November 17, 2009

The Gurgling Confessor Goes to Trial

I admit I was surprised when the Obama Administration's Department of Justice announced that Khalid Sheikh Mohammed (among others) would be tried in a regular federal court in Manhattan for his role in the 9-11 plot. KSM, as he's known (which has always made him sound like a lite rock FM station), was captured in Pakistan in 2003, rendered around, and then was shipped to Guantanamo in 2006. I remember the timing pretty well because I watched George W. Bush's riveting speech on television in a breakfast room in Lyon, France. You may recall it yourself. W's impassioned plea was for immediate action on the Military Commissions Act, which incorporated a trial mechanism for the arrival of the "worst of the worst" from overseas dungeons, including the anticipated landfall of KSM in Cuba. Skeptics (I'm busted!) suggested that Bush's hurry-up had more to do with a couple of other factors, namely, the imminent midterm elections of 2006 and the exoneration clause (from any war crimes that might have been committed by, oh, the Bush Administration) helpful Republican lackeys (like Lindsey Graham) had stuck in the law. So George, whose own vanilla beans were caught in the ice cream maker of justice, was adamant that the bill get passed fast, because the bad guys were due to arrive in Cuba at any moment! And the really bad guys were due to arrive in Washington, D.C. in January!

Not to worry, W. The lame-o Democrats (including erstwhile Republican Arlen Specter, who admitted he was voting for an unconstitutional bill) rolled over, as usual, and passed Bush's get-out-of-jail free card just as they were ordered. No filibuster, no obstruction, not a whimper. Then, mysteriously, the urgency seemed to disappear. Hell, KSM could rot for all W cared. Let the next guy figure it out.

Which Eric Holder did. The reason I'm surprised by the choice of venue is that KSM was waterboarded, by CIA count, 183 times. I thought this pretty much guaranteed KSM immunity from actual trial; he would never set foot outside of prison, of course, but I thought the "preventive detention" doctrine, announced by our Constitutional Law Professor-President as an alternative to what we used to call "due process," sort of had KSM in mind. Otherwise...

Otherwise, KSM (who's gained quite a reputation as a loose cannon) is going to use these last public days of his life, and the district federal court, as a forum for anti-American raving and for a detailed description of the tortures and mistreatment worked upon him. Since he's apparently confessed to everything, up to and including the Lindbergh kidnapping and the Kennedy assassination, his lawyer will have to introduce evidence of coercion in order to zealously represent him, as bar rules require. Being waterboarded 183 times over about a month's period no doubt qualifies as coercion.

All rather odd. I'm well past the point where I expect Obama or his justice department to proceed on the basis of the Bill of Rights simply because, you know, we're a nation of laws. That ship has sailed. So something else is up. Partly, I'm sure, it's the politics: KSM worked his evil in Manhattan, so that's where he should be tried. His lawyer may move for a change of venue (just to go through the motion, so to speak), but he's counting on losing. Would KSM rather be tried in Georgia or Alabama? Thought not. But I don't believe that KSM is actually going to be tried. He's admitted everything already, and I suspect he's going to dismiss his lawyer, plead guilty, and confine his theatrics to that moment before sentencing when the judge asks him, "Is there anything you wish to say?"

Then everyone will get an earful. What I can't imagine is that Holder's DoJ is actually going to set up a forum where the United States, while laudably affording a despised terrorist his day in court, is dragged through the mud for days on end while its torture methods are described in gruesome, unending detail as "catnip" for the cable news shows to display and analyze, ad infinitum. Obama, after all, encouraged Congress to pass an amendment to the Freedom of Information Act allowing the Secretary of Defense, in his unfettered discretion, to withhold any photo of detainee abuse where he thinks disclosure "might endanger U.S. armed services personnel," thus putting an end to a successful FOIA case brought by the ACLU seeking the release of about 2,000 photos of various acts of torture and abuse. And now Holder is going to allow an al-Qaeda member to testify, at length, about waterboarding and rendition, and flights in the belly of a C-5 while chained to the floor, and hypothermia, and sleep deprivation, and getting stuck in a coffin box, and all the rest of it? How will that one play in Kandahar?

There is something we haven't been told yet. I will believe this trial when KSM takes the stand, under oath, and begins to rant and rave.

