What Does $1 Trillion Look Like?

According to Goldman Sachs, the U.S. government may sell a record $3.25 Trillion of debt this fiscal year ending September 30, in an attempt to end the steepest U.S. recession in half a century.

This additional debt will be added to the current $11.25 Trillion national debt, meaning the total debt will probably exceed the entire GDP before the year is over. Last year, the GDP was $14 Trillion, but it is undergoing a serious contraction this year.

Meanwhile the budget deficit has already reached $1 Trillion -- the first time it has ever reached that lofty sum -- and it is expected to reach $1.84 Trillion by the end of this fiscal year (Sept. 30).

We shouldn't be surprised if the deficit reaches $2 Trillion, as these numbers have already gotten so completely out of hand. And once you're talking a about a trillion, what's a few billion more, right?

With all this talk of trillion of dollars, and the figure being tossed around rather casually, perhaps we should put $1 Trillion in perspective.

A stack of $1,000 dollar bills four inches high would equal $1 million.

A stack of $1,000 dollar bills 358 feet high would equal $1 billion.

A stack of $1,000 dollar bills 67.9 miles high would equal $1 Trillion.

You could line the side of the road from Springfield, MA to Albany, New York with $1,000 dollar bills -- stacked on their sides -- and that would equal $1 trillion.

The following graphic provides a better understanding of amount of money we're talking about. Bear in mind, this is only $1 Trillion; the federal budget for ONE YEAR is $3.6 Trillion, and our debt will soon exceed $13 Trillion.

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The Debt and Interest Rates; a Vicious Cycle

The interest on this year’'s debt will cost taxpayers $565 billion, or 4 percent of GDP. That number will only increase in coming years. And naturally, with a shrinking GDP, it will become an ever increasing percentage of the overall economy.

While budget expenditures are increasing, government revenues so far this year have dropped 18 percent from a year ago. Government income and revenues are going in the wrong directions.

Our massive debt will put upward pressure on interest rates.

According to government projections, each 1% rise in interest rates will add $50 billion annually to the debt, and eventually $170 billion annually over time.

If the economy were to recover, demand for credit by the private sector would rise, meaning the government’s borrowing costs would also increase. That would raise interest rates for everyone. This makes for an odd conundrum; do we hope for a recovery at the expense of higher interest rates?

So we've begun a vicious cycle; the growing debt will eventually increase interest rates, and increasing interest rates will only further add to the national debt. Paying debt interest gets us nothing in return; it doesn't generate economic growth.

The government's falling revenues will spur the government to issue more bond debt, which will eventually have to be paid back with interest.

According to Citi Group, the federal government will sell more than $5 trillion in new debt this year and next.

The cavernous hole we're in just keeps getting continually deeper.

Budget Deficit Highest Since WWII

The Office of Management and Budget estimates that the budget deficit this fiscal year (which ends Sept. 30) will be $1.84 trillion. For the 2010 fiscal year, the estimate is $1.26 trillion.

Measured against the economy, this year’'s shortfall is 13 percent of the gross domestic product. Next year’'s deficit would be 8.5 percent of GDP. These deficit projections are the highest in more than 60 years, since the end of World War II.

Economists generally agree that a country'’s annual deficits should not exceed 3 percent of economic output.

US Bank Closings

2007 - 3
2008 - 25 (more than in the previous five years combined)
2009 - 53, and counting. It's only July.

The FDIC’s list of “troubled banks” stood at 305 at the end of the first quarter, the latest data available. By the end of 2008, the agency expected bank failures to cost its insurance fund around $65 billion through 2013, up from an earlier estimate of $40 billion. However, its problems have grown continually worse.

The FDIC has $53 billion to cover $4.4 trillion in deposits. Does that make you feel insured?

POLITICS, SEMANTICS, AND A REALITY CHECK

Most political observers feel that next month's mid-term elections will be a referendum on Iraq, and even on the president's handling of that war. And considering the latest polling data, Republicans, who've been arguing "stay the course" for well over a year, should be worried.

According to the latest Newsweek poll, conducted just last week, a majority of Americans (54%) think that military action in Iraq was wrong, and 65% think the U.S. is losing ground in Iraq. And in a CNN poll, conducted two weeks ago, 64% of respondents said they oppose the war.

