Beruflich Dokumente
Kultur Dokumente
SPENDING DA
spending 1nc ................................................................. 2 aff- n/u- econ low .........................................................12
U- economy strong/not that bad....................................... 4 aff- fiscal discipline = n/u ...............................................13
U- brink of recession....................................................... 5 aff- turn- bubble spending ..............................................14
U- fiscal discipline .......................................................... 6 Aff- Econ = resilient.......................................................16
link- pork snowball ......................................................... 7
link- emissions reductions ............................................... 8
bubble link .................................................................... 9
i/l- us k/t world economy ...............................................10
AT: Economy = resilient .................................................11
1
Economy DA UTNIF 2k8
Super Happy Fun Pack
SPENDING 1NC
A. UNIQUENESS—SOME ECONOMIC PAIN IS INEVITABLE BUT ITS QUESTION OF WHETHER WE
CAN WEATHER THIS STORM
Spengler, 2k8
[“How to stop the Great Crash of '08” Asia times, July 1,
http://www.atimes.com/atimes/Global_Economy/JG01Dj07.html]
Today's crisis, by contrast, threatens the solvency of households. After a quarter-century of taking on debt,
home prices are collapsing. Americans, moreover, have saved nothing during the past decade,
borrowing an annual sum from foreigners that amounted to $1 trillion in 2007. The crisis of household
solvency became a banking crisis through the collapse of the market for lower-quality (subprime)
mortgages, and threatens to metastasize into something much broader. That is the message the
markets delivered during June.
There is no way to avoid some economic pain. America is in a recession and will stay in a
recession for a while. The only question is whether it will come out of the recession in one
piece.
B. LINK- FIAT MEANS THE PLAN’S SPENDING WILL OPERATE LIKE SACRED COW – THIS ALSO
DESTROYS FISCAL DISCIPLINE.
Megna 2005 (Alane, 2/11 The Leaf-Chronicle)
Bush counters that the budget plan - which includes cuts to such traditional sacred cows such as farm subsidies
and other aid to rural areas - are needed in order to bring the budget under control. Republican chairmen of
the Senate Appropriations Committee and the Agriculture Committee, however, are saying that the cuts won't be passed by their
panels.
The president also has run into opposition from both members of Congress and state officials over his plan to scale back Medicaid.
For his part, Tennessee Gov. Phil Bredesen has said that changes have to be made in the Medicaid system in order to prevent it from
bankrupting the states, which have been unable to keep up with cost overruns of providing public health services.
the overall national economy will benefit from the spending discipline he has put forth
The president says
in his budget. But the reality of the situation is that once the government starts spending on something,
it's nearly impossible to stop it because too many people have a vested interest in its
continuance.
THE PERCEPTION OF THE BUDGET IS KEY – LOSS OF CONFIDENCE IN THE BUDGET CRIPPLES
THE US ECONOMY
Bergsten 04 (C. Fred, director of the Institute for International Economics, "The Risks Ahead for the World
Economy," Economist, 9/9, http://www.economist.com/opinion/displayStory.cfm?story_id=3172404)
Robert Rubin, former secretary of the Treasury, also stresses the psychological importance for
financial markets of expectations concerning the American budget position. If that deficit is
viewed as likely to rise substantially, without any correction in sight, confidence in America's
financial instruments and currency could crack. The dollar could fall sharply as it did in 1971-73,
1978-79, 1985-87 and 1994-95. Market interest rates would rise substantially and the Federal Reserve would probably
have to push them still higher to limit the acceleration of inflation. These risks could be intensified by the change in
leadership that will presumably take place at the Federal Reserve Board in less than two years, inevitably creating new
uncertainties after 25 years of superb stewardship by Mr Volcker and Alan Greenspan. A very hard landing is not inevitable but
neither is it unlikely.
