United States
Elections - U.S.
Elections Overview - U.S.
Between dictatorship and democracy, there is the two-party monopoly.
Elections are the basis of any democracy.
In the U.S., we have a system of government that was created to be the perfect democracy because of the separation of powers between Executive, Legislative and Judiciary. It was established this way to create checks and balances so no branch of government could abuse its power.
The biggest danger to democracy has always been corruption, which in turn allows for abuse of power and disregard for basic human rights. History has shown that some degree of corruption is almost impossible to stop. The goal in working for democracy is to minimize it so it doesn’t affect the final outcome. Laws are passed to make sure that the integrity of the process is respected. But what happens when the same people that are candidates for election are also the ones creating the laws that govern the election process? Or when they are the ones who appoint the commissioners in charge of overseeing the process?
In democracies, the media are often viewed as the watchdogs in charge of launching an outcry when laws are trampled. But again, what happens when the same people who support the media through advertising are also the ones financing the candidates’ election campaigns?
In the U.S., we don’t have a dictatorship. We do have political parties. Two of them. Other industrialized countries usually have several parties representing a wide range of political views. Two parties is not much, but it’s better than just one. Now, what’s interesting is the relationship between those two parties. They get most of their financing from the same sources. Of course, a few donors give only to the Democrats, and a few only to the Republicans. But the majority of the large donors with an interest in influencing lawmakers to favor them give to both parties.
There is, of course, a commission that was created in a bipartisan way to oversee election campaign finance laws. It’s called the Federal Election Commission (FEC). What’s interesting is the use of the term “bipartisan” when describing that commission. Bipartisan means set-up in a common agreement between the two parties. And that’s exactly what it is. That commission was set-up by the two parties, and the two parties alone (it is comprised of three democrats and three republicans appointed by the President), and one of its main goals is to make it as difficult as possible for “third” parties to participate in the election process.
The whole U.S. election system is first and above all organized in such a way that no one can easily interfere to spoil their fun and their fundraising.
Another important commission is the Commission on Presidential Debates. It decides who can participate in the debates, the debate format, and all other details regarding the debates. In other words, it has the power to decide which candidates the public will see and hear, and what they will be able to say. The interesting thing about this commission is that it is… (you guessed it) a private organization. Established and funded by corporations!!! Should we say “by corporations, for corporations”?
There are of course other parts of our voting process that are not typical of the democratic process. Among others:
The Electoral College: in every state, both parties appoint a group of people from their party, and their party only, who decide which candidate their state will go to. So it is possible for a presidential candidate to win the majority of the popular votes, and still lose the elections. It is not only possible, it has happened.
Electronic voting: electronic equipment has been creeping-up in U.S. elections for over thirty years, mostly unnoticed. Most voters didn’t pay much attention to it because a paper ballot was still the first step of the process. It was then processed electronically, but most people were not aware of it. The latest versions of electronic voting machines started raising flags, for good reasons: all electronic voting, without a verifiable record, on machines built and owned by corporations known to be politically partisan and with a history of hiring programmers previously indicted for fraud.And that’s only a brief summary. So the least that can be said is that our voting process needs to be scrutinized and, if possible, overhauled. Not an easy task considering the fact that the parties now in power thanks to this system are the only ones legally allowed to make any change.
Campaign Financing - U.S. - Links
Links to Campaign Financing articles – U.S.
The most informative web site:
Your guide to the money in U.S. elections.
http://www.opensecrets.org
The Hoover Institution, Campaign Finance Site:
A lot of very good basic information about campaign finance.
http://www.campaignfinancesite.org/
From the Hoover Institution: a brief history of campaign finance in the U.S.
http://www.campaignfinancesite.org/history/financing1.html
A Wikipedia page on the principle of campaign finance as practiced in various countries.
http://en.wikipedia.org/wiki/Campaign_finance
A PBS/Now section on educating children about Campaign finance.
http://www.pbs.org/now/classroom/campaignfinance.html
The Campaign Finance Institute:
This site, affiliated with the George Washington University, is very basic but has some interesting articles on campaign financing.
http://www.cfinst.org/
PublicCampaign.org, a web site dedicated to public financing of the elections.
That’s an organization that you can’t expect mainstream media to talk much about, because what they are fighting for would cut down their revenues from political campaigning.
http://www.publicampaign.org/
Follow the Money:
Dedicated to following the money at the State level.
http://www.followthemoney.org/
The Public Citizen site on Campaign Finance Reform.
http://www.citizen.org/congress/campaign/index.cfm
A 1998 Washington Post article on the cost of campaigning in 1996.
The cost of elections across the country was $2.7 billion.
http://www.washingtonpost.com/wp-srv/politics/special/campfin/campfin.htm
Center for Responsive Politics estimate of 2006 elections: $2.6 billion.
http://www.opensecrets.org/pressreleases/2006/PreElection.10.25.asp
Electronic Voting Overview.
Electronic voting is a typical example of the need to overhaul our voting system.
When the first electronic systems were introduced in the voting process in the 1970’s, a few newspapers predicted that it could lead to unreliable elections results.
Since then, electronic voting machines have evolved and so has their lack of accountability and audit-ability. The original electronic systems were used to scan paper ballots marked by the voters. With the newer machines, the DREs (Direct-Recording Electronic voting machines), the whole process became fully electronic with no paper trail left for verification purposes. The machines were assumed to be infallible.
In 2002, the Help America Vote Act required that all voting equipment in the country be upgraded and allocated approximately $4 billion for that purpose.
Following heavy marketing tactics from the major voting equipment manufacturers, the choice for most of the upgrades was originally the DRE. In 2004, approximately 30% of all voting equipment in the U.S. were DREs, and it was assumed that they would replace all other types of voting equipment within a few years.
However, public outcry slowed down the process. Despite almost no coverage from the major media, organizations were formed all over the U.S. to fight the spread of the new voting systems. Among the most vocal were some of the top computer security scientists in the nation who had the opportunity to view the code of the software used in many voting machine and decried its absence of security features, among many other flaws.
Ironically, the software could only be studied because it was inadvertently left on a manufacturer’s web site (Diebold) for everyone to see. So much for security.
Other activists have documented over the years voting irregularities that occur systematically when DREs are being used.
Also of concern has been the fact that several of the programmers that created the original software were convicted felons.
The main problem with Direct-Recording electronic voting machines is the secrecy at every level.
In the voting process, the only thing that is supposed to be secret is the choice made by an individual voter. Every other step of the process is supposed to be open to public scrutiny. With electronic voting at its present state, public scrutiny is not possible.
The machines are manufactured by private companies. Like any computer, there are two parts: the hardware (the computer), and the software (the programs that register, and count the votes). Two companies supply approximately 80% of the voting machines in the U.S.: ES&S and Diebold. A few smaller companies like Sequoia and Hart-Intercivic share the rest of the market. Because they are private companies, all their products are patented and are considered to be company secrets.
So the future of voting at some point in time seemed to be machines that were manufactured in total secrecy and also counted the votes in total secrecy without any means of verification.
Numerous organizations all over the United States are now fighting to reverse the process. Some are national, many are local
The CEO of Diebold surely helped their cause when he wrote in a fund-raising letter that Diebold was committed to delivering Ohio to George Bush.
However, it is a hard fight. The passage of the Help America Vote Act was the result of lobbying by very powerful organizations, not just the machine manufacturers. Both the Republican Party and the Democratic Party, at the national level as well as at the local level have shown little interest in pushing for change.
This is an issue that we will follow regularly on this site.
Right now, if you want to know more about it, go to the Electronic Voting Links page.
Electronic Voting - Links
Electronic Voting Links
Links to most major organizations. Many have links to other organizations.
Their front pages often take it for granted that you already know about the issue.
If you don’t, by browsing through these sites you will soon have all the basics.
This list is not exhaustive, and new organizations are forming on a regular basis.
More will be added to the list.
If you know about an organization not listed here, please let us know.
www.electiondefensealliance.org
A political blog covering elections issues and mainly electronic voting.
www.bradblog.com
The “links” page of this site has a lot of information on everything about electronic voting.
www.whereisthepaper.org
A comic book about elections
www.wakeupandsaveyourcountry.com
An organization fighting for open-source software in voting machines.
www.openvoting.org
One of the veteran sites involved in voting issues.
www.calvoter.org
www.democracyfornewhampshire.com
Voterga originated from the above organization, Defenders of Democracy, and is now pursuing a groundbreaking law suit in Georgia, where elections are held 100% on Direct-Recording Electronic voting machines.
www.voterga.org
The Electronic Frontier Foundation deals with all issues involving the digital world.
