Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.
Wednesday, September 11, 2013
With the Syria War on hold , let's catch up on items put on the back burner......Affordable Care Act aka Obamacare updates for September 11 , 2013 - Note AFL - CIO i full revolt over Obamacare and set to demands changes to the Law ! And as today is 9-11 , let's recall what happened last year at Benghzai ! Finally , once one considers the true financial picture of the United States of Ponziland , one understands why John Kerry was happy to announce the GCC nations were more than happy to hire our armed forces as mercenaries ....the financial situation is the US is broke !
White House to Big Labor: Can you guys not pass a resolution shaming ObamaCare, please?
POSTED AT 8:01 PM ON SEPTEMBER 11, 2013 BY ERIKA JOHNSEN
While a handful of individual unions have already come out publicly with strong criticisms of ObamaCare and the unfortunate ways in which the law pretty much wrecks their multi-employer health insurance and hence dissolves one of the largest attractions to even being in a union, among other reasons, the AFL-CIO has declined to get too outright with their ACA-related complaints yet. They’ve maintained that they’re faithful that this was merely an unintended ‘oversight’ by the bills authors and that the White House will fix do them a solid and find a fix for them.
Unions have gotten increasingly frustrated, however, as the administration drags their feet on helping out Big Labor but seems to have plenty of time to cater to other interest groups. In what is clearly an application of a little nudge-nudge pressure on the White House, the AFL-CIO has been batting around the idea of formalizing their ObamaCare criticism with a resolution at their big annual convention going on this week — and the White House would really rather they didn’t, apparently. The White House certainly seems to be doing rather a lot of lobbying these days, via The Hill:
White House officials have been calling union leaders about a resolution critical of ObamaCare that is set to pass on Wednesday at the AFL-CIO convention.
Union leaders have been tight-lipped about the calls coming from Washington, but at least one labor official said he understands that the Obama administration has been watching the resolution’s progress and expressing a desire that it not move forward.
Harold Schaitberger, president of the International Association of Fire Fighters, said the White House would rather not have the AFL-CIO pass a resolution that lays out several complaints against the healthcare law.
“My understanding is [the calls are] to encourage that the resolution not to be brought to the floor and allow the administration to address the concerns with a commitment, an attempt to resolve some of the issues,” Schaitberger said. “My understanding is that they would have preferred that no resolution be brought to the floor.”
No, they certainly wouldn’t want that — ObamaCare can ill afford the bad press, especially not from the people who were once its staunch allies, in the few weeks until its rollout.
Again, I’d guess that the White House is working to appease Big Labor in some way, but that they’re taking the time to figure out how to do so without causing too much of a ruckus — if that’s even possible.
While Syria may have avoided a fate of being bombed (or worse) just so Obama could find what's in it (or rather the pretext to have gotten involved in the first place) Obama's Affordable Care Act did not have the luck of avoiding such a reflexive fallacy. Of course, most rational people and those who actually did the math on Obamacare (as simplified in the chart below), were well aware that America's conversion to a socialist healthcare mandate would not seamless, and in reality would lead to far further disappointment with the outcome. One such outcome, of course is the wholesale elimination of full-time jobs as small, medium and large business all pursue the "part-time" worker loophole, which has lead to a surge in part-time jobs and at the expense of normal, full-time occupations. This was most recently experienced by the New Jersey worker union which was shocked to find that a local casino was overly relying on part-time workers, and complained bitterly. However, while the labor impacts of Obamacare are only indirect if quite painful for most, slowly but surely the impact of Obamacare on actual health coverage, and the lack thereof, are starting to be appreciated.... long after the law has passed.
Moments ago The Hill reported that the Executive Council of the AFL-CIO, the largest federation of unions in the US and one of Obama's staunchest supporters, is expected to consider a resolution, "subject to fierce internal debate, that will call for changes to the Affordable Care Act (ACA) — setting up a potential floor vote this Wednesday before the convention closes." In other words, the one constituency that was supposed to be among the biggest benefactors from Obamacare is about to launch a formal criticism of Obamacare as "frustration has grown within labor as the Obama administration has failed to offer a fix to temper union worries over the law."
But at least "they passed it."
The Hill has more on the four page draft resolution that contains the AFL-CIO's grievances:
The draft resolution says that “federal agencies administering the ACA” are “threatening the ability of workers to keep health care coverage through some collectively bargained, non-profit health care funds” under their interpretation of the law.
In addition, the resolution claims “some workers might not be able to keep their coverage,” and the law will be “highly disruptive” to union members’ health plans, known as multi-employer or Taft-Hartley plans. ObamaCare “will effectively use taxpayer dollars to subsidize employers that refuse to take responsibility for providing their employees health care” while taxing nonprofit plans to benefit insurance companies.
The measure also states that “the ACA should be administered in a manner that preserves the high-quality health coverage multiemployer plans have provided to union families for decades and if this is not possible, we will demand the ACA be amended by Congress.”
“People have been working with the White House for a long time. There has been growing frustration that we haven’t made any progress,” Sean McGarvey, president of the Building Trades and Construction Department, told The Hill.
The draft resolution has "support from all sectors of labor. Manufacturing, transportation, public sector,” McGarvey said."
