Author: j.giglio

China is a global threat to human rights

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The outbreak of the Chinese Communist Party virus has accelerated the need for the United States and others to reset the relationship with this autocratic crowd that rules by repression rather than consent. For too long America and others have become economically dependent on the Chinese Communist Party’s totalitarian regime. Governments, corporations and even academic institutions that are ostensibly committed to human rights have been all too happy to do business with the Chinese Communist Party.

China is a global threat to human rights. Witness its terrible repression and systematic abuse of the Uighur Muslims, Christians, Falun Gong, Tibetan Buddhists, and the protesters in Hong Kong. The Chinese Communist Party has carried out arbitrary detention, torture, and imposed pervasive controls on daily life.

The Chinese Communist Party has constructed an Orwellian high-tech surveillance state to monitor and suppress criticism and free speech over China. It engages in these practices with total disregard of the world’s view of these abuses and uses its economic clout to silence critics. Economic clout translates into political influence.

Indeed, the Chinese Communist Party’s campaign to aggressively silence criticism extends beyond its borders. Last year the party responded to a simple tweet by the general manager of the Houston Rockets supporting the Hong Kong protesters by demanding he be fired and by canceling broadcasts of N.B.A. games. After a series of obsequious apologies, the N.B.A. stood firm.

Also last year, the Chinese Communist Party demanded that foreign airlines remove references to Taiwan from their websites because it regards Taiwan as a renegade province. The four American airlines affected by the order – American, Delta, Hawaiian, and United – complied with the order. Clearly, they were ignorant of Churchill’s definition of appeasement: “An appeaser is one who feeds a crocodile hoping it will eat him last”.

In 2017, the Chinese Communist Party pressured the Cambridge University Press to remove more than 300 articles from its “China Quarterly” journal. The censored articles covered topics the Chinese Communist Party considered incriminating, such as the Tiananmen Square massacre, a subject that remains taboo in China.

In April and May of 1989 thousands of students and civilians protested in Tiananmen Square in the heart of Beijing, calling for a more democratic government. The Chinese Communist Party prohibited foreign newscasts of the protests.

On June 3 and 4, Chinese troops entered the square and fired on the protestors, ending the demonstrations. Estimates of the death toll range from several hundred to thousands. It has been estimated that 10,000 people were arrested during and after the protests. If the protestors had hoped the United States and other countries that had rhetorically championed the universal human right to freedom would support them, they were sorely disappointed.

Though President George H. W. Bush initially criticized the crackdown and announced some sanctions, nothing else happened. The Bush administration believed that as the West opened up to China and the country became more prosperous it would also become more democratic. Is anyone surprised that they were wrong?

The authoritarian regime of the Chinese Communist Party is not a friend. The global pandemic could have been stopped at its source. Instead, the Chinese Communist Party suppressed the truth, destroyed evidence, and lied to the world.

It’s not surprising that the Chinese Communist Party lied to the world. If it is willing to lie to its own citizens about how many the virus killed, why would you ever assume that it would tell the world the truth? If they don’t treat their own people with respect, why would anyone believe they would treat others differently? Put another way, if the Chinese Communist Party has its way, it is not just China’s 1.4 billion people who won’t get justice – it will be the whole world.

It is an open question whether the international community and the United States will make common cause and robustly respond to the Chinese Communist Party’s role in unleashing the coronavirus. But given the Chinese Communist Party’s dishonesty and duplicity, now is the time to recall President Reagan’s famous formula when dealing with the Soviet Union: “Trust but verify.

The U.S. should reconsider its relationship with the CCP

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America is in crisis. In the midst of a pandemic, society is locked down, the economy is stalled and the death count mounts. As of March 30, three-quarters of Americans were living under stay at home mandates or advisories in the fight against the spread of the Chinese Communist Party (CCP) virus.

Americans are buying all the food and supplies they can find and downloading Zoom, everyone’s new favorite hangout. One of the ironies of the moment is that staying home and doing nothing with freshly sanitized hands can actually save lives. Americans are told to work together to flatten the curve, and practice social distancing, altering the rhythms and texture of everyday life.