It was very helpful when the Diebold software was found on their website by Bev Harris.
www.eff.org
Proportional Representation - Links
Proportional Representation
Home page of the World Policy Institute, with the list of the electoral systems worldwide.
http://www.worldpolicy.org/globalrights/prindex.html
Wikipedia: Proportional Representation.
http://en.wikipedia.org/wiki/Proportional_representation
Mount Holyoke College Department of Communications.
Explaining the Proportional Representation system.
http://www.mtholyoke.edu/acad/polit/damy/BeginnningReading/PRsystems.htm
WorldPolicy.org: An excellent overview of Proportional Representation and how to implement it.
http://www.worldpolicy.org/globalrights/democracy/abcs.html
Proportional Representation in Cambridge, Massachusetts.
http://www.ai.mit.edu/projects/iiip/Cambridge/prop-voting/prop-voting.html
Ed Labonte site: Another explaination of Proportional Representation.
http://ed.labonte.com/pr.html
The Commission on Presidential Debates - Links
Links to the Commission on Presidential Debates articles.
Wikipedia:
The Commission on Presidential Debates is a private organization funded by corporations.
http://en.wikipedia.org/wiki/Commission_on_Presidential_Debates
NPR: secrets of the Commission on Presidential Debates.
http://www.npr.org/templates/story/story.php?storyId=4052162
Source Watch: Commission on Presidential Debates.
Explains the creation and basic functioning of the commission.
http://www.sourcewatch.org/index.php?title=Commission_on_Presidential_De...
Common Dreams: a brief history of the commission on Presidential Debates.
http://www.commondreams.org/views/090100-101.htm
Article in Open Secrets regarding the Commission on Presidential Debates and candidates exclusions:
http://www.opensecrets.org/newsletter/ce65/05debates.htm
Wikipedia: the U.S. Presidential Debates:
http://en.wikipedia.org/wiki/U.S._presidential_election_debates
Wikipedia: Citizen’s Debate Commission.
http://en.wikipedia.org/wiki/Citizens%27_Debate_Commission
NPR: secrets of the Commission on Presidential Debates.
http://www.npr.org/templates/story/story.php?storyId=4052162
Ralph Nader court ruling on the CPD.
http://www.votenader.org/media_press/index.php?cid=152
NOW (PBS) analysis of the CPD:
http://www.pbs.org/now/politics/debates.html
Presidential Debates Footage.
http://www.broadcastingcable.com/article/CA6466923.html?display=Breaking...
The Federal Election Commission
The Federal Election Commision is a regulatory agency created by Congress in 1975 to oversee the campaign financing laws in the U.S.
It is supposedly independent, but its six members are from the Democratic Party and the Republican Party only (three from each).
Following approximately a year and a half of stalled discussions between Congress and the President regarding appointments, the FEC finally is back to all six members since July 2008.
In 2007, a bill was introduced in Congress to attempt to replace the FEC with a Federal Elections Administration board.
The following articles have more in-depth information about the FEC:
Wikipedia: Federal Election Commission.
http://en.wikipedia.org/wiki/Federal_Election_Commission
Source Watch: Federal election commission.
http://www.sourcewatch.org/index.php?title=Federal_Election_Commission
July 2007 FEC decision on advertising.
http://www.nytimes.com/2007/07/05/opinion/05thu1.html?ex=1185422400&en=c...
Public Citizen: Summary of the McConnell v. FEC case.
Litigation over the Bipartisan Campaign Reform act of 2002.
http://www.citizen.org/congress/campaign/legislation/bcralaw/articles.cf...
The FEC’s Campaign Finance Guide
http://www.campaignfinanceguide.org/guide-54.html
Third Parties in the U.S. - Links
U.S. Third Parties - Links to articles.
Wikipedia: Third Party.
http://en.wikipedia.org/wiki/Third_party_%28United_States%29
Wikipedia: ballot access in the world.
http://en.wikipedia.org/wiki/Ballot_access
This Nation: History of third parties participation in elections.
http://www.thisnation.com/question/042.html
Wikipedia: List of political parties in the U.S.
http://en.wikipedia.org/wiki/List_of_political_parties_in_the_United_States
Rangevoting.org: life span of third parties.
http://rangevoting.org/TPHist.html
Rangevoting: an alternative to our actual voting system.
http://rangevoting.org/RangeVoting.html
About.com: why third parties.
http://usgovinfo.about.com/cs/politicalsystem/a/thirdparties.htm
Third World Traveler: a summary of the book “Third Parties in America”.
Excellent analysis of the struggle of third parties.
http://www.thirdworldtraveler.com/Political_Reform/Third_Parties_America...
U.S. Presidential Elections: The Biggest Game Show in the World
U.S. Presidential Elections: The Biggest Game Show in the World
By Richard Van Slyke
March 30th, 2008
“Who is your favorite candidate?” Sounds familiar?
Phrased in many different ways, that question is probably one of the most frequently asked in the U.S., and for a good reason. America has for long been in love with game shows. But when asked in times of elections, the question takes a special meaning. Elections are a serious matter that goes right to the heart of most of us; so when a presidential nomination is at stake it is very difficult to bring ourselves to the realization that we are, in fact, unwittingly participating in the biggest game show in the world.
It might seem trivial to compare elections to a game show, but when one looks at all the elements that they have in common, the similarities cannot be dismissed.
Over the years, game shows have used all kinds of variations on every possible theme. But in the natural evolution of entertainment, there is one element that show business knows to be very important: interactivity. It is one thing to have viewers root for their favorite contestant; but when they can be part of the show by influencing the outcome, or believing that they do, that element of participation brings the game to a whole new level. The merger of elections and game show was only natural.
First, as we often say, only in America is this possible.
And it’s made possible by a very unusual feature in our election system that we do not share with any other democracy: the Electoral College. In every other industrialized country, elections mean popular vote. But our long drawn-out process of choosing delegates makes for an entertainer’s dream. With the Electoral College, all the ingredients of a good game show are in our elections process.
The Elections Game Show has something special. The contestants are not just vying for a mere refrigerator or the latest minivan. The prize is one of the most coveted on earth: Superpresident! The leader of the richest country in the world and Commander in Chief of hundreds of thousands of real live GI Joes!
But if we take our eyes off the glitter and the limelight, we are looking at a behind-the-scenes organization on par with the value of the prize, and undoubtedly the most elaborate and well-financed show in the history of show business. It’s also getting bigger and more profitable every year.
The major difference with other game shows is that it’s not the product of just one television station. All the media are involved, reaching out to the whole population. And, in principle, anybody can be a contestant.
Anybody? Well, maybe not!
And that’s where it becomes interesting to look at the show’s structure, its rules, and the whole industry that flourishes around it.
The show sponsors.
They are the political parties acting as “talent agents” and promoters with the financial backing of major corporations.
The first thing that the sponsors do is to make sure that they have full control of the game and that they set the rules. It’s not possible to copyright elections, but they are ways around it. For that purpose, satellite organizations were created.
The Federal Election Commission is a legal entity set-up by the two major parties and its main role is to make it very difficult for any outsider to enter the game. It also makes up and supervises all the rules regarding the show financing.
The Commission on Presidential Debates is a private, corporate-financed organization. Its role is to decide who will be allowed in the debates, who will be allowed in the audience, and the format of the debates (game host, position of the candidates on stage, and types of questions asked).
Amazingly, while we criticize Iran and Russia for allowing only government-anointed candidates to run for elections, this is perfectly legal.
With this taken care of, the political parties are presented as two separate teams, the Blue team and the Red team. Each team associates itself with an array of values carefully crafted to appeal to as many members of the audience as possible in order to win points. This is called a “platform”.
The game is then divided in two periods. During the first period, members of each team compete against each other to elect a team leader. In the second period, the captains of each team compete against each other for the Grand Prize.
During the whole process, called “campaigns”, each contestant is allowed to hire his or her own support cast of advisors, public relations, tour organizers and fundraisers.
Fundraisers are definitely the most important members of the team, as they are primarily responsible for the contestant’s success. The same way as, in some other shows, contestants have a lit panel in front of the podium to show how much money they have accumulated, elections contestants are constantly judged on the amount of funds they have raised. Democracy and other items in the “platform” take second place, and there is no shame in it. The show sponsors know that money is ingrained in the American psyche as the barometer of success, and they “bank” on it.
They also know why Las Vegas is so successful.
And this is where the fun really starts.
The bookies.
The financing of the show is very complex and supposedly very regulated but most rules have weaknesses, called “loopholes”, that allows to circumvent them.
The main sources of financing can be divided in two categories: “major donors”, and “small donors”.
