors’ decision to
downgrade its outlook for the U.S. were already spreading on Monday. The agency also downgraded its outlook for five AAA-rated U.S. insurance
groups: Knights of Columbus, New York Life Insurance, Northwestern Mutual Life Insurance, Teachers Insurance & Annuity Association of
America and United Services Automobile Association. In downgrading their outlook from stable to negative, S&P noted that these companies are
“constrained by the U.S. sovereign credit rating because their businesses and assets are highly concentrated in the U.S.” S&P analyst David Zuber
and his colleagues wrote that they took into account “direct and indirect sovereign risks—such as the impact of macroeconomic volatility, currency
devaluation, asset impairment, and investment portfolio deterioration.” How likely is this nightmare scenario to happen? There are 19
sovereigns rated AAA by the S&P. Of those, only the United States has a negative outlook. There are a number of
countries that have lost AAA ratings over the past 20 years—including Canada, Denmark, Finland and Sweden—but they ended up regaining them.
Goldman Sachs analyst Alec Phillips wrote in a research note on Tuesday that while he agrees with S&P that the “current trajectory of fiscal policy
is unsustainable over the long-term” and that the U.S. “already appears to be on the edge of AAA territory ,” he has a
somewhat more optimistic view of the U.S. situation over the next few years and assumes that some fiscal
tightening is likely to occur.
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2011 Arizona Debate Institutes
1nc
Spending Disad
Decline of dollar causes worldwide economic collapse – collapses hegemony and causes a
nuclear war with China
Mead 2004 – Kissinger Fellow for US Foreign Policy at the Council on Foreign Relations (Walter Russell, Foreign Policy, Mar/Apr. 2004, EBSCO)
Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States-government and
private bonds, direct and portfolio private investments-more and more of them have acquired an interest in
maintaining the strength of the U.S.-led system. A collapse of the U.S. economy and the ruin of the dollar
would do more than dent the prosperity of the United States. Without their best customer, countries including
China and Japan would fall into depressions. The financial strength of every country would be severely shaken
should the United States collapse. Under those circumstances, debt becomes a strength, not a weakness, and other countries fear to break with the United
States because they need its market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a crippling liability, and the
like Samson in the
temple of the Philistines, a collapsing U.S. economy would inflict enormous, unacceptable damage on the rest
of the world. That is sticky power with a vengeance. THE SUM OF ALL POWERS? The United States' global
economic might is therefore not simply, to use Nye's formulations, hard power that compels others or soft
power that attracts the rest of the world. Certainly, the U.S. economic system provides the United States with
the prosperity needed to underwrite its security strategy, but it also encourages other countries to accept U.S.
leadership. U.S. economic might is sticky power. How will sticky power help the United States address today's challenges? One pressing need is to ensure that Iraq's
economic reconstruction integrates the nation more firmly in the global economy. Countries with open economies develop powerful tradeoriented businesses; the leaders of these businesses can promote economic policies that respect property
rights, democracy, and the rule of law. Such leaders also lobby governments to avoid the isolation that characterized
United States must continue to justify other countries' faith by maintaining its long-term record of meeting its financial obligations. But,
Iraq and Libya under economic sanctions. And looking beyond Iraq, the allure of access to Western capital and global markets is one of the few forces protecting the rule of law
from even further erosion in Russia. China's
rise to global prominence will offer a key test case for sticky power. As China
develops economically, it should gain wealth that could support a military rivaling that of the United States;
China is also gaining political influence in the world. Some analysts in both China and the United States believe
that the laws of history mean that Chinese power will someday clash with the reigning U.S. power. Sticky power
offers a way out. China benefits from participating in the U.S. economic system and integrating itself into the
global economy. Between 1970 and 2003, China's gross domestic product grew from an estimated $106 billion to more than $1.3 trillion. By 2003, an estimated $450 billion of foreign money
had flowed into the Chinese economy. Moreover, China is becoming increasingly dependent on both imports and exports to keep its economy (and its military machine) going. Hostilities between the
United States and China would cripple China's industry, and cut off supplies of oil and other key commodities. Sticky power works both ways, though. If China cannot afford war with the United States, the
In an era of weapons of mass destruction, this mutual
dependence is probably good for both sides. Sticky power did not prevent World War I, but economic
interdependence runs deeper now; as a result, the "inevitable" U.S.-Chinese conflict is less likely to occur.
Sticky power, then, is important to U.S. hegemony for two reasons: It helps prevent war, and, if war comes, it
helps the United States win. But to exercise power in the real world, the pieces must go back together. Sharp, sticky, and soft power work together to sustain U.S. hegemony.
United States will have an increasingly hard time breaking off commercial relations with China.
Today, even as the United States' sharp and sticky power reach unprecedented levels, the rise of anti-Americanism reflects a crisis in U.S. soft power that challenges fundamental assumptions and
relationships in the U.S. system. Resolving the tension so that the different forms of power reinforce one another is one of the principal challenges facing U.S. foreign policy in 2004 and beyond.
4
***Neg Uniqueness
2011 Arizona Debate Institutes
2nc uniqueness
Spending Disad
Spending cuts will pass – both Cut Cap and Balance and the Group of Six plans include
spending reductions Memoli, Nicholas and Mascaro July 19, 2011 – Michael, Peter and Lisa, writers for the
Washington Bureau (In emerging Senate plan, Obama sees new hope for major debt deal, http://www.nashuatelegraph.com/newsworldnation/926555227/in-emerging-senate-plan-obama-sees-new.html, MCL) The prospects for a significant debt-ceiling compromise were
revived Tuesday, as President Barack Obama signaled possible support for a plan being offered by the so-called
Gang of Six senators that includes steep spending cuts and an overhaul of the tax code. Making a surprise appearance in the White
House briefing room, Obama said the package crafted by the bipartisan group is “broadly consistent with the approach I’ve urged,” and called it a
“very significant step” in the months-long negotiations over raising the nation’s debt ceiling. As the House began debating the GOP’s
“cut, cap and balance” plan, Obama also told reporters that time is running out to reach a deal and avert what would be a catastrophic default. “We don’t
have any more time to engage in any more symbolic gestures,” the president said. “We don’t have any more time to posture.” An executive
summary of the Gang of Six plan outlines an immediate $500 billion in spending cuts, with a total of $3.7
trillion in deficit reduction in the next decade. The proposal is based on recommendations from the bipartisan deficit commission that
Obama commissioned last year, which he had initially been cool to. It includes entitlement reforms – a major concern of Democrats – and “fundamental”
tax reform, something that Republicans have been wary of throughout the debt negotiations. What was significant was the support it
received, conceptually, from so many Republicans in the Senate – including Lamar Alexander of Tennessee, the
third-ranking GOP member of the chamber. “We now have a bipartisan group of senators who agree with that
balanced approach and we’ve got the American people who agree with that balanced approach,” Obama said. “My
hope ... is that (congressional leaders) tomorrow are prepared to start talking turkey and actually getting down
to the hard business of crafting a plan that can move this forward in time for the Aug. 2 deadline.”
Yes – spending cuts – scare tactics and success of cut, cap and balance prove
Kerpen July 19, 2011 – Phil, vice president for policy at Americans for Prosperity. (Cut Cap and Balance -- Don’t Cut and Run, Fox News,
http://www.foxnews.com/opinion/2011/07/19/cut-cap-and-balance-dont-cut-and-run/, MCL)
The U.S. House of Representatives will vote today on H.R. 2560 also known as the "Cut,
Cap, and Balance Act of 2011." If the
bill would significantly cut
government spending, create binding caps to bring spending back to its historical average, below 20 percent of
the economy, over the next ten years, and require Congress to adopt a tough balanced budget amendment to the
debt ceiling must be raised (an open question for many conservatives) then this is surely the best way to do it. The
Constitution – including a spending cap and a supermajority requirement for tax increases – before the federal government would be allowed to incur
any more debt. President Obama has issued a veto threat, saying, ridiculously, that such structural controls on
spending are not necessary to restore fiscal accountability. He continues to claim he supports spending cuts of four trillion dollars,
but he won’t show anyone anything specific. All we know for sure is that he wants steeply higher taxes that would make government even bigger.
House Republicans have been winning this debate, evidenced by the fact that the White House is using
desperate scare tactics.
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2011 Arizona Debate Institutes
at: obama veto
Spending Disad
All evidence about the VETO refers to the Cut, Cap and Balance plan. Obama would NOT veto
the Gang of Six plan which is much more bipartisan.
House passage increases the change of senate passage – despite veto threat
Memoli July 19, 2011 – Michael, Politics writer for the LA times (House approves GOP debt reduction bill, LA Times, http://www.latimes.com/news/politics/la-pn-house-capvote-20110719,0,7934542.story, MCL)
The House of Representatives on Tuesday passed a Republican-backed plan to extend the nation's borrowing capacity in
return for a cap on future government spending and a balanced budget amendment. The vote on the so-called
"Cut, Cap and Balance" plan was largely symbolic, called to give voice to the conservative majority that has refused to compromise with the White House on raising
the debt ceiling. It passed 234-190, with Democrats largely united in opposition. The proposal would cut spending by $111 billion in 2012 and cap
future outlays to 19.9% of the nation's gross domestic output. It also would require that Congress send a balanced-budget constitutional amendment to
the states for ratification, a lengthy process. Some Republicans who voted no did so because they oppose any increase in the debt ceiling, even with spending cuts. The plan is all but
certain to stall in the Democratic-controlled Senate, and Obama has threatened to veto it should it reach his
desk. But it now clears the way for a final round of negotiations aimed at settling on a consensus plan that
could move through both chambers.
Veto is nothing near certain – administration is focused on compromise
Schroeder July 26, 2011 – writer for the Hill (White House adviser won't say Obama would veto short-term hike, The Hill http://thehill.com/blogs/on-themoney/budget/173531-white-house-adviser-wont-say-obama-would-veto-short-term-hike, MCL)
White House economic adviser Gene Sperling refused to say whether President Obama would veto a short-term debtceiling hike when pressed on the matter Tuesday. The president has been adamant in calling for a debt-limit increase sufficient to keep the government borrowing through the 2012 elections.
However, House Speaker John Boehner (R-Ohio) is putting forward a plan that would offer a small increase upfront, with a later boost to be contingent on steps to reduce the deficit, including a vote on a
But when asked on MSNBC's "Morning Joe" if the president would veto any debt-limit increase that does
not run through the fall of 2012, the director of Obama's National Economic Council dodged. "We’re facing a
stalemate right now," Sperling said, after being asked about a veto by host Joe Scarborough. “Our issue now is not what happens if legislation comes to the president’s desk. Our
issue is that we are at stalemate and we need some kind of compromise to break the stalemate." Scarborough
pressed on the matter, asking Sperling if Obama would veto a six-month boost to the debt limit. Sperling said the president opposed it, but did not say if it would be vetoed. "I think the president’s
been pretty clear that he does not find that acceptable, but we’re not going to start this morning doing hypothetical veto threats of legislation that could hypothetically get there," he said. “We’re
starting this morning saying, 'Let's get constructive.'
balanced-budget amendment.
No veto despite threat – bill is a much better compromise that is a reasonable deal for both
sides
Espo July 26, 2011 – David, AP's chief congressional correspondent. (Analysis: Debt differences narrowing, despite talk, CBS News,
http://www.cbsnews.com/stories/2011/07/26/opinion/main20083792.shtml, MCL)
Pitched partisan rhetoric aside, the differences are narrowing, not widening, as the divided U.S. government struggles
to avert a financial default that neither President Barack Obama nor the leaders of Congress say they want. Which helps explain why day-old legislation unveiled by the House
Republican leadership pulled off something of a political trifecta on Tuesday. Several rank-and-file conservatives in Speaker John Boehner's Republican party attacked it from the right. From other points
Reid labeled it "dead on arrival" in his Democratic-controlled chamber. And moments later the White
House said if the measure somehow managed to clear Congress, "the president's senior advisers would
recommend that he veto this bill." Yet the legislation also represents significant movement from a bill the House
passed last week, rou ghly half of its mandated spending cuts, for example. Just as Reid no longer is insisting on having tax increases as part of any plan to cut deficits.
"We have a bill that is reasonable and responsible," said Boehner's spokesman, Michael Steel.
on the political spectrum, Senate Majority Leader Harry
Obama veto threat is not seen as credible by republicans
NewsMax July 18, 2011 - GOP Shrugs Off Obama's Veto Threat on Budget Bill, http://www.newsmax.com/InsideCover/US-Debt-Showdown/2011/07/18/id/404058, MCL
Courting confrontation and compromise alike, House Republicans on Monday shrugged off President Barack Obama's threat to veto their legislation
to cut federal spending by trillions of dollars, even as they negotiated with him over more modest steps to avert a potential government default. The
Republican bill demands deep spending reductions in exchange for raising the nation's debt limit. But Obama
will veto it if it reaches his desk, the White House said, asserting the legislation would "lead to severe cuts in Medicare and Social Security" and impose
unrealistic limits on education spending. In response, GOP lawmakers said they would go ahead with plans to pass the bill on Tuesday.
"It's disappointing the White House would reject this commonsense plan to rein in the debt and deficits that are
hurting job creation in America," Speaker John Boehner, R-Ohio said. By contrast, neither the administration nor congressional officials provided
substantive details on an unannounced meeting that Obama held Sunday with the two top House Republican leaders, Boehner and Majority Leader Eric Cantor of Virginia. Obama said late
Monday the two sides were "making progress."
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2011 Arizona Debate Institutes
at: military spending outweighs
Spending Disad
Even Congressional Republicans now favor military spending cuts
InterPress Service, September 22, 2010, p. http://ipsnews.net/news.asp?idnews=52936
At the same time, however, the national debt has mushroomed to some 13 trillion dollars, while the federal deficit –
estimated at around 1.5 trillion dollars this year – currently exceeds 10 percent of gross domestic product (GDP), the highest level
since the end of World War II. Until now, the Pentagon has been exempt from growing public pressure to cut the
deficit; indeed, Congress is poised to approve what amounts to a 2.4 percent increase in military spending in 2011. But that exemption may
not last much longer, as even Republicans, particularly those identified with the more- libertarian elements of
the populist Tea Party movement, have begun questioning whether the country can afford the financial burden,
especially at a time when Washington's closest NATO allies are themselves making major cutbacks in their
defence budgets. "Members of Congress from both parties are increasingly eyeing the defense budget as a place
to reduce spending and bring down the federal deficit, a sign that such spending is no longer sacrosanct, as it
has been for nine years," according to John Donnelly, a veteran defence specialist at Congressional Quarterly. Indeed, the bipartisan
nature of the new attitude was underlined in July when Texas Republican Rep. Ron Paul, a Tea Party favourite, co-authored a column entitled
"Why We must Reduce Military Spending" on the widely read HuffingtonPost website with liberal Democrat Rep. Barney Frank. It called for
cutting Pentagon spending by one trillion dollars over the next 10 years, both by "eliminating certain Cold War
weapons and scaling back our commitments overseas".
Deeper US military cuts inevitable
Newsweek, September 12, 2010, p. http://www.newsweek.com/2010/09/12/what-gates-plans-to-do-before-he-leaves-office.html
After 9/11, U.S. military spending more than doubled. President Obama has vowed to cut back—to only 1 percent growth a
year. Deeper cuts appear inevitable. Gates sees the need to turn off “the spigot of money”; he also sees it as an
opportunity. In his speech at the Eisenhower library, he noted that Ike understood that real security lay in a strong economy. Having been Army chief of
staff after Marshall, Eisenhower knew the Pentagon and how to tame its appetites, but few presidents since have been so wise or lucky. In conversation
with NEWSWEEK, Gates was frank about the challenge he faces in forcing what Eisenhower called the “military-industrial complex” to adjust to the new
budget realities. Since 9/11, “what little discipline existed in the Defense Department when it came to spending has gone completely out the window,” he
says. He is measured but scathing in his judgment: “I concluded that our headquarters and support bureaucracies, military and civilian alike,
have swelled to cumbersome and top-heavy proportions, grown overreliant on contractors, and grown
accustomed to operating with little consideration to cost.”
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2011 Arizona Debate Institutes
at: funding demo assistance now
Spending Disad
Extend our 1nc _____ evidence – Congress is determined to cut spending to be more fiscally
responsible.
Democracy assistance funding has been cut –
a) desire for fiscal discipline and republican opposition
Richter April 13, 2011 – Paul, writer for the Washington Bureau (Spending concerns sidetrack aid efforts, April 13, 2011,
http://m.spokesman.com/stories/2011/apr/13/spending-concerns-sidetrack-aid-efforts/, MCL)
The Obama administration’s efforts to use foreign aid to help Middle East and
North African nations undergoing
democratic transitions have been stopped short by a Congress focused on paring federal debt and other
spending priorities. The administration is weighing a request from the new government in Egypt to forgive a
debt of $3.3 billion, and another appeal from the fledgling administration in Tunisia to forgive a far smaller debt, about
$7 million. But the budget battles raging in Washington have made debt relief unlikely, officials said. U.S.
lawmakers not only have shut the door on new spending to stabilize countries rocked by the so-called Arab
Spring. They have resisted proposals to shift money from other foreign aid programs. Administration officials say such
aid offers a way to shape historic change sweeping the region. They fear steep economic declines could cripple nascent democracies in Cairo, Egypt, and
Tunis, Tunisia, where popular uprisings toppled dictators this year and could turn their populations toward Islamist groups that threaten U.S. strategic
interests. Opponents say they support democracy in the Arab world but won’t necessarily pay for it. “There’s just
no appetite to spend more money,” said Rep. Jason Chaffetz, R-Utah, who serves on the House Budget
Committee. “When we can’t pay our own bills, it’s difficult to justify nation-building in foreign countries.” The resistance in Congress
reflects in part the influence of tea party members and other conservatives who long have opposed foreign aid
and who nearly forced the U.S. government to close last week in a bruising fight over budget cuts. Some lawmakers are
skeptical because audits have shown that billions of dollars were squandered over the last decade to prop up governments in Iraq and Afghanistan.
Others, including Sen. Richard Lugar, R-Ind., ranking member of the Senate Foreign Relations Committee, said the
administration hasn’t made a persuasive case for new spending. Lugar held up for several weeks a State Department effort to
funnel $20 million from an aid program into direct economic support for Tunisia. Lobbyists for the American University in Cairo and the Lebanese
American University, independent schools founded by Americans, had argued that the money should not be shifted from their scholarship programs.
The pushback in Congress has frustrated administration officials and spurred them to search for other sources of aid. They have tried – with limited
success – to enlist other major donors, including European countries and international financial institutions such as the International Monetary Fund
and the World Bank. They also have discussed trying to persuade European countries that have seized bank accounts and other assets from allegedly
corrupt officials in Egypt’s former regime to use the money to help the new government in Cairo. “These are pivotal countries in a pivotal region,” a
senior Obama administration official said. “Their stability is crucial.” But the administration has been blocked at almost every turn.
b) civil society funding
Kraus February 25, 2011 – Don, Chief executive officer, Citizens for Global Solutions (Diplomacy in Action: the U.S., UNESCO and Civil
Society, Huffington Post, http://www.huffingtonpost.com/don-kraus/diplomacy-in-action-the-us-unesco-civil-society_b_828204.html, MCL)
Recent proposed budget cuts threaten to reduce the U.S. role in UNESCO, and will make it difficult for the U.S.
to
develop the strong relationship with civil society that will help improve international relations for the U.S. The House just cut
$166 million for international organizations. As we've seen through recent events in the Middle East and in the increasing importance of
non-state actors, individuals have the power to rapidly impact international affairs. Effectively engaging civil society groups through organizations such
as UNESCO will help to bring about a more peaceful and just world. Civil society engagement is will continue to be an important part of U.S. foreign
policy strategy, and strong engagement with civil society and strong support for UNESCO will help to further U.S foreign policy goals. Citizens for Global
Solutions will be following the proposed budget cuts as they make their way through the Senate and meeting with Senate offices to discuss the
importance of funding organizations like UNESCO. For updates check out The Global Citizen.
c) Egypt
Kagan and Dunne March 7, 2011 Robert, Senior Fellow, Foreign Policy, Center on the United States and Europe AND Michele, Senior
Associate, Carnegie Endowment for International Peace (Why Egypt Has to be the U.S. Priority in the Middle East,
http://www.brookings.edu/opinions/2011/0307_egypt_kagan.aspx, MCL)
The disappointment is understandable. As Egypt heads into controversial parliamentary elections in fall 2010 and a presidential election in 2011, the Obama
has been tone-deaf, intent on continuing to improve relations with the increasingly brittle and unpopular Mubarak regime. It has cut
democracy assistance spending in Egypt by half, agreed to forbid assistance from the U.S. Agency for
International Development to groups that lack the government's stamp of approval, and is discussing a future "endowment"
administration
that would commit the United States to years of assistance with diminished congressional oversight. When administration officials have privately raised questions about
democracy or human rights with the Egyptian government, their carefully calibrated "quiet diplomacy" has been dismissed or ignored. Obama himself politely asked Mubarak
during an August 2009 Oval Office meeting to fulfill his 2005 pledge to lift the state of emergency under which Egyptians have been repressed since 1981. Mubarak brushed
him off. Last month, Mubarak renewed the state of emergency for another two years, conveniently the period during which parliamentary and presidential elections will occur.
The Obama administration called it "regrettable."
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2011 Arizona Debate Institutes
--xt: republican factionism
Spending Disad
Republicans have cut democracy assistance and the NED budget
Marshall February 23, 2011 – Will, President of the Progressive Policy Institute (Small Spending Cuts’ Big Impact on America in the
Middle East, Progressive policy institute, http://progressivefix.com/small-spending-cuts%E2%80%99-big-impact-on-america-in-the-middle-east, MCL)
Now is the winter of discontent for Middle East dictators. A great political awakening is roiling the region – which makes this exactly
the wrong moment to weaken America’s ability to help people struggling to free themselves. House
Republicans, however, are determined to do
last week to cut funding for U.S. diplomacy
and assistance by some $4.4 billion, along with a haircut for the National Endowment for Democracy (or NED,
and full disclosure: Will Marshall is a member of NED’s board). Although it usually flies under policy-makers’ radar, the NED is America’s
premier instrument for assisting democratic transitions in long-closed societies. To be fair, President Obama’s new budget
proposes an even deeper cut (12 percent versus the GOP’s six percent) in the NED’s already miniscule $118 million budget, though
just that. Oblivious to the growing democratic ferment in the Muslim world, they voted
it wouldn’t take effect until next year.
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2011 Arizona Debate Institutes
--xt: civil society
Spending Disad
Civil society funding has massively decreased – Egypt proves
McInerney 2010 – Stephen, Director of Advocacy for the Project on Middle East Democracy (POMED) (The Federal Budget and
Appropriations for Fiscal Year 2011 DEMOCRACY, GOVERNANCE, AND HUMAN RIGHTS IN THE MIDDLE EAST, Project on Middle East Democracy,
April 2010, http://www.boell.org/downloads/fy11-budget-analysis-final.pdf, MCL)
The Obama administration’s approach to U.S. assistance to Egypt over the past year has attracted much criticism in
both Cairo and Washington, particularly on questions of democracy and human rights. In the new budget, the levels of overall economic assistance and
funding for democracy and governance remain at levels sharply reduced in March 2009. The FY11 budget also reinforces the
disproportionate cuts in funding for civil society, despite the findings of an October 2009 USAID audit that the most successful portion
of USAID’s democracy and governance funding in Egypt had been the direct grants for civil society. A controversial 2009 decision by the administration
to provide bilateral funding only to those organizations officially registered and approved as NGOs by the Egyptian government remains in place. Finally,
the administration is now exploring the establishment of an “endowment” proposed by the Egyptian government, which could potentially remove
Congressional oversight over future U.S. economic aid. Overall assistance to Egypt in the President’s request remains constant
from FY10, at $1.56 billion. This includes $1.3 billion in Foreign Military Financing (FMF) military assistance and $250 million in Economic
Support Fund (ESF) civilian aid, both held constant from FY09 and FY10. The funding designated for democracy and governance is held steady at $25
million, as required by Congress in FY10. In that year, the administration had requested only $20 million in GJD funding, but Congress included an
earmark in the 2010 Consolidated Appropriations Act declaring that “not less than $25 million shall be made available for democracy, human rights, and
governance programs.” Although the FY11 GJD request accedes to this $5 million increase required by Congress, $25 million remains only half of the
amount spent on such programs annually in FY06 through FY08. It is also only half of the Bush administration’s final GJD request for FY09, which was
itself out of a $200 million request for ESF that year (whereas $250 million in ESF was ultimately granted). The breakdown of the
democracy and governance funding by program area also remains constant from FY10, with $10.5 million for
Rule of Law and Human Rights programming, $6 million for Good Governance and anticorruption programs,
and $8.5 million to support Egyptian Civil Society. This includes $4.6 million in direct grants to civil society organizations, with the
remaining $3.9 million under the “civil society” heading designated for a media development program run in conjunction with the Egyptian Ministry of
Communications and Information Technology. The $8.5 million designated under the civil society heading represents a
decrease of more than 73% from the $31.8 million allocated for civil society in FY08 (of which $27.85 million was given
in direct grants to civil society organizations, with the remaining $3.95 million for the aforementioned media program). This sharp decrease has
been viewed by many as signaling a decreased commitment to support Egyptian civil society by the Obama
administration.