A sense of anxiety and fragility is everywhere.

The economic fallout has been swift and dramatic. The unemployment rate climbed to 4.4 percent in March from 3.5 percent in February, the largest one month increase since January 1975. The economy lost 701,000 jobs in March, but the numbers only begin to capture the beginning of a job market collapse. Weekly initial jobless claims reports reveal nearly 10 million new unemployment insurance claims in just the last two weeks of March.

These numbers are a coming attraction for what is to come, thanks to our pals in the CCP and the business, political, and academic grandees who encouraged offshoring American jobs to China. The increased reliance on worldwide production and long supply chains has undermined America’s national security.

This crowd traded American industrial strength and technology for access to China’s huge market and cheap consumer goods. The price they were willing to pay was teaching China how to manufacture their products and sharing their cutting–edge intellectual property, which helped China join the superpower club. The CCP has been brilliant in exploiting the imprudent greed, myopia, and corporate vanity of western business leaders who kowtow before the CCP regime.

It is not certain whether Vladmir Ilyich Ulyanov, better known as Lenin, actually said: “The capitalists will sell us the rope with which we will hang them.” But if he didn’t, he certainly thought it, and if he were still around, he would likely claim the prophecy as his own. The ruling class in Washington, Wall Street, and the academy sent the CCP the money to buy the rope.

The board overseas the nearly $600 billion Thrift Savings Plan, a retirement savings plan similar to a 401(k), for 5.6 million federal employees and members of the military. The index fund includes companies involved in the Chinese government’s military activities and companies being sanctioned by the US government. To cite one specific example, the index includes China’s state -owned Aviation Industry Corporation. This firm is the sole supplier of military aircraft to the Chinese People’s Liberation Army. Federal employee money is being used to support an adversary, undermining the country’s national security and fueling China’s economic growth.

A group of lawmakers introduced bipartisan, bicameral legislation to ban the investment of Thrift Savings Plan funds in securities listed on mainland China exchanges. Pushing back, the board’s general counsel said that the 1986 legislation that created the plan shows the accounts are private, not federal property.

“The employees owns it and it cannot be tampered with by any entity including Congress,” the general counsel went on to say, neglecting to mention the fund consists of taxpayer money, not private capital.

This decision is another egregious example of an organization facing no consequences for refusing to act in the best interests of the United States and never having to say you are sorry. It’s bad for the United States and good for a strategic foreign adversary.

The Chinese Communist Party propaganda campaign

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The deadly virus that is eating the world is postmarked “Chinese Communist Party” (CCP), and it has already caused more disruption than the financial crisis of 2008 and the ensuing Great Recession.

The CCP virus is threatening lives and economies all over the globe. Social distancing and sheltering in place are necessary to slow the spread of the novel pathogen, but they also make a sharp slowdown in economic activity inevitable.

As the global economy craters, the gap between the haves and have-nots is accentuated, as the well heeled pack their bags and escape to safer locations such as the Hamptons and Palm Beach. The limitless resources of the 1 percent ensure they will never go hungry or lack for medical care, even in a pandemic.

In the meantime, ordinary people are panic buying, standing in long lines to stock up on toilet paper, facing financial instability and trying to make ends meet while being told we are all in this together. Mostly, they remain sequestered at home, apart from the occasional pilgrimage to the grocery store, pharmacy, or package store. The CCP virus has crushed the economy and shut down much of American life.

March 19 was the first day on which the CCP reported no new locally transmitted cases of the pathogen since the outbreak of the virus in Wuhan. The CCP congratulates itself on its extraordinary containment measures, limiting the movement of millions of people, and rapid medical response. Will wonders never cease?

The CCP is working hard to scrub its own culpability and turn this crisis into an opportunity. Its leader Xi Jinping now acts as the charitable godfather, dishing out money, medical supplies and equipment to convince the world they are not responsible for the global public health crisis and economic chaos.