Naturally, the last thing the president, neck deep in scandals, needs is yet another internal revolt, this time from a core constituency group. Or at least formerly so. Which is why none other than trusted confidant Valerie Jarrett was dispatched for damage control.
On Sunday in Los Angeles, Valerie Jarrett, one of Obama’s closest advisers, told union officials that the administration is working on their concerns over the healthcare reform law.
“Though there are challenges that remain, and [AFL-CIO President Richard Trumka] and I were just talking about some of those challenges. We intend to work to solve those problems big and small, and we are committed to sitting down in good faith and working on solutions,” Jarrett said.
Good luck with solutions to a law whose impact will only be realized as the law become effective, although one thing that is clear is to the unions is that core parts of Obamacare simply will not provide coverage:
The resolution claims “some workers might not be able to keep their coverage,” and the law will be “highly disruptive” to union members’ health plans, known as multi-employer or Taft-Hartley plans. ObamaCare “will effectively use taxpayer dollars to subsidize employers that refuse to take responsibility for providing their employees health care” while taxing nonprofit plans to benefit insurance companies.
The measure also states that “the ACA should be administered in a manner that preserves the high-quality health coverage multiemployer plans have provided to union families for decades and if this is not possible, we will demand the ACA be amended by Congress.”
Well, at least that much is known understood. On the other hand, the labor union also understands that if it alienates Obama then all bets are off.
McGarvey, the head of the Building Trades, said the measure has grown less critical of ObamaCare as it has moved through the drafting process.
“It’s less biting, but it does point out the positive attributes of the act that we have supported for decades,” McGarvey said.
Robbins with ALPA said the draft resolution has changed as well, saying the original “did not do as good of a job of drawing a distinction between the positive elements of the ACA and the very major but narrow concerns with the ACA.”
Alas, the time for diplomacy has passed and now that the cat is out of the bag that Obama's healthcare law will not be the magic bullet so many had hoped for, it is inevitable that a very acrimonious outcome will result, one which may end up with Obamacare being revised. That this comes at precisely the worst time - when the GOP is using Obamacare as a bargaining chip over debt ceiling abd budgeting negotiations - is hardly lost on anyone either.
But the lesson here is that all of this could have been avoided simply, if only everyone had been acquainted with and understood just what the government's takeover of healthcare entailed. A process that we explained, delightfully simply, a few weeks ago, with the help of the following inforgraphic.
A memo to House staff on Wednesday said that the Office of Personnel Management may not issue the final rules about how members of Congress and congressional staff members can enroll in Obamacare insurance exchanges until after enrollment begins on October 1.
“Members of the staff are advised that although state and federal healthcare exchanges created under the [Affordable Care Act] will be open for enrollment on October 1, it will not be possible to confirm plan options, costs, benefits, or which House staff will be affected until OPM issues final regulations, which could very well be after the exchanges have already opened.,” the chief administrative officer of the House, Dan Strodel, said in the memo. “However, please be assured that from the day the OPM final rule is issued until the open enrollment period closes, our benefits counselors will work tirelessly to ensure there is no gap in coverage for those no longer eligible to participate in [the standard federal-employees' health benefits plan].”
Enrollment in the insurance exchanges runs from October through March and coverage begins in January.
WASHINGTON — A divide within the Republican Party over whether to use upcoming budget votes to defund and delay President Obama's health care law forced House Republicans to push off until next week a vote on a stopgap spending bill to keep the federal government running through mid-December.
"I think it's going to be difficult if we can't come to a consensus in the Republican Conference," said Rep. Tom Cole, R-Okla., who is part of the House GOP leadership team that counts votes to pass legislation. "I don't think anything is for sure right now. We're going to continue to dispose, delay, defund anyway we can. The only debate is what's a productive way to do it, and what's not."
House GOP leaders propose a spending bill to fund the federal government through Dec. 15 at the current spending levels — $986 billion a year — to buy Congress more time to find a longer-term agreement. The fiscal year ends Sept. 30, and without a stopgap measure, the federal government would shut down. Adding pressure is the timeline: There are just five legislative days to resolve the issue because the House is scheduled to be in recess the week of Sept. 23.
Conservatives want to use the spending bill to defund the president's health care law, a popular effort among the GOP base but one that is certain to be blocked by a Democratic-controlled Senate or face a presidential veto.
"Our position, obviously, is that we will not accept anything that delays or defunds 'Obamacare,'" White House spokesman Jay Carney said Wednesday. "Threatening a government shutdown over an ideological position is not something most Americans would believe is the right thing to do."
In an effort to find common ground, House GOP leaders put forth a proposal to pass the budget bill but also allow the House another vote to defund the health care law while using a parliamentary tactic to force the Senate to take an up-or-down vote to do the same. "It frankly moves the fight where it needs to be: in the United States Senate," said Cole, who supports the tactic.
The move is symbolic: it would result in a swift Democratic defeat of the defund measure in the Senate and a quick enactment of the overall stopgap spending bill that does nothing to rein in the health care law.
It was not enough to appease conservatives Wednesday.
"I'm not out there strongly opposing it as much as I am saying I can't look at that as a viable option to accomplish what we're trying to vote for," said freshman Rep. Mark Meadows, R-N.C. Meadows has rallied 80 Republicans to sign a letter saying they cannot vote for a spending bill that doesn't defund the law. "I don't plant to vote for it if it comes up."
