Here are this week’s top articles that GPP recommends highly.

1. Falling Between Two Stools – Walter Russell Mead, The American Interest

Mead argues that the Obama team needs to get itself together and soon or it faces a failed presidency and a diminished United States:

Finally, there is a kind of temperamental caution that has not, so far, served this President well.  Unlike George W. Bush, who liked to place large and even reckless bets, President Obama likes to hedge.  If he puts four chips on black, he almost immediately wants to put three chips on red.  He surges in Afghanistan, but time limits the surge.  He bombs Libya, but vows to keep the boots offshore.  This can look like a prudent step to limit losses; in some cases it may make bigger losses inevitable.

2. Fleecing the Facebook Generation – Bill Frezza, Forbes

A brilliantly snarky take on the young adults of America’s stubborn support for the current entitlement system:

Let me get this straight. You kids from Generation Twit, or whatever they call 20-somethings these days, are rallying to keep Washington’s Ponzi-as-you-go entitlement systems alive despite the fact that you will never see a dime for yourselves. And, stupid me, I’m wasting my breath trying to talk sense into you.

Sitting here a mere eight years from sticking my snout into the public trough, maybe I need to rethink this. Perhaps I should back off criticizing all those liberal college professors who charged your parents $50,000 a year to fill your heads with mush. Maybe they did me a favor. You graduated so brimming with altruism that you’re willing to sacrifice your own economic well-being so my college buddies and I can keep ourselves in expensive wines and fine single malts until we’re sucking them down through feeding tubes.

3. US Must Stop Libya From Becoming a Farce – Anthony Cordesman, Center for Strategic and International Studies

Cordesman, one of America’s most sober and sharp foreign policy analysts, finds much to worry about in the current US-France-UK led approach in Libya:

What is already certain is that the end result was a set of decisions that focused on short term considerations and bet on the come. French, British, and US leaders do not seem to have fully coordinated, but it is clear that they sought and got international cover from the UN by claiming a no fly zone could protect civilians when their real objective was to use force as a catalyst to drive Qaddafi out of power. They seem to have assumed that a largely unknown, divided, and fractured group of rebels could win through sheer political momentum and could then be turned into a successful government. They clearly planned a limited air campaign that called for a politically safe set of strikes again against Qaddafi’s air defense and air force, and only limited follow-up in terms of ground strikes against his forces. And then, they waited for success…

4. Obama’s Sophistry on the Budget Deficit – Jay Cost, Weekly Standard

When it comes to dissecting modern politics and politicians, no one is better than Mr. Jay Cost:

Obama regularly praises some value that is expounded mostly by conservatives, then turns around to qualify or balance it with a point made by the left. This is designed to create the impression that he is in the political center, or better yet at the final stage of a dialectical process: conservatism the thesis, liberalism the antithesis, Obama the synthesis.

However, this rhetorical move is inevitably a non sequitur, and always promulgated for the same, political purpose. In the case of the deficit, and what to do about it, the president’s “faith” in the free market is completely abstract and is unrelated to the real world of political debate. Sure, he’s pro-free market in the sense that he prefers it to socialism or communism, but that has nothing to do with the contemporary political divide. Most everybody in the mainstream political discourse agrees that free markets – of some sort – are good. The country is not debating whether to become a communist country. Instead, it is debating how much the government should involve itself in the free market.

Obama knows this, of course, and his speech is intended to confuse the issue, to make it seem like his policy proposals are not as liberal as they actually are. He starts out at 30,000 feet, above the political fray, to explain and praise our shared American values, some emphasized by conservatives and others by liberals, then he quietly zooms down to the ground level to stake out a position on the left hand side of the divide, arguing speciously that this final spot is consistent with where he started out. His hope is that you will not notice the transition, and thus assume that his decidedly left wing position is in fact the one that synthesizes liberalism and conservatism.

5. Union Busting, Massachusetts Style – Kimberley Strassel, Wall Street Journal

It appears that Wisconsin’s efforts to curb public union power is becoming more the norm, rather than the exception:

Pop quiz: What political party, in what state, this week passed a bill in the dead of night stripping public-sector unions of their collective- bargaining powers? Republicans in Wisconsin? The GOP in Ohio or Indiana?

