Posted on 28-06-2011
Filed Under (Economics, Politics) by Rashtrakut

The American economic hostage crisis continues as the Republicans continue to balk at letting the government pay its bills, consequences to global economic stability be damned.  Commentators like Matt Yglesias have previously commented how absurd it its to de-link the budget apportionment process from the debt ceiling.  If Congress does not apportion sufficient funds to pay for the expenses it authorizes, the government has only two options: risk hyperinflation by printing money or borrow the difference.  The irony is that even though the rising US debt is a long-term concern, there is little interest rate pressure at present to pay down the debt right now, i.e. the United States could defer this until revenues recover from the drop in tax receipts due to the great recession and the disastrous fiscal effect of the soon to expire Bush tax cuts.

Yet the Republicans are refusing to budge unless medicare and medicaid are slashed (insulating them from the negative effects of the Ryan plan to privatize medicare) and tax loopholes for big-oil and other profitable corporate fat cats are retained.  With some Republicans departing from reality that a default would not be so bad (congrats Chamber of Commerce you helped elect these guys), some commentators like Bruce Bartlett have opined that President Obama can simply ignore the debt limit – because it is unconstitutional.

The argument stems from two sources.  First, is the text of Section 4 of the Constitutional Amendment most hated and ignored by Republicans – the 14th Amendment:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

On its face, the text refers to the suppression of insurrection.  Which brings up the second leg of the argument – the 1935 Supreme Court case (before the “activist liberal court” derided by conservatives) of Perry v. United States, 294 U.S. 330 at 350, 351, 354 interpreting the clause above as follows:

The government’s contention thus raises a question of far greater importance than the particular claim of the plaintiff. On that reasoning, if the terms of the government’s bond as to the standard of payment can be repudiated, it inevitably follows that the obligation as to the amount to be paid may also be repudiated. The contention necessarily imports that the Congress can disregard the obligations of the government at its discretion, and that, when the government borrows money, the credit of the United States is an illusory pledge.

We do not so read the Constitution. There is a clear distinction between the power of the Congress to control or interdict the contracts of private parties when they interfere with the exercise of its constitutional authority and the power of the Congress to alter or repudiate the substance of its own engagements when it has borrowed money under the authority which the Constitution confers. In authorizing the Congress to borrow money, the Constitution empowers the Congress to fix the amount to be borrowed and the terms of payment. By virtue of the power to borrow money ‘on the credit of the United States,’ the Congress is authorized to pledge that credit as an assurance of payment as stipulated, as the highest assurance the government can give, its plighted faith. To say that the Congress may withdraw or ignore that pledge is to assume that the Constitution contemplates a vain promise; a pledge having no other sanction than the pleasure and convenience of the pledgor. This Court has given no sanction to such a conception of the obligations of our government…

…The Fourteenth Amendment, in its fourth section, explicitly declares: ‘The validity of the public debt of the United States, authorized by law , … shall not be questioned.’ While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the amendment was adopted. Nor can we perceive any reason for not considering the expression ‘the validity of the public debt’ as embracing whatever concerns the integrity of the public obligations.

The decision is old enough (and unrelated to gun rights or election funding restrictions on corporations) to possibly draw stare decisis protection from the current conservatives on the Supreme Court.  However, even such an assertion followed by the predictable Republican and tea party hyperventilation could still spook the markets.  However, in addition to holding the Democrats and the economy hostage the Republicans are caught between their own Scylla and Charybdis.  On one side are the tea partiers and a bunch of their presidential candidates adamantly opposed to raising the debt ceiling, though it is hard to envision a legitimate scenario where the government can cut enough expenditure to avoid raising the ceiling.  On the other side is the Chamber of Commerce which is sweating bullets at the Russian roulette played on with economy.

The fragile economic recovery (already buffeted by a series of global weather disasters, the European debt crises, the global food price hike, etc.) hangs in the balance.  Please, please, please let sanity win the day.