House Minority Whip Steny Hoyer, D-Md., said Democrats will not support the stopgap measure if it includes language to defund the health care law, hoisting the burden on to House Republicans to find the votes to pass it. With 233 seats under their control, Republicans would need all but two dozen of their members to vote for the bill to pass it on their own.
"Their my-way-or-the-highway strategy continues to fail because they are deeply divided and continue to balk at the prospect of working across the aisle to achieve results," Hoyer said.
Rep. Jack Kingston, R-Ga., said this is a fight conservatives are ready to have, despite the political stakes for the GOP being seen as forcing a fight over shutting down the government.
"I think that's a risk you have to take," he said, "Any path forward, there's a political downside to it. We didn't come here to get re-elected and have safe political careers. We came here to get things done."
Kingston chairs the appropriations subcommittee with oversight over the Department of Health and Human Services, but he said he would vote against the GOP leadership proposal if it comes to the House floor. "I think that what our base wants is us to go ahead and have the fight over 'Obamacare,' right here, right now," he said.
Study: ObamaCare could cost billions more than anybody projected
POSTED AT 4:41 PM ON SEPTEMBER 11, 2013 BY ERIKA JOHNSEN
Here’s a complementary pair of Reuters stories from the early half of the week, just to help build up the sense of excitement I’m sure you’re all feeling as the first open enrollment day of ObamaCare approaches in T-minus three weeks.
First, when the much-vaunted ObamaCare exchanges open for business on October 1st, the potential for massive delays, abuse, and fraud through the largely untested online systems is still going to be huge:
“At this moment, not a single state appears to be completely ready,” W. Brett Graham of the Salt Lake City-based consulting firm Leavitt Partners said in testimony to a Republican-controlled oversight panel in the House of Representatives.
He said states should be capable of providing “baseline functionality” when enrollment begins in three weeks. But he cautioned about the potential for delays: “Most, if not all, exchanges will experience a rocky enrollment period as they work to overcome both known and unknown operational challenges.” …
Some states are having difficulty integrating exchange technology with existing Medicaid and other state systems, according to Graham, who said the results could include slow enrollment, delayed eligibility determinations and increased potential for fraud and abuse.
Well, you might say, so what if the states aren’t ready to cope with the still-unknowable volume of people who’ll soon begin shifting onto the exchanges? We always knew this was going to be a messy and learning-oriented process with lots of, ahem, glitches. The point is that eventually everything will be smoothed out and ObamaCare will help us reduce both consumer health care costs and insurance premiums as well as help control the federal government’s (i.e., taxpayers) health-care spending, right?
Wrong. As estimates of exactly how much the huge new entitlement program that is the “Affordable” Care Act is going to impact the federal debt and deficit have shifted over the past few years (and not in a good way), the fact is that the top-down attempt to remake an entire sixth of the U.S. economy is bound to be fraught with still more unintended consequences and hidden costs than you can shake a stick at. For instance, a new study from Stanford notes that ObamaCare creates a major incentive for employees to eschew their employer-offered plans and instead take the cash and find a subsidized plan through the exchanges, while lots of employers in turn will find that it helps their bottom line to quit offering health insurance and pay the employer-mandate tax instead. This could lead to a huge migration to the exchanges that would stress the system in ways for which the “Affordable” Care Act’s authors never planned, plus add a heck of a lot more costs:
As many as 37 million Americans who receive health coverage through employers may be better off with the government-subsidized insurance plans that will be offered under President Barack Obama’shealthcare reform law for next year, according to a study released on Monday.
The analysis, compiled by researchers at Stanford School of Medicine and published in the journal Health Affairs, suggests that some employees may choose to dump the coverage they receive at work. It also points to a potential counter-trend to surveys of employers, which show that up to 30 percent would consider terminating health coverage for their workers within the first few years of “Obamacare.” …
That scenario, which would cost the federal treasury billions of dollars above what it has already projected, reflects the complicated financial carrots and sticks at the heart of Obama’s 2010 Affordable Care Act (ACA). …
Roughly “37 million people would be financially better off switching to the exchange” from employer-sponsored insurance, said Dr. Jay Bhattacharya of Stanford School of Medicine, who led the study.
If all of these 37 potential incentive-responders were indeed to switch to the exchanges, the government stands to spend up to $132 billion more in subsidies than they projected. Great.
The other anniversary: One year later, trying to figure out why we were in Benghazi
POSTED AT 6:01 PM ON SEPTEMBER 11, 2013 BY ALLAHPUNDIT
Via Ace, carve out 10 minutes for John Sexton’s news mosaic of what the CIA was really up to in Benghazi when the jihadis made their move. The two leading theories for months have been that the agency was either trying to round up surface-to-air missiles that had gone loose before Al Qaeda could use them against western airliners or, more relevant to the news this week, that the agency was shipping weapons to the Syrian rebels from its base in Libya — in violation of a UN arms embargo.