10
2011 Arizona Debate Institutes
--xt: egypt
Spending Disad
Overall spending for Egypt has decreased
Addis et. Al 2011 – Casey, Coordinator and Analyst in Middle Eastern Affairs, Christopher M. Blanchard, Analyst in Middle Eastern Affairs,
Kenneth Katzman, Specialist in Middle Eastern Affairs, Jeremy M. Sharp, Specialist in Middle Eastern Affairs, Jim Zanotti, Analyst in Middle Eastern
Affairs (The Middle East: Selected Key Issues and Options for the 112th Congress, Congressional Research Service, January 3, 2011, pdf, MCL)
As overall economic aid to Egypt has decreased, so too has U.S. democracy assistance. P.L. 111117, the Consolidated
Appropriations Act, FY2010, provided $25 million in economic aid for democracy promotion (or 10% of total economic aid). Some
analysts
believe the Obama Administration would like to ease tensions with the Egyptian government by deemphasizing democracy assistance. Others assert that U.S. funding has been largely ineffective anyway and that assistance
should be channeled into areas that make a more immediate impact on the daily lives of average Egyptians. Some critics of U.S. policy believe that
portions of U.S. aid should be conditioned on improvements in Egypt's human rights and religious freedom
record.
11
2011 Arizona Debate Institutes
at: no credit downgrade
Spending Disad
threat of credit downgrade exists – moody and S&P
Felsenthal and da Costa July 14, 2011 – Mark, journalist for Reuters, Pedro Nicolaci, D.C. correspondent (Bernanke warns
spending cuts could derail recovery, reuters, July 14, 2011, http://www.reuters.com/article/2011/07/15/us-usa-fed-idUSTRE76774Z20110715, MCL)
NEW DOWNGRADE THREATS Moody's Investors Service warned late on Wednesday that the United States could lose its
top credit rating in coming weeks if a standoff between the White House and congressional Republicans over raising the statutory borrowing
limit is not resolved. Earlier on Thursday, China -- the United States' biggest foreign creditor -- urged the U.S. government
to adopt responsible policies to protect investors' interests after the Moody's warning. Another ratings agency,
Standard & Poor's, also privately told U.S. lawmakers and business groups, a congressional aide said on Thursday,
that it might still cut the United States' rating if the government fails to make any of its expected payments -on debt or other obligations.
Credit rating is on the brink – 50% chance it will be downgraded
National Journal July 14, 2011 – (S&P Puts Chances of U.S. Credit Downgrade at 50 Percent, http://www.nationaljournal.com/s-pputs-chances-of-u-s-credit-downgrade-at-50-percent-20110714, MCL)
The credit-rating agency Standard & Poor's warned on Thursday that there is a 50 percent chance the agency
will downgrade the United States' Aaa credit rating within the next three months as negotiators head toward the August 2 deadline
with no debt-ceiling and deficit-reduction deal in sight. In a statement, S&P put the United States on "CreditWatch with
negative implications." "Since we revised the outlook on our 'AAA' long-term rating to negative from stable on April 18, 2011, the political
debate about the U.S.' fiscal stance and the related issue of the U.S. government debt ceiling has, in our view,
only become more entangled. Despite months of negotiations, the two sides remain at odds on fundamental fiscal policy issues. Consequently,
we believe there is an increasing risk of a substantial policy stalemate enduring beyond any near-term agreement to raise the debt ceiling," the statement
read. On Wednesday, ratings agency Moody's warned that it would put the government's credit rating on review,
which could eventually lead to a downgrade.
12
2011 Arizona Debate Institutes
at: econ low
Spending Disad
Consumer confidence increasing
Bloomberg July 14, 2011 - Consumer Comfort in U.S. Rose Last Week on Boost in Finances, http://www.bloomberg.com/news/2011-0714/u-s-consumer-confidence-rises-on-boost-in-finances-bloomberg-index-shows.html, MCL
Consumer confidence in the U.S. rose last week as households became more upbeat about the state of their
finances and optimism climbed among wealthier Americans. The Bloomberg Consumer Comfort Index
increased to minus 43.9 for the period ended July 10 from minus 45.5 the prior week. Even with the gain,
which is within the survey’s 3-point margin of error, the gauge is lower than it was at the start of the year.
Gas prices are falling, manufacturing is increasing, and jobs are being created – the economy
will continue to grow but is still fragile
Ebeling June 28, 2011 – Peter, studied the global financial and stock markets specialist in equities/commodities, and an accomplished
chart reader who advises technicians with regard to Major Indices Resistance/Support Levels ( “A Stronger US Economy,” June 28, 2011, International
Business Times, http://uk.ibtimes.com/news/170519/20110628/forex/us-dollar/a-stronger-us-economy.htm, MCL)
Economist and analysts are saying the economic growth in the US will brighten in 2-H of this year. The reason
is that the 2 Key causes of the slowdown: high Crude Oil1 prices, and manufacturing delays because of the
disaster in Japan2, have begun to fade. Some of the headwinds that caused us to slow are turning into tail winds," said Mark Zandi, chief
economist at Moody's Analytics. For an economy just inching ahead 2 yrs after the "Great Recession" ended, 1-H of Y 2011 cannot end soon enough, as
the natural and commodity market events that slowed growth in the US in January ,February and March to an annual rate of 1.9% fade into the history
books. The current Quarter is shaping up a little better; the average growth forecast of 38 top economists
surveyed is 2.3%. The economy has to grow 3% a year just to hold the unemployment rate steady, and keep up
with population growth. And it has to average about 5% growth for a year to lower the unemployment rate by a
full percentage point. It is holding at 9.1% now. As welcome as the stronger growth eyed in 2-H is, the improvement will likely be small.
For the final 6 months of the year economists forecast a growth rate of 3.2%. This year, high gasoline and food prices have
discouraged people from spending much on other things, from furniture and appliances to dinners out and vacations. That kind of spending fuels
economic growth. In the latest bit of sour news, the US government reported Monday that consumer spending was about the same in May as in April, the
1st time in a year that spending has not increased from the prior month. The report confirmed the toll that high gas prices, Japan3-related disruptions
and high unemployment have taken a toll on personal spending in Q-2. Relief is in sight though, as the Crude Oil4 price has been
falling since Memorial Day. The drop has lowered the price of regular unleaded gasoline by 0.23 gal in the past month, to a national average of
3.57 gal at the pump according to AAA. The timing of the drop in gasoline prices is good because they usually rise during the Summer driving season.
And the bottle necks in the Global manufacturing chain are starting to clear as the Japanese factories that make cars and electronics resume production,
that means that auto sales should improve later this year because the lost production from the earthquake is coming back faster than had been expected
by many. A sign of that rebound came when the Federal Reserve5 Bank of Chicago reported Monday that manufacturing in
the Midwest rebounded in May after falling sharply in April. And last week, the US government said orders for
machinery, computers, cars and other durable goods rose a bit in May after dropping in April . Economists attributed
the turn around, in part, to Japanese factories that started to rev up early. The US economy is also expected to get a slight 2-H
boost from reconstruction in flood-ravaged sections of the South and Midwest. Construction workers will be
employed rebuilding homes and businesses. People will replace destroyed cars and other possessions. Analysts
predict the economic losses from the floods in the April-June Quarter will be reversed in the July-September Quarter. Economists recently
surveyed opine that unemployment will fall to 8.7% at year's end, not great but a move in the right direction. Stay tuned...
Increase in fuel prices show economic recovery is possible
South Florida Business Journal July 18, 2011 – Fuel prices up on economic optimism,
http://www.bizjournals.com/southflorida/news/2011/07/18/fuel-prices-up-on-economic-optimism.html, MCL
"Despite negative news about the job market and consumer sentiment, investors are seemingly optimistic the
U.S. economy will start to pick up, a statement made for quite some time with no solid data to support the
claims," AAA Auto Club South spokeswoman Jessica Brady said in a news release. "The high unemployment
rate, increased oil and gas prices, along with a volatile stock market, have consumers on edge. Oil and gas
prices are expected to increase again this week on speculation the Federal Reserve may take action this week to
help stimulate the economy."
13
***Neg Links
2011 Arizona Debate Institutes
generic
Spending Disad
Federal programs are mismanaged and overspend
Edwards 10 (Chris, Downsizing the Federal Government, CATO Institute, http://www.downsizinggovernment.org/six-reasons-downsize)
1. Additional federal spending transfers resources from the more productive private sector to the less productive public sector of the economy. The bulk of federal
spending goes toward subsidies and benefit payments, which generally do not enhance economic productivity.
With lower productivity, average American incomes will fall. 2. As federal spending rises, it creates pressure to raise taxes now and in the future. Higher taxes reduce
incentives for productive activities such as working, saving, investing, and starting businesses. Higher taxes also increase incentives to engage in unproductive activities such
as tax avoidance. 3. Much federal
spending is wasteful and many federal programs are mismanaged. Cost overruns, fraud
and abuse, and other bureaucratic failures are endemic in many agencies. It’s true that failures also occur in the
private sector, but they are weeded out by competition, bankruptcy, and other market forces. We need to similarly weed out government
failures. 4. Federal programs often benefit special interest groups while harming the broader interests of the general public. How
is that possible in a democracy? The answer is that logrolling or horse-trading in Congress allows programs to be enacted even though they are only favored by minorities of
legislators and voters. One solution is to impose a legal or constitutional cap on the overall federal budget to force politicians to make spending trade-offs.
New spending in the middle of the year balloons – and even trade-offs don’t prevent it from
going against the deficit
Fox News 5/24 (Chad Pergram, 5/24/11, "Natural Disasters Could Challenge Campaign Spending Promises",
http://politics.blogs.foxnews.com/2011/05/25/natural-disasters-could-challenge-campaign-spending-promises)
It often starts like this. There's a series of natural disasters. Or 9-11. Or war. And Congress decides it needs to approve an additional
spending bill to fund a critical area of the federal government in mid-year. Lawmakers fillet the federal budget into 12 sections, each
one receiving an annual spending measure. But over the past 11 years, Congress has approved 16 extra spending bills, known as
"supplementals," totaling nearly $1 trillion. $20 billion just after September 11th. $79 billion in 2003 for the war in Iraq. $10.5 billion in 2005 to
respond to Hurricane Katrina. And in each case, some lawmakers make a compelling case for tacking on additional
spending. It's essential for the troops. The people of New Orleans are desperate. And on Tuesday afternoon, the process started again. Rep. Robert Aderholt (R-AL) chairs
the House Homeland Security Appropriations Subcommittee. That panel controls the purse strings for the Federal Emergency Management Agency (FEMA). Twisters ravaged
parts of Aderholt's district and other sections of Alabama just a few weeks ago. Then came floods, up and down the Mississippi River. The federal government even blew up a
major levee in Missouri to alleviate upstream flooding. And then a monster tornado sacked Joplin, MO, Sunday night. "It's going to be close," said Aderholt, when asked if
FEMA had enough money to make it through September 30, the end of the government's fiscal year. On Tuesday, the House Appropriations Committee "marked-up" or wrote
the final version of a measure to fund Homeland Security programs and FEMA. No one has tallied the cost of the storms in Alabama. There's no price tag on the flooding. And
it's way too early to ring up the damages in Missouri. But Aderholt and others wanted to make sure FEMA had enough money for now. So during the markup session,
lawmakers from both sides of the aisle injected $1 billion into FEMA's budget. Aderholt and others believe that on top of the $1 billion, they'll also have to craft an entirely
separate supplemental spending bill to pay for the natural disasters. And perhaps those yet to come. "Hurricane season is just days away," warned Aderholt ominously. Not a
single lawmaker expressed reservation and the Appropriations Committee adopted Aderholt's request by voice vote. There's a reason why no one objected. This year, it's
flooding and tornadoes in the South and Midwest. But come summertime, it could be hurricanes in Florida and North Carolina. Or earthquakes in California. Wildfires in the
west. Fiscal
hawks are loathe to vote against such emergency measures. First, they want to help those in need.
And second, they know their district or state could be next. Now here's where it gets interesting. In tight budget
times, lawmakers are intent to find "pay-fors" to cover the additional costs of the natural disasters. In the case
of the $1 billion for FEMA, the Appropriations Committee transferred unused funds from an Energy
Department "green vehicle" program. Still, this money is not for NEXT fiscal year. It's for THIS fiscal year. The fiscal year for which
Congress and President Obama just finished doing battle. The fiscal year where Republicans successfully pared $61 billion out of the budget. An alternative interpretation, but
inaccurate interpretation of Tuesday's $1 billion FEMA infusion means the budget deal dwindled to just $60 billion. That's they way it would appear on a balance sheet if
you're scoring at home. But if you're scoring in Congress, it doesn't work that way. Congress
considers FEMA's $1 billion as an emergency. By
definition, all emergency money is "off-budget." It's real dollars and cents going out the door. But Congress
doesn't count it against the bottom line. It's kind of like a pitcher's Earned Run Average (ERA) in baseball. If a pitcher
yields a run, it counts on the scoreboard. However, if someone committed an error that allowed that run to
score, it's not marked against the pitcher's ERA. Regardless, the run crossed the plate and shows up on the
scoreboard. Spending is spending. And a budgetary gimmick like this is precisely what so
incensed the electorate last fall. Now there's a question of forging a supplemental spending bill once all of the disasters are paid for. Aderholt has
talked about the need for an additional spending bill to cover FEMA. And he's not the only one. "$1 billion isn't going to do it," conceded Rep. David Price (D-NC), the
top Democrat on the House Homeland Security Appropriations Subcommittee. "We are going to need the administration to offer a supplemental request." House Majority
Leader Eric Cantor (R-VA) knows how sensitive this is. "If there is support for a supplemental, it would be accompanied by support for having pay-fors to that supplemental,"
said Cantor on Monday. Note that Cantor said "if there is support for a supplemental." Locating that support could be a problem. Rep. Jo Ann Emerson (R-MO) is a senior
member of the Appropriations Committee and represents the district right next to where the tornadoes hit Sunday. Emerson conceded it may be hard to court conservatives
whose districts aren't experiencing a natural disaster. "We can try and be responsible, but people need money," Emerson said. "While I think it's important we do everything to
offset (the additional FEMA spending), I don't think we can find all that money." When
it's a challenge to cobble together votes for a
supplemental spending bill, lawmakers often turn to a time-honored tradition on Capitol Hill. They begin to decorate
the supplemental with all sorts of baubles and ornaments to attract the support of reluctant lawmakers. But times
have changed in Washington. And most conservatives are unwilling to go that route. " These bills become Christmas trees," said Rep. Steve Scalise
(R-LA). "You end up having a bunch of items that having nothing to do with the bill ." Rep. Jeff Landry (R-LA) is a freshman who
represents Cajun country and the mouth of the Mississippi River. Some of the most serious flooding has washed over parts of Landry's southern Louisiana district. Landry
knows what's essential to recover from the floods.
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2011 Arizona Debate Institutes
demo assistance
Spending Disad
Democracy assistance is massively expensive – expanding it to the Middle East will disrupt the
budget and destroy fiscal discipline
GAO 2009 – US Government Accountability Office (Democracy Assistance: U.S. Agencies Take Steps to Coordinate International Programs but
Lack Information on Some U.S.-funded Activities, GAO-09-993 September 28, 2009, http://www.gao.gov/products/GAO-09-993)
Data available from State show total democracy assistance allocations of about $2.25 billion for fiscal year
2008. More than $1.95 billion, or about 85 percent of the total allocation, was provided to field-based operating units,
primarily country missions. Although complete data on USAID funding per country were not available, USAID mission data, compiled by State
and USAID at GAO's request, show that in a sample of 10 countries, most democracy funds are programmed by USAID.
In the 10 countries, annual funding per project averaged more than $2 million for USAID, $350,000 for State
DRL, and $100,000 for NED. In fiscal year 2008, more than half of State funding for democracy assistance
went to Iraq, followed by China, Cuba, Iran, and North Korea, and NED funding for democracy programs was
highest for China, Iraq, Russia, Burma, and Pakistan. USAID and State DRL coordinate to help ensure complementary assistance but
are often not aware of NED grants. To prevent duplicative programs, State DRL obtains feedback from USAID missions and embassies on project
proposals before awarding democracy assistance grants. State DRL officials generally do not participate in USAID missions' planning efforts; some State
and USAID officials told GAO that geographic distances between State DRL's centrally managed program and USAID's country mission-based programs
would make such participation difficult. Several USAID and State DRL officials responsible for planning and managing democracy assistance told GAO
that they lacked information on NED's current projects, which they believed would help inform their own programming decisions. Although NED is not
required to report on all of its democracy assistance efforts to State and there currently is no mechanism for regular information sharing, NED told GAO
that it has shared information with State and USAID and would routinely provide them with information on current projects if asked. USAID uses
standard and custom indicators to assess and report on immediate program results; USAID also conducts some, but relatively infrequent, independent
evaluations of longer-term programs. The standard indicators, developed by State, generally focus on numbers of activities or immediate results of a
program, while custom indicators measure additional program results. USAID commissions a limited number of independent evaluations of program
impact. USAID mission officials told GAO that they did not conduct many independent evaluations of democracy assistance because of the resources
involved in the undertaking and the difficulty of measuring impact in the area of democracy assistance. In response to a 2008 National Research Council
report on USAID's democracy evaluation capacity, USAID has reported initiating several steps--for example, designing impact evaluations for six
missions as part of a pilot program.
Just the office of Democracy and Governance earmarks democracy work from 5-20 million
Carothers 2009 – Thomas, vice president for studies at the Carnegie Endowment for International Peace. In this capacity, he oversees the
Democracy and Rule of Law Program, Middle East Program, and Carnegie Europe. ( Revitalizing U.S. Democracy assistance the challenge of usaid,
Carnegie endowment for International Peace,
http://www.carnegieendowment.org/files/revitalizing_democracy_assistance.pdf, MCL)
Several offices
at USAID/Washington also contribute to the agency’s democracy and governance work. The Office of
Democracy and Governance, which has a staff of approximately 60, provides technical assistance to the missions on
democracy and governance programming, carries out evaluations and other analytic work, and oversees several
congressional earmarks for democracy work in the range of $5 million to $20 million each. The Office of
Transition Initiatives is a program office that carries out a wide range of assistance, some of it relating to democracy and governance, in urgent politically
transitional contexts. The Office of Conflict Mitigation and Management provides technical assistance on conflict-related programming, which often
intersects with democracy and governance issues.
Democracy assistance is empirically expensive and the payoff is low
Goldsmith 2008 – Arthur A. professor at the University of Massachusetts Boston, where he teaches in the
College of Management and is senior fellow at the John W. McCormack Graduate School of Policy Studies
(Making the World Safe for Partial Democracy? Questioning the Premises of Democracy Promotion,
International Security, Volume 33, Number 2, Fall 2008, pp. 120-147)
The United States spent billions of dollars in Afghanistan and Iraq to secure limited constitutional government
in those countries. In addition, federal funding for other overseas democracy promotion activities jumped, starting in 2000, when it was about
$500 million per year. The 2008 budget request raised foreign aid spending for democracy and human rights to
nearly $1.5 billion, excluding Afghanistan and Iraq.4 The Bush administration initiated high profile efforts to
improve public diplomacy toward areas with large Muslim populations, and engaged in pro-democratic
lobbying of some of their leaders. In 2002 it launched the Middle East Partnership Initiative to support nongovernmental organizations and
government agencies with activities leading to democratic change in the Middle East.5 The freedom agenda never delivered. Five years
later, the prospects for nonauthoritarian order in Afghanistan and Iraq seem more remote than ever . Competitive
elections in Palestine, Lebanon, Pakistan, and other places have produced troublesome results for the United States. Human Rights Watch and
Freedom House both report that democracy is in retreat globally.6 Commentators from across the political
spectrum agree that the U.S. approach to democracy promotion since the September 11, 2001, terrorist attacks is in
tatters, though they offer different diagnoses for what went wrong.7
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2011 Arizona Debate Institutes
demo assistance
Spending Disad
Democracy assistance is very expensive – the 2 billion is just a ‘drop in the bucket’
Janka, June 7, 2011 – Noelle, Program Coordinator, Middle East Initiative Belfer Center Programs or Projects: Middle East Initiative
(Middle East Uprisings: Options for the United States, Belfer Center for Science and International Affairs – John F. Kennedy School of Government,
Harvard university, http://belfercenter.ksg.harvard.edu/publication/21100/middle_east_uprisings.html, MCL)
The urgency of economic assistance: The panelists stressed that an immediate infusion of foreign assistance—in the form
of debt relief, development aid, and investment—is needed to guarantee the success of democratic transitions in Egypt and Tunisia and
prevent imminent state failure in Yemen. Walt said the Obama administration has taken a positive step by promising
assistance to Egypt, but the $2 billion aid package announced on May 18 is only “a drop in the bucket” in the
context of Egypt’s gaping budget deficit and plummeting levels of foreign investment. In Yemen, Boucek said that an
increasingly violent standoff between Yemeni President Ali Abdullah Saleh and street protesters demanding his resignation has pushed the fragile Gulf
state to the brink of “an economic meltdown of cataclysmic proportions.”
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2011 Arizona Debate Institutes
civil society
Spending Disad
Egyptian democracy assistance and civil society funding has been cut by more than half – full
funding totaled $32 million
Huffington post, January 29, 2011 – (Obama Reduced Funding for Democracy Promotion, http://www.frumforum.com/obamareduced-funding-for-democracy-promotion, MCL)
In its first year, the Obama administration cut funding
for democracy and governance programming in Egypt by more
than half, from $50 million in 2008 to $20 million in 2009 (Congress later appropriated another $5 million). The level of funding for civil
society programs and non-governmental organizations (NGOs) was cut disproportionately, from $32 million to
only $7 million. Though funding levels for 2010 are not yet available, they are expected to show an increase to $14 million, says Stephen McInerny,
the director of advocacy at the Project on Middle East Democracy. He notes that the Bush administration slashed economic aid to Egypt in the 2009
budget but kept the funding for democracy and governance programs constant, while Obama cut funding to those programs in an
effort to make the cuts more proportional and under pressure from the American embassy in Cairo.
Civil society building is expensive – Cuba proves it costs at least 20 million
Ryan April 24, 2010 – Brenda, writer for Workers World (U.S. budgets $20 million for anti-Cuba Groups,
http://www.workers.org/2010/world/anti-cuba_0429/, MCL)
For 50 years the U.S. government has tried to develop a counter-revolutionary movement in Cuba. While it has been defeated at every turn, it is once
again pouring money into this campaign. Using deceptive language, the U.S. State Department and the Agency for International Development
(USAID) have announced that they intend to direct up to $20 million in funds “for human rights and civil
society initiatives in support of the Cuban people.” Washington’s real goal is to undermine the Cuban
revolution and turn Cubans into U.S. agents. The funds include $2.9 million allegedly to “support efforts to
promote greater freedom of expression on the island, especially among artists, musicians, poets, writers,
journalists and bloggers”; $2.6 million to increase access to technology and new media to support “the
strengthening of independent civil society organizations and networks”; and $2.5 million to Creative Associates
“to reach out to new sectors of Cuban society to expand the network of independent actors working together toward positive,
democratic change on the island.” While the U.S. government bars most of its citizens from traveling to Cuba and spending money there, a select few
have been allowed to go freely — in order to deliver money and telecommunications equipment to its collaborators. These trips were cancelled in
December after the arrest of Alan Gross by Cuban authorities as he was distributing equipment to such groups. Gross is a contractor with USAID, which
has long been used as a front by the CIA. The Obama administration recently allowed these trips to resume. The funding program also
provides $1.5 million to so-called “political prisoners,” those who have been tried and convicted of trying to
sabotage the Cuban revolution. A person convicted by Cuban courts of collaborating with the USAID program can receive a sentence of up to
20 years. This funding is particularly hypocritical considering that the U.S. has more than 2 million people locked up in prisons and jails, many serving
sentences decades long. The U.S. also has jailed the Cuban Five for nearly 12 years. The Five, who infiltrated CIA-backed, right-wing terrorist
organizations operating in the U.S. in order to monitor and stop their plans to attack Cuba, were given sentences ranging from 15 years to two
consecutive life terms. The program also provides $500,000 to assist “independent” labor unions — meaning anti-
socialist organizations — and to publicize any problems with Cuban labor conditions internationally. This is
ludicrous. Anti-union legislation exists in much of the U.S. and workers pay the price: 29 miners in West Virginia just died because of preventable
hazards in a non-union mine. While unions are on the defensive in the U.S. because of mass layoffs and lack of legal protection, they play a central role in
Cuban society, which in turn provides free education and healthcare for everyone.