The major donors represent the bulk of the financing. They are big corporations and their employees who work in conjunction with the talent agents and the media to promote their favorite team. They usually finance both teams, often favoring one over the other, but sometimes giving equally to both.
The small donors are members of the audience who hope to influence the outcome of the contest by supporting their favorite contestant (either directly, or through independent promoters). Although their contributions are outweighed several folds by the larger contributors (about 5 to 1), they sustain a slew of satellite organizations revolving around the larger organization.
It really is a bookie’s dream: legal betting. To make it perfect, they don’t even have to redistribute the pot. It stays in the “family”.
There are mainly two types of organizations that take in the bets:
The "Political Action Committees”(the PACs), and the “can you chip in” 527s.
The PACs are official team agents. They are allowed to wear the official team caps and T-shirts.
The 527s are the holes in the loop. They are unregulated and can only wear bootleg caps and T-shirts. In other words, they are not officially allowed to root for a particular contestant. But, somehow, they do. That’s probably why they are loopholes.
Most of the members in the game’s audience do not know much about these organizations and trust them blindly because they wear their favorite team’s colors. But one thing is for sure: they know everything about the audience. First of all, they know every audience member’s team preference (it’s called “party affiliation”). But they also know a lot more.
It starts with mass emails (sometimes even old-fashioned letters) designed to find out what motivates the public. Once they know what makes their members or potential members tic, they follow-up with the outrage messages: “You wouldn’t believe what the other team is doing! This is horrific! We have to stop that!”.
Then come the “can you chip in” messages.
This is pure genius in marketing. It plays on all human emotions and uses both the public’s good sides and bad sides: the desire to belong to a group, the desire to do the right thing, the guilt of not acting on an issue viewed as important, the artificially built hate of the other camp, and the love of gambling.
The amounts of money generated by the bookies are not easy to track.
Parts of the funds are funneled to the political parties and the candidates; some funds only sustain the organizations themselves; but the biggest share goes to the show promoters in the form of advertising and show promotion.
The Media.
The revenues for the U.S. media for he 2007-2008 elections cycle are estimated to be around $3 Billion. Approximately 75% of it goes to television. There is no doubt that the Elections Show is big business. In addition to the profits it engenders for the media outlets, it also supports a whole industry of analysts, reporters, production companies, and creative content agencies.
Some members of the audience who actually believe that the whole process is about electing a president complain that the content of the show is too superficial and that the real issues are not being discussed. There just might be a reason for that: it’s show business!
The methods used are similar to the ones in most game shows. It starts with the search for the perfect candidate. Either handpicked by the sponsors or screened according to preset rules of admission, a selection of contenders is presented by each team. The favorites are easy to spot. The contestants are rated by the media on the “electibility” factor, which is purely subjective. As stated earlier, the major item for electibility is how much money a contestant has raised. But, just to make sure that there is no ambiguity about the purpose of the game, the next important thing is how they spend that money. During the whole “campaign”, candidates are scrutinized on how much advertising they purchased, how much they have left compared to other candidates, and how they will manage to raise more money to outspend them. A very important agenda for democracy!
Parallel to the fundraising contest, the show goes on.
During the process of elimination, the personalities of the favorite candidates are built-up until the list of contenders windles down to the “top” candidates. At that point, a reverse process starts in order to create drama. Soap opera becomes the rule. The media is well versed in creating these kinds of situations. Every word, every action of the remaining contestants are scrutinized for opportunities to stir “things” up; and make mammoth dung out of mouse droppings…
I said, he said, are the engines of gossip. And there is something about gossip that grabs us humans at heart, transcending all reasoning. But to maximize the effect, it is best if the viewer is in tune with the media he or she is receiving the “information” from. For that purpose, the media use a trick known in the business as segmentation. Each outlet focuses on a segment of the population and builds up trust by inserting in its programming elements aimed at that part of the population’s tastes or beliefs. The audience can then choose its source of news in full confidence that it is the most reliable.
But at the end of the Elections Show, when the Grand-Prize is to be awarded, all the major media suddenly regroup in one single organization called the National Election Pool. And this organization gets its results of the vote tabulation from one single source, Associated Press.
Has anyone seen an Associated Press vote tabulator lately?
About the author:
Richard Van Slyke is the publisher of OrganizedPolitics.com and the producer of the documentary on electronic voting “The Right To Count”.
Finances - U.S.
U.S. Financial Overview - Federal
U.S. Financial Overview - Federal
In this section we will attempt to analyze the overall financial situation of the U.S. by agglomerating information regarding the various sectors of the government part of the economy.
The first thing that becomes obvious is how difficult it is to obtain official figures that reflect the true situation.
Typical examples:
The Federal Budget government figures do not include revenues from Social Security tax surpluses (hundreds of billions of dollars), which are transferred to the General Funds every year and spent on things other than Social Security.
The official Federal Debt doesn’t include trillions of dollars in liabilities for future payments in Social Security and Medicare.
The cost of wars (hundreds of billions of dollars) is not included in the military budget or anywhere in the Federal Budget.
An interesting May 2007 USA Today article by Dennis Cauchon gives probably one of the best analysis of the situation: The U.S. government keeps its books in a way that no corporation would be allowed to.
In fact even the Government Accounting Office warns that the U.S. government accounting is not reliable.
In this financial overview, we start with the major sections:
- The federal debt and deficit.
- The federal budget.
- The Federal Reserve Bank.
- Social Security and Medicare.
The U.S. Federal Debt - Links
The figures used in most articles about the U.S. Federal Debt are taken from the official government web site. It is possible to create a good analysis with them, but other figures also need to be taken into account to really get the true picture (some spending, income and debt figures are not shown in the official budget).
This USA Today article by Dennis Cauchon is a good example of that.
USA Today article by Dennis Cauchon, Rules ‘hiding’ trillions in debt (May 29, 2007).
This article gives a much more realistic view of our debt.
The main factor is “unfunded promises” for things such as Social Security and Medicare.
As stated in the article, these are debts that the government doesn’t want to talk about.
Read carefully the part regarding the government’s argument that these are not true liabilities because government can cancel or cut them.
Let’s keep in mind that Social Security is not a government giveaway. This is money that has been paid by future recipients over generations. The money is theirs and is supposed to be held in a trust fund. Social Security funding up to now has always showed a surplus which, if kept in the trust fund, would have ensured Social Security payments for many generations to come. So when you’re told that Social Security will soon be in trouble, it’s not because of the baby boomer generation going into retirement or any of the other reasons advanced by the proponents of Social Security privatization. It’s only because the trust fund has been mismanaged and pilfered.
http://www.usatoday.com/educate/college/polisci/articles/20070603.htm
Another article by Dennis Cauchon in USA Today, written the day before the above article:
http://www.usatoday.com/news/washington/2007-05-28-federal-budget_N.htm
A web site specialized in the Federal Budget (this link is also included in the Federal Budget section).
It uses figure from the U.S. Treasury
http://www.federalbudget.com/
The Concord Coalition figures:
Relevant numbers on the public debt in July of 2006.
This site relies mainly on government site figure releases.
This has changed drastically in one year. What’s interesting is that official figures always refer to the public debt, which doesn’t reflect the total debt. The government is actually the main owner of the debt and when this is taken into consideration, we get a very different picture of the debt. Most analysts repeat over and over that we owe most of our debt to foreign entities. This is an error. Most of our debt is owed by our own government, in the form of IOUs. The problem is that this money is gone.
http://www.concordcoalition.org/issues/feddebt/debt-facts.html
MNSBC article, “Just Who Owns the National Debt”:
Uses only the $8.5T figure. Shows that the government owns 52% of the debt.
http://www.msnbc.msn.com/id/17424874/
Financial Management Services (a government entity) figures on full breakdown: http://www.fms.treas.gov/bulletin/b2006-4ofs.doc
(Page is right now missing)
Treasury department own figures. Shows the debt owned by the public, the intragovernmental holdings, and the total public debt.
These are government figures and do not show the unfunded debt!
http://www.treasurydirect.gov/NP/BPDLogin?application=np
Wikipedia, the United States Public Debt.
A good overview of the public debt, but again, it only relies on government figures that do not include unfunded promises.
http://en.wikipedia.org/wiki/United_States_public_debt
United states National Debt, by Steve McGourty.
http://www.cedarcomm.com/~stevelm1/usdebt.htm
National Center for Policy Analysis 5-29-07, Taxpayers on the Hook for $59 Trillion:
Based on the USA Today article by Dennis Cauchon.
http://www.ncpa.org/sub/dpd/index.php?Article_ID=14596
MarkTAW figures and graphs on The National Budget, Debt and Deficit:
This is a 2004 information page, obviously made before the 2004 presidential elections for partisan purpose. It has some interesting graphs.
http://www.marktaw.com/culture_and_media/TheNationalDebt.html
zfacts National Debt History:
http://zfacts.com/p/318.html
Michael Hodges Grandfather Economic Report:
http://www.mwhodges.home.att.net/
An old set of charts (2003) in Centrist.org. regarding the impact of interest payment on the national debt.