This isn’t an either/or proposition, says Sexton:
During the U.S. involvement in overthrowing Libyan dictator Muammar el-Qaddafi during 2011, the Obama administration became aware that shipments of weapons were making their way to Qaddafi’s troops, allowing them to resupply themselves and pose a greater threat to civilians. So in February the US and other allied nations including the UK and France pushed for a package of international sanctions which became UN Security Council resolution 1970…
But despite resolution 1970, the NY Times reported in April 2011 that shipments of arms were reaching the Libyan rebels from Qatar. Another in-depth story published in Dec. 2012 describes how the U.S. winked at these shipments despite concerns that some weapons were falling into the hands of extremists…
This pattern of winking at violations of the UN arms embargo of Libya was repeated after Qaddafi’s ouster. With the war in Libya at an end and the one in Syria ramping up, the direction of the arms pipeline simply reversed itself. Whereas weapons had been coming into Libya from Qatar, they now headed out of Libya back to Qatar and from there on to either Mali or to Syria by way of Turkey…
But in late 2011 the Unites States realized its revolution-on-the-cheap in Libya had a worrisome downside. Thousands of dangerous anti-aircraft weapons were loose in Libya, attracting militants who might wish to use them to commit terrorist acts against civilian air traffic. Something had to be done.
Because of the arms embargo against Libya, he argues, and because the White House hadn’t yet decided to arm the Syrian rebels with American weapons, the only way to keep anti-Assad forces well supplied was to do it quietly by sending them foreign weapons that were readily available. That explains why the CIA would choose Libya, of all places, to use as a weapons hub. At first blush, that seems insane: Once Qaddafi was gone, the only thing protecting the American effort there from the militiamen and jihadis roaming the Libya landscape was the weak new central government. You’re not going to use a place like that as your base unless you have a very good reason to do so. But there was a good reason — weapons were easy to come by and a dangerous environment like Benghazi guaranteed that international bodies like the UN and western media outlets wouldn’t be able to sniff around what the CIA was doing without effort. The agency could pursue its twins goals of taking MANPADs out of circulation in Libya so that jihadis couldn’t get hold of them and sending some along to Syria where they could be put to better purpose against Assad’s fleet of Russian helicopters.
Two points to ponder in that case, though. One: If Sexton’s right that the CIA “encouraged the creation of a multi-national arms pipeline, helped shop for weapons to fill it, [and] vetted the groups who would receive those weapons in Syria,” then Syria’s an even bigger U.S. cock-up than we thought. By every account I’ve read, the jihadis in Syria have spent the past year steadily gaining strength at the expense of the “moderate” rebels. Yet if Sexton’s correct, the carefully vetted “moderates” have been supplied all along by the U.S. and its Sunni allies, in part via the illicit Libyan pipeline. Surely the totality of western arms shipments to the rebels didn’t dry up after the Benghazi attack. In which case, if you were worried before that giving arms to the Free Syrian Army would fail to turn the rebel tide against jihadis and maybe even backfire by having those arms fall into jihadi hands, you should be really worried now. Based on the past year of experience, that’s exactly what’s happened — and yet here are John Kerry and his pal John McCain, making the case this week that what we really need to do is “empower” the moderates even further.
Two: But if Sexton’s right, how to explain the curiously thin security at the consulate in Benghazi and the apparent conspicuousness of the nearby CIA annex? Joshua Foust calls those, correctly, the key unanswered questions a year later:
The two CIA contractors who died defending the outpost were part of a rapid response team, which was inadequate. Both the CIA and Ambassador Stevens had placed their lives in the hands of an inadequate American response team and a local militia that simply melted away during the assault.
Perhaps out of deference to the dead, there are few who have raised the question of why Ambassador Stevens had such faith in this unreliable militia. In the months leading up the assault, despite growing violence in Benghazi, Stevens repeatedly refused offers by the U.S. military to place more American security forces nearby….
To take things a step further, the CIA’s heavy presence in Benghazi is probably also why security was so light. Stereotypes to the contrary, in many places CIA facilities have surprisingly light building security; they rely more on obscurity than imposing defenses to stay safely hidden. When that obscurity is blown, so, too is their best line of defense. So why was the CIA station’s location so well known in Benghazi? Was tradecraft there so lax that everyone nearby knew what it was? And if so, who thought that was a good idea?
You’ve got two options if you’re running a top-secret international weapons pipeline to two different rebel factions from a war-torn Islamic country. Either arm it to the teeth with trustworthy security professionals so that it can repel the inevitable jihadi attack, or do it so secretly that not even the locals know what’s going on. The White House chose door number three — doing it basically out in the open and with the locals themselves providing most of the “security.” Why? Is this gross negligence or is there something else going on?
A year after radical Islamists attacked the U.S. mission in Benghazi in an assault that claimed the lives of U.S. Ambassador Christopher Stevens and three other Americans, the suspects remain at large in eastern Libya—to the mounting frustration of American officials working to bring the assailants to justice.
An armed man waves his rifle as buildings and cars are engulfed in flames after being set on fire inside the U.S. consulate compound in Benghazi on September 11, 2012. (AFP/Getty)
Benghazi isn’t exactly a city that FBI agents have been able to spend much time in, so much of the evidence has is based on U.S. drone surveillance and on electronic intelligence.
Several of the ringleaders have been indicted in absentia in a New York court, and U.S. officials say evidence of their involvement in the attack has been shared with Libyan authorities. But so far, the Libyans have made no moves to apprehend the indicted suspects—an inaction that has some American lawmakers, including Michigan Republican Mike Rogers, chairman of the House Intelligence Committee, fuming about the lack of consequences for the taking of American lives.