More evidence
Bossuyt 2007 – Jean, Programme Coordinator in the Actors of Partnership Programme, European Centre
for Development Policy Management (Democracy promotion: the EU’s implementation capacity, Worldwide promotion of democracy: challenges, role
and strategy of the European Union Proceedings of a conference organised by the European Office of the Konrad-Adenauer-Stiftung,
http://www.kas.de/wf/doc/kas_11856-1522-2-30.pdf?110504154451, MCL)
Second, the delegation staff need more space and time. A
concrete example of this is the civil society programmes. The US is
involved in them and has a different approach to the EU. There is a quick-fix approach, but the delegations want to get to know civil society first,
before money is put into projects. This approach is about investing in a process, which takes one and a half years and
costs money. But the result has a firmer foundation. Delegations are asking how democracy can be supported in a structural way
17
2011 Arizona Debate Institutes
civil society/rule of law
Spending Disad
China proves Rule of Law and Civil Society programs are expensive and likely to increase in
cost with time
Lum 2009 – Thomas, specialist in Asian Affairs for the Congressional Research Service (U.S.-Funded Assistance Programs in China,
Congressional Research Service, http://www.au.af.mil/au/awc/awcgate/crs/rs22663.pdf, MCL)
U.S. government support of rule of law and civil society programs in the People’s Republic of China (PRC)
constitutes a key component of its efforts to promote democratic change in China. Other related U.S. activities include
participation in official bilateral dialogues on human rights, public diplomacy programs, and open criticism of PRC policies. During the past
decade, U.S. assistance to China has grown in size and breadth. Funding has grown from an annual average of
$11.1 million during the 2000-2004 period, mostly for democracy assistance and aid to Tibetans, to $31.5
million during the 2005-2008 period, which included not only democracy and Tibetan assistance but also new funding for educational
exchanges and health care programs (HIV/AIDS awareness, prevention, and treatment). Between 2000 and 2008, the United States
government authorized or made available roughly $182 million for programs in China, of which $159 million
was devoted to human rights and democracy activities and to Tibetan communities.
18
2011 Arizona Debate Institutes
internet assistance
Spending Disad
Internet freedom is costs millions – and the budget only assumes curtailing Chinese and
Iranian internet bans
McInerney 2010 – Stephen, Director of Advocacy for the Project on Middle East Democracy (POMED) (The Federal Budget and Appropriations
for Fiscal Year 2011 DEMOCRACY, GOVERNANCE, AND HUMAN RIGHTS IN THE MIDDLE EAST, Project on Middle East Democracy, April 2010,
http://www.boell.org/downloads/fy11-budget-analysis-final.pdf, MCL)
One area of focus for the Obama administration’s efforts to support democracy, governance, and human rights worldwide has been in
providing support for Internet freedom. In January 2010, Secretary Clinton gave a high profile speech focused on this area, in which she
discussed the role of the Internet and technology in ensuring Roosevelt’s four freedoms: freedom of ex- pression, freedom of worship, freedom from
want, and freedom from fear. To these, she also added the “freedom to connect,” which she defined as “the idea that governments should not prevent
people from connecting to the Internet, to websites, or to each other. The freedom to connect is like the freedom of assembly, only in cyberspace.” The
FY10 Consolidated Appropriations Act passed by Congress in December 2009 includes $30 million earmarked
under the “Internet Access and Freedom” heading, which aims “to expand unmonitored, uncensored access to
the Internet for large numbers of users living in closed societies that have acutely hostile Internet
environments, including in the People’s Republic of China and in Iran.” Of this amount, $10 million is to be programmed by
the State Department’s DRL Bureau, and another $10 million by the Iran-focused NERD program. This $30 million represents a significant increase in
State Department funding specifically allocated for supporting Internet freedom. Approximately $20 million was allocated in this manner over two years
in FY08 and FY09 combined. The FY11 request does not include specific headings for Internet access and freedom, but all signs point to this focus being
maintained with an equal or greater level of funding in FY11.
Promoting internet access requires economic trade-offs and costs money.
Fontaine and Rogers June 2011 –Richard Fontaine is a Senior Fellow at the Center for a New American Security. Will Rogers is a
Research Associate at the Center for a New American Security (Internet Freedom, A Foreign Policy Imperative in the Digital Age, Center for a New
American Security, June 2011, http://cnas.org/files/documents/publications/CNAS_InternetFreedom_FontaineRogers_0.pdf, MCL)
Yet promoting Internet freedom inevitably requires the U.S. government to make tradeoffs with other national security
and economic
interests – a perennial challenge for a government pursuing competing priorities. After all, it is
easier to support Internet freedom in countries in which the United States discerns few overarching strategic
and economic interests than in countries where the United States has a robust and complex agenda. Consider
China, for example. China engages in widespread Internet repression and hosts the world’s largest population of online users. But promoting Internet
freedom there complicates American efforts to win Beijing’s support on an array of other issues, ranging from North Korea to Iran. And strengthening
controls over the sale of American technologies to China could mean shutting U.S. companies out of the world’s largest Internet market at a time when
the American economy is still recovering from the recent financial crisis. The United States should promote Internet freedom abroad, but
this policy does incur costs. Funding for Internet freedom programs uses scarce dollars. The Internet can empower violent
radicals as well as peaceful reformers. There is no guarantee that supporting Internet freedom will enhance freedom or lead to greater democracy. Yet it
is virtually certain that if the United States ceases its Internet freedom-related activities, the balance of online power would shift toward autocracies
seeking to restrict their populations’ freedom. This alone should compel American officials to take Internet freedom seriously.
19
2011 Arizona Debate Institutes
usaid
Spending Disad
Massive bureaucracy means USAID assistance projects are overwhelming expensive
Carothers 2009 – Thomas, vice president for studies at the Carnegie Endowment for International Peace. In this capacity, he oversees the
Democracy and Rule of Law Program, Middle East Program, and Carnegie Europe. ( Revitalizing U.S. Democracy assistance the challenge of usaid,
Carnegie endowment for International Peace,
http://www.carnegieendowment.org/files/revitalizing_democracy_assistance.pdf, MCL)
USAID’s basic operating procedures—a term used here as shorthand for the rules, regulations, and procedures that underpin the agency’s
a major cause of the lamentable patterns of inflexibility, cumbersomeness, lack of innovation,
and mechanical application that hobble much of its democracy and governance work. These basic operating procedures are a
study in dysfunctional bureaucratization. Some career professionals at the agency liken them to an enormous accumulation of barnacles
programming—are
on the hull of a ship. They are attached one by one over the years by Congress or the agency itself in response to some particular incident or concern, but
then they are never removed or rationalized over time, and the accumulated mass threatens to eventually sink the ship. These basic operating
procedures are much more intrusive and constraining than just “normal” government bureaucracy. They reflect years of trying to spend
billions of U.S. taxpayer dollars on assistance programs carried out in difficult foreign contexts under the
constant fear that even a scrap of evidence that any money has been misspent will trigger howls of righteous
protest in Congress. Over time this pressure produces an institutional culture of paralyzing risk avoidance, leading to ponderous controls and
deadening requirements, as well as the pervasive mistrust noted above between the agency and the recipients of its funding.
USAID = bureaucratic – leads to inefficiencies
Birdsall 2010 – Nancy, President of the Center for Global Development (Foreword of The Clash of the Counter-bureaucracy and Development,
July 2010, Center for Global Development,
http://www.hudson.org/files/publications/Clash%20of%20Counterbureaucracy%20and%20Developmen%20final%20text%20pdf.pdf, MCL)
As anyone who knows Andrew Natsios will note, he is not one to pull punches; in this essay he lays bare his views of what’s not
working in USAID. He laments the layers upon layers of bureaucracy—the so-called counter-bureaucracy—that, he says, forces compliance
with bureaucratic procedures and evaluations to the detriment programmatic work. You may agree or disagree, but
what Andrew’s first-hand account of the challenges facing USAID makes clear is that bureaucratic
complexities, unclear leadership, and misaligned incentives make for inefficient development work.
Counter-bureaucracy and dysfunctional incentives prevents effective aid and leads to
misallocation of funds
Natsios 2010 – Andrew, visiting fellow at the Center for Global Development and Distinguished Professor in the Practice of Diplomacy at
Georgetown (The Clash of the Counter-bureaucracy and Development, July 2010, Center for Global Development,
http://www.hudson.org/files/publications/Clash%20of%20Counterbureaucracy%20and%20Developmen%20final%20text%20pdf.pdf, MCL)
The demands of the counter-bureaucracy are now so intrusive that they have distorted, misdirected, and
disfigured USAID‘s development practice to such a degree that it is compromising U.S. national security objectives
and challenging established principles of good development practice. This regulatory apparatus has created an incentive structure
that has led to an emphasis on process over program 7 substance and, in so doing, has produced a perverse bureaucratic result; as the career staff has
declined in size absolutely and proportionately to the size of the aid budget, the compliance side of aid has taken over management and decisionmaking
at the Agency. When the Agency does not comply with the commands of the counter-bureaucracy, it faces stiff
penalties, while there is no legal or regulatory consequence if Agency staff do not regularly interact with
government officials, civil society organizations, and the business people in developing countries about
political, economic, and social policy reform—i.e. the central practices of development work. Today, the newest addition to
the counter-bureaucracy—the State Department‘s Office of the Director of Foreign Assistance—is making
matters worse, creating an even more dysfunctional set of incentives which are compromising the integrity of aid programs by
the demand for metrics for every program and through the laborious and time consuming annual process of each USAID mission writing an Annual
Operating Plan. The question remains whether under sustained pressure from the counter-bureaucracy and the
Congress, USAID is now spending as much money on oversight and control as the implementation of the aid
program itself. What is more the staff time needed to comply with all of these paperwork requirements has crowded out any remaining available
time for the actual implementation of programs in the field offices. A point can be reached when compliance becomes counter-productive. I believe we
are well passed that point.
20
2011 Arizona Debate Institutes
ned
Spending Disad
NED funded by Congress
GAO 2009 – US Government Accountability Office (Democracy Assistance: U.S. Agencies Take Steps to Coordinate International Programs but
Lack Information on Some U.S.-funded Activities, GAO-09-993 September 28, 2009, http://www.gao.gov/products/GAO-09-993)
National Endowment for Democracy. In 1983, Congress authorized initial funding for NED, a private,
nonprofit, nongovernmental organization. 18 NED’s core budget is funded primarily through an annual
congressional appropriation and NED receives additional funding from State to support congressionally
directed or discretionary programs. 19 The legislation recognizing the creation of NED and authorizing its funding, known as the NED
Act, requires NED to report annually to Congress on its operations, activities, and accomplishments as well as on the
results of an independent financial audit. 20 The act does not require NED to report to State on the use of its core appropriation; however, State requires
NED to provide quarterly financial reporting and annual programmatic reporting on the use of the congressionally directed and discretionary grants it
receives from State. 21 NED funds indigenous partners with grants that typically last for about a year. NED monitors program activities
through quarterly program and financial reports from grantees and site visits, performed on average about
once per year, to verify program and budgetary information. About half of NED’s total annual core grant funding is awarded to
four affiliated organizations, known as core institutes. 22 The remaining funds are used to provide hundreds of grants to NGOs in more than 90
countries to promote human rights, independent media, rule of law, civic education, and the development of civil society in general.
NED funds are also empirically mismanaged – administrative problems prevent efficient
democracy assistance
Conry 1993 – Barbara, foreign policy analyst at the Cato Institute in Washington, D.C. (Loose Cannon: The National Endowment for Democracy,
Memo, http://therearenosunglasses.wordpress.com/2011/04/16/loose-cannon-the-national-endowment-for-democracy/, MCL)
In addition to the political problems, a number of administrative problems are inherent in NED’s quasi-private
status. One of those problems is oversight. Since NED is not a government entity, it is not subject to the same oversight as an official agency. It does,
however, have to submit to audits on occasion, always with scathing results. In March 1991, for instance, both the
General Accounting Office (GAO) and the Office of the Inspector General (OIG) of USIA audited the
endowment and revealed a number of major problems.(22) Among the most serious charges were that NED
used inadequate procedures for evaluating the effectiveness of its programs, made questionable decisions on
awarding grants, and mismanaged federal funds. Many of those irregularities had also been cited in previous audits, but few
discernible improvements had been made. The GAO and OIG specifically criticized NED’s judgment in its selection of programs. In addition to renewing
grants to organizations that had previously failed to demonstrate success, NED approved funding for projects for which no
feasibility studies or other preliminary work had been completed and therefore funded projects that were
inviable from the start. It further erred in awarding grants that duplicated support from other agencies, primarily AID and USIA. Since NED’s
very raison d’àtre is its supposed ability to operate where official agencies cannot, the fact that it supported the same programs as AID and USIA should
be a clear indication that the endowment is superfluous. NED’s failure to coordinate with other agencies and the consequent
duplication of awards to groups that were already receiving significant U.S. support is yet another example of
its sloppy administration. The audits have also identified serious financial mismanagement, which has occurred
at all levels. Some problems apparently have been innocent misunderstandings; others seemed to stem from a cavalier attitude
toward book keeping; still others have been clear, willful misuse of federal funds. Although NED has been criticized for having
financial controls that are too lenient, both internally and for its grantees, even the controls that are in place
are routinely violated. The GAO found that NED subrecipients do not comply with NED’s minimal financial controls. In one case, a South
African group received $18,000 to sponsor an international conference but used the money to finance office renovations instead. On other occasions,
NED grants were used for personal expenses, including credit card payments and loans. The four core grantees have violated a number of the financial
controls as well. All four core recipients, particu larly the International Republican Institute, have charged unallowable travel, per diem, and
entertainment costs, including first-class airfare and alcoholic beverages. There has also been financial mismanagement within the endowment. NED has
failed to take appropriate action when abuses at the recipient levels have been apparent. For example, NED was aware that FTUI was not signing the
required grant agreements with foreign subgrantees, yet the endowment continued to fund those grants. In another instance, NED’s own internal audit
identified the accounts of one grant recipient, China Perspective, as “unauditable” and in violation of the terms of the grant. Yet the endowment
continued to authorize the publication’s funding, totaling $482,000, for another two years. Financial mismanagement is thus clearly a problem at the
level of the endowment itself just as it is at the recipient levels. Conclusion NED’s labyrinthine organizational structure is an
administrative and financial disaster. Its “democracy promoting” activities, which have ranged from extraneous
to perplexing to counterproductive, are similarly unimpressive. Even if one ignores such indications that NED is a failure, and
believes that NED has succeeding in using its unique public-private status to support democracy abroad, the endowment is a relic of the
Cold War, and funding for the endowment should be discontinued for that reason alone.
21
***Neg Internal Links
2011 Arizona Debate Institutes
Spending Disad
deficit reduction key
Debt crisis results in economic collapse
The Associated Press 11 (By ANDREW TAYLOR, Associated Press, June 23, “CBO: Debt crisis looms absent major policy changes”, lexis)
The rapidly growing national debt could soon spark a European-style crisis unless Congress moves forcefully, the
Congressional Budget Office warned Wednesday in a study that underscored the stakes for Vice President Joe Biden and negotiators working on a
sweeping plan to reduce red ink. Republicans seized on the report to renew their push to reduce costs in federal benefit
programs such as Medicare. The
report said the nation's debt is on pace to equal the annual size of the economy within a decade. It warned of a
possible "sudden fiscal crisis" if it is left unchecked, with investors losing faith in the U.S. government's ability to manage its fiscal
affairs. At issue is the $9.7 trillion of U.S. debt held by investors and foreign countries like China, the measure that economists
deem most important. Government accounts like the Social Security trust funds account for the rest of the $14.3 trillion total debt. The study
reverberated throughout the Capitol as Biden and senior lawmakers spent several hours behind closed doors. The talks are aimed at outlining about $2
trillion in deficit cuts over the next decade, part of an attempt to generate enough support in Congress to allow the Treasury to take on new borrowing.
Biden made no comment as he departed, except to say the group would meet again on Thursday and probably Friday as well. President Barack Obama
plans to meet with House Democratic leaders Thursday to discuss the status of the ongoing talks. The meeting comes as Democrats want the president to
rule out Medicare benefit cuts as part of any budget deal. The CBO, the nonpartisan agency that calculates the cost and economic impact of legislation
and government policy, says
the nation's rapidly growing debt burden increases the probability of a fiscal crisis in
which investors lose faith in U.S. bonds and force policymakers to make drastic spending cuts or tax increases. "As Congress debates the
president's request for an increase in the statutory debt ceiling, the CBO warns of a more ominous credit cliff a sudden drop-off in our ability to borrow
imposed by credit markets in a state of panic," said House Budget Committee Chairman Paul Ryan, R-Wis. The findings aren't dramatically new, but
the budget office's analysis underscores the magnitude of the nation's fiscal problems as negotiators struggle to
lift the current $14.3 trillion debt limit and avoid a first-ever, market-rattling default on U.S. obligations. The
Biden-led talks have proceeded slowly and are at a critical stage, as Democrats and Republicans remain at loggerheads over revenues and domestic
programs like Medicare and Medicaid. Officials said little if any progress was made during Wednesday's session. With Republicans insisting that the
level of deficit cuts at least equal the amount of any increase in the debt limit, it would take more than $2 trillion in cuts to carry past next year's
elections. House GOP leaders have made it plain they only want a single vote before the elections. That $2 trillion-plus goal is proving elusive. And a top
Senate Democrat warned Wednesday that it would be insufficient anyway. "While I am encouraged by the bipartisan nature of the leadership
negotiations being led by Vice President Biden, I am concerned by reports the group may be focusing on a limited package that will not fundamentally
change the fiscal trajectory of the nation," said Senate budget Committee Chairman Kent Conrad, D-N.D. "That would be a mistake." Democratic leaders,
however, held a news conference Wednesday to argue for more economic stimulus measures such as a proposal floated by the White House to extend a
payroll tax cut enacted last year. The move demonstrates the continuing appeal of deficit-financed policy solutions suggested even as warnings of the
dangers of mounting debt grow louder and louder. "We absolutely need to reduce our deficit. We know that," said Senate Majority Leader Harry Reid, DNev. "But economists tell us that reducing spending is only half the equation. The other half is measures to create jobs." With the fiscal imbalance
requiring the government to borrow more than 40 cents of every dollar it spends, the CBO predicts that without a change of course the national debt will
rocket from 69 percent of gross domestic product this year to 109 percent of GDP the record set in World War II by 2023. The CBO's projections are
based on a scenario that anticipates Bush-era tax cuts are extended and other current policies such as maintaining doctors' fees under Medicare are
continued as well. The debt would far more stable under the budget office's official "baseline" that assumes taxes return to Clinton-era rates and that
doctors absorb unrealistic fee cuts. Economists warn that rising debt threatens to devastate the economy by forcing
interest rates higher, squeezing domestic investment, and limiting the government's ability to respond to
unexpected challenges like an economic downturn. But most ominously, the CBO report warns of a "sudden fiscal crisis" in which
investors would lose faith in the U.S. government's ability to manage its fiscal affairs. In such a fiscal panic, investors might abandon U.S. bonds and
force the government to pay unaffordable interest rates. In turn, the report warns, Washington policymakers would have to win back the confidence of
the markets by imposing spending cuts and tax increases far more severe than if they were to take action now. "Earlier action would permit smaller or
more gradual changes and would give people more time to adjust to them, but it would require more sacrifices sooner from current older workers and
retirees for the benefit of younger workers and future generations," CBO Director Douglas Elmendorf said in a blog post.
Deficit reduction solves economic weaknesses
Dykewicz 2010 (8/10/10, Paul Dykewicz, Human Events, “Europe Accepts Fiscal Discipline, America Goes Other Way,”
http://www.humanevents.com/article.php?id=38478)
Another risk is that the United States could slide
into the kind of distress encountered by European countries in the
1970s and 1980s when uncharacteristically high unemployment rates became the norm. To avoid repeating the
European experience, America will need to adjust its strategy, the European-based Economist magazine recently warned. When international agencies
and European publications are hammering the United States verbally about irresponsible spending and mounting deficits, it shows how far America has
fallen as a global economic leader. The longer the United States government waits to rein in its deficit and adopt the kinds of
free-market policies that spur the private sector to invest in growth opportunities and job creation, the
job growth and the greater the threat of an economic retreat.
slower the recovery, the weaker the
Continued deficit spending causes econ collapse
ATR May 16, 2011 (5/16/11, Americans for Tax Reform, “Seven Actions the Obama Administration Could Take Instead of Raising the Debt
Ceiling,” http://atr.org/seven-actions-obama-administration-instead-raising-a6149)
•End the spending spree. If spending continues on its current trajectory,
debt is expected to consume the entire
economy in the next two decades. Congress must use the debt limit debate to refocus on the government’s overspending problem, and make
meaningful institutional reforms to establish fiscal restraint in federal budgeting. These reforms should look at
constitutional spending limits, reforming budget rules and federal bookkeeping and statutory spending caps.
22
2011 Arizona Debate Institutes
fiscal discipline key
Spending Disad
Failure to address the budget deficit ensures a second global recession and collapse of U.S.
leadership
Bergsten 2009 – C. Fred, Director of the Institute for International Economics, former Assistant Secretary of the Treasury for International
Affairs and Assistant for International Economic Affairs to the National Security Council (“The Dollar and the Deficits,” Foreign Affairs, lexis)
A first step is to recognize the dangers of standing pat. For example, the United States' trade and current account deficits have declined sharply over the
last three years, but absent new policy action, they are likely to start climbing again, rising to record levels and far beyond. Or take the dollar. Its
role as the dominant international currency has made it much easier for the United States to finance, and thus
run up, large trade and current account deficits with the rest of the world over the past 30 years. These huge inflows of foreign capital,
however, turned out to be an important cause of the current economic crisis, because they contributed to the low interest rates, excessive liquidity, and
loose monetary policies that—in combination with lax financial supervision—brought on the overleveraging and underpricing of risk that produced the
meltdown. It has long been known that large external deficits pose substantial risks to the US economy because foreign
investors might at some point refuse to finance these deficits on terms compatible with US prosperity. Any sudden stop
in lending to the United States would drive the dollar down, push inflation and interest rates
up, and perhaps bring on a hard landing for the United States—and the world economy at large.
But it is now evident that it can be equally or even more damaging if foreign investors do finance large US deficits for prolonged periods. US
policymakers, therefore, must recognize that large external deficits, the dominance of the dollar, and the large capital inflows that necessarily accompany
deficits and currency dominance are no longer in the United States' national interest. Washington should welcome initiatives put forward over the past
year by China and others to begin a serious discussion of reforming the international monetary system. If the rest of the world again finances the United
States' large external deficits, the conditions that brought on the current crisis will be replicated. To a large extent, the US external deficit has an internal
counterpart: the budget deficit. Higher budget deficits generally increase domestic demand for foreign goods and foreign capital and thus promote larger
current account deficits. But the two deficits are not "twin" in any mechanistic sense, and they have moved in opposite directions at times, including at
present. The latest projections by the Obama administration and the Congressional Budget Office (CBO) suggest that both in the short run, as a result of
the crisis, and over the next decade or so, as baby boomers age, the US budget deficit will exceed all previous records by considerable margins. The
Peterson Institute for International Economics projects that the international economic position of the United States is likely to deteriorate enormously
as a result, with the current account deficit rising from a previous record of six percent of GDP to over 15 percent (more than $5 trillion annually) by
2030 and net debt climbing from $3.5 trillion today to $50 trillion (the equivalent of 140 percent of GDP and more than 700 percent of exports) by 2030.
The United States would then be transferring a full seven percent ($2.5 trillion) of its entire economic output to foreigners every year in order to service
its external debt. This untenable scenario highlights a grave triple threat for the United States. If the rest of the world again finances the United States'
large external deficits, the conditions that brought on the current crisis will be replicated and the risk of calamity renewed. At the same time, increasing
US demands on foreign investors would probably become unsustainable and produce a severe drop in the value of the dollar well before 2030, possibly
bringing on a hard landing. And even if the United States were lucky enough to avoid future crises, the steadily rising transfer of US income to the rest of
the world to service foreign debt would seriously erode Americans' standards of living. Hence, new record levels of trade and current account deficits
would likely levy very heavy costs on the United States whether or not the rest of the world was willing to finance these deficits at prices compatible with
US prosperity. Washington should seek to sharply limit these external deficits in the future—and it is encouraging that the Obama administration has
indicated its intention to move in that direction, opting for future US growth that is export-oriented, rather than consumption-oriented, and rejecting the
role of the United States as the world's consumer of last resort. Balancing the budget is the only reliable policy instrument for
preventing such a buildup of foreign deficits and debt for the United States. As soon as the US economy recovers from the current
crisis, it is imperative that US policymakers restore a budget that is balanced over the economic cycle and, in fact, runs
surpluses during boom years. Measures that could be adopted now and phased in as growth is restored include containing the cost of medical care,
reforming Social Security, and enacting new taxes on consumption. The US government's continued failure to responsibly address
the fiscal future of the United States will imperil its global position as well as its future prosperity. The
country's fate is already largely in the hands of its foreign creditors, starting with China but also including Japan, Russia, and a number of oil-exporting
countries. Unless the United States quickly achieves and maintains a sustainable economic position, its
ability to pursue autonomous economic and foreign policies will become increasingly
compromised.