The estimates for the most recent years probably need to be reviewed, but it gives a good idea of which elements are important to analyze a budget.
http://www.centrists.org/pages/2003/12/1_guest_budget.html
The Market Oracle.
For the purpose of selling gold, gives a rather good analysis of the state of the U.S. finances:
http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=327
The full GAO (General accounting office) report, source of the above article:
http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=327
The Bureau of Public Debt:
Frequently asked questions about the public debt, answered by the U.S. Department of Treasury:
http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm
Social Security Overview
Promises, promises...
In March 2005, President Bush said in a speech that the Social Security Trust Fund is only IOUs, pieces of paper, “which may be worth something, and it may not be worth something”!
What he was talking about is the U.S Government bonds that represent the trust fund in which money is supposed to have accumulated for future Social Security payments.
Every year, U.S workers pay more in Social Security taxes that is actually needed to pay for the current year’s needs. The surplus goes into the Treasury General Fund in exchange for Government Bonds. These bonds are allocated to a Social Security Trust Fund. The surplus can then be spent for other things, and the government owes that money (secured in bonds) for the time when the U.S. workforce will not be able to sustain the retirement payments of the aging part of the population, which is estimated by the government’s own General Accounting Office (GAO) to happen around 2018.
That’s the way it was set-up in 1983 by Congress with the advice of then Chairman of the Federal Reserve Alan Greenspan, when Social Security taxes were raised to plan for future shortage.
In theory, the money is there. It is there in the form of government bonds.
Bonds are in fact IOUs in the form of paper, but they are presumably legal tenders with the same validity as the dollar bill or any other currency. In fact, most of our debt to the private sector or foreign entities like Japan or China is in the form of bonds.
So how did it come to be that a President of the United States declared in a public forum that his country’s government bonds have no value?
The problem doesn’t seem to be with the bonds, but with who holds the bonds.
Bonds representing the debt owed to foreign entities are held by these entities.
The Social Security Trust Fund bonds are owed by the U.S. government to the U.S. government. It’s called an intragovernmental debt. It is the most unsecured kind of debt because, as we know, the government has the power to change its own rules.
Do we need a hint as to what the government might do with this debt?
When the budget is drawn and presented, year after year, the funds coming from the Social Security surplus are not shown as being part of the budget. Nor are they included in the debts that are owed.
The reason given by the government is that this is money that is not really owed in the sense that it can be cancelled or reduced at the government’s will!!!
The problem is that the funds do not originally come from IOUs. This is real money that was deducted from American people’s paychecks and that they could have spent on something else. It became IOUs only after it went into the government’s coffers.
So when you are told that Social Security is not a viable system, don’t believe a word of it. The problem doesn’t lie with Social Security. It’s about mismanagement of the funds.
What can be deducted is that when the Social Security tax was raised in 1983, it was nothing more than a tax increase hidden in a more politically acceptable form. The money is gone. It was spent on other things. It was presented to the public as a way to save Social Security’s future, but the truth is that when the time comes, other means will have to be used: raising taxes, cutting benefits, taking money from other sectors…
And by the way, when the yearly Federal Budget is drawn and presented, the hundreds of billions of dollars that the Iraq and Afghanistan wars have cost over the last few years are also not included in the budget. I wonder where that money is coming from!
Social Security Links
The following are links to articles relating to Social Security.
What’s interesting is that most of the information that came out to forcefully argue that Social Security was unsolvable came from sources that are usually very protective of the government.
The main reason why the President himself and his allies suddenly came out in public to assert that the U.S. Government’s IOUs have no value was that they wanted the huge sums generated by the Social Security tax to be invested for the benefit of corporations.
What they don’t say is that the plan they propose would further deplete the Social Security funds.
Bloomberg: What’s in the Social Security Trust Fund? ‘Paper, Bush Says.
http://quote.bloomberg.com/apps/news?pid=10000103&sid=av8Zsx0M7.4M&refer...
Wikipedia: In 2018, Social Security will start redeeming its assets.
http://en.wikipedia.org/wiki/Social_Security_Trust_Fund
A Heritage Foundation article from 2004 explains in very clear and simple terms that there is no money in the Social Security trust fund and, mainly, that the funds necessary for future payments no only aren’t in the fund, but they haven’t been invested anywhere. Of course, this article was written for the purpose of arguing for privatization of Social Security. Some corporations would love to be the ones receiving the hundreds of billions of dollars that U.S. citizens pay in Social Security taxes every year.
http://www.heritage.org/Research/SocialSecurity/em940.cfm
A 1999 Cato Institute article with arguments identical to the Heritage Foundation.
http://www.cato.org/dailys/10-16-99.html
The Future of Freedom Foundation: same argument as previous two.
http://www.fff.org/comment/ed0901j.asp
Zfacts article, refuting the Heritage Foundation and the Cato Institute assertions: the situation isn’t that bad, but it would be worse with privatization.
http://zfacts.com/p/784.html
An American Prospect article by Dean Baker, preceded by an introduction by Jeff Weintraub.
No need for the proposed Social Security payments cuts. The bonds are IOUs that must be repaid.
http://jeffweintraub.blogspot.com/2007/01/straight-talk-on-social-securi...
An excellent 2005 MediaMatters article.
If the Social Security trust fund doesn’t exist because it is in the form of government bonds, does that mean that all debts owed to the private sector by the government are also worthless? The decision to raise the Social Security tax in 1983 was proposed by Alan Greenspan exactly for the purpose (or the excuse) of planning for when more money would need to be paid out than the tax would bring in.
http://mediamatters.org/items/200502040009
A Michael Hodges analysis of the link between Social Security and the Federal Deficit.
http://mwhodges.home.att.net/deficit-trusts.htm
Truthout article by Dean Baker addressing the myths of the Social Security Trust Fund.
http://www.truthout.org/cgi-bin/artman/exec/view.cgi/61/20540
University of Illinois: Social Security is not in crisis.
http://www.news.uiuc.edu/news/05/0513socialsecurity.html
CounterPunch article, by Jackie Corr:
In 2001, Bush said he would protect the social Security Fund.
In 2005, the money is gone.
http://www.counterpunch.org/corr03102005.html
A Cato Institute article arguing that government should not invest Social Security funds, and that the investment should be left to private individuals themselves.
In fact, a study on IRA investments has shown that most people who manage their own retirement portfolio end up losing much of it.
http://www.cato.org/pubs/ssps/ssp6.html
Government Social Security FAQs:
http://www.ssa.gov/OACT/ProgData/fundFAQ.html
Stochastic Forecasts of the Social Security Trust Fund.
http://mwhodges.home.att.net/deficit-trusts.htm
General Accounting Office 2003 report:
http://www.gao.gov/new.items/d031038t.pdf
Medicare Funding Links
Medicare represents the bulk of unfunded debt not accounted for in the U.S. Federal Budget.
Which means that there will come a time, in a not so far away future, when U.S. citizens not only will probably have reduced Social Security benefits, but also will not be able to rely on the health benefits that they were promised, and that they paid for during all their working lives.
This will be a harsh reality for the younger part of the present times U.S. population, if they ever intend to retire. There are already talks about raising the retirement age.
National Center for Policy Analysis, 2004 report:
Future Medicare needs unfunded by $62 Trillion.
http://www.ncpa.org/prs/rel/2004/20040604bnr.htm
Howstuff works: the Medicare Trust Fund is harder to manage than the Social Security Trust Fund, because expenses are harder to predict. Medicare expenses amount to about 13% of the total Federal Budget.
http://health.howstuffworks.com/medicare4.htm
A site explaining the source of funding for Medicare:
http://www.ehealthlink.com/Senior/MedicareFunding.asp
Raising the Retirement Age (Economic Policy Institute):
http://www.epinet.org/content.cfm/briefingpapers_raisingretirement_raisi...
Influential Organizations
The Real Powers in the U.S.
Influences, influences!
By Richard Van Slyke
A primer on the most influential organizations in the U.S.
When thinking of political power, the most common perception is that it is a battle between the two major parties, the Republican Party and the Democratic Party.
Both parties present themselves to the American public as the guardians of a set of values and ideologies, thoughtfully packaged to appeal to voters who associate with those values. This is called a platform.
Candidates for office are viewed as the defenders of one of the two platforms, each with their own variations of the same theme. However, because of the huge amounts of money involved in campaigning, most politicians both Democrats and Republicans are in fact subservient to very powerful organizations that control their campaign funding.