Rogers suggested this week that some sort of military action should be mounted to seize the suspected ringleaders, who include Ahmed Khattala, the 41-year-old founder of a Salafist militia called Abu Obaida Bin Jarrah, which has some crossover membership with Ansar al-Sharia, an Islamist brigade first identified by eyewitnesses as having some of their members participating in the assault last September 11.
The Libyans don’t have the excuse of not knowing Khattala’s whereabouts—he is not a hard man to find. He has been interviewed in Benghazi by several Western media outlets, and last January would-be assassins placed a bomb under his car that detonated prematurely, killing one of the bombers and injuring another, say Benghazi police. That assassination attempt had nothing to do with Stevens’s death, say Libyan security sources: the bombers were seeking to avenge a relative’s death in a separate incident.
Khattala has admitted he was at the consulate as it came under attack by a heavily armed group of gunmen but has repeatedly insisted he was not a ringleader and didn’t participate in the fighting. But he has never renounced the attack and has openly stated his disapproval of democracy. He says he’s sympathetic with al Qaeda’s aims, although not a member of the terrorist group.
Some U.S. officials and lawmakers assign dark reasons for the failure of the Libyans to question Abu Khattala and interrogate other suspected ringleaders, let alone seize them, but the truth is more prosaic—the central Libyan authorities just don’t have the firepower to take on the militias involved and no inclination to confront them.
“The authorities can’t do anything—they don’t have the force to be able to make arrests,” says a European diplomat based in Tripoli.
“The authorities can’t do anything—they don’t have the force to be able to make arrests,” says a European diplomat based in Tripoli.
In the year since heavily armed assailants attacked the U.S. consulate, Libya has gone from disturbingly wild to downright unruly, and the central authorities have grown weaker.
Benghazi has been engulfed in violence with waves of score-settling assassinations and the authorities struggling to contain the chaos. Lawlessness has increased elsewhere, too, with militia-on-militia clashes being seen once again in the capital of Tripoli and drug-smuggling, armed robbery, and car jacking on the rise.
On August 19, a group of gunmen attacked a convoy carrying the EU ambassador to Libya, Nataliya Apostolova. The assault outside the Corinthia Hotel in central Tripoli was not far from Prime Minister Ali Zidan’s main office. The gunmen robbed the EU delegation at gunpoint before shooting at passing cars and making their escape. Policemen outside the hotel did not dare intervene, according to EU diplomats.
Privately, Libyan officials conceded long ago that their own probe into the events of that night was hamstrung not only by the absence of experienced investigators and a functioning police, but also by the central government’s lack of authority in Benghazi—and increasingly elsewhere in a country where revolutionary militias, some Islamist, others not, exert the real power and the government day by day appears diminished.
The story of the night America lost its first ambassador since 1979 to violence remains a jigsaw puzzle—the pieces have been fitted together slowly by the U.S. intelligence community but a complete picture remains elusive, partly thanks to the lack of assistance from the Libyans, say U.S. intelligence sources.
Reliable information from the Libyans has been in short supply from the start and in the hours after the attack it was the Libyans who first insisted the attack was a demonstration gone wrong, an opportunistic assault by a flash mob triggered by an overreaction by the mission’s guards.
That explanation was maintained days after the assault by advisers to Mustafa Abushugar, who was elected Libya’s prime minister 24 hours after the attack, who told The Daily Beast in the week of the attack: “So far we really believe that this was a violent demonstration mainly against the movie (The Innocence of Muslims) that swung out of control. The protesters saw on television what was happening in Egypt and decided to have their own protest. We have no evidence at all that this was al Qaeda.”
But evidence quickly mounted that this was an orchestrated and directed attack planned well and efficiently executed with road blocks set up to hinder rescuers and great precision and accuracy demonstrated by those firing mortars at the nearby CIA annex where the Americans from the mission fled under withering automatic fire.
According to Rami El Obeidi, who headed intelligence for Libya’s National Transitional Council during the rebellion against Colonel Gaddafi, al Qaeda didn’t order or plot directly the assault on the U.S. Consulate but encouraged the attack, and the decision to do so was taken not by a single mastermind but by a committee of Libyan and Egyptian jihadist ringleaders. “Radical cells in several of Benghazi’s revolutionary militias were involved in the decision,” he says, including members of the February 17 Brigade, the militia that also had guards detailed to protect the consulate the night of the attack.
He says the leaders of the militia most frequently blamed for the attack, Ansar al-Sharia, were not involved in the assault, although radical subordinates were. Others involved came from the Omar Mukhtar brigade, the Abu Salem Martyrs Brigade, and the Rafala Sahati brigade. Three Algerian al Qaeda members were present during the assault on the consulate. It is a claim a current Libyan intelligence source confirms.
Most U.S. intelligence sources agree with El Obeidi that this wasn’t an attack mounted by core al Qaeda but by radical Islamists, some of whom have links with al Qaeda or share the goals of the terrorist organization. But without some of the ringleaders in U.S. hands, much of the full story will remain unknown.
