Bush Created The Deficit

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Who lost Iraq? Someday, as a fragmented Iraq spirals further into religious madness, terrorism and civil war, there will be a bipartisan inquiry into this blundering intrusion into another people's history.

The crucial question will be why a preemptive American invasion - which has led to the deaths of nearly 2,000 Americans, roughly 10 times as many Iraqis, the expenditure of about $200 billion and incalculable damage to the United States' global reputation - has had exactly the opposite effect predicted by its neoconservative sponsors. No amount of crowing over a fig leaf Iraqi constitution by President Bush can hide the fact that the hand of the region's autocrats, theocrats and terrorists is stronger than ever.

The U.S. now has to recognize that [it] overthrew Saddam Hussein to replace him with a pro-Iranian state, said regional expert Peter W. Galbraith, the former U.S. ambassador to Croatia and an advisor to the Iraqi Kurds. And, he could have added, a pro-Iranian state that will be repressive and unstable.

Think this is an exaggeration? Consider that arguably the most powerful Shiite political party and militia in today's Iraq, the Supreme Council for the Islamic Revolution in Iraq and its affiliated paramilitary force, the Badr Brigade, was not only based in Iran but was set up by Washington's old arch-foe, Ayatollah Ruhollah Khomeini. It also fought on the side of Iran in the Iran-Iraq war and was recognized by Tehran as the government in exile of Iraq.

Or that former exile Ahmad Chalabi is now one of Iraq's deputy prime ministers. The consummate political operator managed to maintain ties to Iran while gaining the devoted support of Donald Rumsfeld's Pentagon, charming and manipulating Beltway policymakers and leading U.S. journalists into believing that Iraq was armed with weapons of mass destruction.

Chalabi is thrilled with the draft constitution, which, if passed, will probably exponentially increase tension and violence between Sunnis and Shiites. It is an excellent document, said Chalabi, who has been accused by U.S. intelligence of being a spy for Iran, where he keeps a vacation home.

What an absurd outcome for a war designed to create a compliant, unified and stable client state that would be pro-American, laissez-faire capitalist and unallied with the hated Iran. Of course, Bush tells us again, this is progress and an inspiration. Yet his relentless spinning of manure into silk has worn thin on the American public and sent his approval ratings tumbling.

Even supporters of the war are starting to realize that rather than strengthening the United States' position in the world, the invasion and occupation have led to abject humiliation: from the Abu Ghraib scandal, to the guerrilla insurgency exposing the limits of military power, to an election in which our guy - Iyad Allawi - was defeated by radicals and religious extremists.

In a new low, the U.S. president felt obliged to call and plead with the head of the Supreme Council for the Islamic Revolution, Abdelaziz Hakim, to make concessions to gain Sunni support. Even worse, he was summarily rebuffed. Nevertheless, Bush had no choice but to eat crow and like it.

This is a document of which the Iraqis, and the rest of the world, can be proud, he said Sunday, through what must have been gritted teeth. After all, this document includes such democratic gems as Islam is the official religion of the state and is a basic source of legislation, and No law can be passed that contradicts the undisputed rules of Islam, as well as socialist-style pronouncements that work and a decent standard of living are a right guaranteed by the state. But the fact is, it could establish Khomeini's ghost as the patron saint of Iraq and Bush would have little choice but to endorse it.

Even many in his own party are rebelling. I think our involvement there has destabilized the Middle East. And the longer we stay there, I think the further destabilization will occur, said Nebraska Sen. Chuck Hagel last week, one of a growing number of Republicans who get that we should start figuring out how we get out of there.

Not that our what-me-worry? president is the least bit troubled by all this adverse blowback from the huge, unnecessary gamble he took in invading the heart of the Arab and Muslim worlds. What is important is that the Iraqis are now addressing these issues through debate and discussion, not at the barrel of a gun, Bush said.

Wrong again, George. It was the barrel of your gun that midwifed the new Iraq, which threatens to combine the instability of Lebanon with the religious fanaticism of Iran.

Now, what Americans need to understand is that that means every single day of the year, our government goes into the market and borrows money from other countries to finance Iraq, Afghanistan, Katrina and our tax cuts, Clinton added. We depend on Japan, China, the United Kingdom, Saudi Arabia and Korea primarily to basically loan us money every day of the year to cover my tax cut and these conflicts and Katrina. I don't think it makes any sense. I think it's wrong.