The influence of corporate money is, of course, not a secret to the general public. What is less known is how it works.
With names that most people would not recognize, a few major organizations not only control access to Congress and higher office, but are also farming grounds for important positions in all branches and at all levels of government.
Their funding comes mostly from corporations, either directly or through foundations (usually tax-exempt) that they have established; another important source of funding are wealthy individuals or wealthy family foundations with strong ties with the corporate world. Almost all the top corporations in the U.S. “invest” in these organizations to defend their interest. The major backers are mainly in finance, oil and defense contracting, but basically every branch of the business world is represented.
The history of these organizations goes back to before the times of the Robber Barons of the late 1800’s. For example, the Richard Mellon Scaife Foundation is one of the most important funders of so-called “right-wing” organizations. It also happens that the Mellon Bank financed most of the ventures that gave rise to the Robber Barons.
The group of businesses that it financed became so powerful in the early 1900’s that they ended-up ripping most of the windfalls from corporate involvement in WWI and their wealth and power grew even bigger.
In 1921, shortly after the war, they financed the creation of the Council on Foreign Relations (CFR), which has been involved in decision-making in every conflict since then. Not surprisingly, the original CFR members included many of the same people that had previously been involved in the creation of the Federal Reserve Bank (in 1913), which had given them control over the U.S. finances.
In 1943, after the U.S. entered WWII, the American Enterprise Institute was created. AEI was very successful in forging ties with the government. Many of its members went on to occupy influential government positions, and in turn had many former government officials as members. George W. Bush is particularly fond of this organization and hired about twenty of its members in various positions in his administration.
Organizations of this type have multiplied, to form a network that has basically become the unofficial governing body of the U.S.
In 1953, five years after the creation of the state of Israel, the American Israeli Public Affairs Committee (originally named the American Zionist Committee for Public Affairs) was created, and has become what many consider to be the most influential of all organizations in regard to electoral campaign fundraising.
In 1973, the Heritage Foundation was born. It brought the power of corporate-backed organizations to new levels by spreading its wings not just over political influence but also social influence. It has been very successful not only in shaping domestic and foreign policies but also in affecting the way average U.S. citizens think, with its strong links to right-wing media.
Other major organizations that followed over the years, such as the Cato Institute (1977), the Council for National Policy (1981) and the Project for a New American Century (1997) have increasingly become more and more radical in their advocacy. The last two seem designed to appeal only to a fringe of extreme ideologists. Despite that (or maybe because of that), they are both heavily funded.
There is no doubt that the corporate world, while suppressing organized labor, is itself very organized. Hundreds of foundations have been set-up all over the U.S., most tax-exempt, that funnel money to organizations or other foundations with the special purpose of influencing and infiltrating the government. They not only dictate policies, but also have a high level of control over how laws are made and applied.
It’s all perfectly legal, because they make the laws that make it legal.
But what needs to be emphasized is that the same cast of characters keeps appearing at the origin and at the leadership of most of these organizations. They are also usually mostly funded by a select group of corporations and foundations.
The trick is simple:
• Corporations help create foundations with bylaws well written by corporate lawyers to make sure they obtain the tax-exempt status.
• Then, the money they give to these tax-exempt foundations is itself often a tax-exempt donation.
• The foundations in turn, with that money, fund organizations or foundations with usually also a tax-exempt status.
• These organizations or foundations then hire executives and lawyers from the corporations who created them, and position them as “advisors”.
• They create corporate-friendly “study-groups” that become a link between the political establishment and the corporate establishment.
• Some of the “advisers” are hired by the government or sometimes run for office with, of course, heavy corporate financial backing; which puts them in a position to draft and enact laws suitable to corporate needs.
A typical example is the Coors brewery, one of the major funders of right-wing organizations. The Coors family is the recipient of a large trust fund, and their agenda is a mix of business, politics, and religion. Through the family trust fund, they created the Castle Rock Foundation (with $ 36 Million to start with). The Castle Rock Foundation financed the start-up of The Heritage Foundation, and is also funding the Council for National Policy. With these two very powerful organizations, the full family agenda found its way deep into politics. However it is interesting to know that, despite their deep religious convictions, the Coors family business was involved for ten years in severe labor disputes with their workforce. That might explain why the CNP wants to bring this country’s laws back 200 years.
AIPAC
AIPAC, the American Israeli Public Affairs Committee (also known as The Lobby), is considered as the rainmaker in Washington D.C. It is widely accepted that no one can win an election at the national level without its support.
AIPAC has been very successful not only at controlling the U.S. Senate and House, but it has also managed to position key people in all branches and at all levels of the government.
Despite constant pressure to do so, it refuses to disclose its funding and has successfully fought off law suits on this matter.
It has also been successful in avoiding registration as a foreign agent, as required by the Foreign Agent Registration Act.
In 2004, some of its members were accused of receiving information from a U.S. Defense Department employee spying for Israel. The AIPAC offices were raided by the FBI, but no further legal action was taken.
AIPAC is an important facilitator for the Military Industrial Complex when it comes to arms sales to Israel. It contrast, it has never seriously made any effort to bring peace to the people of Israel.
As of October 2007 the following information can be found on its web site, which summarizes best the core of its activities.
The House on June 21 passed the fiscal year 2008 foreign aid bill (H.R. 2764) by a vote of 241-178 that includes $2.4 billion in military aid and $40 million in refugee assistance to Israel. The Senate passed the bill on September 6 by a vote of 81-12. The proposed aid for Israel represents the last year of a 10-year plan between Israel and the United States to phase out economic aid to Israel while gradually increasing the amount of military aid. Please thank members of the House and Senate who voted for the foreign aid bill and urge members who voted against it to support it in the future.
An excellent Salon.com article (link below) gives some impressive figures: 500 meetings between AIPAC representatives and members of Congress in one day!
Below are articles with more information on AIPAC:
The organization and its influence:
Wikipedia: the basics about AIPAC.
http://en.wikipedia.org/wiki/American_Israel_Public_Affairs_Committee
Antiwar.com: Where did AIPAC come from?
http://www.antiwar.com/orig/gsmith.php?articleid=11727
Salon.com
http://www.salon.com/news/feature/2007/03/16/aipac/
AIPAC’s status with the Federal Election Commission:
Law suit brought against APAIC:
http://www.law.cornell.edu/supct/html/96-1590.ZS.html
The spying case:
Wikipedia: the Lawrence Franklin espionage scandal.
http://en.wikipedia.org/wiki/Lawrence_Franklin_espionage_scandal
The American Conservative:
The lobby argues that good Americans spy for Israel.
http://www.amconmag.com/2007/2007_05_07/article.html
Bloomberg.com:
Pro-Israel Lobby Weathers Espionage Allegations, Gains Support
http://www.bloomberg.com/apps/news?pid=10000103&sid=aqKsV0UlPXng&refer=us
Antiwar.com: an article on the activities of AIPAC.
http://www.antiwar.com/cole/?articleid=3467
Wikipedia: David Steiner and his conversation with Haim Katz.
David Steiner, former president of AIPAC, brags about his political influence.
http://en.wikipedia.org/wiki/David_Steiner_(AIPAC)
This article has the transcript of the taped telephone conversation between Haim Katz and David Steiner.
http://www.whatreallyhappened.com/AIPACClinton.html
Secretary of State Rice Subpoenaed in AIPAC spying case.
Defense argues that AIPAC is regularly used for backchannel foreign policy.
http://www.jta.org/cgi-bin/iowa/breaking/105057.html
AIPAC influence:
George Soros: On Israel, America and AIPAC.
http://www.nybooks.com/articles/20030
The Christian Science Monitor:
The hidden cost of free congressional trips to Israel
http://www.csmonitor.com/2007/0126/p09s01-coop.html
Counterpunch article by John Walsh:
Why is the peace movement silent about AIPAC?
http://www.counterpunch.org/walsh04172007.html
Stopaipac.org.
A web site dedicated to fight AIPAC.
http://www.stopaipac.org/
American Enterprise Institute
The American Enterprise Institute is one of the oldest think tanks in the U.S.
Founded in 1943, shortly after the country entered WWII and almost all the production in the country was geared for the military industry, its main goal was and has remained to influence national policy in favor of big business.
It was so successful that since its creation there has been a permanent revolving door between its members and government positions.
The list of AEI’s members and donors is a who’s who of the most powerful people in American business.
Its members and participating “scholars” are corporate-friendly economists, financial analysts, corporate lawyers and politically tied individuals such as former President Gerald Ford, economist Milton Friedman, Vice-President Dick Cheney, Lynne Cheney (the Vice-President’s wife), former Speaker Of The House Newt Gingricht and former assistant Secretary of Defense Richard Perle.
