Daily Archives: April 26, 2012

Political arithmetic is invariably suspect and one should always examine carefully the claims of those seeking votes. However, just as one should look at audited and unaudited financials very differently when deciding whether to invest in a company, smart observers have learnt to distinguish between the claims of political candidates and their advisers on one hand, and proposals evaluated by non-political scorekeepers such as the Congressional Budget Office on the other.

This principle has never been better illustrated than by the “budget analysis” put forward by Glenn Hubbard, an economic adviser, to Mitt Romney, the presumptive Republican nominee. In an op-ed published on Wednesday in the Wall Street Journal, he constructs a budget plan he imagines President Barack Obama might one day propose, engages in a set of his own extrapolations, then makes several assertions about it. He does not discuss Mr Obama’s actual plan or how it has been evaluated by the CBO. Nor does he defend the claims Mr Romney has made regarding his own fiscal plans.

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Lawrence Summers

Mr Obama has put forward a plan that would cut deficits by more than $4tn over the decade. It starts by making tough decisions on spending, bringing discretionary spending to its lowest levels since the 1960s. It includes $2.50 in spending cuts for every $1 in additional revenue. It also asks everyone to pay their fair share of taxes, repealing the tax cuts made by President George W. Bush for families making more than $250,000 and closing loopholes and shelters such as preferences for private jets, hedge fund managers, and offshore investments.

The independent CBO confirms that the plan would stabilise the debt as a share of the economy, returning us to a sustainable fiscal path. It would do that while allowing increased investments in education, research and infrastructure that are critical to stronger, shared economic growth in the years to come. By focusing on building a robust economy for the future, it expands the tax base and reduces pressures for future tax increases.

But rather than criticise this approach, Mr Hubbard ignores it – and instead chooses to invent a set of assumptions that bear no relationship to the president’s actual policies. His figures are not explained, but they apparently arbitrarily assume that the president must raise taxes to pay for spending above a level of Mr Hubbard’s choosing. This hypothetical exercise bears no resemblance to the president’s policies.

Rather than filling imaginary gaps in the president’s budget, which has been spelt out in sufficient detail to permit evaluation by independent experts, Mr Hubbard should perhaps fill in some of the many gaps in the current presentations of Mr Romney’s economic plans.

He could start with the tax plan. The Romney campaign has been very clear about what he is promising: $5tn in tax cuts on top of extending the Bush tax cuts, with those benefits heavily weighted towards the wealthiest taxpayers.

Mr Romney claims to pay for this plan by ending tax shelters, principally for the wealthy, but he has not specified a single tax break that he would close. I have been party for many years to searches for “high income tax shelters” that can feasibly be closed. There is no reputable expert in either political party who finds it remotely credible that there is anything approaching $5tn in revenues to be generated from this source.

Mr Romney has also proposed a huge increase in defence outlays, even while he says he will cut spending deeply enough to balance the budget. He has clearly explained why he will not tell voters which cuts he would make: because in past campaigns, he found that disclosing his planned budget cuts was politically damaging.

We have seen this narrative before. When Bill Clinton left office in January 2001, our country was paying down its debt on a substantial scale. I was privileged as secretary of the Treasury to be buying back federal debt. George W. Bush campaigned on a programme of tax cuts supported by economic advisers not subject to the rigours of official budget score-keeping. The results in terms of trillions of dollars of budget deficits speak for themselves.

This is a very consequential election. As we continue to recover from the largest economic crisis in generations, we still need to strengthen the job market, address large fiscal challenges and build an economy based on sustainable, shared economic growth. Voters should have a chance to choose between clear alternatives. Mr Obama has laid out a multiyear budget embodying his vision for the future, and it has been evaluated by independent experts. It is time for Mr Romney to do the same.

The writer was director of the national economic council under Barack Obama and is Charles W. Eliot professor at Harvard University

As Kofi Annan’s number two at the UN, I recall a long few days painstakingly monitoring with lawyers the procedures for the handover of the exiled Charles Taylor by his Nigerian hosts-turned-captors to the Liberian authorities and thence in mid-air to the UN and so to the Hague and his trial. Everything had to be done by the book to avoid later appeal but we were writing the book as we went along. This had hardly been done before. Until then international justice when it came to leaders who had run amok had been with the exception of Nuremberg more mouse than lion when it came to action. Indeed when Mr Taylor went to Nigeria he thought he had a deal ensuring him lifelong sanctuary.

Now the outcome of this special court, the verdicts of the International Criminal Court and the Balkan trials of Slobodan Milošević and fellow military and political leaders, Cambodia’s internationally supported prosecution of Khmer Rouge leaders and others tell a very different story of gathering international judicial activism. Leaders usually cannot get away with mass crimes against citizens anymore. Even if their own judicial and institutional systems are too weak to hold them to account, there is now a higher international authority that will.

This can, as it has in Sierra Leone and Liberia, offer a redemptive healing for traumatised societies where child soldiers incited by Mr Taylor had murdered and mutilated on a massive scale as he sought to control neighbouring Sierra Leone’s diamonds. But it’s more powerful use still is as a deterrent to other murderous leaders, such as Bashar al-Assad in Syria or Robert Mugabe in Zimbabwe, who are still used to getting away with it. Here the impact is more mixed.

These two leaders are probably more determined to hang on because of the risk of international trial if they step down. Whenever I was involved in discussions of what it might take to persuade Mr Mugabe to go there was often talk of allowing him perhaps to end his days in Zimbabwe itself where there might be some protection against an international arrest warrant. For Mr Assad there seems little prospect of a secure retirement with his in-laws in west London. The warrants would fly thick and fast given his vicious actions over the last year. The negotiations over Darfur were complicated by the ICC charges against President Omar al-Bashir of Sudan despite a provision in that court’s charter which would allow the UN Security Council to delay a trial if that would help the diplomacy forward.

So the threat of justice may make old leaders hang on. Where its deterrent value is much higher is with new leaders who as they embark on governing their countries recognise a new accountability. If they fall outside the pale and commit major atrocities they will be judged and there are political deals to ease their departure can no longer trump this. President Obasanjo of Nigeria gave Mr Taylor an offer of safe exile to stop the fighting. But when the wheels of international justice turned he very properly had to renege on his word.

The message is that there is nowhere left for murderous despots to hide. That is an extraordinary step forward in global accountability and responsibility and far outweighs the difficulties of temporarily making it harder to prise a long time offender  from office. We should celebrate today’s verdict by copying President Truman’s old White House office desk sign, “The Buck Stops Here” and sending it to all world leaders starting with A for Assad and completing with Z for Zimbabwe.

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