Fiscal discipline is key to avoid economic collapse
Sullivan 6/20 (6/20/11, Paul J. Sullivan, Al-Arabiya Washington, “Frightening profligacy, poor fiscal discipline, disputatious democracy and
uncertain leadership in the United States. Analysis by Paul J. Sullivan,” http://english.alarabiya.net/articles/2011/06/20/153996.html)
Much of the fiscal indiscipline in many countries is due to the political invertebracy of many in the political leadership. The profligacy
of the past
is catching up with the present and could have deep repercussions in the future. The time for leadership, fiscal courage, and
some hard thinking and choices is now. Otherwise, the financial crisis of the 2000s could seem quite mild compared to the
brewing economic troubles out there.
23
2011 Arizona Debate Institutes
deficit reduction and fiscal discipline key
Spending Disad
Absent fiscal discipline and debt ceiling deal spells out economic meltdown
AFP June 14, 2011 (“Debt limit row risks confidence in US: Bernanke,” Jun. 14, 2011, AFP,
http://www.google.com/hostednews/afp/article/ALeqM5iFm1y5WP_BqpJl5sk3Zl5cQBdUJw?docId=CNG.8e4ecab4df197ac6695e0b85f29cdd3b.3c1)
The United States has never defaulted on its debt but is edging dangerously close. The government will run
out of room to spend more on August 2 unless Congress bumps up the debt ceiling. But Republican lawmakers,
especially in the House of Representatives, are refusing to support such a move until the White House agrees on huge
cuts to spending. Bernanke said that putting in place sustainable fiscal policies was a "daunting" challenge "crucial for our nation."
"History makes clear that failure to put our fiscal house in order will erode the vitality of our economy,
reduce the standard of living in the United States, and increase the risk of economic and financial
instability." However, he said, "In debating critical fiscal issues, we should avoid unnecessary actions or threats that risk
shaking the confidence of investors in the ability and willingness of the US government to pay its bills."
President Barack Obama earlier Tuesday warned of a new economic meltdown if the ceiling is not lifted in time. "We
could actually have a reprise of a financial crisis, if we play this too close to the line," Obama told NBC television
Tuesday. "We're going be working hard over the next month. My expectation is we're going get it done in a sensible way. That's
what the American people expect." Treasury Secretary Timothy Geithner met with Republican and Democratic lawmakers Tuesday to try to find an
exit to the impasse. Republicans back trillions of dollars in spending cuts and oppose tax increases to put the economy on a
sustainable track after the worst recession in decades resulted in ballooning budget deficits and public debt. Obama's Democrats
are open
to spending cuts as long as they do not harm the social safety net, such as social security and Medicare
programs, and keep on track the weak economic recovery.
Credit default and spending would be catastrophic – lose perfect credit ratings, destroy
millions of jobs, cost Chinese investor confidence
AFP June 14, 2011 (“Debt limit row risks confidence in US: Bernanke,” Jun. 14, 2011, AFP,
http://www.google.com/hostednews/afp/article/ALeqM5iFm1y5WP_BqpJl5sk3Zl5cQBdUJw?docId=CNG.8e4ecab4df197ac6695e0b85f29cdd3b.3c1)
The Treasury estimates that a financial crisis resulting from a default would have catastrophic economic
consequences and could potentially cost millions of American jobs, at a time of high unemployment that hit 9.1 percent last
month. Fitch Ratings last week warned the United States could lose its gold-plated credit rating if it fails to raise its
debt ceiling to avoid defaulting on loans. Similar alarms have come from Standard & Poor's and Moody's.
China, by far the top holder of US debt, has expressed concern that the massive US stimulus effort launched
to revive the economy has led to mushrooming debt that erodes the value of the dollar and its Treasury
holdings. China cut its holdings of US Treasury securities in March for the fifth month in a row, to $1.145
trillion, a 2.6 percent decline from an October peak, US data showed last month.
24
2011 Arizona Debate Institutes
deficit plan key to solve credit downgrade
Spending Disad
Curbing the deficit is critical to avert a credit downgrade
Newmyer July 18, 2011 – Tory, writer for CNN Money (Life after a debt downgrade: Clawing back to AAA, CNN Money,
http://finance.fortune.cnn.com/2011/07/18/life-after-a-debt-downgrade-clawing-back-to-aaa/,MCL)
It would be relatively easy for the U.S. to lose its prized AAA credit rating. All
our policymakers need to do
between now and Aug. 2 -- when the federal government reaches the end of its borrowing authority -- is nothing. At that point, the
Treasury would default on some of its debt obligations, leading the credit ratings agencies to downgrade. Clawing our way back to AAA, however, would
be another matter. Even a short-lived default would likely spell an extended hangover for our credit rating, meaning,
at a minimum, higher
interest rates and more downward pressure on our shaky recovery for months, if not years. To
regain our gold-plated borrowing status, both Moody's (MCO) and Standard and Poor's -- which braced the debt ceiling
negotiations last week by warning they are reviewing U.S. debt for a possible downgrade -- said they would need to see the Feds adopt a
sizable, credible deficit reduction package. But sovereign debt ratings, unlike their metric-based corporate cousins, involve a mix of
quantitative and qualitative judgments. And both ratings firms are warily eyeing the dysfunction in our political system as they make their evaluations
about the nation's creditworthiness. Moody's, for one, is explicit: a default would set the precedent that partisan deadlock
could pitch us off the cliff, and to restore a AAA rating, the firm would want to see fundamental process reform.
"We don't presume to tell the government what to do," says Steven Hess, Moody's lead analyst of U.S. debt in
the firm's sovereign risk group. "But in order to be rated AAA, we want to be assured the government continues
to pay its obligations on time. What we mean is fixing it somehow so that we could be assured this wouldn't happen again for that reason."
What would that involve? "Abolishing the debt limit would be one way to go," Hess says. "I'm not saying we
recommend that. There are various ways they could do it," pointing to Senate Minority Leader Mitch McConnell's proposal to essentially hand the
authority to President Obama as another possibility. Ratings agencies in charge? Hess' assessment should present a quandary to ultra-conservative
Republicans in Congress who remain skeptical about the consequences of a debt-ceiling blow-up. If they overplay their leverage in these negotiations, the
ratings agencies could force them to forfeit that power down the line in order to undo the damage a default inflicted on our credit status. But, then, it
would be difficult to imagine the same lawmakers who are ignoring warnings from those firms (and the President, the Treasury Secretary, and the
Federal Reserve Chairman, among others) suddenly surrendering their prerogative -- a fact Hess acknowledges. "We wouldn't expect that this would
happen instantaneously," he says. "The political differences between the parties wouldn't have disappeared, so actually
having such a reform would be difficult… And without it, it'd be hard to imagine the government going back to
AAA anytime in the near future after a default."
around."
Credit downgrade is likely unless the budget deficit is slashed
Reuters, 6/21 (“S&P restates political threat to U.S. AAA rating,” Jun 21, 2011, http://www.reuters.com/article/2011/06/21/us-markets-spidUSTRE75K3AZ20110621?feedType=RSS&feedName=topNews&rpc=71)
The risks of the U.S. losing its prized triple-A rating over the medium term have increased as the country faces
a political impasse and nears its debt ceiling, Standard and Poor's said on Tuesday. While the ability to adapt both fiscal
and monetary policy was a positive for the United States, the risk of a credit rating downgrade had increased due to a
lack of political consensus on how to employ that flexibility, Moritz Kraemer, head of sovereign credit ratings for Europe at
Standard & Poor's, said on Tuesday. "The problem is this flexibility needs to be employed and for that you need political
consensus. That's not very visible right now," he said. The United States is expected to exhaust its ability to meet financial obligations by
August 2, but the Treasury department has said that date could shift. "The downside risks in the medium term have increased and
we did assign a negative outlook that signifies there's a one in three chance the rating might go down in the
next few years," Kraemer told a Euromoney bond conference in London. Standard & Poor's threatened in April to downgrade the
United States' AAA credit rating unless the Obama administration and Congress find a way to slash the yawning federal
budget deficit within two years. Earlier on Tuesday, Fitch ratings said it saw risks of a debt default in the United States, whose
top-rated bonds may suffer if the country doesn't lift its fiscal borrowing ceiling. IMF economist Paul Mills also took a negative line on the politics
surrounding the U.S. debt situation, speaking at the conference. "I don't think the debate has yet even begun to understand how big a fiscal retrenchment
is going to be needed," Mills said. "The parameters of debate are still in the foothills of the problem... we may well see an initial plaster applied until the
presidential election then a more fundamental solution after that."
25
2011 Arizona Debate Institutes
deficit plan key to solve credit downgrade
Spending Disad
Deficit reduction plan is critical to prevent a downgrade in credit rating - would rattle the
economy
Mierke July 18, 2011 – Marco, writer for Monsters and Critics (US worry grows over possible credit rating loss, Monsters and critics
business news, http://www.monstersandcritics.com/news/business/news/article_1651843.php/US-worry-grows-over-possible-credit-rating-loss, MCL)
Washington - The bitter tug of war over the US debt ceiling could be seen as a mere prologue to the 2012
presidential elections. But the dispute could hardly be more serious, posing a threat not only to the credit rating
of the US government but to the entire economy. 'Armageddon' is not a word that US President Barack Obama
throws around lightly. After last week's fruitless negotiations about raising the 14.3-trillion-dollar debt limit, the president used it to underline
concern about disastrous consequences: 'If Washington operates as usual and can't get anything done, let's at least avoid
Armageddon.' Since the legal debt limit was first enacted in 1939, Congress has voted 89 times, mostly routinely, to raise the cap. Obama's Treasury
officials say that without an increase by August 2, the federal government will be unable to meet all its obligations, including payments to bondholders
and pensioners. Republicans and Democrats alike dismiss any suggestion that they would actually allow default to happen, but the brinksmanship in the
dispute has markets on edge, with the country's top credit rating hanging in the balance. 'The current wide divisions between the House
of Representatives and the Obama administration over the debt limit creates a high level of uncertainty and
causes us to raise our assessment of ... risk,' Steven Hess, vice president of Moody's rating agency, warned
Monday. Standard & Poor's agency went a step further: Now that Pandora's box has been opened on an issue Washington has
put off for decades - a grand political deal to reduce outlays in the coming 10 years - it can only be closed
again with a massive deficit-reducing move. The US reached its debt limit of 14.3 trillion dollars in May, and the Treasury has
been patching through with other resources. Conservative Republicans refuse to lift the debt ceiling without massive spending cuts, and negotiations
have focussed on deficit reduction packages ranging from 1.5 trillion to 4 trillion dollars over the next 10 years. And there's the rub. While Obama and
even some of his Democrats in Congress would go along with cuts to social programmes, conservative Republicans have so far refused to agree to
increased revenues that could come from dismantling tax breaks for high earners and some industries. The loss of the AAA rating on US
bonds would mean the federal government would pay considerably higher interest on its loans and fall deeper
into debt. A mere 0.25-per-cent increase in interest would add another 27 billion dollars a year to the debt. By
2015, that number would be 37 billion dollars. But it's not just the US government that would suffer. Moody's has warned that
bond ratings for all 50 states would erode in a federal default, further handicapping already-struggling
localities. Home mortgages, car and student loans, credit card rates: all borrowing would cost more, and some
of it could become prohibitively expensive. This would be 'effectively, a tax increase on everybody,' Obama said
Friday.
Deficit reduction key
State Column July 18, 2011 -
Rep. Rick Larsen: Separate debt ceiling vote from deficit reduction talks,
http://www.thestatecolumn.com/washington/rep-rick-larsen-separate-debt-ceiling-vote-from-deficit-reduction-talks/#ixzz1Sc5U6xKp, MCL
Business groups, including the U.S. Chamber of Commerce, recently sent a letter to Congress asking it to pass a
debt
limit increase to avoid a default that could raise the cost of borrowing for businesses and homeowners. Moody’s rating agency
warned that lack of action on the debt limit could lead to a downgrade of America’s AAA rating, which would
raise the cost of borrowing and make deficits worse. Federal Reserve Chairman Ben Bernanke testified that a default
would send a shock wave through the entire financial system. That includes the middle class. We don’t need another shock wave.
Simply put, failure to avoid a government default will do severe harm to America’s economy and the middle class.
26
2011 Arizona Debate Institutes
credit downgrade --> econ collapse
Spending Disad
Credit downgrade causes a ripple effect throughout the economy – impacts every sector
Prial July 15, 2011 – Dunstan, Author of “The Producer” (U.S. Downgrade Would Ripple Into Every Home, Fox Business,
http://www.foxbusiness.com/markets/2011/07/15/us-aaa-downgrade-would-ripple-into-every-home/, MCL)
The threat that the U.S. might lose its coveted Aaa debt rating probably seems esoteric to most casual observers. After all, who can really comprehend the
numbers involved? A national debt that stands at $14.5 trillion. A $14.3 trillion debt limit that apparently needs to be increased. A projected $1.4 trillion
federal deficit for 2011. But the ripple effect from such a downgrade would be widespread and potentially severe,
impacting everything from local municipalities and the neighborhood bank to home mortgages and student
loans. “It reaches down to every family in America,” said Gary Sasse, director of the Institute for Public
Leadership at Bryant University in Rhode Island. On Wednesday, Moody's Investors Service said it had placed the
government’s Aaa bond rating on “review for possible downgrade.” The credit rating firm said it based its
review on the increasing likelihood that the U.S. could default on its debt obligations if Congress fails to reach an agreement
to raise the U.S. debt limit before an Aug. 2 deadline set by the U.S. Treasury Department. Treasury Secretary Timothy Geithner has
repeatedly warned that the U.S. won’t be able to pay its considerable bills if the debt limit is not raised posthaste. And President Obama raised the stakes earlier this week, saying he couldn’t guarantee seniors would get their Social Security checks if Congress
fails to reach an agreement on the debt ceiling. Republicans and Democrats in Congress have insisted that any agreement to
raise the debt ceiling must also include a plan to get the U.S. fiscal house in order. But they can’t agree (to put it
mildly) how that should be accomplished. Thrown into Moody’s announcement of a potential downgrade -- which
was not entirely unexpected -- was a couple of dense paragraphs explaining that the ratings firm would also be reviewing all manner of securities whose
value depends on the economic well-being of the United States. Up for review in that latter category are the Aaa ratings of financial institutions "directly
linked to the US government,” according to Moody’s, including mortgage giants and quasi government entities Fannie Mae and Freddie Mac; the Federal
Home Loan Banks, and the Federal Farm Credit Banks. Moody’s wrote: “In addition to the financial institutions directly linked to
the US government, Moody's has also placed on review for possible downgrade pre-refunded municipal bonds
(which are invested in government or related securities), certain housing bonds that are supported or guaranteed by the US
government, and other municipal ratings that are directly linked to the rating of the US government .” Moreover
and as a direct result of the above mentioned reviews, Moody’s warned that countless complex “structured finance securities” loaded with U.S.
government backed mortgages and student loans will also be under review. (A bunch of U.S. backed bonds issued recently by Israel and Egypt are also
being reviewed, but that’s another story.) To make a long story short, if the U.S. loses its Aaa rating all of those other debt
securities will probably also be downgraded. For instance, Moody’s said at least 7,000 currently Aaa rated municipal bonds with direct
links to the U.S. government and valued at some $130 billion would be downgraded if the U.S. rating gets cut. Sasse, once a top fiscal advisor
to former Rhode Island Gov. Don Carcieri and an expert in state and municipal finance, said the first and most immediate
impact of a downgrade would be a broad “dampening on the economy.” “Any downgrading of U.S. government
bonds would sweep throughout the entire bond market,” he said. Sasse explained the ensuing domino-effect as
follows: the downgrade not only throws up more roadblocks to an already difficult economic recovery, it makes
it more expensive for the U.S. government and all government entities down the line -- state, county, local -- to
borrow money. The result is a double whammy on all levels of government. To wit, governments across-the-board will see
less revenue coming in due to the economic slowdown and more money going out because without the Aaa rating it will be more expensive for all of those
entities to borrow money.
Downgrade from Moody’s collapses the economy
Alden 6/3 (6/3/11, William Alden, Huffington Post, “Debt Ceiling Fight Could Strain Economy Even Before August, With Moody's Downgrade
Possible,” http://www.huffingtonpost.com/2011/06/03/debt-ceiling-moodys-downgrade_n_870927.html)
NEW YORK -- As politicians fight over the federal debt ceiling, Americans could start feeling the consequences of Congressional gridlock even before
that limit is hit. Moody's Investors Service warned on Thursday that if lawmakers have not made progress in negotiations to raise the debt limit by midJuly, the ratings agency plans to reassess the nation's sterling credit rating for a possible downgrade. The warning, coming after Standard & Poor's
lowered its outlook on U.S. debt to "negative" in April, underscores that the current political stalemate in Washington has already begun to dampen the
nation's economic prospects. A downgrade from Moody's on U.S. debt, or even the imminent threat of one, could itself
begin to choke
the economic processes that still have not fully recovered from the Great Recession. It would imply
that a credit default is possible, likely causing yields on Treasury debt to rise and pushing up interest rates across
the board. "It would be an earth-shattering event," said Scott Anderson, senior economist at Wells Fargo. "It's taken as a given
that U.S. Treasuries are a safe asset. Once you question that assumption, it shakes the foundations of global
finance, and the way it's been established over the last 50 years."
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2011 Arizona Debate Institutes
gridlock --> econ collapse
Spending Disad
Even if no default  economic collapse if there is congressional gridlock
Masters April 22, 2011- Jonathan, Associate Staff writer for the Council on Foreign Relations (U.S. Debt Ceiling: Costs and Consequences,
Council on Foreign Relations, http://www.cfr.org/international-finance/us-debt-ceiling-costs-consequences/p24751, MCL)
Most economists, including those in the White House and from former administrations, agree that the impact of a government
default
would be severe. Federal Reserve Chairman Ben Bernanke has labeled a U.S. default a "recovery-ending event" (WSJ)
that would likely spark another financial crisis. But short of default, officials warn that
legislative delays in raising the debt ceiling could also inflict significant harm on the U.S.
economy. Geithner has argued that congressional gridlock will sow significant uncertainty in the bond markets and
place upward pressure on interest rates. He warns that the increase would not only hike future borrowing costs of
the federal government, but would also raise capital costs for struggling U.S. businesses and cash-strapped
homebuyers. In addition, rising interest rates would divert future taxpayer money away from muchneeded capital investments such as infrastructure, education, and health care . Estimates suggest that
even an increase of twenty-five basis points on Treasury yields could cost taxpayers as much as $500 million more per month. Jamie Dimon, head
of JP Morgan Chase & Co., cautioned against "playing chicken" with the debt cap, asserting that the
consequences of inaction would start to accelerate in the weeks ahead of an actual default. He added that JP Morgan
would take drastic precautionary measures "way ahead of time."
28
***Neg Impacts
2011 Arizona Debate Institutes
dollar collapse --> collapse heg
Spending Disad
A strong dollar is key to both hard and soft power
Kirshner 8 Jonathan Kirshner, Department of Government @ Cornell University (“Dollar primacy and American power: What’s at stake?”, Review
of International Political Economy,15:3,418 — 438 Informaworld)
The key currency role of the dollar also provides to the US not only overt power via its enhanced autonomy and
discretion, it increases the political influence and capacity of the US, via what has been called ‘structural power
’. There are two distinct (if related) strands of thought on structural power that are relevant here, one associated with Susan Strange and the other with
Albert Hirschman. Strange’s conception of structural power owes something to Woody Allen; as with aspiring playwrights, for hegemons, 90% of
structural power is just showing up. Simply by its enormous size, a dominant state creates the context in which
political interactions take place – often without even the intention of doing so. Thus, for example, any discussion of the international monetary system takes place in the context of dollar primacy. Of course, structural power can also be quite purposeful,
although it is ex- pressed not by ‘relational’ power or coercion over specific outcomes, but via agenda setting –
‘the power to decide how things shall be done, the power to shape frameworks within which states relate to
each other ’.25 The strand of structural power associated with Hirschman emphasizes how the pattern of economic relations between states can
transform the calculation of political interest. States (and private actors within states) that use the dollar (and especially those that hold their reserves in
dollars) develop a vested interest in the value and stability of the dollar. Once in widespread use, the fate of the dollar becomes more than just America’s
problem – it becomes the problem off all dollar holders (to varying de- grees from case to case). Even those that simply peg to the dollar
as part of a broader international economic strategy also have an interest in fu- ture of the greenback even
without signing on as ‘stakeholders’ the way large holders of dollars have, advertantly or not, as they
accumulate dollar denominated assets.26 In the contemporary system, then, dollar primacy increases both the ‘hard
power ’ and the ‘soft power ’ of the US Regarding the former, America’s coercive capacity is enhanced by its
greater autonomy to run deficits and to adopt policies that would otherwise elicit a countervailing market
reaction. As for the latter, the structural benefits afforded to the US can be classified under Nye’s definition of ‘soft
power ’ – getting others to want what you want them to want. For Strange the weight of the dollar benefits the US by necessitating that relevant
political arenas will be operate in such a way that cannot but account for American interests. For Hirschman, the US gains because
participation in a dollar-based international monetary order both shapes the perceived self-interests of states
and of many private actors within states, and also, more concretely, by creating stakeholders in the fate of the
dollar.
Heg collapse causes global nuclear conflict – ensures the US is drawn back in
Lieber 2005 – Robert, PhD from Harvard, Professor of Government and International Affairs at Georgetown, former consultant to the State
Department and for National Intelligence Estimates ( “The American Era”, pages 53-54, Print)
Withdrawal from foreign commitments might seem to be a means of evading
hostility toward the United States, but the
consequences would almost certainly be harmful both to regional stability and to U.S. national interests. Although Europe would almost
certainly not see the return to competitive balancing among regional powers (i.e., competition and even military rivalry between France and Germany) of
the kind that some realist scholars of international relations have predicted,21 elsewhere the dangers could increase. In Asia, Japan, South Korea,
and Taiwan would have strong motivation to acquire nuclear weapons – which they have the technological
capacity to do quite quickly. Instability and regional competition could also escalate, not only between India and
Pakistan, but also in Southeast Asia involving Vietnam, Thailand, Indonesia, and possibly the Philippines.
Risks in the Middle East would be likely to increase, with regional competition among the major countries of the Gulf region
(Iran, Saudi Arabia, and Iraq) as well as Egypt, Syria, and Israel. Major regional wars, eventually involving the use of weapons of
mass destruction plus human suffering on a vast scale, floods of refugees, economic disruption, and risks to oil
supplies are all readily conceivable. Based on past experience, the United States would almost certainly be drawn back
into these areas, whether to defend friendly states, to cope with a humanitarian catastrophe, or to prevent a hostile power from dominating an entire
region. Steven Peter Rosen has thus fittingly observed, “If the logic of American empire is unappealing, it is not at all clear that
the alternatives are that much more attractive.”22 Similarly, Niall Ferguson has added that those who dislike American predominance
ought to bear in mind that the alternative may not be a world of competing great powers, but one with no
hegemon at all. Ferguson’s warning may be hyperbolic, but it hints at the perils that the absence of a dominant power, “apolarity,” could
bring “an anarchic new Dark Age of waning empires and religious fanaticism; of endemic plunder and pillage
in the world’s forgotten regions; of economic stagnation and civilization’s retreat into a few fortified
enclaves.”23
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2011 Arizona Debate Institutes
dollar collapse --> econ collapse
US dollar collapse kills the economy and destroys US hegemony
Looney 2004 – Robert, professor of economics at the Naval Postgraduate School (Middle East Policy,
Spending Disad
The Iranian Oil Bourse A Threat to Dollar
Supremacy?, http://faculty.nps.edu/relooney/Rel-Challenge-07.pdf)
Put differently, proponents of this view contend the dollar-priced oil system
creates a virtuous cycle for the United States,
making the country's massive trade deficit tolerable and its foreign military operations financially bearable. In
effect, the existing dollar/oil system allows the U.S. government to run up a massive deficit without raising interest rates as foreign dollars are
used to purchase U.S. government debt. The economy thrives because the U.S. private sector is not crowded
out of the financial markets. The net result is to allow strong levels of consumption and investment despite extraordinarily low rates of savings.
Meanwhile, the United States can pursue overseas military operations without being encumbered by the resource constraints
facing all other countries. The United States can have both guns and butter. It follows that breaking the dollar/ oil link
would drastically reduce the role of the U.S. dollar as an international reserve currency, and
thus the military/economic power of the United States.
Dollar crash tanks the economy via massive inflation and unserviceable debt
Looney 2004 – Robert, professor of economics at the Naval Postgraduate School (Middle East Policy, The Iranian Oil Bourse A Threat to Dollar
Supremacy?, http://faculty.nps.edu/relooney/Rel-Challenge-07.pdf)
3. The effect of an OPEC switch to the euro would be that oil-consuming nations
would have to flush dollars out of their (central bank)
reserve funds and replace them with euros. The dollar would crash anywhere from 20-40 percent in value, with
consequences predictable from any currency collapse and massive inflation (like Argentina's currency
crisis, for example). You'd have foreign funds stream out of the U.S. stock markets and dollar-denominated assets;
there'd be a run on the banks much like the 1930s; the current-account deficit would become unserviceable; the
budget deficit would go into default and so on.