Try Democrats in Massachusetts. Maybe the debate over public-sector benefits isn’t all that ideological after all.

What did you like? Hate? Feel free to offer your own recommendations in the comments.

Below is some weekend reading for you GPPers:

1. Internet Cop -Peter Suderman, Reason

A solution in search of a problem; Suderman profiles the Obama administration’s new head of the FCC with a focus on his role overseeing the Internet:

Julius Genachowski, the man hand-picked by President Barack Obama to chair the FCC, insists not. “I’ve been clear repeatedly that we’re not going to regulate the Internet,” he told The Wall Street Journal in February 2010. But his actions suggest otherwise. Since taking office in June 2009, Genachowski, a tech entrepreneur and former FCC counsel, has led the commission on an unprecedented quest for power over the Web’s network infrastructure, sparking a thunderous, confusing lobbying battle over who gets to control the Net.

2. Revolution in the Muslim World – George Freidman, Stratfor

Geopolitical strategist Freidman takes a stab at predicting how the uprisings in the Arab world may shake out:

If I were to guess at this point, I would guess that we are facing 1848. The Muslim world will not experience massive regime change as in 1989, but neither will the effects be as ephemeral as 1968. Like 1848, this revolution will fail to transform the Muslim world or even just the Arab world. But it will plant seeds that will germinate in the coming decades. I think those seeds will be democratic, but not necessarily liberal. In other words, the democracies that eventually arise will produce regimes that will take their bearings from their own culture, which means Islam.

3. California Dreaming About Texas Jobs -Steven Malanga, Real Clear Markets

Texas is growing, California isn’t. Malanga tries to explain why:

But every politician in California of either party ought to know that the answer to the state’s economic woes lies not in Texas, but in California. Job migration is a very sexy issue, and one blogger, relocation expert Joseph Vranich, is even keeping an online list of firms that have exited California. But migration makes up only a small part of the job gains or losses a state experiences. By contrast, job creation through expansion of businesses and the formation of new companies is far more responsible for job growth. California once knew how to create new jobs and new companies, and a few places in the state still do it fairly well. The answers to California’s woes lie in those places, not in Texas.

4. The Truth about Obama’s 2012 Budget – Veronique de Rugy, Reason

This one is a bit dated, but we should all remember that before Obama’s ‘fiscal policy’ speech last week, he put out a budget that has been so panned that he, well, had to make another one just a few months later:

Myth 1: Under President Barack Obama’s 2012 budget, we will “live within our means”.

Fact 1: Debt and spending will continue to grow and deficits will continue to persist under the president’s Fiscal Year 2012 Budget Request.

White House Office of Management and Budget Director Jack Lew claims that President Obama’s new budget calls for a “sustainable” deficit but the facts tell a different story. Despite a nominal commitment to fiscal reform, the president’s budget calls for $3.7 trillion in spending. That’s more spending than occurred in fiscal year 2010. This spending will result in a projected net deficit of $1.6 trillion, the highest level of deficit in U.S. history.

5. Understanding the S&P Report – Keith Hennessey

Economist Keith Hennessey explains S&P’s decision to downgrade the US fiscal outlook from ‘stable’ to ‘negative’ in layman’s terms:

Yesterday’s report by Standard & Poor’s on the U.S. government’s credit rating is driving headlines. You can learn a lot more from reading the primary source document than from news coverage of it.

Here is what S&P did:

On April 18, 2011, Standard & Poor’s Ratings Services affirmed its ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings on the United States of America and revised its outlook on the long-term rating to negative from stable.

Happy Easter and have a good weekend.

Before the President delivered his much anticipated budget speech on Wednesday, my fellow GPP blogger asked, “Where are our leaders?” He’s right to ask the question, particularly after watching the President talk. For those looking for a detailed response to Cong. Paul Ryan’s budget plan, this was not the speech for you. The details were replaced with high-minded rhetoric about why government is needed to fix all of society’s ills and was basically just another campaign speech for Obama 2012.