The CCP is painting China as a success story and as a friend in a time of dire need. This was after the CCP spread disinformation about the virus, claiming that American soldiers brought the virus to Wuhan last October when they attended the Military World Games. There is no evidence to support this accusation. The CCP is engaged in a massive propaganda campaign to persuade the world they are a model global citizen worthy of trust and respect.

As they say in the Wuhan wet market, famous for its bat soup, this doesn’t smell right.

In the past few weeks, while the rest of the world was busy battling the pandemic, the CCP erected new military bases on reefs in the West Philippine Sea that are claimed by the Philippines, according to Esquire Magazine. In 2016, the Permanent Court of Arbitration, an intergovernmental organization located at The Hague in the Netherlands ruled unanimously that the CCP’s reclamation activities in the West Philippine Sea were illegal. The Court recognized the Philippines sovereign rights to the contested areas. China ignored the ruling, continues aggressive actions, and stands by its sweeping claim to almost the entire South China Sea.

The CCP plays by its own rules and does so with impunity. A March 20 report by China’s Zinhua news website says the Chinese Academy of Sciences has successfully established two new “research facilities” on the Kagitingan Reef and the Zamora Reef. According to the Zinhua report, these “research facilities” are to study coral reef ecosystems, vegetation ecology, and freshwater conservation.

Of course, these reclaimed islands are equipped with military facilities, including missile systems, naval harbors, and runways to accommodate fighter jets and other aircraft. The CCP is hoping the world will overlook the military angle as it focuses on the global public health crisis.

While the short-term focus is the battle against the coronavirus, the international community should not ignore the existential threat presented by the CCP. This global crisis will last a long time, but not forever. Democratic governments must fundamentally rethink their relationship with the CCP and stop treating them with kid gloves.

COVID-19 is another gift from the Chinese Communist Party

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Many of the world’s recent pandemics have been traced to China: the Asian Flu in 1956, the Hong Kong Flu in 1968, SARS in 2002, and the Swine Flu in 2009. Now COVID-19 is another gift from the Chinese Communist Party (CCP).

COVID-19 is believed to have originated at a wet market in Wuhan, China. Wet markets are a cross between a zoo and a slaughterhouse. They put people in constant contact with both live and dead animals, including illegal wildlife. That makes it easy for diseases to be transmitted to humans.

According to a study published by the University of Southampton in England, if CCP authorities had disclosed the outbreak of the COVID 19 virus three weeks earlier, the number of coronavirus cases could have been reduced by up to 95 percent, thereby mitigating the global public health crisis.

A timeline of the early weeks of the outbreak developed by the American news website Axios shows a cover up by CCP officials. This allowed the virus to spread unchecked in Wuhan for weeks, including among the five million city residents who left going to all points of the compass without being screened, leading to a national epidemic, and inevitably to its global spread.

That should come as no surprise. CCP officials prioritize stability – even if it means suppressing information the public needs to know and threatening public health.

CCP leadership covered up the severe acute respiratory syndrome (SARS) outbreak for over a month after it emerged in 2002. Even as the virus spread CCP officials continued to undercount cases and delayed reporting information. They did not alert the World Health Organization until February 2003.

United States National Security Advisor Robert O’Brien said China’s cover up “probably cost the world community two months to respond,” exacerbating the pandemic. As the current outbreak has shown, an infectious disease that starts in one part of the world can spread to others in virtually no time.

So it came as no surprise that on March 17 the CCP said it would expel journalists from The Wall Street Journal, The Washington Post, and The New York Times. China’s Ministry of Foreign Affairs said the three American outlets, plus Voice of America and Time Magazine, would be designated as “foreign missions” and must report information about their staff, finance, operations and real estate in China.

The CCP’s aggressive and highly centralized propaganda machine continues to sow doubt about COVID 19′s origin. Zhao Lijian a spokesman for China’s Ministry of Foreign Affairs said, “It might be the U.S. Army who brought the epidemic to Wuhan.”

Chinese President Xi Jinping and Chinese diplomats are pushing the narrative that China’s response bought precious time for and made important contributions to other countries’ epidemic prevention and control. They claim China is ready to share its experience and research with countries where the disease is spreading as well as to export face masks, pharmaceutical products, and other medical supplies for which it is the dominant global supplier.

