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Reagan's Deal, Bush's Gamble

By Mark Kittel



A few days after Reagans passing, I listened to my local NPR station, as I often do on the way to work. Robert Reich, former Secretary of Labor, was offering a commentary on the economic legacy of Ronald Reagan and comparing the countrys situation under Reagan with the countrys current situation under Bush. Reich noted that spending on defense and the military rose enormously under Reagan as part of a sort of deal with western European nations. On our part, we agreed to provide the military strength necessary to keep the Soviet bloc nations in check, and to spend the money to finance that growing military. In exchange, the European nations invested heavily in our currency and our bonds, making it possible for us to finance the military without a corresponding sharp increase in taxes. Essentially, Europe loaned us the money necessary to build a military largely stationed in or near Europe, to protect American and European interests from the Cold War threat of the Soviet Bloc.

That, of course, is a gross simplification of what happened, but the basics are right. Reich went on to point out that the debt that Reagan incurred by raising military spending was, in reality, not a big deal, because European nations were eager to invest in the American dollar. The dollar was strong and it was the global business currency. There was little or no chance that European governments would suddenly decide to shift their investments elsewhere and force the American government to cough up the money owed on those investments. Those debts were, to us, free of charge.

However, the situation under Bush has changed. Reich does not blame Bush for the change, but he did seem to think that this administration has not done its job in responding to the impending financial disaster. Two things have altered the game. One, the Soviet Union is no longer a threat, and the Soviet Bloc countries are now independent nations building free market economies. That alone makes it less necessary to maintain a large military force. In addition, the furthest Reagan went with our military was to flex some muscle in other words, show our strength without actually using it. Bush, on the other hand, has launched a pre-emptive war without much European support, and that dramatic change in foreign policy has made many European leaders re-think their relationships with the American military. The rise of the European Union also raises the possibility of Europe building and maintaining its own unified military for its own defense without the need for American protection.

Two, the dollar is not the strong man it once was. The euro is rearing its head as an alternative to the dollar, and the dollar is no longer strong enough to keep the euro from threatening its dominance in global business. That problem is only made worse by our countrys growing deficits, which seem to spiraling out of control. European investors may not only see investments in American debts as a bad prospect, but now they have an alternative currency to shift their investments to. Even if Europe does continue to loan us money to finance the military, they may no longer be willing to provide those loans free of charge as they did through the Reagan years.

Those two changes add up to an enormous problem for the United States. How do we continue to finance our military and defense technology research without the financial help of Europe? Reich, of course, pointed out that our deal with the European nations is not over, but the presidents policies have put that deal on softer ground and threatened to sour it altogether. If we can no longer rely on free loans from our allies, the costs of maintaining our military strength will rise forcing a rise in long-term interest rates, which in turn will raise the costs of other essential services that our government pays for.

Naturally, Id assume that the current administration has not had the foresight to even see the existence of this problem, much less think of solutions for it. But that might be a hasty conclusion to draw.

It is clear now that we sent an insufficient number of troops to Iraq to handle the aftermath of invasion and to keep order in the country. Before the war, and even during the aftermath, Donald Rumsfeld assured us that we had adequate troop strengths in Iraq and that there was no need to pour additional troops into the conflict. At the time, I thought that was just pompous arrogance on his part. But now Im wondering if Rumsfeld was hoping to show that the American military could be much smaller and still accomplish its missions and win its battles basically, to show that the military could be reduced in size without compromising our militarys strength. That makes sense if Rumsfeld, or other members of the administration, foresaw a potential problem with military funding in the near or far future. (Of course, its clear that Rumsfeld was wrong and he has as much as admitted this.)

Maybe thats a little far-fetched. But there are other aspects of the Iraq war and the war on terror that suggest that members of this administration have been trying to find ways to continue funding our military without incurring the financial penalties at home. The war on terror itself is given as a justification for increased military spending and heavily increased military action in the Middle East. We already have numerous military bases and personnel in Saudi Arabia and other allied nations, but increased terrorist activity has suggested that a stronger and larger U.S. military presence in the region is vital and critical to the survival of the existing governments. It has been suggested many times that the Iraq war was fought not for oil or liberation, but to institute a government that would permit a large American military presence. Why? Because there is a real possibility that our continued presence in Saudi Arabia will have to come to an end. After all, thats one of the stated grievances that Osama bin-Laden has with the Saudi government, that they allow the infidel American military to continue occupying the most holy land to Islam.

Okay, now were starting to seep into conspiracy theory territory, but this has nothing to do with conspiracies, just behind-the-scenes politics and diplomacy. The Saudi royal family is, of course, an ally of the United States and is strongly tied to the Bush family. That personal relationship aside, the continued reign of the Saudis is considered essential to American interests in the region. They have a great deal of oil, they border two seas from which oil is shipped, and they are more or less centrally located in the Middle East. If the Saudis were to be deposed, or if certain members of the family were to take control (say, those that are inclined toward fundamentalist Islam and hostile to the United States), our interests would be severely compromised and threatened. (Not to mention they are heavy investors in our stock market, to the tune of perhaps trillions of dollars, but lets leave that out of the picture for now.)
The current problem is that the Saudi royal family is under threat. There are several members of the family that are hostile to the United States and western nations in general. And as they are a monarchy well, how do you become king if the king is still alive and someone else is in line to take his place when he dies?