Perhaps with that in mind, this week the White House announced it will no longer use the term "stay the course" in discussions about Iraq. Press Secretary Tony Snow said the White House wants to emphasize its flexibility on achieving its goals and no longer wants to talk about sticking to one approach.

Timing is everything in politics, and with elections looming, its difficult to say if the president's timing couldn't be better, or worse. Does this change in semantics make the president seem as if he finally "gets it", or does it simply make him seem out of touch and out of step with the rest of the country?

While many Democrats running for office this fall have been calling for a phased redeployment of U.S. troops from Iraq, Republicans have consistently derided the idea as "cutting and running".

Meanwhile, polling data aside, the recent White House move was likely prompted by the fact that a commission backed by President Bush has agreed that 'stay the course' is not working and that a phased withdrawal is now on the table. While it weighs alternatives, the 10-member commission headed by former Secretary of State James A. Baker III has agreed on one principle.

"It's not going to be 'stay the course,' " said one participant. "The bottom line is, [current U.S. policy] isn't working…. There's got to be another way."

In a recent television interview, Baker, a longtime Republican and Secretary of State in the first Bush Administration, said, "There'll probably be some things in our report that the administration might not like."

Two options under consideration would represent reversals of U.S. policy: withdrawing American troops in phases, and, incredibly, bringing neighboring Iran and Syria into a joint effort to stop the fighting. Iran, if you remember, was famously on President Bush's "axis of evil" list, along with Iraq and North Korea. Now the U.S. may use one "evil" nation to help subdue another.

While the president talks of "winning" in Iraq, many wonder just what exactly that means. To spell it out, communications strategists working with House Republicans circulated a three-page memo last week that describes winning as, "helping the Iraqis achieve stability and security and doing it as quickly and effectively as possible in order to bring our troops home.''

Of course that says nothing about democracy, which many thought the U.S. had been fighting for all along. But then again, the reasons for the war have changed numerous times. Now its about stability and security. Sometimes you take what you can get, if you can get anything at all.

According to Baker, instead of trying to bring democracy to all nations in the Middle East, the U.S. should define success as achieving "representative government, not necessarily democracy."

So much for good intentions. Perhaps we'll have to leave it to the history books to decide why over 2800 U.S. military personnel have died in Iraq.

Copyright © 2006 Sean M. Kennedy. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.

ON GOD, RELIGION, AND THE LAW

No matter how much things have changed through the ages, much remains quite the same. We still live in a time when Christian conservatives would like to legislate their religious beliefs on the rest of us, though we might not necessarily share their views. These people claim to know God's will -- it's in the Bible, they say. Of course, Muslims think that God's will is found in their holy Koran. And yet, Buddhists and Hindus have their own texts and views.

But some of us believe that God is infinitely unknowable to our limited, and comparatively meager, human minds. God is vast; we are small and meek. Who are we to speak for God, and determine His or Her divine will?

None of this deters those who claim to have divine wisdom, or a window into God's heart and mind. They seem to know God's position on matters such as Terri Shiavo, and other unfortunate souls like her. They also know what God thinks about contraception and gay marriage. But to claim knowledge of God's will certainly isn't a humble position. It is bold and brash, perhaps even insolent.

In fact, some Christian conservatives are so assertive in their views, and so convinced of their own righteousness, that they'd like to force the rest of us to adopt their views -- to think like they do. And if we can't -- or won't -- they'd still like to impose their will, in the form of laws, on all of us. After all, in their view, those are God's laws. So their religion, by this logic, should dictate the laws for everyone.

Well, not in my view. I prefer a more Libertarian perspective. You live your life, and I'll live mine -- as long as we don't hurt each other.

Here's a fine definition of Libertarianism:

"Libertarianism is a political philosophy advocating that individuals should be free to do whatever they wish with their person or property, as long as they do not infringe on the same liberty of others. Libertarians hold as a fundamental maxim that all human interaction should be voluntary and consensual. They maintain that the initiation (or threat) of physical force against another person or his property, or the commission of fraud, is a violation of that principle."

Laws don't exist naturally. They have to be written and enacted by people. They are not written to allow things, but to disallow them. In the natural state, all things are allowed. But then people agree on a consensus of what is not allowed and subsequently make laws proclaiming certain behaviors illegal.

For example, people of the same sex marrying wasn't illegal until people decided to make it illegal. That required action.

