Entitlement spending gone wild or the Social Security bogeyman

Social Security must be fixed now, you will hear this over and over again. But is that where the urgency lies? No, the urgency should focus on the runaway costs of health care which we see in entitlement programs in the form Medicaid and Medicare.

Apparently the GAO presented a nice powerpoint presentation to AARP board of directors on Valentine’s Day. Here is the PDF of the powerpoint.

I think page 3 is good place to start.

page 3

On this page you will find three pie charts representing where federal money is allocated in the years 1966, 1986, and 2006. Medicaid and Medicare are rolled together and shown in red. Now keep in mind that these two programs started in 1965, so the 1% amount in 1966 is probably attributable to the newness of the program and the time it took to implement it. Now if you look at 1986 and 2006, these programs went from 10% to 19% of federal spending. Over the same period, Social Security, show in yellow, went from 20% to 21% of federal spending.

Now on to page 12, we see four bar graphs.

page 12

This page scares me, but not because of Social Security or Medicaid and Medicare, but because of the ballooning net interest. It looks like it is 10% of GDP in 2040. There is also the assumption that expiring tax provisions are extended. Does that mean Bush’s tax cuts??

Now page 14 is a better look at the growth of Social Security, Medicaid and Medicare over time as a percent of GDP.

page 14

I see a gradual bump to about 5% from now through 2030, my assumption baby boomers, for Social Security. But look at the growing monster that is Medicare, and to a lesser extent the growing Medicaid. So what is the pressing problem? Oh yeah, it is Social Security, but only if you are blind.

Now page 25 gets to when different aspects of Social Security will change financially.

page 25

I am going to focus on the third column, OASDI, as it combines the first two columns. The first row is the year in which the amount of money added to the trust starts to decline, and oh no it is 2009, just next year. But wait, what does this really mean? This actually about calculus, the whole rate of change concept, which is more scary than the misleading description.Looking at the 2007 Social Security Trustees report. It isn’t that scary, the OASI adds $183 billion in 2007, $204 billion in 2008 (a $21 billion increase from 2007), $223 billion in 2009 ($19 billion increase from 2008), $237 billion in 2010 ($14 billion from 2009). So while the amount added to Social Security Trust Fund is slowing, it is still increasing from year to year, and over the four years I mention above, it adds $847 billion dollars in 4 years.

Now on to the second row, this is the year that the revenue no longer covers the expenditures. However, since the federal government has borrowed against the Social Security surplus, then they can cover the gap in the amount with the interest on what the federal government has borrowed. On to the third row, this is the year in which revenue plus interest (paid by federal government) no longer cover the expenditures. It is at this point the Social Security Trust Fund will start cashing in its bonds. The fourth row is when the bonds are all cashed out, and either revenue must be increased via taxes, or expenditures must be reduced via benefit reductions.

This is serious stuff, but if you go back to the earlier charts I mentioned the scariest explosion in entitlement obligations is in Medicaid and Medicare, not Social Security. As a society we need to focus our efforts in that area. The battle will not be easy because it will probably need a total restructuring of our fragmented and grossly inefficient private health insurance system.

Now you may wonder why I titled this the Social Security bogeyman. My belief, my prediction, is that Republicans and their masters in the investor class, the folks that fund the right wing think tanks, are aware that when the Social Security Trust Fund stops having a surplus, that the tax man will come, and it will come for a bigger share of the investor classes income than we have seen since Reagan come to power. The only thing that might scare the investor class more is the need for protection from relatives in the year the estate tax is 0%. The way to put off this day of reckoning is trot out the Social Security bogeyman. Hopefully the mainstream press will figure out this is right wing crying wolf, and it is getting old.

UPDATE: Looking at page 9, the implicit exposure in 2007, shows that Medicare Part D $8.4 trillion, that new prescription drug program, is greater than Social Security $6.8 trillion. Or 16.67% of the implicit exposure, the other 83.33% is all from Medicare Parts A, B, and D.

page 9

-Josh

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Big business gets corporate subsidy and whines about changes to bankruptcy laws

I am a big fan of Dean Baker, and I think he nails some issues in the housing market.

