Spending DA

1NC

1NC ShellRepublican control has restored fiscal discipline – spending priorities proveDeirdre Walsh and Jeremy Herb, 6/27/17, CNN, "house republicans put final touches on budget deal," http://www.cnn.com/2017/06/27/politics/house-republicans-budget-deal/index.html, mm

House Republicans are putting the final touches on a bold budget proposal they will roll out later this week

that would boost military spending beyond what President Donald Trump wants and slash billions from welfare and other entitlement programs. Threading the needle of getting defense hawks, fiscal conservatives and those steering tax reform within his own party has been a difficult task, but House Speaker Paul Ryan has reminded House GOP members that this year's budget is critical for getting top priorities like tax reform through both chambers. It's unlikely any Democrats will back the fiscal blueprint, so

Republican leaders are locking down support from the various factions of their conference. They plan to hold up the proposal as evidence they are following through on the promise of GOP control of the White House and the

Capitol intent on reshaping the federal government. The fiscal blueprint is expected to propose more than $1.1 trillion for the next fiscal year and would provide more money for the military and domestic spending than President Donald Trump requested in his budget, which he sent to the Hill in May, according to several congressional aides familiar with the proposal. Republicans reached an agreement on the discretionary funding levels for the Pentagon and domestic agencies, and the last sticking point Republican leaders had to overcome was over how much deficit-reduction should be taken out of mandatory programs like Social Security, Medicare and Medicaid. The budget plan would provide $621.5 billion in base defense spending, as well as $75 billion in war funding, known as Overseas Contingency Operations, sources told CNN. That's $28.5 billion more than the President requested — $18.5 in the base budget and $10 billion extra in war dollars. The House budget blueprint would set domestic discretionary spending at $511 billion, an increase compared to the Trump administration's $462 billion budget request, which proposed deep cuts to agencies like the State Department and EPA. When President Barack Obama was in the White House, final spending deals in recent years included equal increases for defense and domestic spending, but Republicans are trying to move away from that construct now that they control the legislative and executive branches. While the budget agreement will likely will have enough votes to get those spending bills through the House, Senate Democrats are likely to filibuster them, making a final deal uncertain ahead of a September deadline to keep the government from shutting down. This emerging budget deal lays out the GOP wish list, but an agreement that funds federal agencies will be tougher to hammer out. Republicans have had to rely on Democrats to pass those in recent years, so they may need to give in on the split between defense and other domestic programs. Another problem the House faces with the emerging budget agreement is that the defense funding violates spending caps established by the 2011 Budget Control Act. The defense cap for 2018 is $549 billion, and if the cap is not changed, the Pentagon would be subject to across-the-board cuts known as sequestration. Republican defense hawks want to repeal the budget caps for defense, as Trump has requested, but Democrats won't go along unless the cap is also removed for domestic spending. For defense hawks, the $621.5 billion topline for defense is a compromise, as House Armed Services Chairman Mac Thornberry and Senate Armed Services Chairman John McCain have been pressing for at least $640 billion for the military. The difficulties in creating a budget deal in the House have also made for a topsy-turvy process crafting individual authorization and appropriation bills. Both Thornberry and Rep. Kay Granger, the chairwoman of the House defense appropriations subcommittee, were preparing their defense bills at different levels — Thornberry's at $37 billion more than the Trump request and Granger's at the same level as Trump's. But with a budget deal near, the House's defense authorization and appropriations bills were finalized at the same level as the emerging budget agreement. Thornberry told reporters last week that he was willing to come down from $640 billion, but he would need assurances there would be future growth for military spending in future years. The final sticking point to getting House Republicans on the same page was negotiating how much money the plan would cut from the mandatory side of the ledger. Programs like Social Security and Medicare that are funded through mandatory spending account for about two-thirds of the total budget, but they are difficult to

reduce because any change requires Congress to pass a new law. With divided government in recent years,

Republicans in Congress have been unable to make a dent in this area. But House GOP members are looking to get some significant savings from changes to some programs that fall under the Agriculture Department, like

food stamps, or other welfare programs. The House GOP budget is expected to direct several committees to come up with roughly $200 billion in deficit savings. Some in the House Freedom Caucus were hoping they could get a significantly higher number, and House Budget Chair Diane Black also appealed to top GOP leaders to make those savings a major component of the final deal, according to several House Republican sources.

Education spending explodes the deficits and tanks the economy Neal McCluskey, 2/16/11, Orange County Register, "education waste: we have only ourselves to blame," http://www.ocregister.com/2011/02/16/neal-mccluskey-education-waste-we-have-only-ourselves-to-blame/, mm

There’s a curious line in the summary of President Barack Obama’s proposed fiscal 2012 Department of Education budget. “Now more than ever,” it reads, “we cannot waste taxpayer dollars on programs that do not work.” It’s curious because no federal education programs appear to work, yet the Obama administration is proposing to increase Education Department spending from $64 billion to $77 billion. It’s a bankrupting contradiction, but don’t get angry at Obama: We only have ourselves to blame.