There is scant chance this will happen soon. The government’s problems go well beyond street crime and lawlessness though. Political leaders in the east of the country have been agitating for less centralized governing structure since the overthrow of Gaddafi, and now once again are threatening to break away from Tripoli.
Since July, Zidan has been struggling to overcome a strike by oil industry guards that has shuttered export terminals and resulted in oil exports plunging by 70 percent, a devastating setback for Libya, which relies on oil exports for nearly all of its foreign revenue.
“What we are seeing are shifting coalitions involving militias and different political groupings jostling as much over short-term economic interests as anything to do with political ideology,” says a political risk analyst who advises international oil companies.
To complete the dismal picture, in the last few months al Qaeda has established a significant foothold in the country, according to former and current Libyan intelligence officers, with half a dozen training camps being established for jihadists forced out of Mali by the French intervention there. That intervention was punished by a bombing of the French embassy in Tripoli in the spring, a worrying sign of a reconfiguration of jihadist ranks in a Libya ill equipped to cope with further security challenges.
CIA Director promises to produce Benghazi survivors for Congressional testimony
POSTED AT 2:41 PM ON SEPTEMBER 11, 2013 BY ED MORRISSEY
Will John Brennan clash with John Kerry over Benghazi? The survivors of the Benghazi attack exactly one year ago have yet to appear before Congressional committees investigating the terrorist attack that claimed four American lives. including Ambassador Chris Stevens, the first American Ambassador murdered in the line of duty in 33 years. CNN had earlier reported that the CIA had been polygraphing the survivors to make sure they hadn’t begun talking — to Congress or anyone else. Congress has been demanding access to them, but this week John Kerry told CBS’ Sharyl Attkisson that he would not produce the witnesses:
While it is easy and often enjoyable to distract oneself with daily drudgery such as who will bomb whom (if not so enjoyable for those on the receiving end of said bombs), the key word in the sentence is just one: "distract" and as Kyle Bass pointed out correctly, the best, and most "economy-boosting" of all distractions ends up with the proverbial red button being pushed. Sadly, with an economy which Boston University's Larry Kotlikoff defines as "arguably in worst fiscal shape than any other developed country", there is much to be distracted by and is why we correctly predicted in July that the Syrian false flag event is only weeks or months away (turned out to be precisely one month). So for those who have no desire to prove the axiom that ignorance is bliss, or to have their heads stuck in the sand, here is a must read interview between Goldman's Hugo Scott-Gall and the iconoclast economist who, in a vast minority, calls it like it is.
The highlights:
I estimate the US fiscal gap at US$200 tn, 17 times the reported US$12 tn in official debt in the hands of the public . And this incorporates this year’s tax increases and spending sequestration. What would it take to come up with US$200 tn in present value? The answer is tax hikes or spending cuts, or a combination of the two, amounting to 10 percent of GDP, starting immediately and continuing indefinitely. To do so via spending cuts, alone, would require an immediate and permanent 36% cut in all non-interest spending. To do so via tax hikes, alone, would need an immediate and permanent 55% increase in all federal taxes. Hence, a description of the fiscal adjustments made over the last year could be “too little too late.” In terms of generational accounting, were we to leave our kids and future descendants to cover the entire fiscal gap, they’d face tax rates over their lifetimes around twice as high as those we face.
The US is arguably in worst fiscal shape than any other developed country. But Greece, the UK, and Japan are close runner ups. As mentioned, our fiscal gap is 10% of the present value of our future GDP. In Germany it’s around 5%, while Canada, Australia and New Zealand are close to zero. Even Italy's long-term fiscal gap is just half of the US’s, yet Italian government bonds sell at a much lower price than US government bonds simply because people don't understand the pension reforms that Italy has rolled out or that Italy has much better control of its healthcare spending.
Our country is broke. It’s not broke in 50 years or 30 years or 10 years. It’s broke today. Six decades of take as you go has led us to a precipice. That’s why almost the entire economics profession is talking as one at www.theinformact.org. Economists from all political persuasions are collectively sending our government a warning about what is, effectively, a nuclear economic bomb. I’ve been around economics for a long time. I’ve never seen such a strong response to a proposed Congressional bill. This is the profession sending a statement to the President and Congress that’s not unlike the warning physicists sent via Einstein to Roosevelt about the bomb.
And with that, here is the full interview:
Laurence J. Kotlikoff is a William Fairfield Warren Professor at Boston University, a Professor of Economics at Boston University, a Fellow of the American Academy of Arts and Sciences, a Fellow of the Econometric Society, a Research Associate of the National Bureau of Economic Research, and President of Economic Security Planning, Inc., a company specializing in financial planning software.
Hugo Scott-Gall: You argue that the official debts that countries report are economically meaningless numbers. Please explain this?
Larry Kotlikoff: Every dollar the government takes in or pays out can be labelled in economically arbitrary ways. For example, the government can call our social security contributions “taxes” or “official borrowing.” And it can call our social security benefits “transfer payments” or “return of principal or principal plus interest.” There is nothing in the math of economic theory that pins down the government’s word choice and each labelling convention will produce a different reported time path of debt, deficits, taxes, and spending. At their heart, these measures are linguistic and convey nothing about a country’s underlying fiscal policy – only about what the government decides to put on and keep off the books.