If China decided to ban such exports to the United States, the state-run news agency Xinhua noted, the United States would be “plunged into a mighty sea of coronavirus.” Last year, prominent Chinese economist Li Daokui suggested curtailing active pharmaceutical ingredient exports to the United States as a countermeasure in the trade war. His comments validated those made by Gary Cohn, former chief economic advisor to President Trump: “If you’re the Chinese and you want to… destroy us, just stop sending us antibiotics.”

Having made much of the developed world dependent on China, and because of the country’s economic and military power, the CCP will likely avoid censure or sanctions for its role in the pandemic.

Perhaps it is time to get Greta Thunberg on the case to call out the CCP, hold them responsible for COVID-19 and raise the issue of decoupling the West from China.

Selling America’s security to China

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Earlier this year, the World Health Organization (WHO) declared the outbreak of the novel coronavirus, or Covid-19, a public health emergency of global concern. The outbreak should also prompt U.S. leaders to ask some hard questions about pharmaceutical companies’ practice of outsourcing their manufacturing to China.

Coronaviruses infect animal cells. They circulate among animals, and some are known to infect humans. This one was first detected in the City of Wuhan in the “People’s Republic of China.”

It has since spread around the world. The long-term effects of the outbreak are unknown, but it has already brought devastating consequences for individuals, families, communities, and businesses far beyond China.

In addition to the immeasurable social and health impact, the spread of the virus has already affected business and economic activity, global financial markets and supply chains. A global recession is imminent.

The Chinese government has leverage over America’s economy and public health, as it has captured critical portions of global supply chains, including pharmaceutical drugs and medical equipment, without firing a shot.

According to the WHO, the Chinese knew of the “Wuhan virus” as early as Dec. 8, 2019. Yet disclosure to the WHO did not take place until around Jan. 11, 2020. This is typical when dealing with the Chinese government.

In 2002 a coronavirus had emerged in a similar wet market – where live animals are slaughtered and sold for human consumption – in Southern China. When the severe acute respiratory syndrome (SARS) outbreak hit in 2003, the Communist Party again concealed it from the Chinese people and the world until it was a full-blown epidemic.

The Wuhan market is also a wet market. These wild animals are believed to have tonic properties and are used for body- building, sexual enhancement, and fighting disease.

The United States depends on China for pharmaceutical products. A Department of Commerce study found that over 90 percent of all antibiotics in the United States come from China.

While depending on China for thousands of ingredients and raw materials for medicine is a security issue, Americans should also be concerned about the safety and efficacy of Chinese-made pharmaceuticals. As recently as the summer of 2018, one of China’s domestic vaccine makers sold at least 250,000 substandard doses for diphtheria, tetanus, and whooping cough. This instance was just the latest in a slew of scandals caused by low-quality Chinese drug products.

The time is long past to press pharmaceutical companies to bring manufacturing back to the United States. A nation’s first priority is to protect itself. Public health is as essential as military preparedness and economic health. Government must intervene to protect industries that are deemed vital to national security, such as telecommunications, aerospace, and yes, pharmaceuticals. Health care is a non-discretionary good.

The Chinese virus epidemic is a wake-up call that should make Americans ask some hard questions. How is national security defined? Does it only apply to military security or does it encompass industries that produce the technologies needed to ensure that the country remains economically competitive? Does domestic ownership make a difference in a world where national borders are receding in importance?

And when it comes to pharmaceuticals, can the United States survive without a safe, reliable supply? Does it make sense to depend upon foreign governments and companies to supply these products? What if China decides to stop exporting drugs to America?

Is the U.S. government really powerless to stop pharmaceutical companies from outsourcing drug manufacturing to save money and increase profits? The cold reality is that the government is loath to confront China because multinational corporations and Wall Street are the winners in a global system that has seen America hand China its industrial base – good jobs, intellectual property and global standing in exchange for alleged market access and cheap labor.