2
Economy DA UTNIF 2k8
Super Happy Fun Pack
SPENDING 1NC
US ECONOMIC DECLINE SPREADS GLOBALLY, UNDERMINING US LEADERSHIP AND MAKING
WMD CONFLICT WITH CHINA INEVITABLE
Mead 4/1/2k4 (Walter Russell, Senior Fellow @ Council on Foreign Relations, Foreign Policy, lexis)
Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States--government and private bonds,
direct and portfolio private investments--more and more of them have acquired an interest in maintaining the strength of the U.S.-
led system. A collapse of the U.S. economy and the ruin of the dollar would do more than dent the prosperity of the United States.
The financial strength of
Without their best customer, countries including China and Japan would fall into depressions.
every country would be severely shaken should the United States collapse. Under those
circumstances, debt becomes a strength, not a weakness, and other countries fear to break with the United States because they
need its market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a
crippling liability, and the United States must continue to justify other countries' faith by maintaining its long-term record of meeting
a collapsing U.S. economy would inflict
its financial obligations. But, like Samson in the temple of the Philistines,
enormous, unacceptable damage on the rest of the world. That is sticky power with a vengeance.
THE SUM OF ALL POWERS?
The United States' global economic might is therefore not simply, to use Nye's formulations, hard power that compels others or soft
power that attracts the rest of the world. Certainly, the
U.S. economic system provides the United States with the
prosperity needed to underwrite its security strategy, but it also encourages other countries to
accept U.S. leadership. U.S. economic might is sticky power.
How will sticky power help the United States address today's challenges? One pressing need is to ensure that Iraq's economic
reconstruction integrates the nation more firmly in the global economy. Countries with open economies develop powerful trade-
oriented businesses; the leaders of these businesses can promote economic policies that respect property rights, democracy, and the
rule of law. Such leaders also lobby governments to avoid the isolation that characterized Iraq and Libya under economic sanctions.
And looking beyond Iraq, the allure of access to Western capital and global markets is one of the few forces protecting the rule of law
from even further erosion in Russia.
As China develops economically, it should gain
China's rise to global prominence will offer a key test case for sticky power.
wealth thatcould support a military rivaling that of the United States; China is also gaining political influence in the
world. Some analysts in both China and the United States believe that the laws of history mean that Chinese power will
someday clash with the reigning U.S. power.
Sticky power offers a way out. China benefits from participating in the U.S. economic system and
integrating itself into the global economy. Between 1970 and 2003, China's gross domestic product grew from an
estimated $ 106 billion to more than $ 1.3 trillion. By 2003, an estimated $ 450 billion of foreign money had flowed into the Chinese
economy. Moreover, China is becoming increasingly dependent on both imports and exports to keep its economy (and its military
machine) going. Hostilities between the United States and China would cripple China's industry, and cut off supplies of oil and other
key commodities.
Sticky power works both ways, though. If China cannot afford war with the United States, the United States
will have an increasingly hard time breaking off commercial relations with China. In an era of
weapons of mass destruction, this mutual dependence is probably good for both sides. Sticky
power did not prevent World War I, but economic interdependence runs deeper now; as a result, the
"inevitable" U.S.-Chinese conflict is less likely to occur.
3
Economy DA UTNIF 2k8
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Rising energy and food prices have yet to seep into U.S. core inflation or wages, while the economy will face
a headwind for some time, a top Federal Reserve policy-maker said on Wednesday in dovish remarks.
"The high cost of energy and other primary commodities have not led to much increase in core
inflation, partly because of slackening domestic demand, and there is little evidence that these costs
are feeding a wage-price spiral," Fed Governor Frederic Mishkin told a business forum here.
"The U.S. economy will be subject to substantial headwinds for some time," he said, citing an expected slow recovery from financial
market stresses sparked by the U.S. subprime crisis.
"Thus, growth could continue to be quite weak, though I hope it would pick up next year," said Mishkin, who is leaving
the Fed on Aug. 31. He compared the current episode to the post-recession U.S. economy in the early 1990s.
The Fed last week halted an aggressive campaign of interest rate cuts to shield the U.S. economy from a collapsing housing market
that chilled growth and sparked a global credit crunch.
In the statement accompanying its decision to hold rates at 2 percent, it also noted that inflation worries had grown, which investors
took to mean that the next rate move will be upward.