The bulk of their work is to produce articles and researches that shape public opinion, and to create a framework for public policy that can be effectively translated into governmental action.
The fact that so many of its members come from the corporate environment and then enter the government, or come from the government (at the highest levels) to go back to the corporate world while in the institution has been a strong factor for the corporatization of the U.S. government.
The following links are articles related to the American Enterprise Institute:
RightWeb:
History, membership and achievements of AEI.
http://rightweb.irc-online.org/profile/1431
Wikipedia: the American Enterprise Institute. List of most prominent scholars and fellows.
http://en.wikipedia.org/wiki/American_Enterprise_Institute
Media Transparency: AEI and the institutional profile of some of its members.
http://www.mediatransparency.org/recipientprofile.php?recipientID=19
Sourcewatch:
American Enterprise Institute. Brief history, landmark issues, members, scholars and funding.
http://www.sourcewatch.org/index.php?title=American_Enterprise_Institute
Wikipedia:
Bruce Kovner, Chairman of the board of trustees of the AEI.
http://en.wikipedia.org/wiki/Bruce_Kovner
Wikipedia:
Lee Raymnond, Vice-Chairman of the board of trustees of AEI and former CEO and Chairman of Exxon-Mobil.
http://en.wikipedia.org/wiki/Lee_Raymond
The Guardian:
Scientists offered cash by AEI to dispute climate study.
http://www.guardian.co.uk/environment/2007/feb/02/frontpagenews.climatec...
People for the American Way:
An overview of the issues, activities, history and main members of AEI.
http://www.pfaw.org/pfaw/general/default.aspx?oid=4456
ExxonSecrets: Detailed funding of AEI by Exxon.
http://www.exxonsecrets.org/html/orgfactsheet.php?id=9
CommonDreams:
An article by Ralph Nader.
Has the American Enterprise Institute Lost Contact with Reality?
http://www.commondreams.org/views03/0613-01.htm
Salon.com: The real Iraq Study Group.
http://www.salon.com/news/feature/2007/01/06/aei/print.html
Council for National Policy.
The Council for National Policy: a Christian Taliban?
The CNP is an organization of business, religious and media leaders working to influence policies toward an extreme right bias.
They seem to succeed in influencing politicians who want to attract voters by using religion as part of their political platform.
One of the most secretive organizations in the U.S., it is very difficult to know in detail what it is that they do. But just a look at their members, their backgrounds, and their other affiliations, paired with a few occasional leaks, draws a good picture of their activities.
Some of its members are advocating the abolition of the secular laws that govern the U.S. to replace them with religious laws very similar to the sharia in fundamentalist Islam.
The articles below have more information about the Council for National Policy:
The basic facts about the CNP.
http://en.wikipedia.org/wiki/Council_for_National_Policy
Americans United for the separation of church and state:
Good overview of the CNP.
http://www.au.org/site/News2?page=NewsArticle&id=6949&abbr=cs_
Daily Kos:
Overview of the CNP.
http://www.dkosopedia.com/wiki/Council_for_National_Policy
Alternet: CNP’s ties and how it operates.
http://www.alternet.org/story/21372/
Source Watch: CNP.
http://www.sourcewatch.org/index.php?title=Council_for_National_Policy
ABC News: A blend article on the CNP.
http://abcnews.go.com/Politics/Story?id=121170&page=1
All Spin Zone: Council for National Policy: Wingnuts.
http://allspinzone.com/wp/2007/02/25/council-for-national-policy-wingnuts/
Council on Foreign Relations
Council on Foreign Relations.
The Council on Foreign Relations (CFR) is one of the least known organizations but probably the one that has the most influenced U.S. and world policies for almost a century.
Founded in1921, its original members included prominent financiers and businessmen in direct line from the “Robber Barons”. Some of them were at the origin of the creation of the Federal Reserve Bank in 1913, and all were either in government positions or in businesses that influenced decision-making during WWI.
Since its foundation, the CFR has included in its membership prominent personalities at the highest level of government (several U.S. Presidents and Secretaries of State), banking (Warburg, Morgan, Rockefeller), media (New York Times), and most major corporations in America.
It has close ties with England’s Royal Institute of International Affairs, considered as its sister organization. Together, they have been instrumental in building-up the arms race during the Cold War and there is almost no part of the world that hasn’t been affected by their influence.
Below are articles with additional information on the Council on Foreign Relations:
SourceWatch: Council on Foreign Relations.
http://www.sourcewatch.org/index.php?title=Council_on_Foreign_Relations
Wikipedia: Council on foreign Relations.
This article appears to have been written with a bias toward CFR.
http://en.wikipedia.org/wiki/Council_on_Foreign_Relations
RightWeb:
This profile of CFR is from 1989, but has information that is still relevant.
http://rightweb.irc-online.org/gw/1586
NNDB: List of members of CFR since its foundation.
This list shows the diversity of high-profile members at the international level.
http://www.nndb.com/org/505/000042379/
Wikipedia: Elihu Root, founder of CFR (former Morgan lawyer).
http://en.wikipedia.org/wiki/Elihu_Root
Heritage Foundation
The Heritage Foundation was founded in 1973 with the financial support of Joseph Coors (Coors breweries) and later Richard Mellon Scaife.
It is a think-tank, and does not officially lobby.
The foundation advocates “conservative” values, mainly free enterprise and strong defense. It has an interest in a wide range of issues, political as well as social.
It publishes papers, organizes conferences, and on a regular basis provides “analysts” to the media. One of its main achievements has been to associate corporate interests with “American values”, not only in the mind of the politicians, but also with the general public.
Its funding comes mainly from corporations and wealthy individuals with a strong interest in government deregulation and business-friendly tax laws.
Below are links to information on the foundation and its activities, current president Edwin Feulner, main financial backer Richard Mellon Scaife, and Edwin Fulner’s for-profit venture Belle Haven Consultants.
The Mediatransparency article lists the major donors to the heritage Foundation.
Many of these donors also help fund other major corporate-friendly organizations.
Wikipedia: The Heritage Foundation.
http://en.wikipedia.org/wiki/Heritage_Foundation
Sourcewatch: The Heritage Foundation.
http://www.sourcewatch.org/index.php?title=Heritage_Foundation
Rightweb: The Heritage Foundation.
http://rightweb.irc-online.org/profile/1477
Mediatransparency: List of Heritage foundation major donors.
http://www.mediatransparency.org/recipientgrants.php?recipientID=153
NNDB: List of Heritage Foundation members.
http://www.nndb.com/org/489/000049342/
Exxonsecrets.org: The Heritage Foundatiion has received $585,000 since 1998.
http://www.exxonsecrets.org/html/orgfactsheet.php?id=42
Wikipedia: Edwin Feulner.
Edwin Feulner has been the president of the heritage Foundation since 1977.
He was also the President of the Mont Pelerin Society and a member of the National Council for Policy.
http://en.wikipedia.org/wiki/Edwin_Feulner
Wikipedia: Richard Mellon Scaife.
Richard Mellon Scaife inherited money from the Mellon banking, oil and aluminum fortune.
http://en.wikipedia.org/wiki/Richard_Mellon_Scaife
Malaysia-today.
An interesting article on the dealings of Edwin Feulner and the Heritage foundation in Asia through Belle Haven Consultants.
http://www.malaysia-today.net/Blog-e/2005/04/hk-conduit-for-cash-clout.htm
Sourcewatch: Belle Haven Consultants.
http://www.sourcewatch.org/index.php?title=Belle_Haven_Consultants
Wikipedia: Belle Haven Consultants.
http://en.wikipedia.org/wiki/Belle_Haven_Consultants
Project for the New American Century.
The Project for the New American Century is the home of Neoconservatives (as they call themselves), also know as Neocons. They unabashedly present themselves as proponents of war at any cost against anyone who doesn’t go along with their views on America’s predominance over the world.
Many of their major supporters are defense contractors.
A web search for the Project for the New American Century summarizes the organization’s main objectives: "Welcome to the Project for the New American Century A neoconservative organization supporting greater American militarization, challenging hostile governments, advancing democratic and economic freedom".
Below are some interesting articles about PNAC:
SourceWatch: the history and membership of PNAC.
http://www.sourcewatch.org/index.php?title=Project_for_the_New_American_...
Right web: a recent overview of PNAC.
http://rightweb.irc-online.org/profile/1535
Information Clearinghouse: A William Rivers Pitt article from 2003 that is now a little outdated but outlines the basic principles of PNAC. http://www.informationclearinghouse.info/article1665.htm
The PNAC website: http://www.newamericancentury.org/
Military - U.S.