 

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Posted on 22-06-2011
Filed Under (Foreign Policy) by Rashtrakut

These are difficult times for Pakistan and its citizens. Since the 1980’s Pakistan’s military rulers have ridden the tiger of Islamic radicalism to bleed arch-rival India and install pliant regimes in Afghanistan.  However, Pakistan is now discovering how hard it is get off the tiger.  In recent years jihadists have slaughtered innocents in Pakistan’s cities, countryside, mosques, schools and even military bases.  Then came the national humiliation of the American military attack that killed Osama Bin Laden in the Pakistani cantonment town of Abbotabad, a stone’s throw from its national military academy.

The raid that eliminated Bin Laden was a double humiliation: First, because the most wanted man in the world was found ensconced comfortably in the heart of Pakistan (leading to suspicions he was protected by Pakistan’s secret service agency the ISI).  Second, because the Americans launched a military raid deep into Pakistan without the Pakistani army’s knowledge or without them being able to do anything about it.

Not given to deep introspection, the military establishment has focused on the latter and has made ham handed to warn the Americans about future Pakistani cooperation against the Taliban by playing the China card.  Unfortunately for the generals, more humiliation was to come.  The Bin Laden raid was followed by a daring terrorist attack on a naval base, possibly with inside involvement.

All of this has severely dented the credibility of the Pakistani military establishment, previously immune from domestic criticism.  Yet criticism of the military can be fatal.  Shortly after writing about Al-Qaeda infiltration of the Pakistani navy, journalist Saleem Shahzad was found beaten to death – allegedly in ISI custody.  Which brings us to the indomitable Asma Jahangir.

Along with her sister Hina Jalani, Jahangir has been one of Pakistan’s foremost human rights advocates who bravely stands up for women’s right in the face of fundamentalist neanderthals.  In the clip below she boldly eviscerates the Pakistani military for sheer incompetence, impotence and venality.

For those of you who do n0t understand Urdu a rough translation from the blogger Beena Sarwar is provided below:

I don’t need to get a medal for patriotism especially from those who belong to the establishment. We must talk harshly and realistically. I remember during the Bangladesh war, we heard the same discourse. People said that those who criticised the army action in Bangladesh were not patriots. My father was imprisoned; many people we know called me the child of a traitor. But I know that the army’s policy – they are duffers, political duffers (idiots). If you go along with their policy the way we have been doing, Pakistan will not progress. I don’t care what people in America or Africa think. I want our people to be saved from the army. They have put us in a situation where terrorism is cropping up at every corner and neighbourhood. They encourage and support it, detract from debate. They’ve got a whole propaganda machinery going. I am not saying that this goes for all soldiers, but for these generals who play golf and laugh, and keep an eye out for plots. What happened in Karachi – there was a wedding hall at that sensitive place. They’ve made us their slaves. It is time to say please, with folded hands, go back to your barracks, let our children live here. We don’t want bloodshed. If you want acclaim, go and fight – and win — a war. You fought Kargil, killed the Light Infantry soldiers. You’ve become used to making young boys into human shields. You can’t fight, or run the country, or make policy. You are the ‘qabza group’ (land grabbers) of this country. Politicians and everyone should say this clearly. If you ask me, I can give several examples of their stupidity. We need to take out a procession on Mall Road, with folded hands, to say please go home, you ‘eating drinking’ party.”

 

Brave words against a military establishment whose raison d’être has been anti-India hostility, towards which end it leeches off a quarter of impoverished Pakistan’s budget in a unwinnable military race with its far larger and stronger neighbor.  In the process the army lost Pakistan its eastern wing in 1971.  And 3 out of its remaining 4 provinces (not counting the so-called Azad Kashmir) are seething with discontent at domination by the Punjabi majority.  It is a pity that Pakistan’s venal civilian politicians are incapable of fulfilling the promise of its brave human rights activists like Asma Jahangir.  Until a competent civilian leadership emerges, Pakistan will continue to be dominated by its incompetent uniformed thugs.

 

 

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