Mishkin faithfully echoed this caution, saying: "The latest spike up in energy and food prices has raised the upside risk to inflation
and inflation expectations, which we are closely monitoring and seeking to contain."
But Mishkin's remarks also showed that he remained preoccupied with the still-fragile economy, a hint that he might not be pressing
for near-term policy action.
With housing construction continuing to decline and energy prices continuing
"The economy faces challenges.
to rise, risks to growth still appear, to my eyes, to be on the downside. Households face significant headwinds,"
he said.
Recent economic indicators have been stronger than expected. Federal Reserve Chairman Ben Bernanke
has made it clear that he believes the U.S. economy is on the mend, and that he'll resist lowering
interest rates to stoke the economy for fears of fanning the flames of already worrisome inflationary
pressures. (See "Fed Whistles In The Wind.")
4
Economy DA UTNIF 2k8
Super Happy Fun Pack
U- BRINK OF RECESSION
SMALL GROWTH NOW BUT WE ARE ON THE BRINK OF RECESSION
AFP, 2k8
[“Paulson says US economy enduring 'rough period'” July 2,
http://afp.google.com/article/ALeqM5jULwR5qGGziJG3pD5O_WrnIAX5lQ]
giant economic stimulus -- stuffed with tax rebates and backed by the administration of
He said the
President George W. Bush -- had helped shore up US growth, but that the housing downturn poses a
"significant" downside risk to economic momentum.
Foreclosures have soared in recent months as home sales and property prices have continued to tumble across many parts of the
United States.
The world's biggest economy posted subpar growth of 1.0 percent during the first quarter of the
year, and some analysts believe the economy is on the brink of a recession.
Stress in financial markets had abated from earlier extremes but conditions remain delicate, with
spreads in some credit markets still high and banks in pain.
"Significant strains persist. Banks are tightening their lending standards, and conditions could
worsen again should the economic outlook deteriorate further," he said.
In addition, Mishkin said that European growth appeared to be slowing amid their own housing market problems, and noted that
central banks there had eased monetary policy considerably less" than in the United States, due to rising inflation.
But he also warned energy and commodity prices were pressing inflation in emerging economies, and
urged all central banks to be on alert.
"Thecentral banks in most parts of the world are at a crucial juncture. We must all be vigilant to
keep inflation expectations anchored and inflation low," he said. (Reporting by Steven Scheer, writing by Alister
Bull; Editing by Gary Crosse)
5
Economy DA UTNIF 2k8
Super Happy Fun Pack
U- FISCAL DISCIPLINE
HOUSE WORKING HARD TO HOLD THE LINE ON FISCAL-D, PARTICULARLY ON ENERGY RELATED
ISSUES
Cash, 2k8
[Cathy. “Senate to vote on tax credit extensions again; House leaders insist on offsets” Inside Energy with
Federal Lands, June 16, Pg. l/n]
House Democratic leaders have made it quite clear that the House will not
"Once again,
consider an extenders bill that adds to our nation's already enormous debt," Senate Majority
Leader Harry Reid said last week. "I hope that my Senate Republican colleagues will find a way to get beyond the ideological
straightjackets that have led them to oppose this important legislation."
A Senate vote on the Renewable Energy and Job creation Act of 2008 (H.R. 6049) Tuesday was 10 short of the 60 needed to avoid a
Republican filibuster. Senate Finance Committee Chairman Max Baucus said he plans to offer a substitute to the House bill on
Monday (June 16), but maintain that measure's provisions to offset the cost of the tax credits.
any legislation
Citing Senate Republicans as a "roadblock" to a package of energy incentives, House leaders said Thursday that
to extend tax breaks for the energy industry and other sectors must include the means to pay for
them.
"Let me be very, very clear: The House will not vote to waive the PAYGO rule for tax extenders
legislation that increases the deficit," House Majority Leader Steny Hoyer said.
Even if Congress remains in session as late as November, an extenders bill from the Senate that "is not paid for
will not pass" the House, the Maryland Democrat said. "I will not put it on the floor."