In his blog today (this is whole post),

Changing Bankruptcy Rules and the Sanctity of Contracts

The banks are very upset over the possibility that Congress may change the law to allow bankruptcy judges to rewrite the terms of mortgage loans as they can other loans when a person declares bankruptcy. Naturally they are pulling out all the stops in making their case. The Washington Post quotes a Bush administration spokesperson saying that the proposed change “is interfering with contracts.”

This is an interesting charge to come from the Bush administration and to be associated with the banks. Those old enough to remember may recall the bankruptcy reform of 2005. This bill altered the enforcement of loans in the opposite direction, making it easier for lenders to collect from debtors. It was applied to loans that had already been contracted not just future debt yet to be incurred, in that sense, it interfered with contracts.

Clearly, neither the Bush administration nor the banks, both of whom eagerly supported the bankruptcy reform bill, have any principled objection to interfering with contracts. Their objection seems to be based more on whom the interference is favoring. The reporters covering this issue should have provided readers with this background.

This reminded me of attempts by Governor Matt Blunt, son of US Representative Roy Blunt, to reduce (or end) the adoption subsidy of families already receiving it. Here is an article on that attempt in 2006.

But with a stroke of the governor’s pen, children already receiving subsidies were immediately cut off from this state funding, and hope of assistance for future adopted kids in this category was dashed.

From my tax and invest perspective, I see this as a perfect example of Republicans concern for business, but not necessarily the general public. Those adoption subsidy agreements are contracts between the state and adoptive parents.

Besides this blog, Dean Baker has a column on Alternet on a similar topic, helping big business in the housing crisis.

The OTS plan has the government come to the rescue in this crisis. It would have existing loans restructured so underwater mortgages would be broken into two parts. A new mortgage would be issued that is equal to the current market value of the house. This new mortgage is guaranteed by the government.

The other portion of the mortgage is turned into a certificate that is equal to the difference between the value of the original mortgage and the current value of the house. This certificate is a claim against the sale value of the house, if it exceeds the value of the new mortgage.

In the example used by the OTS, the original mortgage is $220,000 for a home that is now worth $200,000. In this case, the new guaranteed mortgage is equal to $200,000. The holder of the old mortgage gets a certificate for $20,000. This certificate gives the holder (it can be traded) a claim against any money the homeowner gets from selling the house, after paying off the mortgage, up to $20,000.

The OTS would have us believe this is a win-win for homeowners, investors and the public. While they may have convinced the born-yesterday crowd that reports the news, it’s not hard to find the trick.

House prices are falling. The home appraised (do we have honest appraisers?) for $200,000 today is likely to be worth 15 percent to 30 percent less in a year or two. That means a very high portion of the mortgages guaranteed today will subsequently go bad, requiring the government to make good on the guarantee.

To use the OTS numbers, suppose we put up $100 billion to guarantee 500,000 mortgages ($200,000 per mortgage). Let’s say 40 percent of the mortgages subsequently go bad, costing an average of 50 percent of the face value, since homes will have to be sold at large losses. That means the OTS scheme will cost taxpayers $20 billion.

Yeah, the spend and borrow conservatives will bend over backwards to help out big business, letting the let people eat cake… er, I mean foreclosure notices, but we could do the same thing in a way that helps the homeowner directly. For example, we could have the government buy up loans and restructure them. An economic professor at Princeton (not Paul Krugman) and former Vice Chairman of the Federal Reserve, Alan Blinder, has an idea from the great depression, the Home Owner’s Loan Corporation (HOLC), first the background history.

A third reason for focusing on foreclosures is that we’ve seen this film before. During the Depression, President Franklin D. Roosevelt and Congress dealt with huge impending foreclosures by creating the Home Owners’ Loan Corporation. Now, a small but growing group of academics and public figures, including Senator Christopher J. Dodd, Democrat of Connecticut, is calling for the federal government to bring back something like the HOLC. Count me in.