Clinton also discussed bringing world leaders together to combat the world's chronic problems � including extreme poverty, global warming and religious conflicts � as well as the Hurricane Katrina recovery effort and Hillary Clinton's political future.

STEPHANOPOULOS: We're here on your initiative, and I want to talk about that, but let's begin with Katrina. President Bush has brought you into the recovery effort, but he's not taking all of your advice. You say roll back the tax cuts for the wealthy. He says no tax increase of any kind. We're spending $5 billion a month in Iraq, probably $200 billion on Katrina. Something's got to give.

CLINTON: Well, that's what I think. I think this idea � I think it's very important that Americans understand, you know, tax cuts are always popular, but about half of these tax cuts since 2001 have gone to people in my income group, the top 1 percent. I've gotten four tax cuts.

They're responsible for this big structural deficit, and they're not going away, the deficits aren't. Now, what Americans need to understand is that that means every single day of the year, our government goes into the market and borrows money from other countries to finance Iraq, Afghanistan, Katrina and our tax cuts. We have never done this before. Never in the history of our republic have we ever financed a conflict, military conflict, by borrowing money from somewhere else.

CLINTON: They should continue to oppose it, and they should make it an issue in the 2006 election, and they should make it an issue in the 2008 election. And they should hope, to goodness, for the sake of our country, that the cows don't come home before we have time to rectify it.

I mean, sooner or later, just think what would happen if the Chinese � We're pressing the Chinese now, a country not nearly rich as America per capita, to keep loaning us money with low interest to cover my tax cut, Iraq, Afghanistan, and Katrina and at the same time to raise the value of their currency so their imports into our country will become more expensive, and our exports to them will become less expensive. And by the way, we don't want to let them buy any oil companies or anything like that.

So what if they just got tired of buying our debt? What if the Japanese got tired of doing it? Japan's economy is beginning to grow again. Suppose they decided they wanted to keep some of their money at home and invest it in Japan, because they're starting to grow?

We depend on Japan, China, the United Kingdom, Saudi Arabia and Korea primarily to basically loan us money every day of the year to cover my tax cut and these conflicts and Katrina. I don't think it makes any sense. I think it's wrong.

STEPHANOPOULOS: Is there anything coming out of this initiative here that you can apply directly to Katrina and the poverty we saw revealed there?

CLINTON: Oh, yes, we have raised quite a bit of money for Katrina here. And former President Bush and I, you know, we were asked to raise money. We already have $90 million to $100 million. And what we're trying to do is make sure that our money goes directly to the poorest people who have been dislodged by working with church groups and others. We're working on some mechanisms now to do that, and we'll have some announcements in the next week or so.

But I think there will be a lot of money coming forward from the federal government. A lot of it will be necessary, you know, to build the infrastructure, rebuild the fabric of life and not simply in New Orleans but along the Gulf Coast.

CLINTON: Yes; you know, keep in mind, Mississippi was devastated. Everything from a mile in Mississippi was blown down, and Alabama, but we've got to do that.

STEPHANOPOULOS: Excuse me; the problems of race that were tied to poverty here, and I know you don't think there's any conscious racism at play in the response, but we saw one more time blacks and whites looked at this event through very different eyes. What can President Bush do about that, and looking back, do you think there was anything more you could have done as president?

CLINTON: Well, I think we did a good job of that. For example, we had the lowest African-American unemployment, the lowest African-American poverty rate ever recorded. We had the highest homeownership, highest business ownership, and we moved 100 times as many people out of poverty in eight years as had been moved out in the previous 12 years.

This is a matter of public policy, and whether it's race-based or not, if you give your tax cuts to the rich and hope everything works out all right, and poverty goes up, and it disproportionately affects black and brown people, that's a consequence of the action made. That's what they did in the '80s; that's what they've done in this decade.

Al-Zarqawi was born Ahmad Fadil al-Khalayleh in October 1966 in the crime and poverty-ridden Jordanian city of Zarqa. But his myth was born Feb. 5, 2003, when then-Secretary of State Colin Powell presented to the United Nations the case for war with Iraq.