U.S. Military Overview
The U.S. Military: A Giant, still growing. It’s big, but it’s never big enough.
By Richard Van Slyke
The Giant Figures :
Bases, bases, bases…
The U.S. has over 700 military bases spread all around the world, and maybe up to 1000 according to some estimates.
In terms of international impact, it’s a giant. But within the U.S. budget, it’s an ogre.
For 2008, the official budget is projected to be close to $500 Billion, not counting the cost of wars (around $40 Billion).
In comparison, China’s budget for 2007, the second largest military budget in the world (2008 projections are not known yet), is estimated to be around $140 Billion (officially $65 Billion), leaving England, the third largest budget at less than $70 Billion way behind, and making all other countries feel like midgets.
However, the military budget of the U.S., like for many other countries, is only a rough estimate because of the many other defense-related expenses that are not officially included in it.
Defense spending can be divided into several categories:
- The official Defense Department budget included in the global U.S. budget (the $ 500 Billion amount).
- The cost of wars, which is not included in the Defense budget and is funded through supplementary bills. That money comes mainly from amounts accumulated in trust funds such as Social Security. These trust funds are also not included in the General Funds, so it’s easy to dig into them without the general public being aware of it. The costs of the Afghanistan and Iraq wars, year after year, start with an initial request based on estimates, followed later on in the year by a supplemental request.
- Other departments not officially within the Department of Defense but that have a role in defense, such as the Nuclear Arms part of the Department of Energy and also small but not negligible amounts in agencies like NASA and the CDC. Over $1 Billion in bioterrorism research might seem like a small amount compared to the overall defense budget, but for other departments it would be significant.
- The Black Budget, of an amount undisclosed for security reasons. A low estimate for it is over $40 Billion a year. The source of these funds is kept secret.
- The Department of Homeland Security also has a separate budget. In 2007, it was $44 Billion.
- The Veteran’s Affairs Department also is not counted as a cost of the Department of Defense. The 2008 budget recommendation is for $41 Billion.
When all defense related expenses are added-up, the whole amount is estimated to be close to $1 Trillion.
To some, it’s not enough.
Not enough? On what grounds?
Some proponents of defense spending, such as the Heritage Foundation, argue that we don’t spend enough money on defense, and that we should not go under 4% of our GDP (Gross Domestic Product). Why use the GDP as a measure of the defense spending?
The Gross Domestic product is the market value of all goods and services produced in a country in a year. It is usually used to evaluate the size of an economy. It is usually also a good indicator of the wealth of a country. However, using it as an index to decide on government spending can be very misleading, mainly when it relates to the U.S. economy.
If we use the 2006 figures for the six richest countries in the world (U.S., Japan, Germany, France, U.K. and China), and we take compare GDPs, government’s revenues, and military spending, we can see some striking differences between the U.S. and other countries.
First, the U.S. is the only one to be at 4% of the GDP for military spending. All other countries are much below that percentage.
Next is something that is something that is usually not talked about by economists, and came up while compiling these figures:
The percentage of GDP that actually materializes in government revenue is much lower in the U.S. than it is in the other countries. The obvious reason being that a large portion of the GDP in the U.S. is created by large corporations that do not pay taxes, or very little.
The following figures are taken both from Wikipedia and the CIA World Factbook.
They are only estimates, as these types of figures always vary depending upon who does the adding, mainly in the case of China, where military expenditures are very difficult to estimate (in both U.S. and China, the real figures are almost double these official figures). But they do represent a reliable average of various estimates for comparison purpose.
The figures are in billions of dollars (B).
Military Spending of the Five Richest Countries in the World
One thing worth noticing is that each and every one of these countries spends more money than what they have in their budget.
Now, if we take the above figures and compare the military spending of each country as a percentage of GDP and percentage of revenues, we can see that the size of the U.S. military is not due to the size of the economy only, but also to a much higher percentage of the country’s revenues being allocated to the military. This despite the fact that the figure used for the U.S. military is a very conservative one and doesn’t include many military-related expenses.
Military Spending in Percentage of Revenue and GDP
The U.S. Military is by far the biggest spender in the world. Its budget is bigger than the revenues of the three largest corporations in the world (Exxon Mobil, General Electric, and Microsoft) combined.
Unfortunately, it is also, according to any account (including the Government Accounting Office’s reports), managed in a way that would not allow a regular corporation to survive. Waste is at unimaginable proportions, and no one seems to ever be accountable for it.
One might think that a thousand-dollar bribe to a local elected official to influence the outcome of a bill is a terrible thing. And it is. But in terms of the U.S. military budget, it could just be the price of a hammer.
When a small company in South Carolina bills the military for $20.5 million over the course of six years for shipping $68,000 of supplies, it seems hard to believe that they didn’t get caught until they twice charged $998,798 to ship two 19-cent washers. Being that they are a small company they will be pursued and someone will most likely go to jail.
In the case of larger companies and larger amounts of money, this seldom happens.
A typical example is KBR, the former subsidiary of Halliburton that has been caught many times for overbilling the military for huge amounts of money. KBR keeps receiving government contracts after paying only small fines that can be viewed as the “cost of doing business”. And surely there is no talk of anyone ever going to jail.
Being a military contractor is the best possible type of business.
- You have only one customer, the U.S. Military, with a budget larger than any corporation in the world and in fact larger than most countries’ GDP.
- There is no accountability for mismanagement.
- For many large projects, cost overrun seems to be the norm.
- Over-billing often goes unnoticed.
- For the largest, established contractors, penalties for fraudulent activities usually result in fines that do not affect overall profits or future contracts.
- The marketing department, an important part of any corporation, is replaced by lobbying and political campaign contributions to a few individuals, at a much lower expense than the regular cost of marketing.
- Because of the nature of the military, a large portion of the budget falls under “national security” guidelines. Vast amounts of money are exempt from any kind of scrutiny, even from members of Congress.
- And most importantly, profits do not need to be reinvested for Research and Development. That part is usually included in the next taxpayer-supported funding. Military contractors can just take the profits and run.
For these reasons and many others, most major corporations want a share of that pie.
The business of the military spans the whole spectrum of the economy, from basic needs like food and clothing to high-tech equipment necessary for missile technology or intelligence. And many corporations not officially listed as military contractors such as Microsoft also have a share of their business dependent on the biggest bulk purchaser in the world. The amounts of money are so huge that it affects the whole U.S. economy.
But there is something very special about the way a military economy works. It is, of course, all based on taxpayer’s money. On the global level (in which the U.S. is an important player), one of the most important factors in economy is the trade balance. That is, in layman’s terms, how much a country buys from other countries, and how much it sells to them. As a simple example, let’s consider our situation with China. We have a huge trade deficit. We buy much more from China than they buy from us. They are also building up their military, and at a faster pace than we are. But their economy is sustained by the influx of money from American consumers, thus increasing their tax-based income. In other words, we are helping them build-up their military. In contrast, the U.S. military is mostly supported by U.S. citizens, both as consumers and taxpayers.
The influence of military economy is so prevalent in our overall economy that the profits made by military contractors are an important part of the figures used by analysts when judging the wealth of our economy. This is wealth that is not healthy. Corporate profits (labeled as the “U.S. Economy”) rely too much on the U.S. taxpayer and not enough on profits from trade.
Wartime, of course is the most profitable. And not just for military contractors. When the price of gasoline went up at the pump for reasons of “instability in the Middle-East”, companies like Exxon (and a few other major oil companies) made the biggest profits ever in the history of the world. But the bill was paid by the American consumer, their favorite “involuntary profit-maker”. And it reinforced the boasting of “the U.S. Economy is doing great” message. Doing great for who?
Since 2001, the median family in the U.S. has been constantly going down; mortgage delinquency and foreclosure rates are increasing. But the “economy” is doing great.
It’s the freedom, stupid!
It’s easy to understand that for a military contractor, the enemy is not the rogue countries of the world. The real enemy is peace.
This is the reason for the permanent search for an enemy that can be witnessed in the U.S media.
The amount of funding that major U.S. corporations dedicate to pro-war messages is hard to sum-up, because it is usually embedded with the support for other causes. But it can be felt in everything that influences opinion and decision-making in the U.S.
A concerted effort has been made over several decades to polarize opinions in two opposed views labeled as “conservative” and “liberal”. The conservative point of view has then been associated with patriotism and patriotism with “strong defense”.
A typical Heritage Foundation message is “Freedom has no price!”.
Thousands of foundations were funded all over the U.S. to create and exacerbate ideologies.