The President also took the occasion to excoriate Mr. Ryan and his plan, claiming it will all but take food out of children’s mouths and kick grandma to the curb. Of course, Mr. Ryan graciously sat just a few feet away taking these blows because the President insisted he be there. And to think, this is the bipartisanship President Obama had in mind when he was talking about change.

Yesterday Mr. Ryan had a chance to respond to the President in the Washington Post. Here’s an excerpt:

“It [the GOP budget] offers a contrast in credibility. Unlike the president’s speech, which was rhetorically heated but substantively hollow, our budget contains specific solutions for confronting the debt and averting the most predictable crisis in our nation’s history. It also offers a contrast in visions. Unlike the speech, our budget advances a vision of America in which government both keeps its promises to seniors and lives within its means…

If you are someone who agrees with the president that we cannot avoid this outcome without resorting to large tax increases, know this: No amount of taxes can keep pace with the amount of money government is projected to spend on health care in the coming years. Medicare and Medicaid are growing twice as fast as the economy — and taxes cannot rise that fast without a devastating impact on jobs and growth.

If you believe that spending on these programs can be controlled by restricting what doctors and hospitals are paid, know this: Medicare is on track to pay doctors less than Medicaid pays, and Medicaid already pays so little that many doctors refuse to see Medicaid patients. These arbitrary cuts not only fail to control costs, they also leave our most vulnerable citizens with fewer health-care choices and reduced access to care.

And if you believe that we must eliminate waste, fraud and abuse in these programs, know this: Eliminating inefficient spending is critical, but the only way to do so is to reward providers who deliver high-quality, low-cost health care, while punishing those who don’t. Time and again, the federal government has proved incapable of doing that.”

Well said, Mr. Ryan. Now if only the President and Democrats would join the conversation.

I would like to thank David Harsanyi of the Denver Post and The Detroit News for helping me compile this small list featuring just some of the bureaucratic web that is our federal government:

• 56 separate programs to help people better understand their finances
• 18 federal food and nutrition assistance programs, costing taxpayers $62.5 billion in 2008
• 10 agencies or departments administering 82 programs dealing with teacher quality
• 80 different economic development programs
• 15 different agencies overseeing food safety
• 18 programs responsible for delivering food assistance to the poor
• 24 federal agencies operating data centers
• 20 programs dealing with homelessness
• 44 programs among Education, Labor and Health and Human Services Departments delivering employment and job training programs
• 5 agencies within the Transportation Department administering more than 100 involved in surface transportation, highway, traffic safety, and railroads

I’m sure many of these programs serve a valuable purpose, but the redundancy of similar programs showcases a federal government that has grown to such a size that it is just feeding off it self. Bureaucracies by their nature grow they don’t wither and the plethora of these programs and departments listed above is proof. Eighty-two programs for promoting teacher quality! We are just talking federal level here, folks. Under President Obama, the budget of the Department of Education has more than doubled, with even this year, where ‘austerity’ is in vogue, seeing it grow another 4.2%. This is not money for books or better teachers, this is a raise for the bureaucracy known as the Department of Education.

In this chart below made by the Cato Institute, one can easily see the growth of all aspects of government from 2007-2012:

I would like to highlight the tremendous growth of ‘Other Mandatory’, which according to CATO features federal employee benefits, food stamps, etc and ‘Domestic Discretionary’, which of course features funding for bureaucracies like the Department of Education, Transportation, etc. President Obama has said that he wants to freeze spending on these sectors. Well, that’s nice, but how about we bring them back down to a level pre-Stimulus spending binge instead. It’s like our government has had 10 shots of patron and said ‘that’s enough, I’m done’. Unfortunately, that leaves us all in a sick and woozy position.