Educational outcomes prove that federal education involvement has practically been the definition of profligate spending. First, elementary and secondary schooling. While real, federal per-pupil expenditures have more than doubled since the early 1970s, the scores of 17-year-olds on the National Assessment of Educational Progress – the so-called “Nation’s Report Card” – have been pancake flat. We’ve spent tons with no educational returns to show. We have, though, got bloat such as a near doubling of school employees per-student, and opulent buildings like the half-billion-dollar Robert F. Kennedy Community Schools complex that opened in Los Angeles last year. In higher education, the federal government has focused on providing financial aid to make college more affordable. The problem is, policymakers have ignored basic economics. The more Washington gives to students, the higher schools can raise their prices, wiping out the value of the aid. In addition to being a major cause of the disease it wants to cure, Washington has fostered higher-ed failure by encouraging an increasing number of people often unready for college to pursue degrees. That’s a likely reason the most recent federal assessment of adult literacy recorded big literacy drops from 1992-2003 among Americans with at least a bachelor’s degree. It’s also no doubt a significant factor behind only about 56 percent of students in four-year programs completing their studies in six years. Wasting federal dollars on schools is not, importantly, exclusively a Democratic problem. Both parties have used education spending to try to signal that they “care” about Americans, especially cute little child-Americans. And while the House GOP has identified about $4.9 billion in cuts for the Education Department, that’s less than 8 percent off the Department’s $64 billion budget. So how is all this the fault of the American people? Isn’t the real problem that politicians lack integrity and will try to buy votes using things that sound wonderful even if they’re toxic? While it would be nice if politicians would start looking at results and stop throwing money into black holes, the fact is they’re human, and, like all of us, they ultimately want what is best for themselves. For politicians that’s votes, and when it comes to education Americans don’t like cuts. When presented with several federal undertakings that could be targets for deficit-reducing cuts in a recent Kaiser Family Foundation poll, education finished second only to Social Security for protection. A full 63 percent of respondents wanted no education reductions, versus 13 percent calling for “major” cuts. In contrast, the top candidate for gutting – foreign aid – saw 11 percent of people call for no reductions and 52 percent demand major slashing. Why do Americans want more

of a bad thing? The problem is, they don’t know it’s bad. As with most things you buy, people generally expect that spending more on education will get a better product. Moreover, the public constantly hears, especially from huge special interests like teachers’ unions, that our schools have been surviving on table scraps for decades. It’s no surprise, then, that average Americans – people with jobs, families, and lots of other pressing concerns that make analyzing education policy hugely

cost prohibitive – recoil at the idea of taking money from schools. But take we must, because federal money does no discernable educational good, and our nation can simply no longer afford pointless spending . Unfortunately, there is only one way to get sustained sanity in federal policy, and it will require slow, hard work. People who know the reality of federal education spending must tell others about it as forcefully and clearly as possible. They

must change the public’s attitude so that what’s in politicians’ self-interest will also change. Ultimately, federal politicians must be rewarded not for giving away dollars in the name of education, but for leaving them in the hands of hardworking taxpayers.

An extended decline causes conflict and warGreen and Schrage 9—Michael J Green is Senior Advisor and Japan Chair at the Center for Strategic and International Studies (CSIS) and Associate Professor at Georgetown University. Steven P Schrage is the CSIS Scholl Chair in International Business and a former senior official with the US Trade Representative's Office, State Department and Ways & Means Committee [March 26, 2009, “It's not just the economy,” http://www.atimes.com/atimes/Asian_Economy/KC26Dk01.html]

However, the Great Depression taught us that a downward global economic spiral can even have jarring impacts on great powers. It is no mere coincidence that the last great global economic downturn was followed by the most destructive war in human history . In the 1930s, economic desperation helped fuel autocratic regimes and protectionism in a downward economic-security death spiral that engulfed the world in conflict. This spiral was aided by the preoccupation of the United States and other leading nations with economic troubles at home and insufficient attention to working with other powers to maintain stability abroad. Today's challenges are different, yet 1933's London Economic Conference, which failed to stop the drift toward deeper depression and world war, should be a cautionary tale for leaders heading to next month's London Group of 20 (G-20) meeting. There is no question the US must urgently act to address banking issues and to restart its economy. But the lessons of the past suggest that we will also have to keep an eye on those fragile threads in the international system that could begin to unravel if the financial crisis is not reversed early in the Barack Obama

administration and realize that economics and security are intertwined in most of the critical challenges we face. A disillusioned rising power? Four areas in Asia merit particular attention, although so far the current financial crisis has not changed Asia's fundamental strategic picture. China is not replacing the US as regional hegemon, since the leadership in Beijing is too nervous about the political implications of the financial crisis at home to actually play a leading role in solving it internationally. Predictions that the US will be brought to its knees because China is the leading holder of US debt often miss key points. China's currency controls and full employment/export-oriented growth strategy give Beijing few choices other than buying US Treasury bills or harming its own economy. Rather than creating new rules or institutions in international finance, or reorienting the Chinese economy to generate greater long-term consumer demand at home, Chinese leaders are desperately clinging to the status quo