The HOLC was established in June 1933 to help distressed families avert foreclosures by replacing mortgages that were in or near default with new ones that homeowners could afford. It did so by buying old mortgages from banks — most of which were delighted to trade them in for safe government bonds — and then issuing new loans to homeowners. The HOLC financed itself by borrowing from capital markets and the Treasury.

The scale of the operation was impressive. Within two years, the HOLC received about 1.9 million applications from distressed homeowners and granted just over a million new mortgages. (Adjusting only for population growth, the corresponding mortgage figure today would be almost 2.5 million.) Nearly one of every five mortgages in America became owned by the HOLC. Its total lending over its lifetime amounted to $3.5 billion — a colossal sum equal to 5 percent of a year’s gross domestic product at the time. (The corresponding figure today would be about $750 billion.)

As a public corporation chartered for a public purpose, the HOLC was a patient and even lenient lender. It tried to keep delinquent borrowers on track with debt counseling, budgeting help and even family meetings. But times were tough in the 1930s, and nearly 20 percent of the HOLC’s borrowers defaulted anyway. So the corporation eventually acquired ownership of about 200,000 houses, nearly all of which were sold by 1944. The HOLC closed its books in 1951, or 15 years after its last 1936 mortgage was paid off, with a small profit. It was a heavy lift, but the incredible HOLC lifted it.

Of course, a proposal like this will make right wing pundits come out frothing at the mouth like a rabid animal. They will claim that big business is interfering in the market. That we shouldn’t bail out folks that got into loans they didn’t understand. Of course, the counter to these arguments are, we shouldn’t bail out big business that wrote the bad loans. That we are already interfering in the market. Interest rate cuts anyone?

Now back to how the HOLC could work,

Details matter, so here are a few: First, any new HOLC should refinance only owner-occupied residences. Speculators can fend for themselves — or go into default. Similarly, second homes or vacation homes should be ineligible, as should very expensive real estate. (Precise limits would vary regionally.)

Third, mortgages obtained via misrepresentation by borrowers should be ineligible for HOLC refinancing, but cases of fraud or deception by the lender should be treated generously. Fourth, as the original HOLC found, not all bad mortgages can be turned into good ones. Where families simply can’t afford to be owners, the new HOLC should not be asked to perform mortgage alchemy.

What about the operation’s scale? Based on current estimates, such an institution might be asked to consider refinancing one million to two million mortgages — proportionately less than half the job of its predecessor, and maybe less than a quarter. If the average mortgage balance was $200,000, the new HOLC might need to borrow and lend as much as $200 billion to $400 billion. The midpoint, $300 billion, is one-seventh the size of Citigroup and would rank the new institution as the sixth-largest bank in the United States.

Given current low interest rates, a new HOLC could borrow cheaply and should find it easy to earn a two-percentage-point spread between borrowing and lending rates, for a gross profit of maybe $4 billion to $8 billion a year.

What about loan losses? A 10 percent loss rate, or $20 billion to $40 billion, spread over the life of the institution, seems incredibly pessimistic. (The original HOLC experienced a 9.6 percent loss rate during the Depression.) So the new HOLC seems likely to turn a profit, just as the old one did. But even if it loses a few billion, we must remember its public purpose: to help the economy recover, not to make a buck. By comparison, the new economic stimulus package has a price tag of $168 billion.

So the question, what should the governments role in fixing our bleeding economy focus on, Americans or Corporations? I say Americans, remember We the People, not We the Shareholders. And if HOLC worked in the 1930s, why re-invent the wheel? Well the rabid right wing punditry will have issues with it being a New Deal program, but for those of rational thought, we can appreciate a program that works and helps people!

-Josh

Deja vu at the movies

No, this isn’t about former stripper Diablo Cody winning the Oscar for the best original screenplay for Juno, although congratulations on that. Apparently she was writing it at the Starbucks in the Target store in Crystal, MN. And kudos to the Coen brothers, also with the Minnesota connection, who won best adapted screenplay, best director and best picture for No Country for Old Men.