November 16, 2009

Further thoughts on U.S. insolvency

An old friend from school days adds his comment, re: my last post, that in his opinion the budgetary Ponzi scheme commenced when Congress began systematically raiding the Social Security surplus and using FICA payments as simply another general budgetary revenue source. While meticulously earmarking the surpluses as "Special Issue Treasury Bonds," stuffing them into a file cabinet in West Virginia, and waiting for the day when they would need to be "redeemed." The reset of FICA rates in 1983 has relentlessly produced an overpayment in Social Security payments, so that the sigma of overpayments currently = $2.5 trillion. This is the "Trust Fund:" a file cabinet full of Blue Ridge Mountain air.

This is an excellent point my faithful reader makes. The telltale mark of a Ponzi scheme is the acceptance of "investment," with payments to early investors made from revenue from later investors, and with inadequate reserves to repay the principal of the investors because of ongoing embezzlement of the money. What Congress has done with FICA overpayments meets the definitional criteria almost perfectly. Madoff got 150 years for operating this way; Congress calls it its "budgetary process."

So in the last post, I admit that I gave a somewhat misleading picture of the overall gravity of the U.S. revenue shortfall in the sense that one month is only a snapshot of a year-long process; however, the year-over-year decline in income is serious indeed, 18% in one year. Still, the deficit added up to $1.4 trillion, exclusive of the $163 billion described in the next paragraph.

The Social Security theft continues unabated, necessarily so (you could say) since FICA payments are nearly equal to the total amount of income tax paid by all Americans. For fiscal year 2009, $890 billion in FICA payments were received, and $727 billion paid out. The difference of $163 billion was transmuted into those magical Special Issue Treasury Bonds and stuffed in the file cabinet over there in Almost Heaven land. The cash was just spent, of course, as part of (inter alia) our ongoing efforts to provide a good life for Iraqis and Afghanis. These embezzled funds add up nearly to 10% of the revenue available (on a cash basis) to the U.S. government.

The most ominous problem relates to demographics. It's one thing to swipe the excess FICA payments in 1983, when the Baby Boomers are all in their prime earning years. Quite another when they're undergoing cataract and hip replacement surgery and getting ready to receive those monthly stipends. The leading edge of Boomer retirement now enters the pay-out zone. How realistic is it to keep pretending that those West Virginia IOUs will get the job done for much longer? Divide $163 billion by 12, and you get $13 billion per month. That's the cushion for FY 2009. But note on the chart from the last blog that FICA inflows in October 2009 had dropped to $61.5 billion per month. On a 12-month basis, that's $738 billion, or $11 billion more than the amounts paid out in fiscal 2009. Extrapolated out, that means the cushion has shrunk to less than $1 billion per month. Meanwhile, the Boomers start collecting (or try to), the income shrinks and the outgoes increase.

Where is Congress going to steal 10% of its operating budget if FICA income matches outgoes? Where are they going to find the money to pay Social Security when the income is less than the outlay? That was supposed to happen in 2017. It doesn't look to me that we'll have to wait that long for the "break-even" point. The American unemployment Depression will probably guarantee its arrival much sooner.

Which is why, despite my credentials as a Liberal and everything, I think that the advocates of huge deficit spending must be smoking something very powerful and deranging. Unless you can more or less guarantee that the stimulus trillion or so (maybe taking the yearly deficit to $2 trillion, so that the deficit itself becomes larger than all income received by the Treasury) will absolutely, positively produce all those jobs and increase income and, thus, increase tax receipts, it seems like something akin to financial suicide to undertake it. I think what we have is a huge structural problem with the economy in this country that no feasible amount of government spending is going to fix. This is the result of waiting way too long to look at the problems of offshoring good jobs, running huge current account deficits and playing GloboCop with our gargantuan military budgets. Reality's a mean mo'fo', and it always bats last.

Paul Krugman at the New York Times is convinced that Stimulus II, the Sequel, could do the trick and get Americans spending again, which highlights the problem. That's what the moribund U.S. economy was based upon before it crashed. He calls deficit reduction "bad economics," because stimulus spending will lead the way, eventually, to a balanced budget. Yet if a system is far enough along in insolvency and unemployment, that promised day of equilibrium may arrive too late to avert sovereign debt repudiation, that bugaboo of countries such as Argentina and Zimbabwe. Maybe it's better to live within our means and work our way out of this problem instead of attempting to borrow the money and then hoping that John Maynard Keynes was not only right, but psychic enough to think his prescriptions would apply to modern day America.