The first assault of the new Trump administration and Republican Congress on Social Security has been launched. It's a new report by the Congressional Budget Office (CBO), which these days is a wholly owned subsidiary of the Republican Congressional Caucus.
Using some financial sleight-of-hand, this CBO report pushes forward by two years the date at which its ideologically driven experts claim Social Security benefits will exhaust the Trust Fund, and since the Social Security program is required to be self-financing, the date at which promised benefits would have to be cut by what the CBO claims will have to be 31%. this differs dramatically from an earlier report which concluded a 21% cut would be required in 2033.
Such a cut would be a staggering blow to the finances and livelihoods of nation's retirees, dependents and the disabled. (David Lindorff) read more
A couple of years ago the Pentagon paid consultants to identify waste to cut. If some good ideas came out of this, Pentagon officials figured, they could show how concerned with efficiency they were and apply the savings to their wish lists of pet military projects.
The Pentagon workforce has ballooned in the last decade, even as the ranks of soldiers, sailors, and airmen and women have shrunk. The report proposed $125 billion in cuts, nearly a quarter of the total budget, mostly to the workforce of accounts, human resources, and property management. The report didn't even mention the $1 trillion to replace our entire nuclear arsenal, or the $1.4 trillion the F-35 costs, a plane which after 19 years in development still cannot reliably outperform the planes we already have.
The Pentagon freaked, what if they actually had to cut costs? So they buried the report, which has now leaked. (Miriam Pemberton) read more
In theory, the Fed's low interest rates are supposed to have a positive impact on the economy by spurring a credit expansion. But it hasn't worked out that way. Bank lending has remained stubbornly subdued throughout the post-crisis period. But what hasn't remained subdued is corporate borrowing (via the bond market) which has exceeded all previous records increasing the probability of massive corporate defaults sometime in the next two years.
The bottom 99% of corporate borrowers have just $900 billion in cash on hand to back up $6 trillion in debt, the lowest recorded over the past decade, including the years preceding the Great Recession. Stock buybacks, which were illegal before the Reagan administration, are a deceptive form of financial ------ ---- that distort prices, create bubbles and lead to crisis. The reason the Fed ignores these issues because it sees profit making as a higher priority than ensuring the safety of the system. (Mike Whitney) read more
A former official revealed that when Obama made the first move toward supporting the arming of Syrian opposition forces, the president failed to foresee the risk of a direct Iranian or Russian intervention on behalf of the Syrian regime in response to an externally armed opposition, because his advisors had failed to take this likelihood into account themselves.
The Saudis effectively control US access to the naval base in Bahrain, Turkey controls the airbase at Incirlik, and Qatar controls land and air bases that had become central to US military operations in the region. So the administration was unwilling to be at cross-purposes with its Sunni allies. these three States want to oust Assad.
No one on Obama's national security team warned him that Iran also had a very major national security interest in keeping the Assad regime in power. These major errors of omission become obvious as the war unfolded. (Gareth Porter) read more
China considers Taiwan to be a breakaway province, and would go to war to prevent its secession, just as Lincoln went to war to keep the South within the United States. The Chinese media responded by demanding closure of the gap between China's and the US's nuclear arsenal. Don't be fooled by the Chinese government's relatively restrained reaction: they are giving Trump a chance to chart a different course before he takes office on January 20.
China has been intervening to keep its own currency from falling, and has burned through about a quarter of its international reserves (about $1 trillion) since June 2015 doing this. We will soon see if the new US presidential administration actually wants to do anything to preserve US manufacturing jobs. Picking a fight with China over Taiwan is about the worst way it could start out, short of actual warfare. (Mark Weisbrot) read more