Now for me, Sunday was deja vu because of one day at the Toronto International Film Festival. I was reading about Sarah Polley’s nomination for best adapted screenplay and Julie Christie’s best actress nominations for Away From Her. I had seen Away From Her at Ryerson at 9 AM on September 12, 2006. I was really looking forward to seeing Sarah Polley’s directorial debut of a feature film. It is a very good movie and Toronto native Sarah Polley got the biggest applause of any person at the 23 movies I saw that year.

Now one movie is not enough to give me deja vu, but two are. The other thing I saw yesterday was the ad for Bonneville staring Jessica Lange, Kathy Bates, and Joan Allen. Talk about star power, twelve Oscar nominations and three wins between the three of them. I saw this at noon of the same day in the same theater just after Away From Her.

What I don’t understand is how come Away From Her was released, albeit limited, May 4, 2007 and this is being released February 29, 2008.

Here is the trailer from Bonneville,

I was lucky enough to hear the Q&A with the director and screenwriter. The most memorable question and answer was when one of the audience members asked about how does a young man write such great roles for older actress, which are few and far between in Hollywood. The screenwriter had the very easy answer, he based it on three important women in his life, his mom, his aunt, and one of their friends (I think those were the three people, it has been 18 months, so if I am off, apologies).

SPOILER ALERT BELOW

You can pick up on some of the premise from the trailer. I am not going to give away anything major, but provide more of the background story.

The plot revolves around Jessica Lange’s character. Her husband of 20 years dies while they are on a trip to Bali. She has him cremated and brought back to Idaho where they live. His daughter, her step-daughter, shows up at the wake. She is pissed, she plays the bitch role perfectly, she didn’t want him cremated, she wants him buried next to her mom in California.

Now the house in Idaho is very nice, and in the will is to be left to the bitchy daughter. Apparently he had updated the will to leave to Jessica Lange’s character, but they can’t locate it. The daughter use this to force Jessica to bring the ashes to California to be buried next to his first wife, in exchange she will let Jessica have the house. I told you bitch.

Jessica decides to take the ashes in person and her two friends played by Kathy Bates and Joan Allen decide to join her for support. The rest of the movie is really their journey to California. I really liked the movie and recommend it highly. My friends have been wondering when/if it will ever come out.

-Josh

Great deals on DVDs

I like good deals.  In fact today, I picked up Season 6 of Smallville for $23.99 at Target.  Unlike Lost, which I haven’t seen big discounts on, I knew that Smallville would eventually drop in price, so I waited  Although I think the studios are wising up to me, as more often we see all but the newest season on sale.  I really hate that.  I think the Simpsons started that trend.

Anyway, I usually check out the Sunday ads for Best Buy, Circuit City, and Target for deals on DVDs.

Today the folks that run TV Shows on DVD have created a web page and RSS feed to track updates of sales of at Amazon for TV shows on DVD.  I like the information that they get and the provide for free.  And this new web page is great in its display of the information.  Alpha sorted, grouped by shows, listing of MSRP, discount, and sale price.  My one criticism with them is that they only track sales that are tied to them making money.  So if there is an amazing deal at some of the Big Boxes I mentioned, you won’t see it on their site.

Now is that a fair criticism?  Well, when I compare it with Don Lindich’s Soundadvice blog, I think it is.  He has recommended retailers that he will make money off of, but he also has many listed that he won’t.  So to me, this displays a purity in Don goal of helping us readers and consumers find good deals regardless of financial gain opportunities.  For example, today he has a deal finder for Polk R50 Tower speakers for $59.99 each down from $199.99 each, for the math challenged that is a reduction in price of 70%.  I am not 100% certain that he won’t financially gain from this, but I will put it at 98% certain.

On a side note, Don also has a new web page called www.avglossary.com, that looks similar to his blog.  It is a huge glossary/dictionary of audio, visual and photography terms.  He is still putting information up.

