Monday, September 24, 2007

Iraq War Costs - supplement

In my 9/12/07 posting titled "Iraq War Costs" I stated my view that our government needs to negotiate a much fairer sharing of the costs among the other nations that have a similar strategic interest with us in achieving a stable, peaceful, relatively prosperous, and hopefully also democratic Iraq. The other nations include other countries in the Middle East, the European Union, Japan, Russia, China, and India. As I indicated before, it's late in the game, but not too late, especially if we end up having 60,000 or more troops there for several more years and costly infrastructure rebuilding programs are needed for a longer period.

Our highest priorities in the region should still be achieving a stable and peaceful Iraq which can operate independently and defend itself, bringing our troops home as soon and as safely as possible, moving forward in the global war on terror, dealing effectively with Iran in coordination with our allies, and securing a satisfactory and lasting peace agreement between Israel and the Palistinians that is preferably also endorsed by Egypt, Jordan, Saudi Arabia, Syria, Lebanon, the Gulf states, and Turkey. Of course, another priority is making more progress in Afghanistan, so we can safely reduce our military and political commitments there.

However, we should also put a strong effort into the cost sharing objective. It's not a minor matter, considering the tens of billions of dollars involved, our sizable federal budget deficit, our critical funding needs to shore up Medicare and Social Security, and the need to find a satisfactory solution to the growing number of Americans, currently closing in on 50 million, who do not have health insurance coverage. Additionally, we must also seriously consider the need to fund our own growing infrastructure upgrading requirements, which include those for our water supplies, water treatment, sewage collection and treatment, highways, bridges, airports, and schools. Many of these were built decades ago to meet the needs of a much smaller population. To underline this point, in 1960 we had 189 million, in 1970 213 million, in 2000 291 million, and now we're up to about 302 million! That's nearly a 60% increase since 1960! And I bet quite a significant share of our important infrastructure was built well before 1960.

The U. S. is no doubt the most prosperous country in the world. However, we obviously do not have unlimited resources, far from it. Our politicians need to do a better job of balancing funding between international and domestic needs. And we voters need to do our part to get their attention and to improve our monitoring of their performance. Agree?

Saturday, September 22, 2007

Illegal Immigration

Illegal immigration continues to be a major problem and controversial public policy issue for the U. S. which, together with the Iraq war, global terrorism and health care, will likely dominate topics of debate as the presidential election campaigns go forward in their excessively long journey.

As has been widely publicized in recent months, there are currently estimated to be close to 15 million undocumented (illegal) immigrants in this country with an additional 400,000 to 500,000 coming here annually. Approximately 60% come from Mexico and most of the rest come from other Latin American countries or from southeast Asia. 25% of these people came here legally, but overstated or violated terms of their visas and are now considered illegal. Many of them not only entered the country illegally, but are using fake Social Security numbers and other identifying documentation, are driving without valid licenses and without required auto insurance. An estimated 50% have no health insurance. Based on factual figures from Arizona and partial data from California, the estimated costs of providing health, education, social, police, and judicial services for the illegal population are $37 billion annually nation-wide. Despite activist claims to the contrary, only a small fraction file tax returns and pay income taxes.

That said, there is no question that the great majority of illegals work extremely hard, often with several jobs, and provide valuable employment services, especially in the agricultural, construction, and hospitality industries. There are widespread opinions about what should be done, but several needed actions to me are "no brainers". We must adequately secure our borders, especially in the south, to greatly limit illegals from entering; we must enforce existing laws against employing illegals, increasing fines for violations; we must develop a better tamper proof ID card with photo and coded Social Security number which employers can use electronically to check status with U. S. Immigration; and we must eliminate the present restrictions on contacts between U. S. Immigration and the IRS to check the status of suspected or known illegals.

There is at least one other "no brainer" action no one seems to be talking about, and this includes both leading politicians and the media. It is arranging as soon as possible a very high level and candid negotiation with the Mexican government as to what we expect (not would like)them to do to assist us in limiting illegals from Mexico entering our country. Right now the Mexican government has a win-win situation. They are essentially exporting much of their poverty to the U. S., considering a) that almost all the illegals from Mexico come from the rural areas of the country, are quite poor, and have limited prospects to find any kind of decent job in their own country; and b) the government is doing very little, as far as I can tell, to stop or discourage illegals from leaving. The other win the Mexican government has is the fact that the illegal Mexican workers send an estimated $20 billion in remittances annually back to their families to help them with living expenses and other needs. As individuals they should be commended for this dedication. This large amount of money provides valuable foreign exchange to the government, a sizable boost to the country's economy as these funds are spent, and lessens the need for the government to provide social and economic support to these hundreds of thousands, if not millions, of poor families.