This picture cost the Pentagon $25 million dollars

My blogging colleague FMFP’s recent writings on the ongoing struggle for the US government to agree on a budget for this coming year highlighted the discrepancy between mandatory (entitlement programs such as Social Security, Medicare, and Medicaid) and discretionary funding, basically everything else the government pays for, including defense spending. FMFP cited a poll that showed that far too many Americans are unaware of the fact that entitlement spending is what is really driving our country toward insolvency and another poll by WSJ/NBC also portrays an American populace unwilling to give up any ‘significant’ portion of these program’s benefits to fix the budget. FMFP, after using Tarrance Group poll results showing that a majority of Americans think the government spends more on defense than on entitlements, accurately pointed out defense/security procurements take up roughly 20% of the budget while Social Security and Medicare take up almost twice as much and are expected to explode in coming decades.

It is this context, that I recently read Robert Kagan’s article ‘The Price of Power‘. Here’s his intro:

In other words, if the US really wants to cut down on our defense spending we are going to have to change or adjust our strategic posture. To some, specifically Jeffersonians and domestic liberals, a smaller US military would be overall beneficial: more money for social programs/less military adventures abroad. For others, a lessening of our international presence will lead us and the world down a potentially dangerous path (great power war, global instability) that will cost us much more than 20% of our budget to get out from under.

I have to admit, though I’m clearly in the ‘US military and global presence is a source for good’ camp, I have to admit that our modern defense industry is bloated and could use some trimming. Greg Scoblete of Real Clear World rightly points out that overall the US currently finds itself in more sure security surroundings compared to the Cold War, WW II, etc. I believe the US needs a strong presence in East Asia to combat a growing China and keep allies such as Japan, Indonesia, and South Korea secure. The scourge of Islamic terrorism is as real as ever and demands a secure homeland and strong military, diplomatic, and intelligence network in numerous hot spots around the globe to deter and defeat. Global trade, which still depends largely on maritime travel, demands safe passage through the earth’s oceans and seas and there is no better guarantor of that than the US Navy. The Middle East, which includes a menacing regime in Tehran, a Turkey posturing away from the West, a vulnerable ally in Israel, oil supplies and pathways up the wazoo, is cauldron of instability and no one knows where these popular uprisings may lead. I could go on…

So in short, yes, I do think the United States could sustain some cuts in our defense spending, but we have to admit that this will come with some costs. which we must choose wisely. and we must not let these cuts distract us from our real budget calamity, ever expanding entitlement programs. This country and the world need a strong American presence and for this to be maintained now and in the future we need not only a capable military, but a fiscal future that doesn’t look so much like present day Greece.

As I wrote yesterday, the Continuing Resolution (CR) likely to arrive at the President’s desk today or tomorrow will grant the government a two week reprieve from what many people were preparing for – a government shutdown. Rightly criticized for simply kicking the can down the road, I’m curious to see what will happen in two weeks considering the broader divide between the Senate Democrats and House Republicans has not really been addressed. In fact, all sides knew this deadline was coming since the 111^th Congress passed their CR back in December. So passing this two week CR doesn’t exactly inspire confidence that an agreement to fund the government through September is imminent.

Like many major budget battles, much of the dispute (and ultimately, the resolution) resides in the varying effectiveness of each side’s public relations effort. The Republicans’ position is that America’s high debt and stagnant economy are symptoms of the larger problem – a government that is bloated and spending at unsustainable levels. Therefore, we need to cut the size of government starting with discretionary spending (as opposed to entitlement spending that is considered mandatory). The Republicans claim these cuts are both a down payment on further spending reforms to come and a fulfillment of their campaign promise to rein in our debt (roughly $14.3 trillion) and deficit (projected at $1.6 trillion for 2011).

The Democrats’ position is that our economy is fragile right now and any major cuts like the ones proposed by the Republicans will deflate our current recovery (see yesterday’s reference to Goldman Sachs and Moody’s analysis claiming a loss of 700,000 jobs if Republicans plans to cut $61 billion are adopted). In a nutshell, their argument is that now is not the right time for cuts (without necessarily stipulating that cuts in the future are altogether necessary).

So who’s right and perhaps more importantly for our current discussion, who is winning the public relations battle? Well that’s obviously a complicated question but it just might be the Democrats. On one hand, we see a sustained interest among the public in reining in government spending – cutting the Republicans’ direction.