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2011 Arizona Debate Institutes
dollar collapse --> trade wars
Spending Disad
Dollar decline guts trade
Caploe 8-MA in Political Science and a PhD in International Political Economy from Princeton University
(David, “It's the fiscal deficit, stupid,” The Straits Times, 9/2/08, lexis)
The origins of this system lie in the shattered condition of the world economy after World War II. At that time, the only currency
universally accepted for international trade was the US dollar. This 'dollar hegemony' has enabled the US to survive
and prosper for decades despite the fact it has run consistent balance of payments deficits since 1959 - a condition that would have devastated
any other country whose currency wasn't the world's 'reserve currency'. Put simply, countries accept dollars, even in their currently weakened
state, to buy and sell from each other - above all oil, which has been priced in US dollars since even before World
War II. The result of dollar hegemony has been a 'win-win' situation for both the US and the rest of the world: The
US can import goods and services far beyond its immediate ability to pay, and the rest of the world has been willing to take
dollars, which they can use themselves. In this way, America serves as not just the global consumer of last resort - the place where countries know they
are usually able to off-load their inventories - but also the global financier of last resort. That is, the supply of dollars moving around the
world has, for the last half century, helped maintain the flow of not just trade, but international investment as
well.
Trade key to prevent war-empirical evidence, decade-long studies, and economic freedom
index proves
Boudreaux 06-chairman of the economics department at George Mason University (Donald J. Bourdreaux,
“Want Word Peace? Support free trade.” Christian Science Monitor, 11/20/06,
http://www.csmonitor.com/2006/1120/p09s02-coop.html)
These activities employ workers here at home and raise their wages. Mountains of empirical evidence show that protectionism is
economically destructive. The facts also show that protectionism is inconsistent with a desire for peace – a desire admirably expressed by many
Democrats during the recent campaigns. Back in 1748, Baron de Montesquieu observed that "Peace is the natural effect of trade. Two nations who differ
with each other become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling; and thus their union is founded
on their mutual necessities." If Mr. Montesquieu is correct that trade promotes peace, then protectionism – a retreat from open trade – raises the
chances of war. Plenty of empirical evidence confirms the wisdom of Montesquieu's insight: Trade does indeed promote
peace. During the past 30 years, Solomon Polachek, an economist at the State University of New York at Binghamton,
has researched the relationship between trade and peace. In his most recent paper on the topic, he and co-author Carlos Seiglie of
Rutgers University review the massive amount of research on trade, war, and peace. They find that "the overwhelming evidence indicates
that trade reduces conflict." Likewise for foreign investment. The greater the amounts that foreigners invest in the United
States, or the more that Americans invest abroad, the lower is the likelihood of war between America and those countries
with which it has investment relationships. Professors Polachek and Seiglie conclude that, "The policy implication of our finding is that
further international cooperation in reducing barriers to both trade and capital flows can promote a more
peaceful world." Columbia University political scientist Erik Gartzke reaches a similar but more general conclusion:
Peace is fostered by economic freedom. Economic freedom certainly includes, but is broader than, the freedom of ordinary people to trade
internationally. It includes also low and transparent rates of taxation, the easy ability of entrepreneurs to start new businesses, the lightness of
regulations on labor, product, and credit markets, ready access to sound money, and other factors that encourage the allocation of resources by markets
rather than by government officials. Professor Gartzke ranks countries on an economic-freedom index from 1 to 10, with 1 being very unfree and 10 being
very free. He then examines military conflicts from 1816 through 2000. His findings are powerful: Countries that rank lowest on an
economic-freedom index – with scores of 2 or less – are 14 times more likely to be involved in military conflicts
than are countries whose people enjoy significant economic freedom (that is, countries with scores of 8 or higher).
31
2011 Arizona Debate Institutes
xt: econ collapse --> war
Spending Disad
Economic collapse causes global war
Austin 2009 – Michael resident scholar at AEI (“Averting Disaster”, The Daily Standard, February 6, 2009 http://www.aei.org/article/100044)
As they deal with a collapsing world economy, policymakers in Washington and around the globe must not forget that when a depression
strikes, war can follow. Nowhere is this truer than in Asia, the most heavily armed region on earth and riven
with ancient hatreds and territorial rivalries. Collapsing trade flows can lead to political tension, nationalist
outbursts, growing distrust, and ultimately, military miscalculation. The result would be disaster on top of an already dire
situation.
No one should think that Asia is on the verge of conflict. But it is also important to remember what has helped
keep the peace in this region for so long. Phenomenal growth rates in Japan, South Korea, Hong Kong,
Singapore, China and elsewhere since the 1960s have naturally turned national attention inward, to
development and stability. This has gradually led to increased political confidence, diplomatic initiatives, and in many nations the move toward
more democratic systems. America has directly benefited as well, and not merely from years of lower consumer prices, but also from the general
conditions of peace in Asia.
Yet policymakers need to remember that even during these decades of growth, moments of economic shock, such
as the 1973 Oil Crisis, led
to instability and bursts of terrorist activity in Japan, while the uneven pace of growth in
China has led to tens of thousands of armed clashes in the poor interior of the country.
Now imagine such instability multiplied region-wide. The economic collapse Japan is facing, and China's potential slowdown, dwarfs
any previous economic troubles, including the 1998 Asian Currency Crisis. Newly urbanized workers rioting for jobs or living wages, conflict over natural
resources, further saber-rattling from North Korea, all can take on lives of their own. This is the nightmare of governments in the region, and particularly
of democracies from newer ones like Thailand and Mongolia to established states like Japan and South Korea. How will overburdened political leaders
react to internal unrest? What happens if Chinese shopkeepers in Indonesia are attacked, or a Japanese naval ship collides with a Korean fishing vessel?
Quite simply, Asia's political infrastructure may not be strong enough to resist the slide towards confrontation and
conflict.
This would be a political and humanitarian disaster turning the clock back decades in Asia. It
would almost certainly drag America in at
have alliance responsibilities to Japan, South Korea, Australia, and the Philippines
should any of them come under armed attack. Failure on our part to live up to those responsibilities could mean the end of America's
some point, as well. First of all, we
credibility in Asia. Secondly, peace in Asia has been kept in good measure by the continued U.S. military presence since World War II. There have been
terrible localized conflicts, of course, but nothing approaching a systemic conflagration like the 1940s. Today, such a conflict would be far more bloody,
and it is unclear if the American military, already stretched too thin by wars in Afghanistan and Iraq, could
contain the crisis. Nor is it clear that the American people, worn out from war and economic distress, would be willing to shed even more blood
and treasure for lands across the ocean.
The result could be a historic changing of the geopolitical map in the world's most populous region. Perhaps China would emerge as the undisputed
hegemon. Possibly democracies like Japan and South Korea would link up to oppose any aggressor. India might decide it could move into the vacuum.
All of this is guess-work, of course, but it has happened repeatedly throughout history. There is no reason to believe we are immune
from the same types of miscalculation and greed that have destroyed international systems in the past.
32
2011 Arizona Debate Institutes
econ turns all impacts
Spending Disad
Economic decline makes every impact inevitable
Silk, Professor of Economics at Pace University and Senior Research Fellow, 1993 (Leonard, Professor of Economics at Pace University and Senior
Research Fellow at the Ralph Bunche Institute on the United Nations at the Graduate Center, City University of New York. "Dangers of slow growth,"
Foreign Affairs, Wntr v72 n1 p167(16).)
In the absence of such shifts of human and capital resources to expanding civilian industries, there are strong economic pressures
on arms-producing nations to maintain high levels of military production and to sell weapons, both
conventional and dual-use nuclear technology, wherever buyers can be found. Without a revival of
national economies and the global economy, the production and proliferation of weapons will continue, creating more Iraqs, Yugoslavias, Somalias and
Cambodias - or worse. Like the Great Depression, the current economic slump has fanned the fires of nationalist, ethnic and religious hatred around the
world. Economic hardship is not the only cause of these social and political pathologies, but it
aggravates all of them, and in turn they feed back on economic development. They also
undermine efforts to deal with such global problems as environmental pollution, the
production and trafficking of drugs, crime, sickness, famine, AIDS and other plagues. Growth will not
solve all those problems by itself But economic growth - and growth alone - creates the additional resources that
make it possible to achieve such fundamental goals as higher living standards, national and
collective security, a healthier environment, and more liberal and open economies and
societies.
33
2011 Arizona Debate Institutes
econ turns democracy
Spending Disad
Economic Crisis greatly damages moves towards democratization
Michael Allen, Democracy Digest, 10/23/08 (http://www.demdigest.net/blog/872/economic-crisis-could-turn-democracys-stagnation-intoretreat-report-warns.html)
Democracy’s forward march has halted, according to the Economist Intelligence Unit’s Democracy Index 2008. The third wave of
democratization has given way to stagnation and regression. The EIU cautions that if the global financial crisis generates a
protracted recession, “the recent halt in democratization could turn into a retreat”, as fragile non-consolidated
democracies deteriorate. “There is talk of a broken financial system discrediting Western values in general,” the report suggests. “A broader
backlash may develop against free markets and neo-liberal ideology in some countries as economic conditions
deteriorate.” Some 48 countries have a high risk of social unrest, says the EIU. The financial and economic crisis may boost the appeal of the
Chinese model of authoritarian capitalism in emerging markets. The index defines almost half of the world’s states as
democracies, but only 30 as “full democracies” 0); 50 are deemed “flawed democracies”; and, of the remaining
87 states, 51 are authoritarian and 36 “hybrid regimes”.
Economic Depression Leads to undemocratic government- Germany proves
Thom Hartmann, radio host, author, former psychotherapist and entrepreneur, ‘07 (http://www.thomhartmann.com/2007/11/02/democracy-
and-economic-cycles/)
But what will come out of this time of danger/opportunity? What sort of future can we fashion? Will we use the crisis to create positive change for our
children and grandchildren, or allow forces of oppression to have their way? The oppressors too are fighting for survival, and history shows what lengths
they’ll go to. When Germany faced the last depression, its government turned to a hand-in-glove partnership with
corporations (German and American) to solidify its power over its own people and wage war on others. Benito
Mussolini first named this new form of corporate/state partnership fascism, referring to the old Roman fascia, or bundle of
sticks held together with a rope, that was the symbol of power of the Caesars. This time, Mussolini said, the bundle was the police and military power of
the state combined with the economic power of industry. The fascist system was adopted by Italy, Spain, Japan, and Germany.
Mussolini also noted that there was a more accurate word to describe his political/economic system: “Fascism should more appropriately be called
corporatism,” he wrote in the Encyclopedia Italiana, “because it is a merger of state and corporate power.” And indeed, the results of fascism can look
very good, at first; in Germany it worked so well that Adolf Hitler was named TIME magazine’s Man of the Year on February 2, 1939.
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2011 Arizona Debate Institutes
econ turns heg
Spending Disad
Economy is key to hegemony
Phillips, P. Michael. "Deconstructing our dark age future." Parameters 39.2 (2009): 94+. Academic OneFile. Web. 14 July 2010.
http://find.galegroup.com.proxy.lib.umich.edu/gtx/infomark.do?&contentSet=IACDocuments&type=retrieve&tabID=T002&prodId=AONE&docId=A208333702&source=gale&srcprod=AONE&userGroupName=lom_umichanna&versi
on=1.0
What is in decline is the ability of the United States to dominate the global environment unchallenged. For almost a century,
American policymakers and theorists have considered US power as essential to maintaining
international security and prosperity. Woodrow Wilson categorically rejected European power politics and believed that America's
mission was to create a world order dedicated to the promotion of "liberal, democratic, and capitalistic values of order, law, and harmony." (58) The
United States' emergence following World War II as the international system's most powerful state placed it in an unprecedented position to effect
significant global change. Commanding more than half of the world's production of manufactured goods and accounting for fully a third of all exports,
post-war America was the essential engine to rebuild and modernize war-ravaged Europe and the world. (59) Furthermore, concerned that
the absence of widespread prosperity would cause a repeat of the economic disaster of the interwar years,
American policymakers inextricably bound the nation's economic power to its security policy, a policy most
obviously embodied in and reinforced by the success of the Marshall Plan. (60) Against the backdrop of the Cold War specter
of nuclear annihilation, the United States assumed the mantle of benevolent hegemon, the indispensable rule maker and enforcer. (61)American power,
however, is paradoxical. According to Joseph Nye, on one hand the international community demands Washington's
leadership, as well as its dependence and interdependence through the processes of globalization. On the other
hand, these processes invoke opposition and conflict where the benefits of globalization fail to take root. (62) In
essence, depending upon one's point of view, the United States is at once the solution and the problem.The
absence of an overarching global threat and the diffusion of globalization's prosperity have empowered a greater number of states to pursue interests that
increasingly challenge American hegemony. In spite of NATO ties, West European states often have policies that run counter to Washington's goals.
Russia has, for the moment, rationalized its post-Soviet domestic politics as well as harnessed its oil and natural gas wealth, enabling Moscow to once
again offer muscular responses to perceived American encroachments. Industrial China, India, and Brazil are assuming, by gradual and steady steps, a
greater share of the capital markets that have historically underwritten American power. Smaller and more focused regional powers, such as Syria, North
Korea, Iran, and Venezuela, increasingly challenge America's leadership by engaging in international criminal activity or by proliferating dangerous
technologies. Even unaffiliated minor nations, such as Sudan, Zimbabwe, and Eritrea, have felt unconstrained in their efforts to all but quit the
international community to pursue seemingly self-destructive domestic policies that risk regional destabilization. Add to this Washington's post-9/11
anxiety that spillovers from weak and failing states will promote the spread of pandemic disease, transnational terrorism, and special weapons
proliferation, and the international system might seem as if it will rip apart at the seams. (63)
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***Aff Answers
2011 Arizona Debate Institutes
econ low
Spending Disad
Consumer confidence and other economic factors are decreasing –new study proves
AP July 18, 2011 - Consumer Confidence on Shaky Ground, MCL
A new Reuters/University of Michigan study indicates consumer confidence is not as steady as one may hope.
According to the study, the consumer sentiment index suffered a major blow in June as it fell to its lowest level since
March 2009, dropping 7.7 points to 63.8. As Chris G. Christopher Jr., senior principal economist with IHS
Global Insight, explained, "the consumer side of the economy is not looking good. There is hardly one good thing that has
developed in the past few months that would indicate that consumers should be optimistic -- with the exception of falling gas prices." He added that May
and June employment figures also shine a light on the lack of jobs still plaguing the country. "In the first months of the year, the
relatively strong employment numbers and robust stock market were holding up consumer spending and
confidence despite rising gasoline and food prices, falling home prices, depressed levels of household net worth
and tight credit conditions," he said. "Consumer confidence and spending have headed south as job prospects
started to wane and volatility in the stock market increased. As gasoline prices started falling, food prices were still increasing and
core price inflation (price inflation excluding energy and food) starting rearing its ugly head." In addition to consumer confidence, the report
found that the economic conditions index fell 5.7 points to 76.3 -- a level not seen since September 2009. Also, the
economic outlook index decreased 9 points to hit 55.8, also its lowest level since March 2009. "This is a very bad report. Consumer mood
is at depressed levels and most of the economic news has not been favorable to consumer confidence and
spending; falling gasoline prices are helpful but are insufficient to drive up consumer spending and confidence," Christopher stated. "The recent
bickering over the debt ceiling emanating from the Capitol is not very helpful to confidence as well. It is blatantly clear that the American
consumer is worried and tired. This is terrible news since consumer spending represents 70 percent of the
economy."
Econ low – slow recovery, low consumer confidence, low job prospects
IB Times, July 15, 2011 – (Americans Downbeat About Economy, U.S. Debt, International Business Times,
http://www.ibtimes.com/articles/181090/20110715/consumer-sentiment-consumer-confidence-lowest-since-recession.htm, MCL)
More Americans feel bad about falling income and rising unemployment in the U.S., dropping consumer
confidence in the U.S. to its lowest level since the Great Recession. The U.S. has been officially out of the recession for two years
now, but the recovery has been slow, and different that others historically. Companies are now hiring less, and differently, and wages are
stagnant. The economy is also in a slow-growth mode, and housing inventory and prices have years to go before
full recovery, and U.S. politicians are nearing a deadline to raise America's debt ceiing but talks are stalled. A survey released Friday
shows American's have reached a peak of pessimism over the economic conditions since the recession, as
consumer confidence dropped to 63.8 in July from 71.5 in June. The federal government announced in July that
unemployment had risen to 9.2 percent from June. According to a Reuters poll, economists had predicted a July consumer
confidence reading in consensus of 72.5 -- almost 10 points higher than the actual reading. The survey, by Thomson Reuters/University
of Michigan, also showed consumer expectations on the economy fell to 76.3, the lowest since November 2009,
from 82.0 in June. Consumers are still more optimistic in expectations than there were in March 2009, the last
time consumer sentiment fell so low, but the reading was still troubling. "Whenever the Expectations Index has been this low
in the past, the economy has been in recession," survey director Richard Curtin said in a statement. "Nonetheless," Curtin said, "one month's data is
insufficient to signal a renewed downtown, particularly if a last-minute agreement on the debt ceiling results in a partial restoration of confidence."
Half of those Americans polled said they felt the economy had worsened recently, and two times as many
consumers than before said they heard more about jobs losses than jobs gains, dropping sentiment to its lowest
level since 2009. "We remain in a very slow recovery with extraordinarily grudging employment," said Patrick
O'Keefe, director of economic research at J.H. Cohn in New York, in an interview with Reuters. "They're not
seeing a lot of benefits."
Econ low – large debt, high unemployment, and business and consumer uncertainty
Lance July 15, 2011 – Leonard, U.S. Representative for New Jersey's 7th congressional district (Failure to control spending threatens
national security, July 15, 2011, Asbury Park Press, http://www.app.com/article/20110717/NJOPINION06/307170023/Failure-to-control-spendingthreatens-national-security, MCL)
So said then-Sen. Barack Obama in 2006 just moments before he voted against raising the debt ceiling by less than $800 billion to the then-new limit of
$8.965 trillion. As our nation’s debt now approaches its current $14.29 trillion limit , now-President Barack Obama is
calling on Congress to increase the debt ceiling by $2.4 trillion. And most Americans rightfully ask: “How did this
happen?” Leaders of both political parties are guilty of past decades of fiscal irresponsibility by spending beyond our means. In the past decade alone,
Congress has authorized an increase in the debt limit 10 times. The federal government has only managed to balance its budget five times in the last 50
years. And we continue to spend approximately 40 cents of every dollar. Recently we have seen our government debt grow by $3.4
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2011 Arizona Debate Institutes
Spending Disad
trillion during the first 29 months of the Obama administration — the equivalent of about $4 billion per day.
Foreign investors, including China, hold half of our nation’s $14 trillion debt, causing Adm. Mike Mullen, chairman
of the Joint Chiefs of Staff, to call the national debt “the single biggest threat to our national security.” Last
Congress, there was no budget, no spending plan and no final decision on funding levels for the whole fiscal year for the first time in modern history.
The years of fiscal mismanagement have resulted in a sputtering American economy in which the
unemployment rate hovers above 9 percent and unprecedented uncertainty has made it harder for our nation’s
job creators to start and expand businesses.
Economic recovery is not certain – unemployment is increasing, prices are decreasing, and lack
of momentum
Felsenthal and da Costa July 14, 2011 – Mark, journalist for Reuters, Pedro Nicolaci, D.C. correspondent (Bernanke warns
spending cuts could derail recovery, reuters, July 14, 2011, http://www.reuters.com/article/2011/07/15/us-usa-fed-idUSTRE76774Z20110715, MCL)
Economic reports released on Thursday suggested the economy will struggle to regain speed in the second half of the
year, as the Fed has forecast. The number of Americans claiming initial unemployment benefits dropped last week, but
remained elevated, and retail sales barely rose in June, government data showed. Also, producer prices in June posted their
steepest decline since February 2010 as energy prices eased. While Fed policymakers have been worried about rising inflation, the
risk of a damaging deflationary spiral could force the central bank to act to promote growth. Economists polled by Reuters cut their
outlook for U.S. growth to 2.5 percent this year. That forecast put the United States ahead of major European economies
except Germany, but behind some major emerging markets including China. Although Bernanke told Congress the Fed's recently completed $600
billion bond-buying program has been effective in lowering long-term interest rates and coaxing investors to take greater risks, it has been controversial,
and several lawmakers questioned it on Thursday. "I believe the stage is set for a resurgence of inflation if the Fed is not careful," Senator Richard Shelby
told Bernanke at the hearing. Former Fed chairman Paul Volcker on Thursday also raised doubts about the Fed's ability to
ease policy further, adding that more efforts might have negative unintended consequences.
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2011 Arizona Debate Institutes
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no spending cuts
Boehner is unlikely to drastically cut spending cuts – out year cuts rarely materialize
Hanna July 15, 2011 – Colin, president of Let Freedom Ring (Guest column: Congress must 'cap, cut and balance' budget, Cincinnati news,
http://news.cincinnati.com/article/20110716/EDIT02/107160310/Guest-column-Cap-cut-and-balance-, MCL)
The federal government's skyrocketing debt is set to broach $14.3 trillion, the statutory limit Congress set for itself, which will have to
be raised in the near future for the federal government to take on any additional borrowing. Speaker of the House John Boehner and
Republicans correctly see this as a significant leverage point to make legislative demands that will put us on a
path to returning our nation's fiscal house to order. Unfortunately Boehner, the lead negotiator for the GOP, appears willing
to accept a debt ceiling deal that falls way short of his own benchmark. All reports suggest he will support a compromise
of between $2-4 trillion of spending cuts, almost all accruing in future years known in legislative jargon as outyears, in exchange for a debt ceiling increase. This would utterly fail to take advantage of our nation's present come-to-Jesus moment to
fundamentally reform the way Washington spends taxpayer money. Boehner's former House colleague and current Ohio Governor John Kasich, once
famously said "I've never lived in an out-year", making the point that future spending cuts in out-years often
never materialize as future Congresses can freely choose to undo them. His statement precisely demonstrates why a debt limit
deal of mere spending cuts that can't be guaranteed, would be unacceptable.
Balanced Budget plan is expected to fail in the senate – includes spending cuts
Schroeder July 19, 2011 – Robert, reporter for MarketWatch in Washington (House plan to raise debt ceiling heads for vote, Market Watch,
http://www.marketwatch.com/story/house-plan-to-raise-debt-ceiling-heads-for-vote-2011-0719?dist=countdown, MCL)
WASHINGTON (MarketWatch) — Ignoring a veto threat from President Barack Obama, House Republicans moved forward
on a Tuesday vote that would raise the U.S. debt ceiling on condition that deep spending cuts are made and that
both chambers of Congress pass a balanced-budget amendment. New debt-reduction plan emerges WSJ's Simon Constable speaks with Washington reporter Damian Paletta
about a
new $3.7 trillion debt-reduction plan that has emerged from the Senate and was praised by President
Obama. The plan is from a group of senators known as "the group of six." The measure, dubbed “Cut, Cap and
Balance,” is expected to fail in the Senate and has been ridiculed by the White House as “duck, dodge and
dismantle.” Republicans say that they are offering the plan to avoid a default by the U.S. government and that
cutting and capping spending will ensure that Washington lives within its means. “Today, the House will vote on the Cut, Cap
and Balance Act; our balanced plan to meet the president’s request for a debt-limit increase while achieving serious
spending cuts, binding budget reforms, and putting in place a balanced-budget amendment to ensure we don’t
continue to kick the can down the road,” said a statement from House Majority Leader Eric Cantor’s office on
Tuesday.
Republican factionism makes debt deal unlikely
Lightman and Douglas July 17, 2011 – David and William, writers for the Miami Herald (House GOP splits into 2 camps: one flexible, one not,
McClatchy newspapers, http://www.miamiherald.com/2011/07/17/2317809/house-gop-splits-into-2-camps.html#ixzz1SO5hyaUm, MCL)
There are two types of Republicans in the House of Representatives: the no-compromise bloc of die-hard
conservatives, and the old guard who consider getting 80 percent of what they want to be a pretty good deal. The
two sides rarely clash in public, but the schism is clear. "I'm a conservative. I'm also an institutionalist. I want to see this place work," said Rep. Dan Lungren, R-Calif., who
first came to Congress as a staff member in 1969. But freshman Rep. Allen West, R-Fla., wants bold action now. "I've never been worried about being blamed for stuff as long
as I stick to my principles," he said. "I didn't come here to kick the can 10 years down the road." These
differences in outlook could have a huge
impact on resolving the impasse over how to cut federal spending while increasing the nation's $14.3 trillion
debt limit. If that limit isn't raised by Aug. 2, the government risks default on its obligations. Treasury officials, business leaders and financial experts warn that economic
chaos could result. The key to passing a deal is the House, where Republicans have a 240-192 majority, with 218 needed for passage. House Majority
Leader Eric Cantor, R-Va., leader of the new-breed conservatives, has been the most visible negotiator, drawing attention not only
for his hard line against higher taxes but also for his aggressive style. House Speaker John Boehner, R-Ohio, has shown
more inclination to compromise. The two men embody the House GOP's factions. Michael Franc, the vice
president for government studies at the Heritage Foundation, a conservative research center, said House
Republicans could be grouped loosely into those elected before 1994 and those who came after. The pre-1994
group, which includes Boehner, who was first elected in 1990, arrived in an era when Democrats had controlled Congress since the
mid-1950s. House Republicans' voting records were firmly conservative, but legislative success for them
usually depended on working with Democrats. Then came 1994, when 73 freshmen Republicans were swept
into the House after running on the "Contract with America," a conservative ideological agenda championed by
Newt Gingrich, R-Ga., who was House minority whip. The GOP won control of the House for the first time in 40 years, and Gingrich was elected House speaker. Last
year the conservatives rose again, as 87 Republican freshmen were elected, many with the backing of the tea party movement. The party regained control of the House for the
first time in four years. "People who got elected in 2010, they weren't shy about their campaigns. They weren't shy about what they believe," said Sen. Lindsey Graham, R-S.C.,
who was first elected to the House in 1994 and is known for his occasional willingness to find common ground with Democrats.