-Josh

Mortgage refinancing

I must be good people.  Or at least people with good credit.

Tonight I received an letter, via UPS Next Day Air Saver from Detroit, from CitiMortgage.   I have my primary mortgage and a second mortgage in the form of a home equity loan through CitiMortage.  So they know my payment history, and I am sure checked my credit score.

Now this offer is not that great.  First thing that they do to mislead you is at no point do they talk about the size of the loan, other than with this footnote, “Your new loan and payment is based on an estimated loan balance, including interest.”  While the size of a loan should be a minimum piece of information provided, although ideally the total cost of principal and interest would be included, I can’t find it on this piece of paper.  This matters because who is paying the closing costs, how much will the starting principal be.  I can grab my most recent statement and see exactly how much principal left to pay on my primary mortgage.  I will come back to this issue later.

What I get is pressure, because if I respond within 3 days, by February 28, 2008, I get a $500 credit.

I also get a grid that compares the current and the refinanced loan.  This shows both programs are 30 year fixed, that my current rate is 0.625% higher than the new one, that the principal and interest (what the mortgage company gets) of my monthly payments would go down 11.75, and what I see as very strange is that the tax and insurance amount goes up 15.78%.   The total monthly payment would go down 4.28%.

Second problem and it is huge, is why are they showing the tax and insurance as to different amounts.  The movement up or down (you never see down) in this component of the payment will be the same whether I stay with my current mortgage or refinance it.  So to use two different amounts is so bizarre.  In fact using the higher tax and insurance rate for the refinanced mortgage hurts the case for refinancing as the difference in the total payment would have been a reduction of 8.57% (if both had the same tax and insurance amount) rather than the posted 4.28%.

Now back to the issue of not knowing the amount of this new mortage, how much principal I would owe the mortgage company.  This matters a lot especially in a market with falling housing prices.  If I were to refinance and the amount of principal owed went up significantly and the value of the home went down significantly, I could owe more for my house than I could sell it for.  This leads to three options.

  1. Stay in the home and pay down the principal and eventually have some equity built up.
  2. Walk away, take the black mark on the credit score with the bankruptcy, and let the mortgage company eat the loss.
  3. If move before I start to have equity again, then pay to sell my house.

Now since they are unwilling to disclose the amount of the loan, I took a lazy approach to see if this is a good deal for me, with the signs pointing to no.  I bought the house in May 2000, and refinanced in September 2001.  So I have about 283 months of payments left.  I took that amount and multiplied it by the current amount of principal and interest I pay to calculate the total amount left.  Then I took 360 months (3o years) and multiplied it by the refinanced principal and interest amount.  What I learned from this is that I would pay in principal and interest 12.27% more with the refinanced loan over the whole length of the two loans.  That is not a good deal for me in my current financial status, plus I would rather pay off my house if I stay here at 60, not 67.

I have no fancy economic degree or background.  I was and am very good at math, and understanding information or the lack of it.

-Josh

Most secretive administration ever!

Today we learn from the Washington Post that the army has moved non-classified material that was available to the public on a web site behind a password protected firewall, shutting out the public access to this information.

Army officials moved the Reimer Digital Library ( http://atiam.train.army.mil) behind a password-protected firewall on Feb. 6, restricting access to an electronic trove that is popular with researchers for its wealth of field and technical manuals and documents on military operations, education, training and technology. All are unclassified, and most already are approved for public release.

Who is the government, we the people, this is our government not theirs, if the information is not classified we should be able to access it.  Yet at every turn, this administration has acted like that selfish little kid, that crouches over the table, covering something up with his arm and chin, and saying “mine, you can’t see it.”  Well that is how kids act, but we correct their bad manners, and let them know they have to share.  Fortunately there are ways to make them share (FOIA), but even more unfortunately the Bush administration has fought this transparency in governance at every turn.  Let us count the ways that I have emphasized in bold from the article:

For years, open-government advocates have complained about the Bush administration’s penchant for confidentiality, from the White House‘s long-standing refusal to release lists of presidential visitors to the secrecy surrounding the administration’s warrantless wiretapping program and Vice President Cheney‘s energy policy task force.