But on the other hand, we see a real misunderstanding among the public over the composition of government outlays (spending in real people language). For instance, a recent poll released by Tarrance Group shows:

“A majority of voters incorrectly believes the federal government spends more on defense/foreign aid than it does on Medicare and Social Security (63%). Also, a similar majority (60%) incorrectly believes problems with the federal budget can be fixed by just eliminating waste, fraud and abuse. Voters do not casually agree with these untruths- at least 40% strongly agree. Further, less than half (44%) believe Medicare and Social Security costs are a major source of problems for the federal budget (49% disagree).”

These numbers should hearten Democrats because they cut against (factually correct) claims made by Republicans that 1) entitlements/mandatory spending remains the biggest budgetary problem and 2) spending on non-defense discretionary programs (where most of the stimulus dollars were allocated) is also out of control. I’ll back up the assertions just made in a second, but first one more point for the Democrats. The poll demonstrates the prevalence of a long-standing liberal position among the public. Specifically, the claim that defense spending is at least as much – or more, depending how liberal you lean – to blame as entitlements for our budget problems.

Now for the facts. Discretionary spending – including defense – is roughly 1/3 of the federal budget. The other 2/3? You guessed it – mandatory spending, made up primarily of the big three: Social Security, Medicare and Medicaid.

Even if we were to take the poll’s findings head on, we would still find the public’s beliefs dubious. Defense/security spending equals roughly 20% of the federal budget. Social Security and Medicare? Roughly 35%. And even scarier, mandatory spending is growing nearly five times the pace of discretionary spending. So it’s really not even a close call. (Btw, I used a liberal-leaning think tank for these numbers in case you were wondering – the Center on Budget and Policy Priorities).

Since I’m trying to keep these posts at a manageable length (and not really succeeding), I’ll close with my main points. The Democrats seem to be in a strong position if they can sell their position that the real problem is defense spending and the fragile economic recovery is dependent on maintaining government’s current level of support.

Meanwhile, Republicans have a long road uphill to educate the average American on the serious budget problems facing the country and the relatively minor impact the discretionary cuts they’re proposing will have on the economy. Ultimately, they need to convince Americans that the problem lies not just in eliminating waste, fraud and abuse, but rather setting priorities on what we can afford as opposed to what we would like to be able to pay for.

As a new writer to the Great Power Politics site, I look forward to commenting on an array of domestic and occasionally foreign, policy issues with you. I hope this will lead to a discussion (civil of course) where we can agree/disagree/educate each other on the various issues being discussed.

From the standpoint of an interested observer of current events and politics, we live in very interesting times. At times, this makes it difficult to decide what issue to focus on each day. So for the most part, I will write about issues related to economics, government spending, taxation, health care and the politics that surround such issues. I welcome your comments, criticisms, feedback and general thoughts.

To begin, I’d like to hear some of your thoughts on the budget battle going on in Washington right now? To fund the government, Congress must pass, and the President must sign, a Continuing Resolution (CR) by March 4 (this Friday). If not, we are looking at a repeat of the 1997 government shutdown that became a political winner for President Clinton and conversely, hurt the GOP-controlled Congress. The debate, similar to 1997, has focused on cutting government spending, with the Republicans demanding major cuts and the Democrats opposing such austerity measures.

Part of this debate is which programs will face cuts. But another part is what this will do to our economic recovery (to the extent we are experiencing an economic recovery). Ben Bernanke came out today in the negative, saying he doesn’t think the Republicans’ larger proposal to cut $61 billion from the remaining 2011 budget would have a significant impact on the economy’s growth. Of course, this is in contrast to the Goldman Sachs and Moody’s analysis that said the cuts would have a significant negative effect, potentially leading to 700,000 lost jobs.

For now, it looks like the government’s funding will be extended for another two weeks with Republicans getting $4 billion in cuts that they sought. Who was this temporary CR a win for – Democrats or Republicans? How do you think this shapes the debate for the next CR later in the month?