Napoleoni, the author of Insurgent Iraq, told reporters last week that Powell's argument falsely exploited Zarqawi to prove a link between then-Iraqi President Saddam Hussein and al-Qaida. She said that through fabrications of Zarqawi's status, influence and connections the myth became the reality - a self-fulfilling prophecy.

He became what we wanted him to be. We put him there, not the jihadists, Napoleoni said.

Iraq's most notorious insurgent, Napoleoni argues, accomplished what bin Laden could not: spread the message of jihad into Iraq.

In an article of Napoleoni's in the current November/December issue of Foreign Policy, she said, In a sense, it is the very things that make Zarqawi seem most ordinary - his humble upbringing, misspent youth and early failures - that make him most frightening. Because, although he may have some gifts as a leader of men, it is also likely that there are many more 'al-Zarqawis' capable of filling his place.

The myth of al-Zarqawi, Napoleoni believes, helped usher in al-Qaida's transformation from a small elitist vanguard to a mass movement.

Al-Zarqawi became the icon of a new generation of anti-imperialist jihadists, she said.

The grand claim that al-Zarqawi provided the vital link between Saddam and al-Qaida lost its significance after it became known that al-Zarqawi and bin Laden did not forge a partnership until after the war's start. The two are believed to have met sometime in 2000, but al-Zarqawi - similar to a group of dissenting al-Qaida members -rebuffed bin Laden's anti-American brand of jihad.

He did not have a global vision like Osama, said Napoleoni, who interviewed primary and secondary sources close to al-Zarqawi and his network.

A former member of al-Zarqawi's camp in Herat told her, I never heard him praise anyone apart from the Prophet [Muhammad]; this was Abu Musab's character. He never followed anyone.

Al-Zarqawi's scope before the Iraq war, she continued, did not extend past corrupt Arab regimes, particularly Jordan's. Between 2000 and early 2002, he operated the training camp in Herat with Taliban funds; the fighters bound for Jordan. After the fall of the Taliban, he fled to Iraqi Kurdistan and set up shop.

In 2001, Kurdish officials enlightened the United States about the uninvited Jordanian, said Napoleoni. Jordanian officials, who had still unsolved terrorist attacks, were eager to implicate al-Zarqawi, she claimed. The little-known militant instantly had fingerprints on most major terrorist attacks after Sept. 11, 2001. He was depicted in Powell's speech as a key player in the al-Qaida network.

By perpetuating a terrifying myth of al-Zarqawi, the author said, The United States, Kurds, and Jordanians all won ... but jihad gained momentum, after in-group dissension and U.S. coalition operations had left the core of al-Qaida crippled.

In her article, Napoleoni says, [Zarqawi] had finally managed to grasp bin Laden's definition of the faraway enemy, the United States. Adding that, Its presence in Iraq as an occupying power made it clear to him that the United States was as important a target as any of the Arab regimes he had grown to hate.

... The myth constructed around him is at the root of his transformation into a political leader. With bin Laden trapped somewhere in Afghanistan and Pakistan, al-Zarqawi fast became the new symbolic leader in the fight against America and a manager for whoever was looking to be part of that struggle, she wrote.

The author points to letters between al-Zarqawi and bin Laden that have surfaced over the past two years, indicating the evolution in their relationship, most notably a shift in al-Zarqawi which led to his seeking additional legitimacy among Sunnis that bin Laden could help bestow.

In late December 2004 - shortly after the fall of Fallujah - the pan-Arab network Al-Jazeera aired a video of what was bin Laden's first public embrace of Zarqawi and his fight in Iraq.

... We in al-Qaida welcome your union with us ... and so that it be known, the brother mujahid Abu Musab al-Zarqawi is the emir of the al Qaida organization [in Iraq], bin Laden declared.

Napoleoni believes that al-Zarqawi, however, is still largely driven by the romantic vision of a restored Caliphate, and that his motives still are less political than some other factions participating in the Iraq resistance.

She questions whether he has actually devised a plan for what he will do, if and when, he wins.

Peter Peterson. (Photo: Reuters)

Peter Peterson is coming to get your Social Security and Medicare. Peterson was the commerce secretary in the Nixon administration. He then went on to make billions of dollars as one of the top executives at the Blackstone Group, a private equity fund. Mr. Peterson is known as one of the top beneficiaries of the fund managers' tax break, through which he personally pocketed tens of millions of dollars.