Those who oppose gay marriage, for instance, might say that its legalization would force them to accept it. But allowing people to exercise their free will is not the same as imposing your will upon them. That's the difference between a Libertarian view, and the views of others who are comfortable telling the rest of us what to do. Now I'm not gay, or even a strong supporter of gay marriage, but Libertarians oppose any laws restricting personal or consensual behavior.

I wouldn't force two people, of any persuasion, to get married. And I wouldn't keep two people, of any persuasion, from getting married -- assuming they're both legal adults (it's worth noting that age of consent laws are set by each state and vary from 14-18 years). But there are people who want to prevent others from getting married. There is a huge difference between those two positions.

Freedom shouldn't be measured in how little we're constrained by authority, or how much we're allowed to do, but rather by how much we're able to do.

Throughout the ages, philosophers and have contended that the paramount natural rights are the rights to life and liberty, which have long been considered the two highest priorities.

The following definition of Natural Law is useful:

"Natural rights are universal rights that are seen as inherent in the nature of the world, and not contingent on human actions or beliefs. The theory of natural rights was developed from the theory of natural law during the Enlightenment in opposition to the divine right of kings, and provided a moral justification for liberalism.

The concept of a natural right can be contrasted with the concept of a legal right : A natural right is one that is claimed to exist even when it is not enforced by the government or society as a whole, while a legal right is a right specifically created by the government or society, for the benefit of its members."

As a society, we must join together in deciding which laws should be adopted. But we must remain free from constraints that have evolved, or resulted, from religious beliefs, sacred myths, patriarchal teachings, or any dogmatic concepts that remain open to interpretation. If a law is proposed that doesn't suit you, make a rational argument about why it is impractical, or harms somebody, or is in opposition to another useful law; but don't tell me it offends God.

Copyright © 2006 Sean M. Kennedy. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.

NEW PENTAGON REPORT RAISES CONCERNS OF CIVIL WAR

The latest Pentagon report on the Iraq war, issued Friday, says that the Sunni Arab insurgency has now been overshadowed by the battle between Shiite and Sunni militias.

That struggle, referred to as the “core conflict”, has the Pentagon quite concerned.

“Conditions that could lead to civil war exist in Iraq, specifically in and around Baghdad, and concern about civil war within the Iraqi civilian population has increased in recent months,” the report stated.

Attacks have increased by 15 percent in the past three months and casualties among Iraqis surged 51 percent. According to the report, the increasing sectarian violence is being fed in part by interference from neighboring Iran and Syria.

Of particular concern is that the militias have become entrenched in various neighborhoods, especially in Baghdad, where they are seen as providers of security as well as basic social services.

The report said the U.S. is currently facing its greatest challenge since the war began in March 2003. “The security situation is currently at its most complex state since the initiation of Operation Iraq Freedom,” it read.

Though notably gloomy in its acknowledgment of the potential for civil war, the report said the current violence does not amount to that just yet and asserted that the momentum toward such a war can be stopped.

But just last week, a statement purportedly from al-Qaida’s Iraqi umbrella group urged Sunnis, who form the majority among the world’s Muslims but a minority in Iraq, to launch a holy war against Shiites.

Many Iraqis fear a divided capital, separated by the Tigris River in the middle as the sectarian boundary, resulting in a Sunni west and a Shiite east. Trying govern under those conditions would be nearly impossible for the fledgling government.

DIVIDE AND CONQUER?

MIGHT PITTING SUNNIS AND SHIITES AGAINST ONE ANOTHER BE A SOLUTION TO THE PROBLEMS IN IRAQ AND IRAN?

In Iraq, the daily barbarism and savagery continue unabated.

And yet, the Bush Administration and Pentagon continue to protest that, despite evidence to the contrary, Iraq is not in the midst of a civil war.

Though the civilian death toll Iraq exceeded 3400 in July, with all signs pointing to at least the initial stages of a civil war -- if not the middle of one -- the powers that be deny it. President Bush, VP Cheney, Sec. Rumsfeld, Sec.Rice, and the top generals in the field, Peter Pace and John Abizaid, think that by denying the truth that they can reassure, and even fool, the American public.

But July was the most deadly month for civilians since the war began, and clearly the fighting is not waning in any way.