Failure to address these questions makes the ordinary American wonder if our current crop of political leaders could run a bath.

Afghanistan: another mission failure

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More than 18 years since President George W. Bush ordered bombing in response to the 9/11 attacks, America’s “forever war” in Afghanistan may finally be nearing an end. The United States signed a dicey deal with the Taliban on February 29 amid upbeat rhetoric to end the war and lead to the withdrawal of American forces.

The peace is fragile. To make it work, the Taliban and the Afghan government negotiate the political terms for ending the war and sharing power.

Afghanistan is but one of a string of dicey foreign entanglements that mark U.S. policy since the end of the Cold War America’s longest war came at a tremendous cost of blood and treasure. By the numbers, it claimed the lives of more than 2,300 American soldiers, and 20,000 more have been injured. Tens of thousands of Afghans have been killed. It has cost U.S. taxpayers $2 trillion, according to Brown University’s Cost of War Project.

Since the disappearance of the existential threat of a nuclear-armed Soviet Union in 1991, the United States has indulged a missionary calling to remake the world in its image. It has ranged far and wide to export American values: Somalia, Haiti, Bosnia, Afghanistan, Iraq, Libya, Yemen, Syria, and the beat goes on.

In the decades before the Cold War ended, the United States used its military and economic power to defend American interests at home and abroad. America’s desire to remake the world in its image was held in check by the existence of a powerful geopolitical rival: The Soviet Union.

When the fall of the Berlin Wall ended the Cold War, the American political establishment believed it had prevailed in a cosmic struggle with communism. The United States could bask in its new role as the world’s sole superpower. It was perched at the pinnacle of power.

History had validated American-style liberal democratic capitalism. Political scientist Francis Fukuyama argued that humanity had reached its final stage: liberal capitalist democracy. The world was witnessing the End of History. He predicted that unipolar American influence would bring lasting world peace. The U.S. had no major existential threats and everything seemed possible. The future looked bright.

This was a seismic event, yet there was no debate about America’s role in world affairs. Instead, the United States under three presidents chose to pursue a policy of promoting American values as universal values, what some have described as “missionary work” or, alternatively, “nation building” – using American power to reshape domestic institutions in foreign lands, regardless of whether American interests were at stake.

This foreign policy shift was embraced by both political parties. The post-Cold War presidencies of Bill Clinton, George W. Bush, and Barack Obama wandered into well-intentioned but clueless adventures in nation building, most of which have turned out badly. Elites had their heads up their hindquarters.

But it was in Afghanistan and Iraq that the notion of nation building became the ultimate policy objective. The Bush crowd, with extravagant hubris and ignorant of local conditions, thought that such transformations were feasible with limited resources. The United States failed to achieve a decisive victory in either war.

It is ironic that because the United States is so powerful and intrinsically secure, it has the freedom to wander around the world intruding in various places. The outcomes don’t have a decisive impact on American security, even if things go as badly as in the Vietnam debacle.

But the emergence of China as a global superpower and the reemergence of Russia have put an end to that post-Cold War world. Truth be told, the United States no longer has the power to make unilateral changes in other political cultures.

On the other hand, Americans can take comfort in the German statesman Otto Bismarck’s reputed comment that “There appears to be a special providence that protects idiots, drunkards, children and the United States of America.” Hopefully that is true.

Big business dominates the American

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As demonstrated by the current presidential campaign, Americans live in an age of hostility toward economic power being concentrated in a few big firms. The breakup of big tech, big pharma, big banks, and firms in other industries such as airlines, beer, and hospitals may get a lot of media coverage, but the public shouldn’t bet on seeing much really change.

Candidates on the left sermonize that it is time to take a fresh look at antitrust laws that have not gotten much attention for the last 40 years, with the exception of the Microsoft case in the late 1990s. They want to smack down companies that have gotten too big, too powerful and make it harder for entrepreneurs to build the next Google or Facebook. The candidates argue that the U.S. economy has grown more concentrated since the early 1990s, with the spoils going to a select few in each industry.

They’re right. Beyond all the left-wing piety, American industry is increasingly dominated by a shrinking handful of giant companies.