Uncle Sam is very powerful, but he has only one set of vocal cords. We are all free to label past, present, and projected future government receipts and outlays any way we want, as long as our labelling convention is internally consistent (e.g., if we label government receipts as borrowing, we need to label other outlays as debt service). Consequently, we can produce any past, current, and projected future measure of the government’s debt and other fiscal quantities. With the right past labelling, we can say the current debt to GDP ratio is miles higher than Rogoff-Reinhart’s critical 90 percent. Or, we can argue that the debt to GDP ratio is hugely negative. The Economics labelling problem tells us that what we measure as the size of standard fiscal variables is language- or frame of reference-dependent. This is fundamentally no different from physics. The measurement of time and distance is not uniquely pinned down by the math. What time you report and how you measure the size of physical objects depends on one’s frame of reference (direction and rate of speed through space) or language, if you will.
Here’s another way to see my point. My mother gets checks from the US Treasury all the time. They all look the same except for their amounts. Some are for social security and some are for holding Treasury bonds. But Uncle Sam is discounting the amounts coming on the Treasuries and including that in his official debt measure, while ignoring the amounts coming for social security benefits. Using economically meaningless fiscal indicators to guide fiscal policy is like driving in NY with a map of LA. If you aren’t careful, you’ll drive into the East River.
Hugo Scott-Gall: If conventional fiscal measures are, as you say, content free, what should we measure?
Larry Kotlikoff: Every dynamic mathematical model of the economy that economists write down (and thousands are being constructed each year) includes what’s called the government’s intertemporal budget constraint. This constraint simply requires that the present value of government outlays, no matter how labelled, equals the present value of government receipts, no matter how labelled. In this over-time government balance sheet, the outlays represent the liabilities and the receipts represent the assets. If the value in the present of the liabilities exceeds the value in the present of the receipts, the government’s balance sheet isn’t balanced, with the difference between the liabilities and assets call the fiscal gap. The fiscal gap doesn’t suffer from an economics labelling problem for a simple reason - it puts everything on the books. The fiscal gap is the true measure of a government’s debt. And once one determines its size, one can assess the impact on our children of paying it off if it’s all dumped into their laps. This is part of a companion analysis, called Generational Accounting, which I initiated in the late 80s together with my co-author, UC Berkeley economist Alan Auerbach and my then student, Jagaadesh Gokhale (now at the Cato Institute).
Hugo Scott-Gall: How big is the US fiscal gap and what does US generational accounting show?
Larry Kotlikoff: The CBO will release its 2013 long-term fiscal projection, called the Alternative Fiscal Forecast (an alternative to the Extended Budget Forecast produced for Congress) this Fall. But I estimate the US fiscal gap at US$200 tn, 17 times the reported US$12 tn in official debt in the hands of the public. And this incorporates this year’s tax increases and spending sequestration. What would it take to come up with US$200 tn in present value? The answer is tax hikes or spending cuts, or a combination of the two, amounting to 10 percent of GDP, starting immediately and continuing indefinitely. To do so via spending cuts, alone, would require an immediate and permanent 36% cut in all non-interest spending. To do so via tax hikes, alone, would need an immediate and permanent 55% increase in all federal taxes. Hence, a description of the fiscal adjustments made over the last year could be “too little too late.” In terms of generational accounting, were we to leave our kids and future descendants to cover the entire fiscal gap, they’d face tax rates over their lifetimes around twice as high as those we face.
Hugo Scott-Gall: How do we get better fiscal book keeping?
Larry Kotlikoff: At my encouragement and that of The Can Kicks Back – a non-profit in DC run by twenty-somethings fighting for generational equity, Senators Kaine and Coons – two Democrats – and Senators Thune and Portman – two Republicans – have just co-introduced THE INFORM ACT. The Bill, which I largely drafted in consultation with Alan Auerbach, will require three agencies in the US government (the CBO, the OMB and the GAO) to do fiscal gap analysis as well as generational accounting on an ongoing basis. To date, 12 Nobel Laureates in economics, over 500 of the nation’s other leading economists, George Shultz, the Former Secretary of the Treasury, State and Labor and the OMB Director, and other prominent government officials, and thousands of non-economists have endorsed the bill atwww.theinformact.org. I’m hoping everyone in the country will go to the site, endorse the bill, and spread the word.
Hugo Scott-Gall: How do you recommend solving this issue?
Larry Kotlikoff: Measuring our fiscal gap and disclosing its implications for ourselves and our children is just step one in addressing our fiscal issues. What’s really needed is the adoption of radical, but generationally fair reforms to our tax, social security, and healthcare system. Maintaining the status quo is not an option. When a patient needs heart surgery, radical surgery is often the safe option. America needs radical policy surgery. I lay out postcard length reforms of out tax, social security, healthcare, and banking systems atwww.thepurpleplans.org. Many of these plans have been endorsed by the economics’ profession’s top economists.