The U. S. has significant economic and political leverage that can be used to achieve a satisfactory and fair agreement with the Mexican government. We can, if necessary, affect the volume of remittances through taxes and fees, as well as restrictions on remitting banks and other institutions. We can impact the volume of direct investments by U. S. companies in Mexico. We can impact loans and foreign aid to both the government and Mexican companies and agencies.

My sense is that our current U. S. administration and leading politicians in both parties would be reluctant to initiate this needed action, due to a concern that it might offend the important, large and increasing number of Hispanic voters in this country as we are fast approaching primaries, nominating conventions and the presidential election next year. However, if this action is carried out properly, I don't see why it would offend the great majority of these voters. After all, a major part of a prospective agreement should be that the Mexican government should promptly move to initiate economic and political reforms that would stimulate their economy and provide millions of more attractive investment and employment opportunities for their people, making it much less necessary or desirable to take the risks and bear the costs of entering this countrey illegally. Why should our Hispanics here object or be offended at that?? Those that do object should be reminded of how the Mexican government treats illegal immigrants coming from other Latin American countries. As I understand it, they are either deported or jailed without much recourse for the guilty party! Another part of the agreement I have in mind should be a serious participation on their part, in coordination with our forces, to better secure our mutual border. Isn't this virtually a no brainer?

Other actions I would like to see, which probably don't qualify as no brainers, include: no ridiculously expensive and ineffective border fence; establishment of a well-designed temporary worker program, though I'm very concerned about workers disappearing in the underground economy after their term is up and they are supposed to return to their homeland; and no actions that smell strongly of another amnesty, including automatic legalization and a clear path to citizenship for nearly everyone as most recently promoted by the last failed legislation. Finally, we should amend the 14th Amendment and/or its judicial interpretation that provides automatic citizenship to children of illegals born in this country. I wouldn't insist that it applies retroactively, but it should apply to future births as one of the logical deterrents to illegal immigration. This is close to a no brainer.

Wednesday, September 12, 2007

Iraq War Costs

My understanding is that the Iraq war over the past 4 1/2 years has cost the U. S. upwards of $500 billion and currently the ongoing cost is running at roughly $10 billion monthly. That's clearly a huge amount of money and it looks like we will be spending close to this for at least one more year, and very possibly for several more years to come. (I'm also extremely concerned about our 25,000 military casualties, including fatalities approaching 3,800, but this posting is primarily about financial costs.)

It's my strong impression that, while many other countries both in the region and elsewhere also have similar strong strategic interests in Iraq becoming a stable, peaceful and prosperous country, the U. S. is bearing the bulk of the financial burden in working towards this common goal, including paying for the training of their troops and police as well as the reconstruction of their infrastructure. Is my impression correct? If so, why is this? How much is being financed by Saudi Arabia, Kuwait, Qatar, the Emirates, Syria, Egypt, Turkey and Iran? What about Russia, China, Japan, and the European Union? With the extensive media coverage of the war, the presidential election campaigns, and the Congressional hearings on the reports by General Petraeus and Ambassador Crocker earlier this week, it is amazing that this subject has rarely if ever come up as an issue of concern. I also want to note that Iraq itself, while they currently are in a chaotic state with a disfunctional government, could, and should, be contributing to its own reconstruction. While it might prove difficult to arrange at present, they have the ability to raise sizable project finance loans, supported by their very vast oil and gas reserves, among the largest in the world.

The fair sharing of war costs should have come up and been agreed upon well prior to the invasion, but it's not too late to bring it up even at this late point, especially if there is a consensus among many of these countries that our troops need to remain in the country for several more years. Of course, those countries that were not part of the original coalition, and those that do not support our continued presence at this time are unlikely to be opening their wallets any time soon.

posted by Knut Dale 9/12/07