Many freshmen feel pressure
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2011 Arizona Debate Institutes
Spending Disad
to resist raising the debt ceiling unless they also get significant long-term spending cuts. They think that "we
shouldn't go home and say 'All right, we've raised the debt ceiling but nothing really changed,' " Graham said.
Yet because seniority matters in the House, most committees are run by lawmakers who were first elected
before 1994. And they often see the younger hard-liners' desire to slash government across the board as too
facile.
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2011 Arizona Debate Institutes
no spending cuts – obama veto
Spending Disad
No chance of passing spending cuts in the senate
Taylor July 19, 2011 – Andrew, writer for the associated press ('Cut cap and balance' debt measure passes House, Forbes.Com,
http://www.forbes.com/feeds/ap/2011/07/19/general-us-debt-showdown-house_8573923.html, MCL)
The House has passed legislation conditioning a $2.4 trillion increase in the nation's borrowing cap on a tea
party-backed plan to require immediate spending cuts and a constitutional amendment requiring a balanced budget. The 234-190 vote
sends the "cut, cap and balance" plan to the Democratic-controlled Senate, where it has virtually no chance
of passing. With the House tally cast, attention is returning to efforts in the Senate to provide President Barack
Obama authority to impose an increase in the debt limit without approval by Congress and on a new Senate
"Gang of Six" proposal to cut the deficit by almost $4 trillion over the coming decade.
Obama will veto the cut cap balance plan – supports a more moderate plan from the ‘group of
six’
Silverleib and Cohen July 19, 2011 – Alan and Tom, writers for CNN (House Passes GOP Debt Measure; Obama Praises
Compromise Plan, CNN, http://www.wapt.com/politics/28595454/detail.html#ixzz1Sbp0eRYu, MCL)
The U.S. House on Tuesday night passed the "cut, cap and balance" deficit reduction
plan backed by tea party
conservatives but dismissed by
President Barack Obama, who offered strong praise for another proposal put together by a bipartisan group of senators. The so-called
Gang of Six plan -- drafted by three Democratic and three Republican senators -- presents a possible compromise to Obama and
congressional leaders as they approach a deadline for a deal on cutting federal deficits in order to gain Republican
support for raising the federal debt ceiling to avoid an unprecedented default. It would cut the nation's debt by about $3.7 trillion over the next 10 years - similar to the president's call for roughly $4 trillion in savings. Obama called the plan by the Gang of Six senators "broadly consistent" with his own
approach to the current debt ceiling crisis because it mixes tax changes, entitlement reforms and spending reductions. However, the top two Democrats
in the Senate said they don't think there is enough time before the government needs to borrow more money on August 2 to pass the comprehensive
Gang of Six plan. Meanwhile, the Republican-led House of Representatives voted 234-190 to pass the "cut, cap and
balance" plan that would impose strict caps on all future federal spending while making it significantly tougher
to raise taxes -- the solution favored by hard-line conservatives. The vote was almost completely on party lines for the
measure that included the requirement that Congress pass a balanced budget amendment to the U.S. Constitution
before agreeing to extend the federal debt ceiling. "While President Obama simply talks tough about cutting spending, House Republicans are
taking action," House Speaker John Boehner, R-Ohio, said in a statement after the vote. Boehner called the House measure "exactly
the kind of 'balanced' approach the White House has asked for -- it provides President Obama with the debt limit increase he's requested while making
real spending cuts now and restraining future government spending and debt that are hurting job growth." Obama has said he would
veto such a measure, and Senate Democrats are expected to kill it. On Tuesday, the president
said legislators "don't have any more time to engage in symbolic gestures" with time running
out to raise the debt ceiling in order to avoid default.
--xt: obama veto
AP, July 19, 2011 -
Latest developments in debt ceiling standoff, http://www.charlotteobserver.com/2011/07/19/2467086/latestdevelopments-in-debt-ceiling.html, MCL
Congress has until Aug. 2 to raise the federal borrowing limit or the government will run out of money and
possibly default on its debt. House Republicans say they won't raise the debt limit without equal spending cuts.
President Barack Obama and Democrats insist that higher revenues must be included. Tuesday's
developments: A deficit reduction plan was offered by the bipartisan "Gang of Six" senators that calls for
almost $4 trillion in budget cuts over a decade and $1 trillion in higher taxes, raising hopes for a last-minute
compromise. The Republican House passed 234-190 a bill to cut and cap spending and require that Congress
pass a balanced budget amendment before the debt ceiling can be raised. That measure is unlikely to pass the
Democratic Senate, and Obama has threatened to veto it if it did.
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2011 Arizona Debate Institutes
spending now – generic
Spending Disad
Spending on wars in Afghanistan and Iraq outweigh any new spending
Dwyer 6/22 (6/22/11, Devin Dwyer, ABC News, “Afghanistan War Costs Loom Large Over Obama Troops Announcement,”
http://abcnews.go.com/Politics/afghanistan-war-costs-soar-obama-troops-announcement/story?id=13902853)
President Obama's planned drawdown of U.S. troops in Afghanistan next month fulfills a promise he made more than a year ago, but also underscores
the overwhelming costs of America's longest war. While the United States grapples with debt and deficit crises, taxpayers are expected to
spend more than $118 billion this year in Afghanistan for military operations, base security, reconstruction, foreign aid, embassy
costs and veterans' health care. That's more than double the amount the Department of Homeland Security spends per year to secure the nation's
borders, screen air travelers and help Americans recover from natural disasters, among other services. Afghanistan war spending is roughly
six times the annual budget of NASA. All told, the war that began in October 2001 has cost taxpayers more than an estimated $443 billion,
according to the Congressional Research Service, and the lives of more than 1,523 U.S. military service members. Polls show the U.S. public has become
increasingly war weary, leading members of both parties -- including some Republican candidates for president -- to pressure Obama to expedite his
Afghanistan plan and reprioritize the war funds. The pace of U.S. withdrawal proposed by Obama "sounds a little slow and a little cautious, when you
look at one out of every six Defense Department dollars going in support of what we're doing in Afghanistan," former Utah governor and GOP
presidential candidate Jon Huntsman said today on "GMA." "Nine years and 50 days into this conflict, the money that has been spent on both conflicts,
well over $1 trillion, I think we have to say, 'What have we accomplished in Afghanistan?'" he said. Huntsman is not alone. While 57 percent of
Americans in the latest ABC News poll say the war has contributed to long-term national security, far fewer, 25 percent, say it has contributed "a great
deal," which is the kind of payback many want to see, given the war's steep price tag. The Pentagon says all of its war-related costs
since Sept. 11, 2001, including in Iraq, have topped $1 trillion. Add diplomatic expenses and care for veterans and total
government spending reaches an estimated $1.3 trillion. In a Senate speech Tuesday, freshman Democrat Joe Manchin of West
Virginia said it was time to "rebuild America, not Afghanistan," and that Obama should pursue significant troop reduction immediately. Earlier in the
week, members of the U.S. Conference of Mayors also urged Congress to end both the Afghan and Iraq wars and invest the money instead on jobs at
home. Still, while Obama is expected to announce a reduction of 5,000 to 10,000 troops from Afghanistan by the end of the year, and
as many as 30,000 "surge" troops next year, the shift won't dramatically reduce the burden of war on America's budget ,
statistics show. The Pentagon estimates show that taxpayers could save $30 billion in the first year of a drawdown. But the nonpartisan Congressional
Budget Office projects war costs in both Iraq and Afghanistan in the next decade could still top $496 billion, even if
troop levels fall to 45,000 from 99,000 by 2015.
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2011 Arizona Debate Institutes
spending now – democracy assistance
Spending Disad
Massive economic aid to the Middle East for democracy assistance now – the link is non-unique
MacAskill May 19, 2011 – Ewen, the Guardian's Washington DC bureau chief. He was diplomatic editor from 1999-2006, chief political
correspondent from 1996-99 and political editor of the Scotsman from 1990-96 (The Guardian, Barack Obama to back Middle East democracy with
billions in aid, http://www.guardian.co.uk/world/2011/may/19/barack-obama-middle-east-aid, MCL
Barack Obama is to announce that the United States and the west will pour billions of dollars into the Middle
East in support of Egypt, Tunisia and other countries embracing democracy, a move the White House portrayed as being on
the scale of aid to former communist countries after the fall of the Berlin Wall. Speaking in Washington, the president will attempt to
reposition the US as a champion of the newly-emerging Arab democracies. His speech comes amid criticism that the US has
been too slow to support the uprisings, and has adopted contradictory approaches in its dealings with different countries. It is his most important speech
on the Middle East since Cairo in 2009, when he called for a new beginning in relations between the US and the Muslim world. The support for Obama
in the Arab world in 2009 has since dropped sharply. The speech will deal mainly with the Arab spring, hailing the benefits of democracy and respect for
human rights, in spite of America's long-time support for authoritarian regimes in the region. Senior Obama administration officials,
briefing on the speech, said he will take a fresh look at the Middle East after a decade of tension and division.
With the winding down of the Iraq war and the death of Osama bin Laden, "we are turning a page", one official said, adding that the democracy
movements reinforced this. The official suggested that the best way to support democracy was through economic reform, and
drew comparisons with the massive injection of American aid to Europe after the war, and with the support given to
central and eastern Europe in 1989. The US is to relieve Egypt of up to $1bn in debt and lend or guarantee up to $1bn.
The World Bank, the IMF and other multilateral institutions to provide a further $2bn-3bn. The official described
Tunisia and Egypt as beacons, models to encourage others to pursue democracy. " It is the beginning of a long-term effort," an official
said. The speech is expected to last 45 minutes, a long one by Obama's standards. He is to devote a big portion to castigating countries such as Iran and
Syria. The US Treasury announced sanctions on Wednesday targeted for the first time at Syria's president Bashar
al-Assad over the brutal crackdown on pro-democracy protesters. Six other Syrian officials were also added to
the sanctions list. "The actions the administration has taken today send an unequivocal message to President
Assad, the Syrian leadership, and regime insiders that they will be held accountable for the ongoing violence
and repression in Syria," said David Cohen, the acting Treasury undersecretary for terrorism and financial intelligence. The European
Union on Tuesday imposed fresh sanctions against Syria but did not include Assad. The US assets freeze on Assad is mainly symbolic
as the Syrian leader has few assets in the country but it is a sign the US has lost patience with a president it
once hoped might initiate reforms.
Despite challengers – bipartisan support exists to increase spending for democracy assistance
in the Middle east
Cadei March 3, 2011– Emily, foreign policy reporter for Congressional Quarterly (Democracy funding may be squeezed, Congress.org,
http://origin-www.congress.org/news/2011/03/03/democracy_funding_may_be_squeezed, MCL)
Democrats in Congress have begun a push for additional programs and aid for
Arab pro-democracy movements as a
way to establish relations with a new generation of leaders in the region. But with federal spending under assault, those lawmakers
face a difficult challenge in persuading colleagues to back new initiatives. At a Senate Foreign Relations Committee hearing on the fiscal 2012
budget, Chairman John Kerry announced that he is working with his Senate colleagues “on both sides of the aisle to
create a package of financial assistance to help turn the new Arab awakening into a lasting rebirth.” “Events this
powerful demand a response of equal power,” said Kerry, a Massachusetts Democrat. “Our commitment now to the ordinary people who are
risking their lives to win human rights and democracy will be remembered for generations in the Arab world. We have to get this moment
right.” After the hearing Wednesday, Kerry said that he was still working on the package but wants to have it added to
appropriations legislation for the rest of fiscal 2011. “I think we have bipartisan support for it,” he said. Other
senators, including Lindsey Graham, R-S.C., the ranking member on the Appropriations subcommittee that oversees foreign aid,
have voiced support for targeted aid to new governments in nations such as Egypt, Tunisia and, potentially,
Libya. In an interview last month, Graham said the United States has “a great opportunity, maybe the best chance
we’ve had in decades, to turn things around in the Arab world,” referring to the pro-democracy protests sweeping
from Tunisia and Algeria in North Africa across the Arabian Peninsula and all the way to Iran. “Whatever assistance that we can provide that’s requested
within reason would be a good opportunity.” At a subcommittee hearing Wednesday, Graham reiterated that “how we help the Libyan people, the
Tunisian people, will matter, because if we don’t help them, someone else will.” Gary L. Ackerman of New York, the ranking
Democrat on the House Foreign Affairs subcommittee responsible for the Middle East, also urged the State
Department to come up with a comprehensive strategy for outreach and assistance to the emerging governments and civil society in
the region. Speaking to Secretary of State Hillary Rodham Clinton at a hearing March 1, Ackerman said the international community has been caught flat-footed by the sudden developments that already
have ousted two governments and now needs to get up to speed. “There’s an opportunity here that we’ve never sensed,” Ackerman said. “This is a new generation of people. . . . They have dreams, and
Joseph I. Lieberman, I-Conn., a member of the Armed Services Committee, said in an
interview Wednesday that he backed Kerry’s package, at least in theory.
they’re looking to us to help them.” Sen.
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2011 Arizona Debate Institutes
spending now – democracy assistance
Spending Disad
Democracy assistance funding has increased in most areas – rule of law, consensus building
and civil society
McInerney 2010 – Stephen, Director of Advocacy for the Project on Middle East Democracy (POMED) (The Federal Budget and Appropriations
for Fiscal Year 2011 DEMOCRACY, GOVERNANCE, AND HUMAN RIGHTS IN THE MIDDLE EAST, Project on Middle East Democracy, April 2010,
http://www.boell.org/downloads/fy11-budget-analysis-final.pdf, MCL)
As previously mentioned, the Department of State breaks down the budget for international affairs into five broad
strategic objectives: Governing Justly and Democratically (GJD); Peace and Security; Investing in People; Economic Growth; and
Humanitarian Assistance. Several of these areas are interconnected – it could certainly be argued that promoting peace, security, and economic
development are themselves essential components of democratic development. Nonetheless, the GJD objective is the best, though imperfect, measure of
funding for supporting democracy, governance and human rights. The GJD objective is further divided into four program areas: 8
• Rule
of Law and Human Rights: Assists constitutional and legal reform, judicial independence and reform, the administration of and access
to justice, protection of human rights, prevention of crime, and community-based efforts to improve security. • Good Governance: Strengthens
executive, legislative, and local government capabilities and improves transparency and accountability for government institutions; also strengthens
anticorruption programs. • Political Competition and Consensus Building: Promotes free, fair, and transparent multiparty elections,
and promotes representative and accountable political parties committed to democracy Civil
Society: Strengthens independent media,
four categories are used to classify
all funds designated for GJD, whether through bilateral assistance or multi-country programs via USAID, the
Department of State and MEPI. Because of large cuts in assistance to Iraq in conjunction with the drawing down of the U.S. military
nongovernmental organizations (particularly advocacy functions), think tanks, and labor unions. These
presence in Iraq, the raw totals for GJD funding for the Near East are all significant decreases relative to FY10. However, when excluding the Iraq
numbers from the region, a different picture emerges – total GJD funding for the region is $225.7 million, a 10% increase
over
the $204.3 million granted in FY10. Further, the budget request reflects increases to three of the four GJD
program areas: for Rule of Law and Human Rights (up 39% from $49.4 million to $68.7 million); Political Competition and
Consensus Building (up 13% from $23.2 million to $26.2 million); and Civil Society (up 3% from $83.6 million to $86.3 million). Only
the Good Governance program area sees a modest (8%) decrease in requested funding. It should be noted that this is a reverse from
last year, when funding for Good Governance programming was increased 16%.
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2011 Arizona Debate Institutes
spending now – internet assistance
Spending Disad
The building of independent networks are being funded now – $2 million by State department
and $50 million for efforts in Afghanistan
Glanz and Markoff June 12, 2011 – James, Afghanistan expert and Baghdad bureau chief for NYT, John, journalist best known for his
work at The New York Times, and a book and series of articles about the 1990s pursuit and capture of computer hacker Kevin Mitnick. ( U.S.
Underwrites Internet Detour Around Censors, June 12, 2011, NYT,
http://www.nytimes.com/2011/06/12/world/12internet.html?pagewanted=4&_r=1&hp, MCL)
The Obama administration is leading a global effort to deploy “shadow” Internet and mobile phone systems that
dissidents can use to undermine repressive governments that seek to silence them by censoring or shutting down
telecommunications networks. The effort includes secretive projects to create independent cellphone networks inside
foreign countries, as well as one operation out of a spy novel in a fifth-floor shop on L Street in Washington, where a group of young
entrepreneurs who look as if they could be in a garage band are fitting deceptively innocent-looking hardware
into a prototype “Internet in a suitcase.” Financed with a $2 million State Department grant, the suitcase could
be secreted across a border and quickly set up to allow wireless communication over a wide area with a link to
the global Internet. The American effort, revealed in dozens of interviews, planning documents and classified diplomatic cables obtained
by The New York Times, ranges in scale, cost and sophistication. Some projects involve technology that the United States is developing;
others pull together tools that have already been created by hackers in a so-called liberation-technology movement sweeping the globe. The State
Department, for example, is financing the creation of stealth wireless networks that would enable activists to
communicate outside the reach of governments in countries like Iran, Syria and Libya, according to participants in the
projects. In one of the most ambitious efforts, United States officials say, the State Department and Pentagon have spent at
least $50 million to create an independent cellphone network in Afghanistan using towers on protected military bases inside
the country. It is intended to offset the Taliban’s ability to shut down the official Afghan services, seemingly at
will. The effort has picked up momentum since the government of President Hosni Mubarak shut down the Egyptian Internet in the last days of his
rule. In recent days, the Syrian government also temporarily disabled much of that country’s Internet, which had
helped protesters mobilize. The Obama administration’s initiative is in one sense a new front in a longstanding
diplomatic push to defend free speech and nurture democracy. For decades, the United States has sent radio broadcasts into
autocratic countries through Voice of America and other means. More recently, Washington has supported the development of
software that preserves the anonymity of users in places like China, and training for citizens who want to pass information along the
government-owned Internet without getting caught. But the latest initiative depends on creating entirely separate pathways
for communication. It has brought together an improbable alliance of diplomats and military engineers, young programmers and dissidents from
at least a dozen countries, many of whom variously describe the new approach as more audacious and clever and, yes, cooler. Sometimes the State
Department is simply taking advantage of enterprising dissidents who have found ways to get around government censorship. American diplomats are
meeting with operatives who have been burying Chinese cellphones in the hills near the border with North Korea, where they can be dug up and used to
make furtive calls, according to interviews and the diplomatic cables. The new initiatives have found a champion in Secretary of
State Hillary Rodham Clinton, whose department is spearheading the American effort. “We see more and more
people around the globe using the Internet, mobile phones and other technologies to make their voices heard
as they protest against injustice and seek to realize their aspirations,” Mrs. Clinton said in an e-mail response to a query on the
topic. “There is a historic opportunity to effect positive change, change America supports,” she said. “So we’re
focused on helping them do that, on helping them talk to each other, to their communities, to their
governments and to the world.”
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2011 Arizona Debate Institutes
spending now – egypt
Spending Disad
250 million is already allocated for democracy assistance in Egypt
Project on Middle East Democracy April 12, 2011 – (The POMED Wire, http://pomed.org/blog/2011/04/new-fy2011-budget-billreleased.html/, MCL)
Congress released H.R.1473, the FY2011 bill which will fund the federal government through September 30th. The
bill, which is $78.5 billion less than the President’s FY2011 request, includes $39.9 billion in cuts from FY2010
levels. House Appropriations Chairman Hal Rogers (R-KY) lauded the bill stating, “Never before has any Congress made dramatic cuts such as those that are in this final legislation.” Senate
On Tuesday,
Appropriations Chairman Daniel Inouye (D-HI) stated: “The final compromise legislation negotiated with the House of Representatives contains significant spending reductions, but protects the vital
the funding level for the State Department and Foreign Operations totals
$48.3 billion, a $504 million reduction from FY2010 levels and $8.4 billion less than the President’s FY2011 request. However, it represents an increase over the proposed
cuts in H.R.1, which sought to reduce the State and Foreign Operations budget by $3.8 billion. The bill freezes most of the spending near FY2010 levels. It
also makes available up to $250 million for democracy and development assistance in Egypt and asks that
Secretary of State Hillary Clinton submit a spending plan with a “comprehensive strategy” to promote these
two goals. The bill requires a report by Clinton on the progress of Egypt’s political transition and preparations
for free and fair elections, but notably shifts this requirement from Egypt’s foreign military financing, as proposed in the
Senate’s version of the FY11 bill in March , to its economic assistance. Also compared to the March Senate version, the bill omits $5 million in democracy assistance to Tunisia and
economic and security interests of the United States.” Under the bill,
also prohibits appropriating foreign military funding to Yemen in addition to Bahrain, unless waived by the Administration. It also notes that funds appropriated under the State and Foreign Operations
heading may be made available to support other democratic transitions in the Middle East and North Africa.
The FY2011 budget has reprogrammed increased funds for Egypt and Tunisia – plan would
spend that money
Trister 2011 – Sarah, congressional Liason for Freedom House (Investing in Freedom: Analyzing the FY 2012 International Affairs Budget Request,” May,
http://freedomhouse.org/uploads/special_report/100.pdf)
With democratic transitions in progress in Egypt and Tunisia, ongoing violence and protests in Syria, Bahrain,
and Yemen, and full-out war in Libya, the Middle East and North Africa has become one of the highest
priorities in terms of assistance for Congress and the Administration. Since the revolutions, the State
Department has announced it would immediately make $150 million in aid available for support to Egypt and
an additional $20 million available in support for Tunisia for FY 2011 by reprogramming funds that have
already allocated. 10 Additionally, the United States has announced billions more in loans and other economic
support to Egypt as it attempts to build its economy after 30 years of stagnation. Moving toward democracy in Egypt and Tunisia
will be a lengthy and complicated process. The United States has an opportunity to make an important impact by supporting improvements in electoral processes, robust civil
society participation in elections and constitutional debates, institutional reforms, and efforts to address human rights abuses, as well as by promoting gender equality and
religious freedom, so that members of these societies are able to thrive in a free and open environment. In
terms of the FY 2012 request for the Near
East, Freedom House is pleased to see that the request for the Middle East Partnership Initiative (MEPI) has
received a 68% increase over FY 2010 amounts. MEPI has been an invaluable instrument for providing democracy and human rights assistance
since its inception in 2002. Funds provided through MEPI are especially vital now, as they have the flexibility required to
respond to the constantly changing environment in the region. The ongoing protests and crackdowns in the
Middle East have drawn attention to the disproportionate amount of assistance that the United States is giving
to Middle Eastern governments to support military capabilities compared with the amounts given for
democracy and human rights. In the Middle East region as a whole, democracy and human rights funding
makes up about 6 percent of United States foreign assistance. In contrast, Foreign Military Financing (FMF) makes up more than 71% of
foreign assistance.
Massive funding for Egyptian Democracy Assistance now
Sharp June 17, 2011 – Jeremy M. Specialist in Middle Eastern Affairs (Egypt in Transition, Congressional Research Service,
http://fpc.state.gov/documents/organization/167872.pdf, MCL)
Between February and May 2011, U.S. policy toward post revolutionary Egypt was primarily concerned with developing contacts with new political forces
and working with the SCAF to ensure that the transition struck a balance between the need for the military to quickly relinquish power while at the same time provide
adequate time for secular reformers and young revolutionaries to formally organize themselves politically in time for elections. The
Administration also
announced that between $150 and $165 million in existing Economic Support Funds (ESF) would be
reprogrammed to support, among other things, economic recovery and democracy promotion to support
nascent political parties and new elections. In addition, the U.S Export-Import Bank has approved $80 million
in insurance cover to support letters of credit issued by Egyptian financial institutions. The Administration also has
instructed the Overseas Private Investment Corporation (OPIC) to provide financial support to encourage private sector investment in Egypt. On May 19 at his address
on U.S. policy toward the Middle East at the State Department, President Obama announced a new package of aid to Egypt which
included $1 billion in bilateral debt relief 4 , and $1 billion in U.S.-backed loan guarantees. The President also promised to
work with Congress to create a U.S.-Egyptian Enterprise Fund and to expand trade to the Middle East region, possibly by expanding the Qualified Industrial Zone (QIZ)
program that allows goods produced in 13 industrial zones in Egypt to be shipped to the United States duty free.