In 2006, the National Archives acknowledged that the CIA and other agencies had withdrawn thousands of records from the public shelves over several years and inappropriately reclassified many of them. Early in 2002, then-Attorney General John D. Ashcroft issued a memo urging federal agencies to use whatever legal means necessary to reject Freedom of Information Act requests for public documents.

Army officials said yesterday that they were compelled to limit access to the Reimer library site to comply with Department of Defense policies that call for tightening the security of military Web sites and to keep better track internally of who is accessing them and why.

You know what happens when you turn light on in a dark place, the vermin go scurrying for cover, well we need to shine the light on this administration and trust me the vermin are going to go scurrying.  The problem is the vermin have control of the light switch.

-Josh

The difference one or two words could make

Selective editing can make a big deal in the perception we have of people.  We have learned this week about the editing of Michelle Obama’s audio, taking “really” out of the audio.   That extra word does make a difference in how you perceive her words.

To further make the point, lets look to John McCain.  I am taking this from the NY Times story on the Romancing the Lobbyist.

“I would very much like to think that I have never been a man whose favor can be bought,” Mr. McCain wrote about his Keating experience in his 2002 memoir, “Worth the Fighting For.” “From my earliest youth, I would have considered such a reputation to be the most shameful ignominy imaginable. Yet that is exactly how millions of Americans viewed me for a time, a time that I will forever consider one of the worst experiences of my life.”

Now imagine if took that last line and dropped the “one of” from it, it would look like this:

…a time that I will forever consider the worst experiences of my life.

Now if you were to this phrase, minus two little words “one of” connect to the Keating 5 scandal, then contrast that description with his recent vote to not tie the CIA to the Army Field Manual and highlight what type of torture he faced as a POW in Vietnam.   Well that would make it seem that a scandal was the worst experience ever.  That torture, isn’t that bad, or least not the worst thing that ever happened to him.  That would put a very different perception on his vote and his stance on torture over all.

So let us make sure that what is reported is what is said.  No editing audio and no distorting the context.  And if you are part of the media, highlight that deceptive behavior.

-Josh

The honeymoon is over, the right wing echo chamber takes the gloves off on Obama

If you watched the Sunday news shows in the past few weeks, especially pre-Super Tuesday, the right wing pundits were falling over themselves to see which one could defend Obama from Clinton’s political tactics. That has now ended, with the “proud of America” or “really proud of America” controversy.

I would suggest you start by looking at this clip on youtube which seems to show two different speeches, one with “really” the other without it.

Now if it is true she had a speech in which she didn’t say “really” (which I believe is very possible) then why do we see clips like this where you can read her lips (George HW Bush deja vu) and the beginning “rr” sound but the full word “really” was edited out in the audio.

It is the edited audio in the second clip that is the point here, these sorts of attacks are just beginning. Hopefully MSM will point out the distortions, not continue the right wing echo chamber like they did with the Swift Boat crap in 2004.

-Josh

Proof readers need not apply

It would be nice if the Strib decided to be competent enough to print articles without clear errors.  Unfortunately they have corrected on-line, but here it is.

 NBA interest in the Twin Cities is at its lowest point in the 19 seasons since the league re-emerged here with the expansion Timberwolves in the fall of 1989.

In print today, that paragraph ended …fall of 1999.  Nice job folks.

On to his point of lowest level of interest.  Hmmm, well lets see.  We lost the Lakers, eventually got a new team the T-Wolves.  So getting a new team created excitement even if they weren’t good.  Then we got KG, one of the best players, who worked hard and was a decent fellow.  Even after they got to the Western Conference championships and then had some crappy years, we still got to see KG wear a T-Wolf uniform, probably what Packer fans thought of seeing Farve play (in the couple of seasons prior to last one).  Well they aren’t very good, KG is gone, and well, I would rather do something else.