Talk shows are heavily funded to pump-up these ideologies, with a recurring message in the background: strong defense. In the media, advertisers with the strongest budgets, usually large corporations, invest only in conduits that put out content that will not interfere with their profits. The result is what supposedly is self-editing by reporters. But in fact advertising is not the only pressure exerted on the media. Most major media are themselves part of conglomerates with interests intertwined with the ones of their advertisers; so self-editing is not only influenced by advertisers but also by the desire to not interfere with the interest of the media corporate owners. This is most obvious when it comes to politics.
During election campaigning, any candidate who doesn’t support war becomes virtually non-existent in the media. They are also the least likely to receive campaign donations from large corporations. This in turn makes them look like less viable candidates, destined to be excluded from major debates.
When the largest corporations in the world decide to collude to promote their interest, it makes for a very powerful organization. However, the sheer size of these corporations all vying for Americans supporting them either as consumers or as taxpayers is what creates a conundrum. Past, present and futures generations have already all been suckered to a point that could potentially already be above their limit. Of the total amount of the U.S national debt that has accumulated over many generations, over half is estimated to be due to the cost of wars. The present-times national debt is close to ten trillion dollars. But if we add to it the sums due for future payments of Social Security, Medicare and Medicaid, the real debt is approximately 60 Trillion dollars.
Blame it on someone else.
Knowing that a disaster is looming, the defenders of defense spending are of course already placing the blame: Social Security, Medicare and Medicaid will bankrupt the system. They of course ignore the fact that the effect of the aging of the U.S. population was planned for and that since 1983, taxes on these items were raised to accumulate a surplus to be used for future payments. However that surplus was raided every year by being converted into defense spending. And at the exact present times when there is full awareness of the disasters to come, Social Security and Medicare are still bringing in surplus money every year and it is, every year, being spent on wars.
In the near future, the situation will no doubt become dire. The consequences are already known. Retirees will see their benefits reduced (both living expenses and health benefits), and the younger generations will have their taxes increased. Will the defense spending pie decrease? Probably not! If any one has any doubt, let us remember that the westernized version of this country was created in large part by impoverished Europeans fleeing heavy taxations imposed by their warring monarchs.
Unfortunately, it appears that all continents on this earth have now been discovered and we have nowhere to run.
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For reference sources of this article, go to the U.S Defense Budget Links page:
http://www.organizedpolitics.com/node/32
U.S. Defense Budget - Links
Organized by Topics
The basics on the Budget:
737 U.S. Military bases = Global Empire
http://www.alternet.org/story/47998
The Independent Institute.
The Trillion-Dollar Defense Budget Is Already Here.
http://www.independent.org/newsroom/article.asp?id=1941
About.com: U.S. 2008 Military Budget.
Compares figures with the two previous years.
http://useconomy.about.com/od/fiscalpolicy/p/2008_defense.htm
China Daily: the 2008 U.S. Defense Budget is $716.5 Billion.
http://www.chinadaily.com.cn/world/2007-02/06/content_802007.htm
Wikipedia. U.S. 2007 Military Budget.
http://en.wikipedia.org/wiki/Military_budget_of_the_United_States
U.S. 2006 Military Budget (Los Alamos Study Group).
http://www.lasg.org/USMilitarySpending.pdf
IDSA. Institute for Defence Studies and Analyses (Indian Think Tank – New Dehli).).
The U.S. Defence Budget for 2008.
http://www.idsa.in/publications/stratcomments/LaxmanBehera210207.htm
The second most expensive war in U.S. history, by Eric Margolis.
http://www.lewrockwell.com/margolis/margolis68.html
Wikipedia. Black Budget.
http://en.wikipedia.org/wiki/Black_budget
The CIA Black Budget. A summary of Michael Salla’s report.
http://www.arcticbeacon.citymaker.com/articles/article/1518131/24982.htm
Michael Salla’s original report on the CIA Black Budget.
http://www.american.edu/salla/Articles/BB-CIA.htm
The Center for Arms Control and Non-Proliferation.
Defense Budget Process.
http://www.armscontrolcenter.org/policy/securityspending/articles/defens...
National Defense Industry Association. The coming challenge for Defense (2006).
Since September 2001, the Defense Budget has increased by 70%.
http://www.ndia.org/Content/NavigationMenu/Resources1/Presidents_Corner2...
2007 Homeland Security Budget $40.6 Billion.
http://www.govexec.com/story_page.cfm?articleid=37591&dcn=todays_most_po...
Congressional Budget Office.
Federal Funding for Homeland Security, 2001 to 2005.
http://www.cbo.gov/ftpdoc.cfm?index=5414&type=0
The Department of Homeland Security, $44 Billion Budget in 2007.
http://en.wikipedia.org/wiki/United_States_Department_of_Homeland_Security
House Committee on Veteran’s Affairs 2008 Budget proposal.
Final figures are on page 23. Recommendation is for $41 Billion.
http://veterans.house.gov/about/comdocs/110/Viewsandestimates110.pdf
The “We don’t spend enough” side of the story.
An analysis of the 2008 Defense Budget by the Heritage Foundation.
Increasing Defense spending is one of the main goals of the Heritage Foundation.
http://www.heritage.org/Research/Budget/bg2012.cfm
The ”We spend too much” side of the story.
An analysis of the Defense Budget by Anti-War.com.
http://www.antiwar.com/bandow/?articleid=10525
U.S Military compared to other countries.
U.S. Military Spending vs. the World.
Includes tabs with U.S.-specific statistics.
http://www.armscontrolcenter.org/archives/002279.html
Wikipedia.
List of countries by military expenditures.
http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures
Washington Post, March 2007.
China Boosts Military Spending.
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/04/AR200703...
Wikipedia.
Definition of GDP.
http://en.wikipedia.org/wiki/Gross_domestic_product
List of countries by GDP (Gross Domestic Product).
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
Wikipedia. Measures of national income and output.
http://en.wikipedia.org/wiki/GNP
Economic Indicator: Gross Domestic Product (GDP)
http://www.cftech.com/BrainBank/FINANCE/GDP.html
CIA Factbook.
List of National Budgets by Country.
Revenues vs Expenditures.
https://www.cia.gov/library/publications/the-world-factbook/fields/2056....
Corporations Compared to the Size of the military:
Revenues of the largest corporations in the world.
http://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalization
The Military Budget Waste:
Pentagon waste has been going on for decades without accountability.
http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml
Pentagon waste in 2003.
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/05/18/MN251738.DTL
GAO (Government Accounting Office) labels Pentagon’s accounting as a mess.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/12/13/MNG96MUHPF1.DTL
The American Conservative.
Money for Nothing. Waste under Iraq’s CPA (and after).
http://www.amconmag.com/2005/2005_10_24/cover.html
Cato institute.
Corporate Welfare for Weapons Makers.
http://cato.org/pubs/pas/pa-350es.html
Classified bills can be refuge for mischief (USA Today).
How Randy Cunningham used “black” budgets.
http://www.usatoday.com/news/washington/2006-07-23-black-budgets_x.htm
Military pays $998,798 to ship 19-cent washers.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070817/NEWS07/70817039...
PilotOnline (February 20, 2007).
Pentagon investigates Blackwater’s expense tab.
http://content.hamptonroads.com/story.cfm?story=119795&ran=143615
Subsidiary of Halliburton overbilling.
It seems to be common practice with Halliburton.
http://www.smh.com.au/articles/2004/05/20/1085028468241.html
Washington Post, November 30, 2006.
Halliburton Unit To Pay $8Million for Overbilling.
http://www.washingtonpost.com/wp-dyn/content/article/2006/11/29/AR200611...
Navy Times, August 10, 2007.
Lockheed overbilled Pentagon for $265 Million and no one noticed.
http://www.navytimes.com/news/2007/08/defense_jsfrefund_070809w/
The Center for Public Integrity.
Windfalls of War.
Various articles on military contractors.
http://www.publicintegrity.org/wow/
CBS News: Top U.S. Official Eyed For Blocking Probes.
http://www.cbsnews.com/stories/2007/09/18/national/main3271931.shtml?sou...
House oversight Committee:
Probe of the conduct of the State Department Inspector General.
http://oversight.house.gov/story.asp?ID=1482
Foreign sales by U.S Arms Makers Doubled in a year.
http://www.commondreams.org/headlines06/1111-02.htm
Wikipedia. List of United States defense contractors.
http://en.wikipedia.org/wiki/List_of_US_defense_contractors
Wikipedia. Private Military contractors.
http://en.wikipedia.org/wiki/Private_military_contractor
Privatization of war.
http://www.publicintegrity.org/wow/
World Policy Institute;
Arms Trade Resource Center.
A good resource site on arms trade.
http://www.worldpolicy.org/projects/arms/reports.html