With a population of approximately 28 million, it requires quite a leap to suggest that 3400 hundred citizens killing each other in just one month isn't civil war. For comparisons sake, consider the following; the July death toll represented about .012% of Iraq's population. The U.S. has about 11 times Iraq's population. If we were to have suffered a relative civilian death toll in July (.012%), it would have resulted in 36,000 American deaths.

Does anybody really doubt that, if there were that many Americans killed at the hands of fellow Americans, we wouldn't be calling it a civil war?

Since the war started in March of 2003, roughly 2600 Americans have died in Iraq. That death toll is shocking to most of our civilian population, and many of them want out troops out now. Just imagine how shocked we'd all be if there were 36,000 deaths in just one month this summer, and if were the result of Americans killing each other.

Military officials fear that Iraq's civil war -- let's call it exactly what it is -- will spill over into a regional conflict. It could result in more than just country versus country, but could rather be a matter of Shiites versus Sunnis, regardless of borders.

According to U.S. intelligence sources, in recent months the Saudis and Jordanians, who are predominantly Sunni, have quietly moved to support the insurgency with money and intelligence, fearing that Shiite Iran will dominate the new Iraqi government if the U.S. decides to leave.

The Bush Administration has gotten the U.S. into a no-win situation. We are stuck between the proverbial rock and a hard place, where none of the choices are very good, and all outcomes are uncertain.

What's most ironic is that the Sunni insurgency, which has long been fighting for a U.S. withdrawal, is now hoping the U.S. will stay put to protect them from the majority Shiites, whose death squads have been indiscriminately, yet methodically, killing Sunni civilians and government officials alike. Who could have imagined that turn of events?

And according to retired Marine Colonel Thomas X. Hammes, author of The Sling and the Stone: On War in the 21st Century, that's just what the Sunnis now fear. "They absolutely think we're leaving. This is what happened in Afghanistan when it became clear the Russians were leaving. The factions began fighting each other."

Afghanistan is instructive: civil war led to the Taliban government; the Taliban provided a safe haven for al-Qaeda; and we all know the rest of the story. A U.S. withdrawal from Iraq could lead to far worse consequences, given Iraq's strategic location and potential oil wealth.

But remaining in Iraq in the middle of a civil war is as mad as it is fruitless. Choosing sides would be picking the lesser of two evils. One way or another, the U.S. would be in bed with the devil -- and that's not a good bed partner.

It's time to consider a critical question; might it be in the best interests of the U.S. to let the war rage and allow the participants to exhaust themselves? The old axiom is "the enemy of my enemy my friend." With both groups hostile to the U.S., as long as they're fight one another instead of us, don't they both become our friends? A peculiar logic indeed, but perhaps useful nonetheless.

What if the U.S. military were to "help" the Syrian and Iranian governments by completely drawing back to, and sealing, those borders from the Iraqi side. That way the U.S. could keep out foreign fighters entering from those countries, as well as cutting off supply lines that feed the both the Sunni and Shiite insurgencies. Syria and Iran claim that either there is no problem at all, or that they're doing the best they can. Perhaps our military could do better while staying out of harms way.

Iran clearly sees itself as not only the most powerful nation in the region, but also as a burgeoning counter-balance to the U.S. on the world stage. The Bush Administration aren't the only ones concerned. The Egyptians, Saudis and Jordanians also fear Iranian hegemony in the region and would like to thwart the rise of Shiite dominance.

And over the past few months, the Iranian government has been setting the stage for a showdown with the U.S. over its nuclear program, betting that the Europeans will likely back down, leaving the U.S. to go it alone once again, as it did in Iraq. And they are also gambling that the U.S. is too burdened in Iraq to take them on militarily as well.

A military report earlier this year described the army as a "thin green line" that has already been stretched too far. It claims the U.S. lacks the resources in terms of money, manpower, or conventional weaponry to engage in another simultaneous conflict. Retired Gen. Barry McCaffrey backed the report's conclusions. Perhaps the Iranians read the report too.

That said, might not be in the best interests of the U.S. to pit the Sunnis and the Shiites against one another? It's a question worth asking.

Copyright © 2006 Sean M. Kennedy. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.

THE MIDTERM ELECTION: CONTEMPLATION AND EXASPERATION

At present, the Republicans hold as massive fundraising advantage over the Democrats. In the seven biggest Senate races this cycle, Republicans have a combined advantage of more than $20 million. The Dems will use that as either a rallying cry, or an excuse, but one way or the other, the figure does sound surmountable.