Hoyer, who said he also spoke for House Speaker Nancy Pelosi, made the comments at a Capitol Hill news conference where he was
joined by House Ways and Means Chairman Charles Rangel and Tennessee Democrat John Tanner of the House's fiscal conservative
"Blue Dog Coalition." The House passed the bill May 21.
Hoyer sent a letter signed by more than 100 House members to Senate Republican Leader Mitch McConnell of Kentucky and Reid, a
Nevada Democrat, reiterating the House position.
"The House will not pass this legislation if the Senate strips the offsets from the package," the letter said.
"Continued opposition to the reasonable offsets for this legislation will result in millions of American families and businesses being
denied tax relief."
Congress is also on track to consider a package of tax extenders, including a fix for the Alternative
Minimum Tax that is expected to hit some 21 million taxpayers filing 2008 tax returns next year. On
Wednesday, the House approved a $62 billion AMT fix, including tax increases for hedge-fund
managers and the oil and gas industry to offset the cost of the bill. The bill passed 233 to 189 but faces strong
opposition from Senate Republicans, who have the votes to hold up the legislation until the offsets are removed.
6
Economy DA UTNIF 2k8
Super Happy Fun Pack
Congressional Democrats did an admirable job of purging pork barrel projects — also called earmarks —
from spending bills that were left unfinished when Republicans were ousted from power last fall. They
had to do something, given all their campaign rhetoric about those fiscally feckless Republicans. But whether they can for long hold
the line on earmarks is doubtful, given the party in power’s propensity to pork out.
The true test isn’t what Democrats did right out of the starting gate, when they knew the American people were watching, but how
they will operate over the long haul, when the public’s anger over earmarks subsides and attention shifts elsewhere. So far, on that
front, the signals are mixed.
We were heartened to read a recent report that House Appropriations Committee Chairman David
Obey, D-Wis., might try keeping fiscal 2008 spending bills pork-free. If he’s serious, and succeeds, it
could mark a turning point in the war against wasteful federal spending. But success is far from
certain, given the appetite most members of Congress — and their constituents — have for homestate pork.
“Eliminating (earmarks) altogether is still in the discussion stage, sources said, but the prospect has triggered widespread concern
over the potential for another earmark-free fiscal year,” CongressDaily reported last week. Obey is feeling pressure not just from
Democrats looking to cash in on majority status, but from Republicans who’ve made a clean break from the party’s fiscally
conservative roots.
During a recent meeting, House Agriculture Appropriations Subcommittee ranking member Jack Kingston, a Republican from
Georgia, said the fight against earmarks may have gone too far. “I think that we have worked ourselves into a frenzy on the subject
and when that happens Congress historically overreacts,” Kingston said. If Democrats want bipartisan backing for their bills, they’ll
have to grease the skids with the accustomed giveaways, he warned. “The problem is you need Republicans to pass the bill and
Republicans need their pork-barrel projects the same way Democrats always did,” Kingston said.
That’s one of the most candid admissions of how Washington really works that we’ve heard — at least from a sitting member of
Congress. And it’s nauseating. If Republicans ever want to regain credibility as deficit hawks they ought to keep Kingston and his ilk
under wraps.
Many Democrats also hope the aversion to earmarks is short-lived, no doubt. And it has lobbyists in a tizzy. One of them told
CongressDaily that eliminating earmarks from House spending bills would “run this train right into an embankment.” But that’s one
trainwreck the taxpayers who fund this spoils system might like to see.
Obey probably is just toying with the idea. In March, for instance, we read that he was entertaining requests from colleagues to push
back a deadline for adding fiscal 2008 earmarks. Apparently, many members are confused by new House rules requiring that they
disclose their sponsorship of a pork project and declare that neither they nor their spouse stands to financially benefit from it. This
suggests to us that the new rules aren’t a serious impediment to porking out, but simply a way for House Speaker Nancy Pelosi and
other Democrats to seem to be doing something about it until the storm blows over. Trying to shame the shameless is futile.