Let me lay out just one of these plans - the Purple Health Plan. The costs of Medicare, Medicaid, the new health exchanges, and employer-paid healthcare (here the costs entail loss of revenue because premiums are exempt from taxes) constitute 60% of the fiscal gap. The Purple Health Plan would eliminate these four systems and start with a clean slate. Under the plan, each US citizen gets a voucher each year, the size of which is determined by his pre-existing medical condition. The voucher is used to purchase, in full, the Basic Health Plan from an insurance provider. The Basic Health Plan’s coverages are established by a panel of doctors subject to the constraint that the costs of all the vouchers never exceeds 10% of GDP. Those who could afford it would be free to buy supplemental policies. No insurer could turn anyone away, but since each voucher is individually rated, insurers would have no incentive to cheery pick. This simple reform, in essence, the healthcare system of Germany, Israel, Holland, Switzerland, and Japan, retains private provision, turns the Basic Health Plan into a commodity with insurance providers competing to attract and retain participants. A very large share – roughly 60% – of America’s fiscal gap can be eliminated via this reform alone. Adopting the other purple plans would eliminate the rest of the fiscal gap without visiting untoward hardship on anyone.
Hugo Scott-Gall: Will society be able to hold current demographic fiscal systems together where young people are heavily taxed...
Larry Kotlikoff: Our country is broke. It’s not broke in 50 years or 30 years or 10 years. It’s broke today. Six decades of take as you go has led us to a precipice. That’s why almost the entire economics profession is talking as one atwww.theinformact.org. Economists from all political persuasions are collectively sending our government a warning about what is, effectively, a nuclear economic bomb. I’ve been around economics for a long time. I’ve never seen such a strong response to a proposed Congressional bill. This is the profession sending a statement to the President and Congress that’s not unlike the warning physicists sent via Einstein to Roosevelt about the bomb.
Hugo Scott-Gall: What does all of this mean for overall consumption and savings in the US?
Larry Kotlikoff: Our huge off-the-books fiscal problems were created as a result of the take-as-you-go policies of the post war periods that passed on benefits to older people at the expense of younger people. This systematic intergenerational redistribution produced a massive increase in the absolute and relative consumption of the elderly and a massive decline in our net national saving rate, from 15% in 1950 to 1% now. The ratio of the consumption of a 70-year-old compared to a 35-year-old is about 2.5 times larger today than it was back in 1950. And the reason they’re consuming so much more is that they get the entire set of benefits, from healthcare and social security to tax cuts. National saving finances most domestic investment, so as we’re saving next to nothing means we’re also investing next to nothing. Last year’s net domestic investment rate was 5%, only a third of the 1950 level. And less domestic investment means slower real wage growth, as workers have less capital with which to operate. Finally, since we Americans aren’t saving, we can’t invest in our country. So $4 out of every $5 of investment in the US is now by foreigners. In the late 1970s, Alan Auerbach and I pioneered the development of large-scale computable general equilibrium life-cycle models that we could simulate on a computer. In this and subsequent research, we were able to simulate the impact of take-as-you-go fiscal policy. What we see from these increasingly sophisticated computer models matches exactly what you see in the country, less saving, less investment, less growth, and stagnant wages. While generational policy is not the sole driver of post-war secular economic trends, it’s likely the biggest.
Hugo Scott-Gall: How do other countries compare to the US when you look at their fiscal gaps?
Larry Kotlikoff: The US is arguably in worst fiscal shape than any other developed country. But Greece, the UK, and Japan are close runner ups. As mentioned, our fiscal gap is 10% of the present value of our future GDP. In Germany it’s around 5%, while Canada, Australia and New Zealand are close to zero. Even Italy's long-term fiscal gap is just half of the US’s, yet Italian government bonds sell at a much lower price than US government bonds simply because people don't understand the pension reforms that Italy has rolled out or that Italy has much better control of its healthcare spending.
The case of Norway is also very interesting. I conducted generational accounting with a Norwegian economist named Erling Steigum back in the mid-90s, which proved that while Norway was reporting a huge surplus because of how it was labelling its transactions, in reality the country was spending at far too high a rate. To its credit, the government went ahead and continued carrying out this analysis on a regular basis, and as a result, created a generational trust fund, where some of the North Sea oil revenue is set aside for future generations. This has left them in a much better position today. Chile, another resource-dominated economy, has also got a similar trust fund in effect. The Canadians have also been very careful about their long-term liabilities. So, some countries are acting more responsibly.
Hugo Scott-Gall: Have you considered the impact of fewer jobs, driven by rising automation, in your analysis?
Larry Kotlikoff: Automation and the structural loss of jobs is a very important issue. In fact, Jeff Sachs and I have together written about the implications of smart machines, machines that today can substitute almost perfectly, if not more than perfectly for people, and constitute, effectively, competing robots. We’re not far from the day when machines will drive cars too. While that sounds great, the other side of the coin is that younger people are earning less and saving less, and so, they bring much less wealth into old age than previous generations did. Owing to this vicious cycle, these youngsters, who as a group are not the prime owners of capital, aren't going to reap the benefits from this new technology. The beneficiaries are instead going to be a small number of people who are either the inventors, or older people who have the capital to help get the invented technology in place. So, we’re going to see wealth redistributed further, from young workers to older people, with yet direr implications for national saving, domestic investment and growth. Indeed, technological change can, through these general equilibrium feedback effects, end up making all of society worse off in the long run, unless one is careful to redistribute to the young losers from the old winners.
Submitted by Tyler Durden on 09/11/2013 19:43 -0400
Obama administration denies labor’s request for health care waiver