If the Democrats can't bridge the gap, there'll be at least a couple more years of such Republican frivolity as trying to impose further limits on abortion, and passing constitutional amendments against gay marriage and flag burning; Senate Majority Leader Bill Frist has said as much himself. Meanwhile the Republicans haven't been able to find the time to work on Universal Healthcare -- the lack of which is making U.S. businesses highly uncompetitive -- or stem cell research, which has the potential to save lives. Instead, they'll continue using inflammatory wedge issues to divide the nation, because that's what's worked in the past.

There is so much important work to be done on behalf of the citizens of this country, yet the Republican leadership has wasted their time and energy pandering to the extreme interests of evangelical Christians and Big Business.

Instead of working on issues such as the growing trade debt, renewable energy, the environment and global warming, education, and paying down the federal debt, the Republican leadership spent their precious time interfering in the private matters of the Shiavo family. What they thought was the moral high ground turned out to be just one more low point among many.

Social Security reform went nowhere, which is exactly where immigration reform and lobbying reform seem to be headed.

The Republicans control the Congress, and thus have budgetary control -- or at least what passes for it. One look at the recent history of Republican spending tells us plenty about the Republican priorities.

According to the Wall Street Journal, when the Republicans took control of the purse strings in Congress in 1995 the federal budget was $1.5 trillion. It is now $2.55 trillion per year - or $ 5 million per minute - and the latest Treasury data reveal that in fiscal 2005 federal outlays grew by another $ 179 billion, an eight percent increase and more than twice the rate of inflation.

In 1995 there were 1439 earmarked federal projects, otherwise known as pork barrel spending, costing $10.1 billion. By 2005 the number had grown to 13,998 earmarked projects, for a total cost of $27.3 billion in taxpayer money.

Republicans controlled both houses of Congress during that decade.

In 2001, unemployment was 4.2% and is now 4.9% -- a 17% increase.

In 2001 the federal budget had a $281 billion surplus, today there is a $400 billion deficit -- a $681 billion loss.

In 2001 the federal debt was $5.7 trillion, it is now $8.2 trillion -- up 44%.

Whatever happened to the party of smaller government and fiscal responsibility?

As an Independent, I don't really have a dog in this fight, ideologically. However, I have nothing in common with the Christian Right or Big Business, so that's where the Republicans and I part company. As someone with a strong Libertarian streak, I fail to see how gay people marrying affects my life one iota. Nor, for that matter, does someone burning the flag. I may not like it, or respect it, but a Constitutional Amendment against it? Please! I'm more concerned about the fact that my health insurance went up 50% in less than 2 1/2 years -- with no claims!

I'm also more concerned about the effect the price of oil will have on our economy. Millions of Americans are already feeling the pinch every time they fill up their gas tanks. Meanwhile, every single day, cars and municipal busses across the U.S. are being run on biodiesel -- which is essentially vegetable oil -- as well as ethanol, and yet we're still paying $3 plus for petroleum. What a racket! How can Brazil, long known as a Third World country, declare itself energy independent, while we're still reliant on foreign countries for 50% of the oil we consume? How can that be? Perhaps the powers that be (i.e. the oil and automotive industries) have shut out these competing and revolutionary technologies in their own interests. As we know, those two industries are good friends of the Republican leadership, and as such any attempts at raising the fuel efficiency standards of autos has gone nowhere.

President Bush and the Republicans spent too much time, and too much political capital, trying to "save Social Security" when in actuality its trust fund is expected to remain funded until at least 2041 -- 35 years down the road. Meanwhile the real fiscal crisis looms in the form of Medicare. The medical trust fund that benefits the elderly will run out of money in 2018 - just 12 years from now. Have you heard any public warnings about that? No, well the Republicans have been shamefully silent about it.

The point is that the Republicans have been the party in control and were expected to lead. But they haven't. Instead they've done virtually nothing except let Big Energy write the energy bill, and the pharmaceutical industry write the massively expensive new entitlement known as the Medicaid Prescription Drug Bill. What a legacy.

The midterm elections are just five months away, and scandals aside, the Republicans have plenty of reason to worry, not the least of which is that they've failed the American people miserably.

Copyright © 2006 Sean M. Kennedy. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.