“The way this place works, I wouldn’t be surprised if in the end we didn’t want to put any earmarks in,” Obey said. “I can’t tell you if
we’re going to have earmarks or not until I see what the hell they look like, until I see what mood the House is in, what mood the
Senate is in.
If such decisions are made based on the “mood” of members, and Obey and other leading Democrats don’t impose fiscal
discipline from above, pork will be back on the congressional menu later this year, and in a very
big way.
7
Economy DA UTNIF 2k8
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Dr. Alan S. Manne of Stanford University conducted a study of typical abatement proposals intended to stabilize carbon emissions
between 1990 and 2000, reduce them to 80 percent of this level by 2010, and stabilize them thereafter. According to Dr.
Manne's findings in "Global Carbon Dioxide Reductions-Domestic and International Consequences," price-
induced energy conservation and shifts to low-carbon fuels would result in annual losses ranging from 1 percent of the U.S. gross
domestic product to nearly 2.5 percent of our GDP.
Dr. Manne's basic conclusions have received support in studies conducted by Dr. Lawrence Horwitz of
DRI/McGraw Hill. Dr. Horwitz reported in "The Impact of Carbon Dioxide Emission Reductions on Living
Standards and Lifestyles" that efforts to reduce greenhouse gas emissions to 1990 levels by 2010 through
the use of carbon taxation would reduce U.S. GDP by 2.3 percent, or $203 billion.
Dr. Horwitz discovered additional problems with near-term emissions- abatement programs. He predicts that 89
percent of U.S. consumption categories would be affected negatively by the carbon tax, with 40 percent of the total energy-cost
increases falling directly on households. The balance of the increases would be borne by industry, then passed
along to consumers. According to Horwitz, higher costs and lessened demand would spread damage
throughout our economy. Real business fixed investment would decline $56 billion annually by 2010. Real disposable
income levels would drop $75 billion in 1992 dollars by 2010. These developments would lead to severe job losses.
Dr. Horwitz estimates the loss of more than 500,000 jobs per year between 1995 and 2010, with 1,000,000 jobs lost two
years after the tax was fully implemented.
The Manne study of global C02 reductions also reveals that restrictive approaches to limit carbon emissions would
hinder our international competitiveness in such basic industries as chemicals, steel, aluminum, petroleum refining, and mining. He
contends further that the U.S. coal-exporting industry would be put out of business, and severe strains
would be placed on important trade pacts like NAFTA and GATT.
****NOTE: LOOK IN THE ECONOMY DA FROM THE NUCLEA POWER AFF STARTER PACK FOR
NUCLEAR POWER COSTLY CARDS AND READ A COUPLE OF THEM****
8
Economy DA UTNIF 2k8
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BUBBLE LINK
LINK--- INCREASED ALTERNATIVE ENERGY SUBSIDIES CREATE A NEW BUBBLE- FED RESERVE
INCOMPETANCE ENSURES ECONOMIC COLLAPSE
Gross, 2k8
[Daniel. “Money Culture” May 20, http://www.newsweek.com/id/137912]
the Federal Reserve is a part of the U.S. government. And far from combating
While an independent agency,
bubbles, government agencies through the years have helped start, perpetuate, and prolong them.
When an industry becomes a juggernaut (dot-com, real estate, alternative energy), the momentum in
Washington always weighs in favor of helping the bubbled interest with more subsidies, more tax
credits, more cheap money. At times, the bubble sectors can hijack government policy. In February
1929, Charles Mitchell, the CEO of National City bank and a governor of the New York Federal Reserve, helped put the kibosh on the
New York Fed's efforts to cut off speculative lending on stocks by raising interest rates. As the Fed considered raising rates, William
Crapo Durant, the founder of General Motors, bought airtime on CBS radio and proclaimed: "Let the Federal Reserve Board keep its
even as there are signs of a bubble in alternative energy, some of the
hands off business." Today,
venture capital money plowed into the sector is deployed to lobby for more government
support.
Washington policymakers are generally eager to help prolong the bubble sectors because they become significant engines of growth.