For example, the top four domestic airlines collected 41 percent of the industry’s revenue 10 years ago; today they collect 65 percent. It’s the same story in the beer industry, where four firms control nearly 90 percent of the market despite the proliferation of craft brewers. Even in the poultry industry, Tyson’s, Pilgrim’s Pride, and Perdue all but control U.S. production. And three major drug store chains – Walgreens, CVS Health, and Rite Aid – dominate that industry.

Facebook has acquired 67 firms and Amazon 91 firms – some of which were rising, young competitors – without being challenged by regulators. And the number of companies listed on the New York Stock Exchange fell by half between 1996 and 2016. The dominant players believe that if they are to succeed, they must shore up economies of scale and erect high barriers to entry to scare off potential competitors and lock up new markets.

A handful of politicians, policy advisors, and economists contend that unrestricted concentration in certain industries is a threat to a functioning democracy. This is a fancy way of saying that the United States has massive income inequality, with the top 1 percent earning 23.8 percent of the national income and controlling 38.6 percent of national wealth. For political candidates on the left, this intensifies their meliorism and arguments that a structural dismantling of this concentrated power is necessary.

In general, Washington politicians have failed to take steps to make markets more competitive, allowing superstar companies to become even more powerful. Sure, retirement accounts do OK, but wages and the economy suffer as a result of decreasing competition.

None of this is new, it’s just been forgotten. Regulating market concentration has been a leitmotif in American history, starting with passage of the nation’s first antitrust law, the Sherman Act of 1890. Later, President Theodore Roosevelt led the effort to break up the Standard Oil Company’s monopoly, and up through the 1960s many mergers were routinely challenged.

Fast forward to the 1970s, when University of Chicago scholars argued that the Sherman Act was to protect consumers from high prices, not preserve competition by protecting small businesses from big ones. They claimed that large companies contribute to economic efficiency and innovation, and government should cut back on antitrust enforcement. In effect, get government off the back of American industry.

They won the day. Other than Microsoft, antitrust enforcement on big companies has been essentially dormant for the last 40 years.

It may be time to take a fresh look at the enforcement of antitrust law – especially big tech companies. But don’t hold your breath. Big corporations spend tens of millions of dollars every year to push their objectives. According to the Center for Responsible Politics, Facebook spent $12,120,000 on lobbying in 2018 and Amazon spent $14,400,000.

Former California political power broker Jesse M. Unruh was indeed right when he said, “Money is the mother’s milk of politics.”

The Platform Economy

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As the third decade of the 21st century begins, the power of digital platforms to disrupt industries is impressive. But the time may have come for tech companies to take more responsibility for the content on their platforms.

For the uninitiated, a platform is essentially a marketplace that connects goods and services with people who want to buy them, bringing together producers and consumers in high-value exchanges that disrupt traditional industries and incumbent players. Companies such as Facebook, Google’s YouTube, Twitter, Amazon, Uber, and Airbnb have all been built around this concept.

These online platforms play an important role in the economy and have insinuated themselves into people’s everyday lives, often serving as gateways for how goods, services, and information and even people access each other. They deploy bespoke software systems to connect content creators with viewers, sellers with buyers, link riders and drivers and hosts with travelers. But the companies claim no responsibility for the products or services on their platforms.

Economists use the term “network effects” to refer to the way the value of a product or service increases in tandem with the number of people who use it. The idea is that you benefit from aligning your behavior with that of others. The argument goes that the value of a platform largely depends on the number of users on either side of the exchange. The more users a platform has, the more attractive it becomes, creating a virtuous circle.

Once a platform reaches a certain size, the thinking goes, it begins to dominate the market, dislodging incumbents and creating a formidable barrier to entry. Network effects handcuff customers to the largest player.

For example, it is much harder to switch to a different smartphone if doing so means you have to give up all your apps. Online two-sided platforms or marketplaces are among the fastest-growing Internet startups in existence. Among notable two-sided platforms that quickly reached millions of customers were Airbnb, eBay, and Uber.