Mr. Peterson has been using his Wall Street wealth to attack these social insurance programs for decades, but he recently stepped up his efforts. Last year, he spent $1 billion to endow the Peter G. Peterson Foundation to further his efforts.

In politics, it's not easy to counter the impact of $1 billion. In addition to its money, the Peterson crew enjoys the support of many important news outlets, most importantly The Washington Post, which pushes his line on both its editorial and news pages.

In fact, The Post even went so far as to identify Peterson's foundation by its boilerplate, an organization that "advocates for federal fiscal responsibility," instead of telling readers of its political leanings, the normal mode of identification for such organizations. (The Center for Economic and Policy Research was established "to promote democratic debate on the most important economic and social issues that affect people's lives.")

While the Peterson crew may have the money and the support of the media, the rest of us can rely on logic and ridicule to counter the attack. In this spirit, we have the Peter G. Peterson Intergenerational Fairness Tax Credit. (Mr. Peterson is apparently fond of having things named after him. In addition to his new Peter G. Peterson Foundation, he also has a think tank named after him, the Peter G. Peterson Institute for International Economics.)

The Peterson tax credit would essentially take the Peterson crew at their word. They claim that they are worried that huge tax burdens will leave future generations worse off than the generations that preceded them.

This isn't true. There is no plausible scenario, short of war or environmental disaster, that would leave future generations worse off than their parents or grandparents. But we don't have to argue with the billionaire; let's just give future generations the option to trade places with their parents or grandparents who made out so well.

This is where the tax credit comes in. The tax credit would allow an individual to trade her after-tax income for the after-tax income that someone born 20 or 40 years sooner would have earned at the same age. For example, if someone born in 1990 believes in 2020 that their grandparents got a better deal, they would simply check off the year 1940, and they would have their taxes adjusted so that they would have the same after-tax income of a person born in 1940, when they were also age 30.

Of course, the young ones would end up big losers in this story. Real wages, on average, will be more than 50 percent higher in 2020 than they were in 1970. Even if tax rates were, on average, 5 percentage points higher, workers in 2020 will still have after-tax wages that are more than 40 percent higher than their counterparts in 1970.

This means that anyone who chose to take advantage of the intergenerational equity tax credit would end up as a big loser. That is why it can help solve the deficit problem. If people check off the tax credit, they will pay more in taxes and, therefore, increase government revenue.

It might be hard to convince large numbers of people to voluntarily pay more in taxes. This is where the Peterson Foundation comes in. They are spending huge amounts of money trying to convince young people that they are being ripped off by their parents and grandparents. They are even promoting front groups of young people to advance this effort.

With his billion dollars, Peterson could convince a huge number of gullible young people to tax advantage of the intergenerational equity tax credit. Insofar as he is successful in this effort, he can help to generate billions of dollars that can be used for items like health care, preschool education, and other pressing needs.

So, let's join efforts with Mr. Peterson and encourage his followers to take advantage of the Peter G. Peterson Intergenerational Fairness Tax Credit. There is a word for taking money from willfully ignorant young people who would deny their parents and grandparents the Social Security and Medicare benefits they need to survive: justice.

how do you know no one has anyone serving over there. You have no way of knowing that.

"Anyone in my office involved with a leak will be fired" to "Anyone who is found guilty of leaking," I figured he had a handle on what the decision is going to be by the special prosecutor, who, incidentally, was appointed by BUSH.

A year ago the U.S. Army Corps of Engineers proposed to study how New Orleans could be protected from a catastrophic hurricane, but the Bush administration ordered that the research not be undertaken. After a flood killed six people in 1995, Congress created the Southeast Louisiana Urban Flood Control Project, in which the Corps of Engineers strengthened and renovated levees and pumping stations. In early 2001, the Federal Emergency Management Agency issued a report stating that a hurricane striking New Orleans was one of the three most likely disasters in the U.S., including a terrorist attack on New York City. But by 2003 the federal funding for the flood control project essentially dried up as it was drained into the Iraq war. In 2004, the Bush administration cut funding requested by the New Orleans district of the U.S. Army Corps of Engineers for holding back the waters of Lake Pontchartrain by more than 80 percent. Additional cuts at the beginning of this year (for a total reduction in funding of 44.2 percent since 2001) forced the New Orleans district of the Corps to impose a hiring freeze. The Senate had debated adding funds for fixing New Orleans' levees, but it was too late.