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2011 Arizona Debate Institutes
spending now – yemen
Spending Disad
McInerney 2010 – Stephen, Director of Advocacy for the Project on Middle East Democracy (POMED) (The Federal Budget and Appropriations
for Fiscal Year 2011 DEMOCRACY, GOVERNANCE, AND HUMAN RIGHTS IN THE MIDDLE EAST, Project on Middle East Democracy, April 2010,
http://www.boell.org/downloads/fy11-budget-analysis-final.pdf, MCL)
Due to these heightened concerns, the FY11 request for assistance to Yemen represents another large increase, from
$67.3 million granted in FY10 to $106.6 million. This follows sizable increases in FY09 and FY10, resulting in a
fivefold increase over three years from the $19.4 million in aid to Yemen granted in FY08. The bulk of the increase for
FY11 is in military and security assistance, which is increased from $19.3 million in FY10 to $51.6 million in the FY11 budget request. In addition, U.S.
assistance for local health services is more than doubled to a requested $21 million from $10 million in FY10.
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2011 Arizona Debate Institutes
link non-unique – lots of spending now
Spending Disad
Previous USAID spending denies the link
Carothers 2009 – Thomas, vice president for studies at the Carnegie Endowment for International Peace. In this capacity, he oversees the
Democracy and Rule of Law Program, Middle East Program, and Carnegie Europe. ( Revitalizing U.S. Democracy assistance the challenge of usaid,
Carnegie endowment for International Peace,
http://www.carnegieendowment.org/files/revitalizing_democracy_assistance.pdf, MCL)
USAID’s spending on democracy and governance programs ballooned in these years, from $165 million in 1991
to $635 million by 1999. The funding was widely distributed to all regions where USAID operates. The 1999 regional breakdown of
democracy and governance spending, for example, was $288 million in Central and Eastern Europe and the
former Soviet Union; $123 million in sub-Saharan Africa; $111 million in Asia and the Middle East (at the time
USAID combined these regions in one bureau); $86 million in Latin America; and $27 million on global
programs.
Previous increases in democracy assistance disprove the link
Goldsmith 2008 - Arthur, a professor at the University of Massachusetts Boston, where he teaches in the College of Management and is senior
fellow at the John W. McCormack Graduate School of Policy Studies. (Democratization in the 21st Century: What Can the United States Do, The
Whitehead Journal of Diplomacy and International Relations, 2008, http://blogs.shu.edu/diplomacy/files/archives/Goldsmith.pdf, MCL)
A final way outsiders can possibly encourage democratization is through technical assistance focusing on electoral processes, rule of law, and related
activities. Democracy assistance is difficult to identify because it coincides with other types of development aid,
but reported amounts, specifically intended for democratization, are modest but rising. According to the European Council,
the total value of Organization for Economic Cooperation and Development (OECD) country support for
democracy, human rights, judicial reform, governance, and civil society was $9.9 billion in 2004, with about
half the amount coming from the United States. This is almost four times the level of democracy assistance in 2000.22 Another
source using different criteria comes in with a lower figure for the United States of $2 billion in democracy
assistance in 2004, not counting Afghanistan and Iraq.23 The previous year’s spending was only half as much.
Long-term trends show a large increase in democracy assistance funding
Magen 2009 – Amichai - w. glenn campbell and rita ricardo-campbell national fellow (Where Hard Power Meets Soft, Hoover Institution
Stanford University, http://www.hoover.org/publications/hoover-digest/article/5624, January 22, 2009, MCL)
Nor is it all empty rhetoric. Measuring spending on democracy assistance programs is notoriously difficult, but there is
little doubt that—even when we discount American expenditure on postconflict state building in Afghanistan and Iraq—democracy
assistance spending has grown substantially over the past decade, on both sides of the Atlantic. U.S. government funds
allocated specifically to democracy promotion abroad rose from an average of $125 million a year in the 1990s
to nearly $1 billion per annum under the Bush administration. In addition, the Millennium Challenge Corporation
(MCC), created by the United States in 2004, now maintains assistance compacts with sixteen countries—
including Armenia, Georgia, Ghana, Madagascar, Mongolia, Morocco, Mozambique, and Tanzania— totaling $5.6 billion. For a country to
become eligible for MCC funding, it must demonstrate achievements in fighting corruption, strengthening civil liberties and the rule of law, and
encouraging economic freedom.
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2011 Arizona Debate Institutes
no link
Spending Disad
Democracy promotion is extremely cost-effective
Diamond 95 (Larry Diamond, senior fellow at the Hoover Institution, December 1995, Promoting Democracy in the 1990s,
http://wwics.si.edu/subsites/ccpdc/pubs/di/1.htm)
At a time when every domestic spending program in the United States is coming under searching scrutiny, it is only right that international spending
should as well. But it is indefensible that so few voices in public life are explaining why promoting democracy is vital to our national security--not just to
serve our values and ideals, but to defend against serious, possibly devastating, threats to our safety and well- being. That the defense democracy
provides is preventive, and therefore subtle and at one remove, makes the case harder to establish but also
more compelling. For prevention is far, far cheaper and safer than emergency response--whether in medicine or world
politics. It is precisely when our resources are as scarce and precious as they are today that we can least afford to overlook the most intelligent and costefficient strategies. As the review below will indicate, democracy promotion programs tend to be unusually costefficient in
financial terms, because the grants are typically small and because they focus on transferring techniques,
building capacities, and generating the institutions and policies for sustained good governance and
development, rather than on providing an indefinite stream of resources for consumption. Diplomatic pressure
and initiatives may also pull a country off the path to political and humanitarian disaster, at costs in political
and financial capital that are much more bearable than those associated with peacekeeping and disaster relief.
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2011 Arizona Debate Institutes
plan saves money/link turn
Spending Disad
Link Turn – plan saves money – cuts defense spending
Smith June 16, 2011 – Patrick, writer for the Fiscal times (The ‘Arab Spring’ Can Help Cut Defense Spending, Fiscal times,
http://www.thefiscaltimes.com/Columns/2011/06/16/The-Arab-Spring-Can-Help-Cut-Defense-Spending.aspx, MCL)
If we want to bring our unconscionably wasteful defense spending under control, the place to start is with a
fundamentally re-imagined foreign policy that does not require a trillion-dollar military. President Obama’s
recent pledge of $2 billion in response to the “Arab Spring” uprisings is taxi fare compared with the U.S.
defense budget. (It’s also a puny fraction of the $40 billion the Group of 8 promised the Middle East’s emerging democracies when it met in France
recently.) But it is smart money well spent and may be evidence that a White House groping for some kind of
“Obama Doctrine” is finally finding its footing. Obama has proven to be a hard read: He is the liberal internationalist who keeps
Guantánamo open and caves to the Pentagon at every turn. But his small gesture toward the Middle East’s nascent democracies signals an opportunity
for him to leave a meaningful mark. If Obama can begin to redefine U.S. foreign policy goals, Washington can put significant cutbacks in defense
spending seriously on the table for the first time in 65 years. The connection between foreign policy and a defense budget that
came to $687 billion last year is essential. The U.S. now has more than 300,000 troops deployed in nearly 200 bases and installations
overseas. Defense spending has risen 81 percent since 2001, and military operations in Afghanistan alone consume almost $7 billion a
month. As a TFT graphic demonstrated after the killing of Osama bin Laden, homeland security has cost Americans $1.1 trillion since the 9/11 attacks.
Plainly, what the U.S. spends reflects what the U.S. is trying to do—its foreign policy objectives. The truth of
this equation is that you cannot reduce the defense outlays significantly unless you rethink the intentions . The
magazine Foreign Policy recently looked at defense spending and identified $280 billion in savings straight off the top of the current budget. “The
place to start reducing defense spending is with U.S. overseas commitments,” writes Douglas MacGregor, a retired colonel.
“Why does America need all these facilities? What better time than now, when the United States faces fiscal calamity but few real military threats, to
judiciously sort those that are truly needed from those the Pentagon can live without? It’s time to declare victory and go home.” MacGregor poses good
questions. But coming home requires more than a technocratic examination of weapons systems, troop configurations, and the like. We have to
look deeper down to make real progress in reining in runaway defense and security costs. Washington‘s foreign
policy must evolve from the goals Woodrow Wilson set down when he defined what came to be called the
American Century. America’s century in the sun, bursting with Wilsonian idealism, was all about “making the
world safe for democracy,” as the scholarly president declared our national mission. When the Cold War brought new concerns, notably global
stability in the context of prolonged East-West rivalry, what is commonly called neo-Wilsonian idealism emerged. To put a complex matter briefly, this
meant making the world safe for American democracy: If you wanted to ally with the U.S., you had to do things just as the U.S. did them. NeoWilsonianism has been the source of much anti-Americanism and is among the root causes of our defense burdens. Obama’s big chance is to
begin an advance toward post-Wilsonian idealism. Yes, democracy must be encouraged at every opportunity.
But in each case those achieving democratic government should be left to decide for themselves what form it takes. “There are as many varieties of
capitalism as Heinz has pickles,” an economist named Hy Minsky famously observed in the 1960s. Post-Wilsonian democracy should be brined in the
pickle principle. You could not ask for a better place to put post-Wilsonian democracy to the test than the Middle
East, because democracies emerging from the Arab Spring will arise out of the Islamic tradition. It is commonly
argued that Islam and democracy are incompatible, but this is yesterday’s perspective. Middle Eastern democracies will simply look different: The
separation of religion from the state will be blurred and may appear strange to Westerners; the role of the state in the economy and everyday life may be
more prominent. The G-8 made it plain that its pledge of substantial support for post-dictatorship nations in the Middle East—and it was careful not to
define its promises too specifically—would be conditional on certain reforms. Already we see the potential for progress ahead but also
problems: • On one hand, G–8 leaders indicated that they would insist on social and political reforms such as moves toward greater transparency. This is
a wise stipulation in the interest of a universal value. (Transparency International, one of the planet’s best-managed NGOs, is dedicated to it.) • On the
other hand, officials said the industrialized economies plus Russia would also insist on development policies based on private-sector initiatives. This
reflects strong beliefs prevalent in G-8 nations, but it is neo-Wilsonian, not post-Wilsonian, to require them. What if Middle Eastern electorates want to
follow a sort of Nordic model, one form or another of social democracy, because they think their level of development requires it? Would this be a cause
to withhold the generous hand extended in the name of a safer, stabler world? One noteworthy feature of the Middle East uprisings this spring was the
absence of animosity toward the U.S. despite its support for numerous hard-line rulers during the Cold War decades and since. The focus was on local
issues—corruption, civil rights, democratic institutions. The contrast is in Afghanistan, where there will be no similar movement: So long as U.S. and
allied troops are there, resistance will be all about getting the foreigners out. The “war on terror”—a term Americans alone accept any longer—has been
self-perpetuating as well as egregiously expensive. (And it was never a war so much as a set of intrusive policy goals, at home and abroad.) When the
Obama administration begins writing its modest checks to a new generation of Middle Eastern leaders, it
should consider that $2 billion spent on a renovated foreign policy could soon enough save the U.S. multiples
of that amount in the defense costs that now overburden Americans.
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2011 Arizona Debate Institutes
deficit spending good
Spending Disad
Deficit spending helps the economy
Stiglitz 2004 - Joseph Stiglitz, recipient of the 2001 Nobel Prize for Economics, a Professor of economics at Columbia University, Chairman of
the President's Council of Economic Advisers during the Clinton Administration, Chief Economist and Vice President for Development of the World
Bank(The Economists’ Voice, Vol. 1 issue 1, “The Parties’ Flip-Flops on Deficit Spending: Economics or Politics?”
http://ic.ucsc.edu/~fravenna/econ100n/ReadingStiglitz.pdf)
When Economists Agree Deficit Spending Works: To Correct Lack of Demand Indeed, this cynicism ignores a half-century of
there is an overwhelming consensus among economists about a few basic
propositions. And one area of such consensus involves the key circumstances when deficits matter, and when they do not. Suppose the
economy is operating below its potential — say, because of a lack of aggregate demand. In that case, an increase in
aggregate demand can help the economy. And deficits normally increase demand. That's because the
government is spending more money, or because low taxes encourage increased consumer spending — or both.
Keynes made this point clear a long time ago — and he is still correct. No wonder, then, that the IMF’s imposition of fiscal
stringency in East Asia and Latin America — when those countries already faced a downturn — was a disaster.
The IMF policy had the predictable consequence of making the economic downturns worse, turning downturns
into recessions, and recessions into depressions. The right prescription for the affected countries was not balancing the
budget, but running a temporary deficit to stimulate the economy — as Keynes knew.
economic science — one result of which has been that
Deficit spending is good for the economy – introduces demand
Nugent 2003 – Thomas, is executive vice president and chief investment officer of PlanMember Advisors, Inc., and principal of Victoria Capital
Management, Inc(“The Budget Deficit/The Budget Surplus: The Real Story”, March 4,
2002http://www.epicoalition.org/docs/budget_deficit_real_story.htm)
Newspapers are filled with warnings about the potential for growing budget deficits due to President Bush’s proposed fiscal stimulus package. Two years
ago, we were going to have surpluses as far as the eye could see—somewhere upwards of $2 trillion. Politicians were ebullient over the likelihood that
these record surpluses would allow them to save Social Security, increase spending on pet projects, and give well-heeled constituents a nice fat tax cut.
Now these same politicians are all stressed out over the forecasts of ballooning federal deficits. The outlook has changed to burdening our children with
the bill for our lifestyles and the fact that Social Security will go broke. The government plays a critical role in influencing the
economy especially when cyclical factors knock a long-term trend off track. In such circumstances the federal government
steps in and replaces some of the lost demand that was coming from the private sector by greater spending. The U.S. dollar is not anchored to any
particular commodity; the government is free to net spend (spending in excess of revenues) as much money as necessary to keep the economy afloat.
When government “spends,” it introduces demand into the economy. For example, when the government
orders a fleet of aircraft, it pays for the aircraft with a check drawn on the U.S. government, and credits the
appropriate bank account when that check clears through the Fed. The federal government doesn’t need money
to spend money. There is only one way for our government to spend-- it credits an account for a member bank
at the Fed. When companies begin producing the planes and hiring the associated workers as a result of the government purchase, income and
output goes up. As a matter of accounting, it is the same money the government spends that, at the end of the day, purchases the government bonds that
are ultimately issued with the presumption of ‘financing’ the initial government spending. In other words, deficit spending creates the new funds to buy
the newly issued securities. The result is an increase in output as well as in increase in savings of net financial assets
(in the form of treasury securities) for the private sector. The government deficit has important economic
consequences, assuming there was excess capacity in the real economy. Economic activity increases; the
government acquires goods and services that are needed; unemployment declines; production goes up; the
overall economy grows; and individuals and companies savings increase in the form of the newly issued
government bonds
.
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2011 Arizona Debate Institutes
spending cuts bad
Spending Disad
Spending cuts would derail the already fragile recovery – Bernanke believes
Felsenthal and da Costa July 14, 2011 – Mark, journalist for Reuters, Pedro Nicolaci, D.C. correspondent (Bernanke warns
spending cuts could derail recovery, reuters, July 14, 2011, http://www.reuters.com/article/2011/07/15/us-usa-fed-idUSTRE76774Z20110715, MCL)
U.S. Federal Reserve Chairman Ben Bernanke warned on Thursday that overzealous cuts to government spending in the
short term could
derail a shaky recovery and said a U.S. debt default could wreak financial havoc. "I only ask ... as Congress looks at the
it does take into account that in the very near term the recovery is
still rather fragile, and that sharp and excessive cuts in the very short term would be potentially damaging to that recovery," Bernanke told the
Senate Banking Committee. Congress and the White House are stalemated in talks on cutting the budget deficit, with
Republicans seeking $2.4 trillion in spending cuts in exchange for agreeing to raise the $14.3 trillion U.S.
government borrowing limit. The U.S. Treasury has said it will run out of money after Aug. 2 to pay all of the country's bills if a deal is not
reached to raise the debt ceiling. On the second day of delivering the Fed's semiannual monetary policy report to Congress, Bernanke renewed
his warning that a United States debt default would be devastating for the U.S. and global economies. "It would
be a calamitous outcome," Bernanke said. "It would create a very severe financial shock that would have effects not
only on the U.S. economy, but the global economy." Failure to raise the debt limit in time would constitute a
"self-inflicted wound" to the economy, he added.
timing and composition of its changes to the budget, that
Spending cuts NOW undermine future economic recovery efforts
Irwin June 7, 20112011 – Neil, writes about economics and the Federal Reserve for The Washington Post (“Bernanke: Economy can
withstand recent setbacks”, http://www.washingtonpost.com/business/economy/deficit-must-fall-to-prevent-economic-crisis-bernankewarns/2011/01/07/ABZv6jD_story.html, MCL)
The recent slowdown in the U.S. economy is being driven by temporary factors, and growth is likely to
accelerate later in the year, Federal Reserve Chairman Ben S. Bernanke said Tuesday. The Fed chairman gave no indication that signs
of economic weakness over the past few weeks, including a disappointing report on the job market Friday, will lead the central bank to consider new
steps to try to boost growth, such as a third round of injecting billions into the economy by buying Treasury bonds. Rather than suggest the Fed might
ease its monetary policy further — a controversial program announced in November is set to expire this month — Bernanke in effect argued that the
things holding back the U.S. economy will not be fixed by the central bank printing even more money. “The U.S. economy is recovering
from both the worst financial crisis and the most severe housing bust since the Great Depression, and it faces
additional head winds ranging from the effects of the Japanese disaster to global pressures in commodity markets,” Bernanke said at the International
Monetary Conference in Atlanta. “In this context, monetary policy cannot be a panacea.” William C. Dudley, president of the Federal Reserve Bank of
New York, gave a separate speech Tuesday evening that articulated a related idea — that the United States needs fundamental, structural changes to
make the economy poised for stronger growth. He was a strong internal advocate of earlier rounds of bond pur­chases, or quantitative easing, but in
Tuesday’s speech did not advocate for expanding that strategy. “We, as a nation, have to take steps that facilitate the needed
structural adjustment of U.S. economic activity that will position us to thrive in the next chapter of global economic transformation,”
Dudley said at the Foreign Policy Association Corporate Dinner in New York. “We need to make sure that the next business cycle
will be more sustainable than the last, which was built on an unstable foundation of asset price gains, easy credit and
outsized financial-sector profits.” Both speeches reflect a growing sense within the Federal Reserve that the central bank has done about all it can to try
to support the economy. The Fed’s main policy tool of monetary policy can help economic growth by making more money
available to households and businesses to borrow at cheaper interest rates; by keeping prices for other assets, such as the stock market, high; and by
decreasing the value of the dollar on international currency markets. By those measures, the economy should be doing great.
Banks and corporations are sitting on trillions of dollars in extra cash, interest rates are low for all sorts of borrowers and stock prices have risen steadily
for nine months. The Fed’s strategy of keeping its target interest rate near zero and buying $600 billion in bonds, expiring in June, has worked in some
narrow sense but hasn’t been enough to create jobs in any large numbers. That being the case, Fed officials are unconvinced that the tools they have
available, such as a third round of bond purchases, or QE3, would create meaningful economic improvement. That's not to say they are crowing about
the economic situation. “U.S. economic growth so far this year looks to have been somewhat slower than expected,” Bernanke said in his comments. “A
number of indicators also suggest some loss of momentum in the labor market in recent weeks.” But Bernanke said he views the causes as
partly temporary, suggesting that momentum will accelerate as the year progresses. “With the effects of the Japanese
disaster on manufacturing output likely to dissipate in the coming months, and with some moderation in gasoline prices in prospect, growth seems likely
to pick up in the second half of the year.” The economic recovery is proceeding at a rate that is “frustratingly slow from the perspective of millions of
unemployed and underemployed workers,” he said. Bernanke did offer a warning — that seemed to be aimed at some
Republicans in Congress — that cutting federal spending too quickly could undermine growth. “If the nation is to
have a healthy economic future, policymakers urgently need to put the federal government’s finances on a sustainable trajectory,” he said. “But, on the
other hand, a sharp fiscal consolidation focused on the very near term could be self-defeating if it were to undercut
the still-fragile recovery.”
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2011 Arizona Debate Institutes
deal not key to econ
Spending Disad
A back-up, temporary rise in the debt ceiling prevents an economic collapse
Reske 11 (Henry Reskey, Staff writer for newsmax.com and national geographic; “Mitch McConnell Has Backup Plan If Debt Talks Fail” 6/21)
Should Congress and the White House fail to come up with a plan to reduce the deficit and raise the debt ceiling,
Senate Minority Leader Mitch McConnell, R-Ky., is ready with a backup. McConnell said Congress could vote to
temporarily raise the debt ceiling and return to the issue in the fall, The Washington Post reported. In an appearance on CBS’s
“Face the Nation,” McConnell said, “The president and the vice president, everybody knows you have to tackle entitlement reform. If we can’t do
that, then we’ll probably end up with a very short-term proposal over, you know, a few months, and we’ll be
back having the same discussion again in the fall,” the Post reported. Democratic and Republican leaders have said they would
prefer raising the $14.3 trillion borrowing limit through 2012 so they can avoid multiple votes on the issue with an election approaching, the Post
reported.
No default – funds could be shifted and impact claims are alarmism
Ackerman 11 (Andrew, Dow Jones, WSJ, “ Sen. Pat Toomey: No Scenario In Which US Default Is Necessary”
http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201106031755dowjonesdjonline000601&title=senpat-toomeyno-scenario-inwhich-us-default-is-necessary)
WASHINGTON -(Dow Jones)- Despite a warning by Moody's Investors Service that it might downgrade its credit rating for the U.S. if progress isn't
made soon on raising the federal debt ceiling, Sen. Pat Toomey (R., Penn) insists that a failure to increase the debt cap need not
have adverse credit implications for the country or lead to an immediate default. In an interview Friday, Toomey said President
Barack Obama could prioritize federal payments to ensure that principal and interest payments are made to
bondholders even if the federal government must partially shut down most of its other operations. "There's no scenario
in which a default is necessary," Toomey said. He suggested that Moody's was reacting to the "shrill alarmism" of the
Obama administration, which has warned a failure to raise the debt limit before an Aug. 2 deadline would have catastrophic consequences.
Raising the debt ceiling is inevitable – prevents a default
Delawala July 17, 2011 – Imtiyaz, 2004 winner of the Eliav-Sartawi Awards for Middle East Journalism, assistant at ABC News,
Associate
Producer for Koppel on Discovery (Jacob Lew and Jon Kyl: Differences Over Taxes, Spending Still Hold Back Budget Talks, ABC News,
http://abcnews.go.com/Politics/lew-kyl-differences-taxes-spending-hold-back-budget/story?id=14091032, MCL)
While budget negotiations continue to try to reach an agreement before the Aug. 2 deadline, differences over taxes and spending
continue to hold back progress on a final deal. But White House budget director Jacob Lew says he believes an
agreement will be reached before the country is at risk of defaulting on its debt obligations. "I do not believe
that responsible leaders in Washington will force this to default," Lew told "This Week" anchor Christiane Amanpour. "I
think that all the leaders of Congress and the president have acknowledged that we must raise the debt limit , and the
question is how." "I think that what we face now is not a challenge of do we have time. It's a question of do we have the will," Lew added. "The president
has shown through his leadership that we must take action, we must take it now." Lew said there are still "multiple tracks" being
debated, including efforts by Sen. Harry Reid (D-Nev.) and Sen. Mitch McConnell (R-KY) on a fallback agreement to give President
Obama authority to raise the debt ceiling without enacting major spending cuts. "The minimum is I believe that
the debt will be extended," Lew said. "I think notwithstanding the voices of a few who are willing to play with Armageddon, responsible leaders
in Washington are not."
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2011 Arizona Debate Institutes
econ resilient – US
Spending Disad
Economy more resilient than predicted – has taken shocks and still growing
The Business Insider 11 (Bob Eisenbeis, March 31, “This Market Is Showing Incredible Resilience In The Face Of Many Crises”, lexis) WSX
No, not shock and awe as in how the military uses the terms, but rather shock as a characterization of what has hit the US and
world economies recently and awe in terms of how resilient both have been. Just think of the variety of shocks
that financial markets have had to digest and synthesize.
First there was the financial crisis, the shutdown of the commercial-paper and mortgage markets, and broad concerns about systemic risk.
Then there were failures of major private-sector and government-sponsored institutions, government injections of
capital, and guarantees of bank liabilities.
Europe has been wrestling with its own debt and fiscal finance problems, and these have caused politicians both in Europe
and the US to face the hard realities that governments “ local, state, and federal “ cant continue to run increasing deficits forever; and the public has sent
a strong reaffirmation of that fact.
We see the US fighting two wars, in Iraq and Afghanistan, that have sapped our military capabilities and have not been particularly well
received in that part of the world. Then, the self-immolation of a street vendor culminated in the toppling of an autocratic Egyptian government.
Demands for freedom and liberalization have spread farther and faster in the Middle East than one could have imagined.
Now, a third military front has been opened in Libya, and there is much concern and confusion both in the US and the rest of the world as to what the
objectives are and how to define success. And then there are the triple disasters of earthquake, tsunami, and nuclear reactor farm meltdown, which
promise to further worsen Japans deficit, in order to finance rebuilding. Oh, and did I mention the flooding in Australia and major quake
in New Zealands capital? The global political economy is facing as much uncertainty as has ever been
experienced in recent times.