Instagram is another example. The social media application allows you to follow people of interest and share posts to those who follow you. Having more people on the service means more accounts of interest to follow and more people to interact with your posts.

Social networking sites emulate the network effects strategy used by another brand that has long held a dominant position in the tech industry. When a customer buys one of Apple’s iPhones, one consideration is the number and types of apps that are available on the platform. The company has created a beautiful ecosystem, a bit like the Hotel California: Once you check in, you might never leave.

There is a dark side to these platforms. The dominance of tech companies such as Amazon, Google, and Facebook benefits customers with low prices and access to more data-driven services, but they have also become powerful monopolies, preventing new market entrants. Also, firms such as Amazon, with its considerable market power, throw their weight around by requiring some sellers to provide them with the best prices they can bestow on any online channel.

The dominance of the leading online platforms has invited bipartisan support and scrutiny from lawmakers and regulators in the U.S. and Europe for not doing enough to police platform content. Many lawmakers and regulators have criticized social media platforms such as Facebook and Twitter for the flood of misinformation during the 2016 Presidential election.

The U.S. Department of Justice and state attorneys general have initiated a review of market-dominating online platforms in response to concerns about lack of choice, privacy, transparency, and public safety. Of course, you can expect the leading firms to fight back and defy demands to police content and resist the heavy hand of regulation on their online digital platforms.

As always, they want to regulate their own businesses. You all know how that generally turns out.

The Debt Dilemma

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The U.S. debt is more than $23 trillion, by far the largest in the world. During the fiscal year that ended on Sept. 30, 2019, Uncle Sam laid out nearly $4.4 trillion, while taking in just $3.5 trillion in revenue, which adds up to a $984 billion deficit, 26 percent higher than the year before and equal to 4.6 percent of the country’s gross domestic product. In the first two months of the current fiscal year (October and November) the feds ran a $343 billion deficit.

If not corrected, the fallout from exploding debt will be felt for generations.

Most of the federal budget goes toward entitlement programs such as Social Security, Medicare, and Medicaid, which account for about 47 percent of all spending. Those costs are expected to increase because of the aging population and the resulting rise in health care spending.

Unlike discretionary spending, which Congress must appropriate each year, entitlement spending occurs automatically unless Congress alters the underlying legislation. In the past fiscal year, only 31 percent of federal spending went toward discretionary programs, with defense spending taking up roughly half of that.

Going forward, the nation is looking at trillion-dollar deficits. According to the Congressional Budget Office, federal budget deficits are projected to average $1.2 trillion annually for the next decade thanks to recent tax cuts and spending increases, along with continued growth in entitlements programs.

Federal Reserve Chair Jerome Powell recently testified that the country’s current fiscal situation is unsustainable, noting that high and rising debt threatens to slow economic growth and increase federal interest payments, leaving the country vulnerable when the next recession occurs and putting an undue burden on future generations. The national debt is growing faster than the economy, and its rapid growth threatens the nation’s economic health.

So far, none of the leading presidential candidates, including the incumbent, have interrogated the debt issue. Stoned on their own virtues, invincible in the belief they are right, the candidates make incandescent, seductive promises, promises, and more promises to the laity who are looking for a free lunch and shortcuts to economic growth. These promises, such as Medicare for All, are to be financed by cooking up a raiding party on the 1 percent, on corporate America and on an Amazon forest of magical money trees postponing the day you have to square the ledger.

The reason the debt issue and its attendant risks are studiously avoided is obvious enough: politics trumps (if we can use that word) economics. There is no incentive to put principle before career ambitions. Better to live in the eternal present and just spend, spend, spend. The public is okay with that. The fault, with apologies to Shakespeare, is in ourselves.

There are a number of risks attendant to the rising debt. For example, if interest rates rise, servicing the federal debt will consume resources that could be spent on infrastructure, education, and research. As Chairman Powell noted, increased federal interest payments could leave the country less prepared for the next recession and put undue burdens on future generations.