Reusse (who I have never liked) goes on to talk about the NBA All-Star game.

As of Monday evening, TNT still had not provided information on its ratings for Sunday night’s All-Star Game.

Presumably, the Twin Cities claimed its usual place for the NBA — in the bottom few among the 56 metered markets. If so, those hundreds of thousands of Minnesotans who were involved with other entertainment missed some remarkable athletic prowess.

The first half was a demonstration of layups, lobs and dunks, of course, making it as nonsensical and non-physical as the Pro Bowl or the NHL All-Star Game. This continued for much of the third quarter, and then these two squads filled with immense talent set about trying to win the game.

The West came back from a 16-point deficit and took the lead, only to have Boston’s Ray Allen bring back the East with his magnificent shooting for a 134-128 victory.

First point, it was on TNT.  If you want a better reason for poor numbers for NBA ratings, don’t look much further than this.  I haven’t had cable since June 2000.  So this basketball fan is limited to NBA games shown locally of the less than stellar T-Wolves (I did appreciate it in the good years), or the Sunday games on ABC which are dominate by teams I don’t care that much about.  But the killer for me, is come playoff time most of the games are only on cable.  So guess what, I don’t get into the playoffs unless my team is doing well.

Second point, Reusse points out that the game has little meaning.  That it is like watching some freaking peacocks strut their stuff.  Not what I am looking for in a game.

But if that wasn’t enough for you Reusse acknowledges gambling is the biggest excitement for many people.

The most-intriguing number for the All-Star Game is where the over-and-under lands. On Sunday, the betting number was 262 1/2 points and the total finished at 262.

A local fellow who facilitates wagers on athletic contests said: “This is the only game all year in any sport where there’s more action on the over-and-under than the winner and loser. Everybody had the over, making it a good night for your neighborhood bookmaker.”

Yes, who do you turn to find out what the excitement in the game is, check out you local neighborhood bookie.  Maybe you can check with a pimp about new ideas for the bedroom.

-Josh

Fidel is leaving, but our policy remains the same, hypocrisy manifested

So Fidel is resigning, that communist bogeyman in our backyard will no longer be in control.  You might think this would change our policy, end the embargo, but no, that would be requiring us to be consistent in our foreign policy and that won’t happen.  According to the AP we have this from Dubya,

“They’re the ones who suffered under Fidel Castro,” Bush told a news conference in Rwanda. “They’re the ones who were put in prison because of their beliefs. They’re the ones who have been denied their right to live in a free society. So I view this as a period of transition and it should be the beginning of the democratic transition in Cuba.”

“Eventually, this transition ought to lead to free and fair elections — and I mean free, and I mean fair — not these kind of staged elections that the Castro brothers try to foist off as true democracy,” Bush said. “The United States will help the people of Cuba realize the blessings of liberty.”

Shouldn’t free and fair elections be those that represent the people.

  • This could lead to socialist governments like Hugo Chavez, who will remain bogeyman #2 (or he might move up to #1) in Latin America, but didn’t we support a coup attempt against him?
  • Elections could lead to undesirable results like Hamas winning in Palestine, or Hezbollah in Lebanon, our aid to Palestine dried up because we didn’t like the results.
  • Or we could support those non-democratic leaders like Musharraf in Pakistan who became a leader via coup, because he is “helping” us fight the war on terror.
  • Or advocate better trade relations (kind of the opposite of an embargo) with China which has sham elections and is also communist county like Cuba.  And they invaded Tibet, have cracked down on a religion.

It is time for the embargo to end.  This policy is holding our democracy hostage to Cuban Americans hatred of the Cuban government.  If we truly believed that democracy was the ideal result in Cuba, we would tear down this wall that is an embargo and expose the Cuban populace to the advantages of our economic model and our democratic process.

You will hear a lot of reasons for maintaining the embargo and a majority if not all of them will come from Cuban-Americans that lost property when Castro came to power.  They shouldn’t dictate America’s foreign policy.

-Josh

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