The New Orleans Times-Picayune, which before the hurricane published a series on the federal funding problem, and whose presses are now underwater, reported online: No one can say they didn't see it coming ... Now in the wake of one of the worst storms ever, serious questions are being asked about the lack of preparation.

The Bush administration's policy of turning over wetlands to developers almost certainly also contributed to the heightened level of the storm surge. In 1990, a federal task force began restoring lost wetlands surrounding New Orleans. Every two miles of wetland between the Crescent City and the Gulf reduces a surge by half a foot. Bush had promised no net loss of wetlands, a policy launched by his father's administration and bolstered by President Clinton. But he reversed his approach in 2003, unleashing the developers. The Army Corps of Engineers and the Environmental Protection Agency then announced they could no longer protect wetlands unless they were somehow related to interstate commerce.

In response to this potential crisis, four leading environmental groups conducted a joint expert study, concluding in 2004 that without wetlands protection New Orleans could be devastated by an ordinary, much less a Category 4 or 5, hurricane. There's no way to describe how mindless a policy that is when it comes to wetlands protection, said one of the report's authors. The chairman of the White House's Council on Environmental Quality dismissed the study as highly questionable, and boasted, Everybody loves what we're doing.

My administration's climate change policy will be science based, President Bush declared in June 2001. But in 2002, when the Environmental Protection Agency submitted a study on global warming to the United Nations reflecting its expert research, Bush derided it as a report put out by a bureaucracy, and excised the climate change assessment from the agency's annual report. The next year, when the EPA issued its first comprehensive Report on the Environment, stating, Climate change has global consequences for human health and the environment, the White House simply demanded removal of the line and all similar conclusions. At the G-8 meeting in Scotland this year, Bush successfully stymied any common action on global warming. Scientists, meanwhile, have continued to accumulate impressive data on the rising temperature of the oceans, which has produced more severe hurricanes.

In February 2004, 60 of the nation's leading scientists, including 20 Nobel laureates, warned in a statement, Restoring Scientific Integrity in Policymaking: Successful application of science has played a large part in the policies that have made the United States of America the world's most powerful nation and its citizens increasingly prosperous and healthy ... Indeed, this principle has long been adhered to by presidents and administrations of both parties in forming and implementing policies. The administration of George W. Bush has, however, disregarded this principle ... The distortion of scientific knowledge for partisan political ends must cease. Bush completely ignored this statement.

In the two weeks preceding the storm in the Gulf, the trumping of science by ideology and expertise by special interests accelerated. The Federal Drug Administration announced that it was postponing sale of the morning-after contraceptive pill, despite overwhelming scientific evidence of its safety and its approval by the FDA's scientific advisory board. The United Nations special envoy for HIV/AIDS in Africa accused the Bush administration of responsibility for a condom shortage in Uganda -- the result of the administration's evangelical Christian agenda of abstinence. When the chief of the Bureau of Justice Statistics in the Justice Department was ordered by the White House to delete its study that African-Americans and other minorities are subject to racial profiling in police traffic stops and he refused to buckle under, he was forced out of his job. When the Army Corps of Engineers' chief contracting oversight analyst objected to a $7 billion no-bid contract awarded for work in Iraq to Halliburton (the firm at which Vice President Cheney was formerly CEO), she was demoted despite her superior professional ratings. At the National Park Service, a former Cheney aide, a political appointee lacking professional background, drew up a plan to overturn past environmental practices and prohibit any mention of evolution while allowing sale of religious materials through the Park Service.

On the day the levees burst in New Orleans, Bush delivered a speech in Colorado comparing the Iraq war to World War II and himself to Franklin D. Roosevelt: And he knew that the best way to bring peace and stability to the region was by bringing freedom to Japan. Bush had boarded his very own Streetcar Named Desire.

Sidney Blumenthal, a former assistant and senior advisor to President Clinton and the author of The Clinton Wars, is writing a column for Salon and the Guardian of London.