The country is experiencing a surge in terrorist attacks, and those attacks are most likely an attempt to destabilize the monarchy and the government, and potentially allow an ambitious member or group of members of the Saudi family to stage a coup and take power. The Saudis know this, and they also know that a strong American presence in the country is unpopular with many devout Muslims those radical members of the family would probably find much popular support if they did indeed attempt to take control. But expelling the U.S. military altogether itself invites disaster it threatens the Saudis continued good relations with the United States and leaves the country open to hostile attacks, whether internally or externally.

Thus, a strong, permanent military presence in Iraq makes sense. It allows America to shift its troops out of Saudi Arabia, but leave them stationed in a central location to protect our allies and, of course, our interests.

That kind of military presence requires a lot of money the same kind of financial burden needed to keep a strong presence in Europe through the Cold War. Who is available to finance such a military presence?

Why, the Arab nations themselves, naturally. The governments of these nations are extremely wealthy and control a commodity the world is willing to pay for. But these governments also face hostile forces threatening to usurp them but here, the threat is internal and not specific to one nation, as opposed to an overt threat such as the Soviet Union. But regardless of the source, the proposed solution is the same a strong, overwhelming military presence. In this case, its not just for a show of force to deter a Soviet attack, but for the quelling of terrorists and insurgencies.

I doubt that any such deal, of convincing Arab leaders to invest in American debt in order to finance a strong military presence, is something that our government would want to be made public. It has the feel of sleeping with the enemy, of supporting governments that we cant trust to remain faithful to us. And perhaps my speculations are nothing more than that pure speculation. So far, our method of paying for our increased military operations is to borrow against future funds basically, shove the payments into the future, in the hopes that we will be able to pay those debts in another decade or two.

But this, at least, is true. The European Union is looming as a potential new superpower. Historically, the world cannot have two superpowers without those powers coming into conflict, in whatever form that conflict comes economic, military, etc. That same superpower that once helped finance our military may no longer wish to do so. If the United States is to maintain its role as the dominant superpower, it needs a strong military it cannot afford to let the military shrink. But putting that financial burden on the Americans wont work in the long run at some point, the American taxpayer will decide that a growing military isnt worth the paycheck bite. So someone else needs to fund our military and the incentive for funding someone elses military is that you get the benefits of protection from that military. The Middle Eastern nations not only have the need for the military and the money to pay, they also have a commodity that we do not want to see controlled by anyone else say, the European Union.

But this only works if in fact we can find other nations to invest in our debt without cost to us. That may not happen, and a likely scenario is that we will make military commitments that we cannot extract ourselves from, but that we cannot pay for without raising the financial burden on American citizens. Eventually then, wed have to either reduce our military and thus reduce our dominant presence in the world, or wed have to sacrifice other services that we have relied on the government to provide for us for decades or wed have to accept the increased cost of those services. Or, worst of all, accept that all three are necessary.

This is not a problem that will go away with a new president, although the current president and his administration do not seem to be able to deal with the problem either. It is a problem for us to consider over the next several administrations, and we will have to be prepared to make smaller sacrifices in order to avoid larger sacrifices for example, we may have to follow John McCains advice and be willing to sacrifice our tax cuts. If we are not willing to do this now, we will end up paying for it dearly in the future.

Mark Kittel is a staff writer for the Moderate Republican.



An Open Letter to the President

By Michael Edwards

February 24th, 2004

Dear President Bush,

Today you endorsed an action to change the Constitution of the United States to deny Americans equal access to benefits offered by the US government to couples. This is a denial of civil rights to gay and lesbian, citizens of this country. The amendment, if passed, would write discrimination into a document that stands to ensure liberty, freedom and equality.

Im sure the question is, does this action truly represent your principals, or are you just pandering for votes in an increasingly competitive election campaign? If its the former, I would hope that you would take a better approach to expressing your desire to keep marriage as is. If its the latter, you may want to consider the loss of my vote, and the loss of other votes of gay Americans who supported you last election.

I voted for you in 2000. I still side with you on tax cuts and the war on terror. We differ on such issues as the reasoning to go to war with Iraq, which certainly needs more explanation during the campaign, and the fact that you and the members of the Republican Party in Congress have done little if nothing to curtail government spending while decreasing current revenues. When Republicans state that they should run government like a business, that business should not be Enron.

However, we obviously disagree on social issues, especially those that concern the equality of American citizens. Gay Americans should receive the same treatment, the same benefits, and the same protections that all other citizens of this country enjoy. That all citizens of this country should be considered equal is still a goal of this country, and today, with the President of the United States expressing that a religious view of civil marriage should cause us to consider the removal of civil rights from a group of citizens, the attainment of equality has taken several steps back.