Asha Bangalore of Northern Trust found that between November 2001 and October 2005, housing and real estate accounted for 36
percent of U.S. private-sector payroll job growth. Advocating policies to deflate bubbles would be like the coaches tripping up
running backs as they're sprinting for the end zone. At a time when private sector money is flowing into cleantech at record pace,
the only thing the three remaining presidential candidates can agree on is the need for the government to invest in green-collar jobs
to revive the economy, ensure national security, and clean up the environment. There's not much the Fed could do to slow this
biodiesel-powered train.
Finally, the Federal Reserve is an organization much like any other—run by human beings with fallible judgment, driven by
In bubbles, skeptics are always marginalized while the
consensus, and less than congenial for contrarians.
promoters are anointed as seers. And when a bubble gets loose, it infects every institution:
banks, the media, and, yes, the Federal Reserve. The Fed, in the person of Alan Greenspan, failed to
diagnose the Internet bubble accurately, and it misjudged the housing bubble, too. The
Fed, in the person of Ben Bernanke, failed to see the credit mess coming. And once that crisis
hit, the Fed failed to accurately gauge its scope and depth. When the party really gets going, we
all drink from the same punch bowl.
9
Economy DA UTNIF 2k8
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"If the US were to slow significantly that would have adverse implications for the rest of the
world." Such a scenario could strip one percentage point off world growth for 2003, which is expected to
be about four percent, the economist said. Sal Guatieri, global economist based in Chicago for Bank of Montreal, said that if a war
in Iraq was swift, oil prices would quickly settle lower and the US economic growth pace would be slowed by just a few tenths of
a percentage point in 2003. "The big risk is if you had an escalation of military action both in Iraq, in the Middle East and a
prolonged war. That would likely push crude oil prices to much higher levels than we currently forecast," he said. Such an
outcome could knock half a percentage point or even a full percentage point off economic growth, he said. But even that would
not push the US economy into recession, Guatieri said. "To push the economy into recession -- just assume it is growing at a
trend rate of three percent -- would likely require crude oil prices at least doubling, possibly tripling from current levels: going up
The effects of any US slowdown would ricochet around the
to 60 to 90 dollars per barrel on a sustained basis."
world, Guatieri said. One-third of the Canadian economy depended on US consumers and businesses. Euro zone and
Japanese economies would take a smaller hit but they were more fragile. Asian economies would
be hurt by slower exports to the United States.
10
Economy DA UTNIF 2k8
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Sound and sustainable national finances—with fiscal deficits kept at manageable levels over a sustained period of time—
are vital to ensuring that the American economy remains resilient and that resources are available to
meet such security challenges. A bloated debt could lead to climbing interest rates or force painful increases
in taxes. The United States must make all future programs fiscally sustainable to avoid a rapidly
rising debt in the next decade and restore flexibility to the federal budget. Our national security, and the
health of domestic programs, depend on it.
11
Economy DA UTNIF 2k8
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The oil price has doubled in the past year because the US Federal Reserve panicked over risks to the
over-leveraged financial system and flooded markets with excess liquidity. The world is willing to pay
arbitrarily high prices to hedge against inflation, but the cost of inflation hedges drags down the
world economy. Last week's spike in commodity prices and swoon in global stock markets points the
way to a deep and prolonged fall in economic activity.
12
Economy DA UTNIF 2k8
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14
Economy DA UTNIF 2k8
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15
Economy DA UTNIF 2k8
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economist at JP Morgan in New York, stressed the limited economic toll of 9-11 and said the
David Hensley,
world economy was then much weaker than it is now. "After 9-11, the anecdotal surveys of
consumer and business sentiment were hit pretty hard. But the damage was pretty fleeting and most
of these reversed within a month or two," he said. "The heartening lesson to learn from these tragedies is
that people are resilient, economies are resilient and tend to bounce back – as painful and sad as it
is." Economists at Goldman Sachs said in a note to clients that it was hard to draw conclusions in the middle of such tragic events
but said more factors would have to come into play for there to be a lasting economic impact.
16