Yet, in the face of all these events, the US stock market has essentially regained its lost value. To be sure, the job
market is lagging and has a long way to go to recoup the 7.4 million or so jobs that were lost during the recession. The housing market faces a glut
of excess supply that will take a long while to work off. However, corporate profits are at an all-time high, interest rates are
low, and inflation has so far remained contained. Real economic growth has been positive and has increased at
a steady, albeit modest, pace. State tax revenues are recovering. Consumer spending on services, durables, and nondurables are all positive
and have been for the last few quarters. Who would have guessed that outcome, despite the best efforts of politicians and economic policy makers?
An individual investor, however, is likely to be shell-shocked to the point of numbness by now. Witness the reaction to assertions about the municipal
bond market that have triggered large sell-offs “ especially by uninformed investors. Both risk and uncertainty are still high, and one wonders where the
next shock will come from. Will it come from Europe or the UK, as policy makers begin to raise interest rates out of concern for domestic inflation, which
is clearly on the increase? Will the surprise come from the FOMC, in an early truncation of its most recent QE II purchases of government securities?
Will it come from a pullback in US consumer spending, as food and energy costs continue to rise? (Consumer confidence has recently taken a large hit,
due in no small part to the increases in headline-inflation components.) Or will it come in the form of an external shock due to an acceleration and
spread of the turmoil in the Middle East, which would further threaten world energy supplies?
What are the best policies for governments to follow under such circumstances? First, they should recognize that the real economies dont
seem to be as fragile as many fear. US GDP is currently at an all-time high, in both real and nominal terms, “ and
exceeds its level at the onset of the financial crisis. This means that somebody is making something, somebody is selling services, and most people are
still working. The economies of the world will pick up again when governments act to remove imbalances, that is, when fiscal responsibility is restored,
tax and spending programs are brought into balance, promises that cant be kept are revoked, central-bank balance sheets are restored to normal, and
clear strategies for dealing with political unrest and their implications for energy policies are formulated and articulated. When all this is done,
uncertainty will be reduced and risks clarified. Then businesses can begin investing and hiring again.
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econ resilient - world
Spending Disad
The global economy is resilient – their impacts are empirically false
Zakaria 2009 – Fareed, editor of Newsweek, former editor of Foreign Affairs, PhD from Harvard, serves on the board of Yale University, The
Council on Foreign Relations, and The Trilateral Commission (“The Secrets of Stability” Newsweek, 12/12, http://www.newsweek.com/id/226425
Beyond all this, though, I believe there's a fundamental reason why we have not faced global collapse in the last year. It is the same reason that we
weathered the stock-market crash of 1987, the recession of 1992, the Asian crisis of 1997, the Russian default of
1998, and the tech-bubble collapse of 2000. The current global economic system is inherently more resilient
than we think. The world today is characterized by three major forces for stability, each reinforcing the other and each historical in nature. The first
is the spread of great-power peace. Since the end of the Cold War, the world's major powers have not competed
with each other in geomilitary terms. There have been some political tensions, but measured by historical
standards the globe today is stunningly free of friction between the mightiest nations. This lack of conflict is extremely
rare in history. You would have to go back at least 175 years, if not 400, to find any prolonged period like the one we are living in. The number of people
who have died as a result of wars, civil conflicts, and terrorism over the last 30 years has declined sharply (despite what you might think on the basis of
overhyped fears about terrorism). And no wonder—three decades ago, the Soviet Union was still funding militias, governments, and guerrillas in dozens
of countries around the world. And the United States was backing the other side in every one of those places. That clash of superpower proxies caused
enormous bloodshed and instability: recall that 3 million people died in Indochina alone during the 1970s. Nothing like that is happening today. Peace is
like oxygen, Harvard's Joseph Nye has written. When you don't have it, it's all you can think about, but when you do, you don't appreciate your good
fortune. Peace allows for the possibility of a stable economic life and trade. The peace that flowed from the end of the Cold War had a much larger effect
because it was accompanied by the discrediting of socialism. The world was left with a sole superpower but also a single
workable economic model—capitalism—albeit with many variants from Sweden to Hong Kong. This consensus enabled
the expansion of the global economy; in fact, it created for the first time a single world economy in which
almost all countries across the globe were participants. That means everyone is invested in the same system.
Today, while the nations of Eastern Europe might face an economic crisis, no one is suggesting that they abandon free-market capitalism and return to
communism. In fact, around the world you see the opposite: even in the midst of this downturn, there have been few successful electoral appeals for a
turn to socialism or a rejection of the current framework of political economy. Center-right parties have instead prospered in recent elections throughout
the West. The second force for stability is the victory—after a decades-long struggle—over the cancer of inflation.
Thirty-five years ago, much of the world was plagued by high inflation, with deep social and political
consequences. Severe inflation can be far more disruptive than a recession, because while recessions rob you of better jobs
and wages that you might have had in the future, inflation robs you of what you have now by destroying your savings. In many countries in the 1970s,
hyperinflation led to the destruction of the middle class, which was the background condition for many of the political dramas of the era—coups in Latin
America, the suspension of democracy in India, the overthrow of the shah in Iran. But then in 1979, the tide began to turn when Paul
Volcker took over the U.S. Federal Reserve and waged war against inflation. Over two decades, central banks
managed to decisively beat down the beast. At this point, only one country in the world suffers from hyperinflation: Zimbabwe. Low inflation allows people, businesses, and governments to plan for the future, a key
precondition for stability. Political and economic stability have each reinforced the other. And the third force that has
underpinned the resilience of the global system is technological connectivity. Globalization has always existed in a sense in the modern world, but
until recently its contours were mostly limited to trade: countries made goods and sold them abroad. Today the
information revolution has created a much more deeply connected global system. Managers in Arkansas can
work with suppliers in Beijing on a real-time basis. The production of almost every complex manufactured
product now involves input from a dozen countries in a tight global supply chain. And the consequences of
connectivity go well beyond economics. Women in rural India have learned through satellite television about the independence of women
in more modern countries. Citizens in Iran have used cell phones and the Internet to connect to their well-wishers beyond their borders.
Globalization today is fundamentally about knowledge being dispersed across our world. This diffusion of
knowledge may actually be the most important reason for the stability of the current system. The majority of the
world's nations have learned some basic lessons about political well-being and wealth creation. They have taken advantage of the opportunities provided
by peace, low inflation, and technology to plug in to the global system. And they have seen the indisputable results. Despite all the turmoil of
the past year, it's important to remember that more people have been lifted out of poverty over the last two
decades than in the preceding 10. Clear-thinking citizens around the world are determined not to lose these
gains by falling for some ideological chimera, or searching for a worker's utopia. They are even cautious about
the appeals of hypernationalism and war. Most have been there, done that. And they know the price.
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2011 Arizona Debate Institutes
at: credit downgrade
Spending Disad
No impact to credit downgrade – its Moody and S&P playing hard ball and T-bonds investments
will stay at the same level
Petruno July 16, 2011 – Tom, markets columnist for The Times (U.S. AAA credit rating in jeopardy as risks get reality check, LA Times,
Business Market Beat, http://www.latimes.com/business/la-fi-0716-petruno-debt-20110716,0,1614179.column, MCL)
Moody's and S&P warned this week that they might soon cut the government's top-rung debt rating because of the
political battle over the debt ceiling and spending cuts. Yet so far, that hasn't scared off Treasury bond buyers. Nearly three years after
the financial system crash, the concept of investment risk continues to be turned on its head. Things have happened in the markets and
the economy that have far exceeded most people's worst-case scenarios. What many Americans thought they
knew about investing turned out to be dead wrong. That learning experience is speeding up again. Investors are being forced to
rethink a generally accepted financial principle of the postwar era: that the world's developed nations are inherently low-risk places to put money. The
debt problems that have mushroomed in the U.S., Europe and Japan since 2008 have "shattered the concept of
the major economies being stable, dependable investments," said Sean Egan, head of Egan-Jones Ratings Co., a smaller rival
to Wall Street's credit-rating giants. This week, two bigger credit raters, Moody's Investors Service and Standard &
Poor's, warned that they might soon cut the U.S. government's top-rung AAA debt rating because of the political battle
in Washington over the federal debt ceiling and spending cuts. Think of it. U.S. Treasury bonds are supposed to be the world's
"risk-free" asset, in the sense that there should be zero doubt about the government's willingness and ability to pay promised interest and repay
principal in full. Treasuries have long been the benchmark by which the risk of other investments is measured . Other
interest rates, such as mortgage rates, are set based on Treasury yields. So it's monumental that S&P, in an announcement Thursday, said
that if Congress and the Obama administration failed to agree on a "credible" plan to rein in deficit spending, it
might drop its U.S. debt rating from AAA "into the AA category." That would put the U.S. in with a group of
countries that includes Japan, China, Spain and Slovenia. And America would be considered less creditworthy
than remaining AAA-rated countries including Canada, Germany, Switzerland, Finland, Norway and Australia. Finland: The new risk-free
asset? Still, in the realm of debt-rating-speak, a AA rating is considered "high quality." By contrast, that description
no longer applies to bonds of Ireland and Portugal, according to Moody's. The firm this month cut both of
those countries' ratings to the Ba level, which is the top rung of junk status, or non-investment-grade — i.e., speculative. A junk
rating for Ireland would have been inconceivable to the Irish people just a few years ago. The country's once fast-growing economy, the Celtic tiger of Europe, held Moody's top Aaa rating, or close to it, for
most of the last two decades. But since 2009 Ireland's rating has been on a fast slide. Ditto for Portugal and, of course, for Greece, the epicenter of Europe's financial crisis. The ratings firms — and,
belatedly, investors — have come to realize how heavy the debt burdens of these countries have become and how difficult it will be for them to grow their way out of that debt. The same borrowing that
fueled their growth since 1990 now is a millstone. Ireland's public debt equals about 94% of its annual gross domestic product. Portugal's percentage is 83%. Greece's is a stunning 144%. By comparison,
U.S. public debt is about 60% of GDP, not counting what's owed to government agencies such as Social Security. At the other end of the debt spectrum from Western Europe are countries such as South
Korea, Slovakia and Brazil, which have public-debt-to-GDP ratios of 24%, 41% and 61%, respectively. Not surprisingly, their investment-grade credit ratings have been untainted by the 2008 global
financial crash and its aftereffects. Greece, Portugal and Ireland, each of which has gone to the European Union for financial aid, now are caught in a vicious cycle: Investors are demanding double-digit
market yields on their bonds to compensate for the risk implied by low credit ratings. The annualized yield on two-year Greek bonds is a stunning 33.1%; on Irish two-year bonds it's 23.1%. If those rates
are sustained, the countries will be unable to borrow what they need from investors to roll over maturing debt. Moody's says that makes it more likely the countries will need further help from the
The U.S., nearly everyone
presumes, is a long way from the fates of Greece, Portugal and Ireland. Even so, with both Moody's and S&P
threatening credit downgrades this week, it would be logical for some investors to feel a bit unnerved about
Treasury bonds and demand higher interest rates. Yet so far, that isn't happening. The yield on two-year Treasury notes
ended Friday at a mere 0.36%, down from 0.39% a week ago and near the 2011 low of 0.33% reached June 24.
The 10-year T-note yield ended the week at 2.91%, down from 3.03% a week ago. Byron Wien, a veteran money
manager at Blackstone Group in New York, has been predicting for the last year that the 10-year T-note yield
would rise to 5%. "I've been very wrong," he said. "I am astonished" that yields remain so low. Wall Street, usually prone to
overreaction, remains underwhelmed by the ratings-cut threats. Why? There is disbelief that the cuts really will
happen. Congress must raise the $14.3-trillion federal debt ceiling by Aug. 2 or risk the Treasury running out of money, but by Thursday there was
European Union — and that the EU eventually will require private bondholders to bear some of the bailout pain by writing off part of the debt.
talk in Washington of a compromise between President Obama and Republican leaders that would avert that potential debacle. What's more,
investors rightly are suspicious of the ratings firms. There is the sense that Moody's and S&P are playing
hardball with Uncle Sam because their reputations are so tarnished by the many AAA ratings they handed out
to mortgage bonds that crumbled with the housing bust. Wien adds another reason investors keep funneling cash to Treasuries: "U.S. rates are so low
because there's so much fear around the world." U.S. consumer confidence in the economy is plummeting again, to lows last seen in 2009. Europe's debt
crisis has spread to Spain and Italy. The Middle East remains racked by social upheaval. Meanwhile, the developing world has a different set of problems.
China, India, Brazil and other fast-growing developing countries are tightening credit to curb inflation. That has whacked their stock markets this year
while the Dow Jones industrial average holds on to a 7.8% year-to-date gain. But looking out a few years, global investors are presented with two starkly
different choices: Developed countries' onerous debt burdens will continue to retard growth, and those burdens will grow heavier if interest rates rise.
For the developing world, where debt levels are light, growth prospects remain bright and interest rates could come down if inflation recedes. Boiled
down to that, it doesn't look like much of a competition.
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2011 Arizona Debate Institutes
at: dollar collapse
Spending Disad
Dollar decline is inevitable-credit crunch and recession and shift in economic power prove –
none of their evidence takes into account oil which is the key internal link to the dollar
Global Changes 2009 (“The Decline of the Dollar,” Globalchanges.org, October 13, 2011, http://www.global-changes.com/the-decline-ofthe-dollar/, MCL)
One year on, and the Credit Crunch could prove to do more damage to both US and UK economies than first thought. Despite
much of the
world beginning to show signs of economic growth, both the Dollar and the Great British Pound have hit 5 year
lows against the Euro and the Yen. The Dollar has always been regarded as a “safe haven” for investors over the past decades. America
boasts the biggest economy in the world and the biggest bank, The Federal Reserve. But the credit crunch and the following recession
have set in motion the inevitable decline of the once powerful green-back. Investors have turned to more reliable and sustainable
means of investing their money. Gold has just hit an all time high of over $1000 per ounce. Commodity backed
currencies like the Australian dollar are now soaring. $12 Trillion We all know by now why some of America’s biggest banks failed
this time last year, and how some of them were saved. The Tax payer had to pay the price so these banks and the economy could live to fight another day.
1$ Trillion later and the quick fix to the failing banking sector has left a permanent scar on the dollar bill. America is now an astonishing $12
Trillion in debt. But the guys at the Federal Reserve are using some dangerous tactics to save themselves. Because a weak currency is not all bad
news. Firstly it boosts exports, as more foreign importers rush to snap up cheaper goods. A weaker dollar also lowers the value of America’s debt. This
seems to be the Federal Reserves plan of choice for solving the massive economic issues they face at the moment. They have even been accelerating the
decline of the Dollar themselves, on purpose, with excessive ‘quantitative easing’. Don’t know what that is? It’s because they coined a name that the
average person wont understand. Quantitative Easing is literally printing new money and feeding it into the economy. ‘Quantitative Easing’ (printing
new money) It’s not uncommon in times of financial difficulty. It has been used by quite a few nations during this recession, including the UK, to help
supply the demand for loans as banks ran out of cash. But again, at best it is a quick fix. Long term it pushes up inflation, loan interest rates and reduces
the worth of the currency. The huge issue now is that the reputation of the Dollar has been weakened so much by the credit crunch, that further
weakening it’s worth could lead it’s steady and inevitable decline into a nosedive. The British Pound is not looking too good either, sinking to lows
against the Dollar, Euro and Yen. They too are also facing massive debt, resorting to selling off assets to try to claw back some of the £175 Billion shortfall
in public spending they face this year alone. Not to mention the £1 Trillion in national debt they face after years of wasteful spending. The BBC’s Robert
Preston provides perhaps the best insight on British financial fiasco’s. Last week Asian central banks were forced to prop up the dollar to limit the
damage that the currency’s weakness could cause to their export industries. Central banks in Hong Kong, Taiwan, South Korea, the Philippines and
Thailand intervened by buying dollars after the currency came under pressure, in an attempt to safeguard their own exports. The Inevitable Shift The
decline of the Dollar is inevitable for several reasons. Economic power has been shifting from the west to the east for
many years and is showing only signs of accelerating. The American financial system is unsustainable and
failing. Smart investors know it and have been moving their investments East. The only people who don’t seem to realize it are
Americans themselves. Economies are built on businesses and industries and the resources they have at their disposal. America is running out of the
latter. The price of oil is directly linked to the wealth of the dollar. High oil prices further push down the value of
the Dollar as the US has to import 80% of its oil demand from foreign suppliers. America as a whole is unsustainable.
Over-consumption and wasteful spending are almost built into the way of life for many Americans after years of being the richest nation on earth.
America is in debt, big debt, and printing money is not going to fix that. Meanwhile the resource rich Middle East is reaping
the benefits of the higher price of oil, and China thrives from loaning massive amounts of stockpiled cash failing economies in the west with interest. The
truth is America really has nothing to offer compared to the rising economic powerhouses of China, India, the United Arab Eremites and even the
European Union. It could be less than a year until the Euro passes parity with the Pound for the first time. From
then on it will probably be only a matter of time before Britain becomes one of the last European nations take
on the Euro. What then for the failing Dollar? Perhaps the Amero will be a last ditch resort to save the west from economic gloom.
Demise of the dollar overstated-weak European economies, Chinese wouldn’t let it happen, and
Japan will stabilize
Hugh 10 – Edward, Macroeconomist who specializes in growth and productivity theory (Interview with Edward Hugh: The Dollar’s Demise is
Vastly Overstated, Blog Invest, April 30, 2010, http://trick-bloggerinvest.blogspot.com/2010/04/interview-with-edward-hugh-dollars.html, MCL)
Forex Blog: You wrote a recent post outlining the US Dollar carry trade, and how you believe that the Dollar’s decline is cyclical/temporary rather than
structural/permanent. Can you elaborate on this idea? Do you think it’s possible that the fervor with which investors have sold off the Dollar suggests
that it could be a little of both? Well, first of all, there is more than one thing happening here, so I would definitely agree from the outset, there are both
cyclical and structural elements in play. Structurally, the architecture of Bretton Woods II is creaking round the edges,
and in the longer run we are looking at a relative decline in the dollar, but as Keynes reminded us, in the long run we are all dead, while as I noted
in the Afoe post, news of the early demise of the dollar is surely vastly overstated. Put another way, while Bretton Woods II has
surely seen its best days, till we have some idea what can replace it it is hard to see a major structural adjustment in
the dollar. Europe’s economies are not strong enough for the Euro to simply step into the hole left by the dollar, the
Chinese, as we know, are reluctant to see the dollar slide too far due to the losses they would take on dollar
denominated instruments, while the Russians seem to constantly talk the USD down, while at the same time
borrowing in that very same currency – so read this as you will. Personally, I cannot envisage a long term and durable alternative to the
current set-up that doesn’t involve the Rupee and the Real, but these currencies are surely not ready for this kind of role at this point. So we will stagger
on. On the cyclical side, what I am arguing is that for the time being the US has stepped in where Japan used to be, as one side of your carry pair of
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2011 Arizona Debate Institutes
Spending Disad
choice, since base money has been pumped up massively while there is little demand from consumers for further indebtedness, so the broader monetary
aggregates haven’t risen in tandem, leaving large pools of liquidity which can simply leak out of the back door. That is, it may well be one of the perverse
consequences of the Fed monetary easing policy that it finances consumption elsewhere – in Norway, or Australia, or South Africa, or Brazil, or India –
but not directly inside the US. This is something we saw happening during the last Japanese experiment in quantitative
easing (from 2002 - 2006) and that it has the consequence, as it did for the Yen from 2005 to 2007, that the USD will have a trading parity which it
would be hard to understand if this were not the case. I am also suggesting that this situation will unwind as and when the Federal
Reserve start to seriously talk about withdrawing the emergency measures (both in terms of interest rates and the various
forms of quantitative easing), but that this unwinding is unlikely to be extraordinarily violent, since the Japanese Yen can simply step in to
plug the gap, as I am sure the Bank of Japan will not be able to raise interest rates anytime soon given the
depth of the deflation problem they have. Indeed, investors will once more be able to borrow in Yen to invest in
USD instruments, to the benefit of Japanese exports and the detriment of the US current account deficit, which
is why I think we are in a finely balanced situation, with clear limits to movements in one direction or another .
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2011 Arizona Debate Institutes
no impact – econ collapse
Spending Disad
Economic collapse does not cause war—their historical arguments are wrong
FERGUSON 2006 (Niall, MA, D.Phil., is the Laurence A. Tisch Professor of History at Harvard University. He is a resident faculty member of
the Minda de Gunzburg Center for European Studies. He is also a Senior Reseach Fellow of Jesus College, Oxford University, and a Senior Fellow of the
Hoover Institution, Stanford University, Foreign Affairs, Sept/Oct)
Nor can economic crises explain the bloodshed. What may be the most familiar causal chain in modern
historiography links the Great Depression to the rise of fascism and the outbreak of World War II. But that simple story
leaves too much out. Nazi Germany started the war in Europe only after its economy had recovered. Not all the countries
affected by the Great Depression were taken over by fascist regimes, nor did all such regimes start wars of
aggression. In fact, no general relationship between economics and conflict is discernible for the century as a whole. Some
wars came after periods of growth, others were the causes rather than the consequences of economic
catastrophe, and some severe economic crises were not followed by wars.
There’s just no impact—recession proves economic decline has no effect on world stability
Barnett 2009 – WPR columnist and editor for Esquire, senior managing director of Enterra Solutions (8/24, Thomas, World Politics Review,
“The New Rules: Security Remains Stable Amid Financial Crisis”, http://www.worldpoliticsreview.com/articles/4213/the-new-rules-security-remainsstable-amid-financial-crisis)
When the global financial crisis struck roughly a year ago, the blogosphere was ablaze with all sorts of scary predictions
of, and commentary regarding, ensuing conflict and wars -- a rerun of the Great Depression leading to world war, as it were. Now, as global
economic news brightens and recovery -- surprisingly led by China and emerging markets -- is the talk of the day, it's interesting to look
back over the past year and realize how globalization's first truly worldwide recession has had virtually no impact
whatsoever on the international security landscape. None of the more than three-dozen ongoing conflicts listed by
GlobalSecurity.org can be clearly attributed to the global recession. Indeed, the last new entry (civil conflict between Hamas and
Fatah in the Palestine) predates the economic crisis by a year, and three quarters of the chronic struggles began in the last century. Ditto for the 15 low-intensity conflicts listed by
Wikipedia (where the latest entry is the Mexican "drug war" begun in 2006). Certainly, the Russia-Georgia conflict last August was specifically timed, but by most accounts the opening ceremony of the Beijing Olympics was the most important
Looking over the various databases,
see a most familiar picture: the usual mix of civil conflicts, insurgencies, and liberation-themed terrorist movements. Besides the recent Russia-Georgia dust-up,
external trigger (followed by the U.S. presidential campaign) for that sudden spike in an almost two-decade long struggle between Georgia and its two breakaway regions.
then, we
the only two potential state-on-state wars (North v. South Korea, Israel v. Iran) are both tied to one side acquiring a nuclear weapon capacity -- a process wholly unrelated to global economic trends. And with the United States effectively tied
down by its two ongoing major interventions (Iraq and Afghanistan-bleeding-into-Pakistan), our involvement elsewhere around the planet has been quite modest, both leading up to and following the onset of the economic crisis: e.g., the usual
Everywhere else we find serious instability we
pretty much let it burn, occasionally pressing the Chinese -- unsuccessfully -- to do something. Our new Africa Command, for example, hasn't
led us to anything beyond advising and training local forces. So, to sum up: *No significant uptick in mass violence or unrest
(remember the smattering of urban riots last year in places like Greece, Moldova and Latvia?); *The usual frequency maintained in civil
conflicts (in all the usual places); *Not a single state-on-state war directly caused (and no great-power-on-great-power crises even
counter-drug efforts in Latin America, the usual military exercises with allies across Asia, mixing it up with pirates off Somalia's coast).
triggered); *No great improvement or disruption in great-power cooperation regarding the emergence of new nuclear powers (despite all that
diplomacy); *A modest scaling back of international policing efforts by the system's acknowledged Leviathan power (inevitable given the strain); and
*No serious efforts by any rising great power to challenge that Leviathan or supplant its role. (The worst things we can cite are Moscow's occasional deployments of strategic
assets to the Western hemisphere and its weak efforts to outbid the United States on basing rights in Kyrgyzstan; but the best include China and India stepping up their aid and investments in Afghanistan and Iraq.) Sure, we've finally seen global
cooperation
on such stimulus packaging was the most notable great-power dynamic caused by the crisis. 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 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
defense spending surpass the previous world record set in the late 1980s, but even that's likely to wane given the stress on public budgets created by all this unprecedented "stimulus" spending. If anything, the friendly
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! Add it all up and it's fair to say that this global financial crisis
has proven the great
resilience of America's post-World War II international liberal trade order. Do I expect to read any analyses along those lines in the
blogosphere any time soon? Absolutely not. I expect the fantastic fear-mongering to proceed apace. That's what the Internet
is for.
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