Perhaps you do not know the prejudice that you are proposing here. Maybe youre not considering the families that you are hurting by supporting this amendment, families of gays, lesbians, bisexual and transgendered people, and the families created by those people. You are creating an atmosphere in this country that invalidates these family ties and tells them that they, or their sons and daughters are second-class citizens, not eligible to share the full promise of this country.

I dont agree with your interpretation of civil marriage. The religious definition of marriage is untouched by the opening of civil marriage to any two citizens, regardless of the gender of those two people. Churches and other religious organizations can still marry people using the tenants of their faith. Inclusiveness in civil marriage will allow all Americans to be able to benefit from stable relationships, and committed partners, something you have already stated is an important part of the health of our society. That recognition of stable, loving relationships is not currently provided to gay citizens by the federal government, or by most states.

I fear that my relationship may not be accepted by the courts, may prevent me from visitations if either of us are in the hospital, and may be contested by others when reading our wills when that time comes. Anything that we do as a couple can be easily invalidated by the state, since we are not recognized as an acceptable couple in the eyes of the law. These are things that married couples take for granted, but are unavailable to me since the state has stated that the love I have is invalid. No one should ever be told that their love isnt up to governmental standards.

There are millions out there waiting to take part in marriage. They want a part of something that you consider sacred, and I consider a civil right. Civil marriage shouldnt be a goal or a privilege. It should be a right of all citizenry. All this time you state that the status quo should be protected, but for the last 40 plus years marriage has been eroded by access to The Pill, no-fault divorce, and people rejecting the tenants of marriage and just living together. None of this erosion happened because of gays, as they werent allowed to participate. Its an institution that was broken by those already given access to it. Still, the fact that gays and lesbians would want to take part in that institution should attest to its endurance, strength and importance to society.

It said that the proposed amendment would still allow states to provide civil unions for same-sex couples. Civil unions are the same as segregation was in our schools. Trying to provide a semblance of the same rights through creation of a wholly separate set of partner benefits is not the same. Those rights can be different in different states, they can be allowed not to mimic all of the benefits and privileges afforded to married couples, and may not be transferable to other states. Full civil marriage rights would assure that all Americans were treated equally and equally protected. Unfortunately, the most discussed wording for the proposed amendment has been designed that even civil unions, referred to by the sentence: Neither this Constitution or the constitution of any State, nor state or federal law, shall be construed to require that marital status or the legal incidents thereof be conferred upon unmarried couples or groups.", would be invalidated by the amendment. The language is designed to take away any possibility of gay citizens to have their relationships recognized.

You state that the voice of the people must be heard, but you present a draconian plan to work to stop any state from using their sovereignty to decide this issue, and create true, public discourse of the issue. This amendment would actually trump the checks and balances our society has created to respect both the rights of the individual, and work for the common good, issues that do not always result in the most popular decisions, but have strengthened this nation. You say that the historical meaning of marriage must be preserved, but marriage itself has changed, not only in the last 40 years, but also in the last 200, and the millennia before that. You are trying to stop society in its tracks, making it more difficult to change this issue in the future, as society creates new rules, and finds new ways of thinking. Society, despite what people want, or even sometimes need, progresses.

When you ran in 2000, you stated that you were a uniter, not a divider, but yet you play the same politics of class warfare, intolerance, prejudice and fear that any other candidate does. This is shameful and depressing. One would hope that a politician would rise above such petty tactics as supporting a divisive measure that hurts Americans and drives them to a second class status, trying to sweep them back into the closets, all to pander to a group of voters who support this discrimination.

I am not a one-issue voter. I will weigh many different factors when making my choice this fall, a choice that has been made much more difficult with your announcement today. I cannot, and will not vote for a candidate that so blatantly supports discrimination, whether that discrimination directly affects me or not. This leaves me with one fewer choice than I had yesterday. Im sure your advisors and your party has said that losing my one vote, or the even the votes of the estimated million or so gays, lesbians, bisexual and transgendered people who voted for you in 2000 was insignificant to re-asserting yourself to your base voters, those who would support this draconian measure. They told you to try to stop debate in the states before it gets too far. Im sure that the stomping on my rights, and my future was much less important than placating voters who were firmly in your corner already.

I already am a member of a minority that doesnt share in the same rights and protections that others receive, simply for the gender of whom I love, and that I would wish to have a relationship with him. I have hopes that a president, charged to uphold the constitution, would understand that the Constitution should represent all of the people, not just those that are his voting base, or those that agree with him. Unfortunately, I no longer have that faith in you, and I cannot support you.

When you endorse discrimination, when you decide that peoples loving relationships are invalid, when you deny that all citizens should be able to share the American Dream, America loses.

Sincerely,


Michael Edwards

Michael Edwards lives in Houston. This letter appeared in the Houston Chronicle in February 2004.