Correcting the debt trajectory will require politically difficult decisions. Basic economics suggest three options for balancing the books: cut benefits, raise taxes, or do both. There are no easy answers. Whether you seek to increase taxes or cut spending, you are likely to face headwinds. Benefits once given are hard to cut, much less freeze.

The path of least resistance is just to print money. Simply monetize the debt, make asset prices rise and ignore the consequences of currency depreciation. Sound familiar?

One thing is certain; the country needs to get debt under control before the fiscal house of cards collapses and we find ourselves in another financial crisis. It would be wise to recall what Herbert Stein, an economist and member of the Council of Economic Advisors under Presidents Nixon, Ford, and Reagan wrote: “If something cannot go on forever, it will stop”.

A Day That Should Live In Infamy

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Editor’s note: This was first published in The Patriot Ledger Dec. 5, 2014.

Early in 1941, the government of resource-poor Japan realized that it needed to seize control of the petroleum and other raw material sources in the Dutch East Indies, French Indochina and the Malay Peninsula. Doing that would require neutralizing the threat posed by the U.S. Navy’s Pacific Fleet based at Pearl Harbor in Hawaii.

The government assigned this task to the Imperial Navy, whose combined fleet was headed by Admiral Isoroku Yamamoto. The Imperial Navy had two strategic alternatives for neutralizing the U.S. Pacific Fleet. One was to cripple the fleet itself through a direct attack on its warships, or cripple Pearl Harbor’s ability to function as the fleet’s forward base in the Pacific.

Crippling the U.S. fleet would require disabling the eight battleships that made up the fleet’s traditional battle line. It was quite a tall order.

The most effective way to cripple Pearl Harbor’s ability to function as a naval base would be to destroy its fuel storage and ship repair facilities. Without them, the Pacific Fleet would have to return to the U.S., where it could no longer deter Japanese military expansion in the region during the year or so it would take to rebuild Pearl Harbor.

It soon became apparent that the basics of either strategy could be carried out through a surprise air raid launched from the Imperial Navy’s six first-line aircraft carriers. Admiral Yamamoto had a reputation as an expert poker player, gained during his years of study at Harvard and as an Imperial Navy naval attaché in Washington. He decided to attack the U.S. warships that were moored each weekend in Pearl Harbor. But in this case the expert poker player picked the wrong target.

The Imperial Navy’s model for everything it did was the British Royal Navy. Standard histories of the Royal Navy emphasized its victories in spectacular naval battles.

Lost in the shuffle was any serious consideration of trying to cripple Pearl Harbor’s ability to function as a forward naval base. So it was that, in one of history’s finest displays of tactical management, six of the world’s best aircraft carriers furtively approached the Hawaiian Islands from the north just before dawn that fateful Sunday, Dec. 7, 1941, launched their planes into the rising sun, caught the U.S. Pacific Fleet with its pants down and wrought havoc in spectacular fashion. On paper at least, this rivaled the British Royal Navy’s triumph at Trafalgar.

But so what?

The American battleships at Pearl Harbor were slow-moving antiques from the World War I era. As we know, the U.S. Navy already had two brand new battleships in its Atlantic Fleet that could run rings around them. And eight new ones the navy was building were even better.

More importantly, the Pacific Fleet’s three aircraft carriers weren’t at Pearl Harbor. American shipyards were already building 10 modern carriers whose planes would later devastate Imperial Navy forces in the air/sea battles of the Philippine Sea and Leyte Gulf.

Most importantly, as the sun set on Dec. 7 and the U.S. Navy gathered the bodies of its 2,117 sailors and Marines killed that day, all-important fuel storage and ship repair facilities remained untouched by Japanese bombs, allowing Pearl Harbor to continue as a forward base for American naval power in the Pacific.

So in reality, Dec. 7 marked the sunset of Japan’s extravagant ambitions to dominate Asia. Admiral Yamamoto and the Imperial Navy’s other tradition-bound leaders chose the wrong targets at Pearl Harbor.

The dictates of tradition are usually the worst guides to follow when it comes doing anything really important. After all, if they survived long enough to be venerated, they’re probably obsolete.