(though Beijing deserves credit for short-term efforts to stimulate economic growth). The greater danger with China is not an eclipsing of US leadership, but instead the kind of shift in strategic orientation that happened to Japan after the Great Depression. Japan was arguably not a revisionist power before 1932 and sought instead to converge with the global economy through open trade and adoption of the gold standard. The worldwide depression and protectionism of the 1930s devastated the newly exposed Japanese economy and contributed directly to militaristic and autarkic policies in Asia as the Japanese people reacted against what counted for globalization at the time. China today is similarly converging with the global economy, and many experts believe China needs at least 8% annual growth to sustain social stability. Realistic growth predictions for 2009 are closer to 5%. Veteran China hands were watching closely when millions of migrant workers returned to work after the Lunar New Year holiday last month to find

factories closed and jobs gone. There were pockets of protests, but nationwide unrest seems unlikely this year, and Chinese leaders are working around the clock to ensure that it does not happen next year either. However, the economic slowdown has only just begun and nobody is certain how it will impact the social contract in China between the ruling communist party and the 1.3 billion Chinese who have come to see President Hu Jintao's call for "harmonious society" as inextricably linked to his promise of "peaceful development". If the Japanese example is any precedent, a sustained economic slowdown has the potential to open a dangerous path from economic nationalism to strategic revisionism in China too . Dangerous states It is noteworthy that North Korea, Myanmar and Iran have all intensified their defiance in the wake of the financial crisis, which has distracted the world's leading nations, limited their moral authority and sown potential discord . With Beijing worried about the potential impact of North Korean belligerence or instability on Chinese internal stability, and leaders

in Japan and South Korea under siege in parliament because of the collapse of their stock markets, leaders in the North Korean capital of Pyongyang have grown increasingly boisterous about their country's claims to great power status as a nuclear weapons state. The junta in Myanmar has chosen this moment to arrest hundreds of political dissidents and thumb its nose at fellow members of the 10-country Association

of Southeast Asian Nations. Iran continues its nuclear program while exploiting differences between the US, UK and France (or the P-3 group) and China and Russia - differences that could become more pronounced if economic friction with Beijing or Russia crowds out cooperation or if Western European governments grow nervous about sanctions as a tool of policy. It is possible that the economic downturn will make these dangerous states more pliable because of falling fuel prices (Iran) and greater need for foreign aid (North Korea and Myanmar), but that may depend on the extent that authoritarian

leaders care about the well-being of their people or face internal political pressures linked to the economy. So far, there is little evidence to suggest either and much evidence to suggest these dangerous states see an opportunity to advance their asymmetrical

advantages against the international system. Challenges to the democratic model The trend in East Asia has been for developing economies to steadily embrace democracy and the rule of law in order to sustain their national success. But to thrive, new democracies also have to deliver basic economic growth. The economic crisis has hit democracies hard , with Japanese Prime Minister Aso Taro's approval collapsing to single digits in the polls and South Korea's Lee Myung-bak and Taiwan's Ma Ying Jeou doing only a little better (and the collapse in Taiwan's exports - particularly to China - is sure to undermine Ma's argument that a more accommodating stance toward Beijing will bring economic benefits to Taiwan). Thailand's new coalition government has an uncertain future after two years of post-

coup drift and now economic crisis. The string of old and new democracies in East Asia has helped to anchor US relations with China and to maintain what former secretary of state Condoleezza Rice once called a "balance of power that favors freedom". A reversal of the democratic expansion of the past two decades would not only impact the global balance of power but also increase the potential number of failed state s, with all the attendant risk they bring from harboring terrorists to incubating pandemic diseases and trafficking in persons. It would also undermine the demonstration effect of liberal norms we are urging China to embrace at home. Protectionism The collapse of financial markets in 1929 was compounded by

protectionist measures such as the Smoot-Hawley tariff act in 1932. Suddenly, the economic collapse became a zero-sum race for autarkic trading blocs that became a key cause of war. Today, the globalization of finance, services and manufacturing networks and the World Trade Organization (WTO) make such a rapid move to trading blocs unlikely. However, protectionism could still unravel the international system through other guises . Already, new spending packages around the world are providing support for certain industries that might be perceived by foreign competitors as unfair trade measures, potentially creating a "Smoot-Hawley 2.0" stimulus effect as governments race to prop up industries. "Buy American" conditionality in the US economic stimulus package earlier this year was watered down somewhat by the Obama administration, but it set a tempting precedent for other countries to put up barriers to close markets. Nations pushing the bounds of their trade commitments could overload the circuits of a system that can take two years to determine violations - more than enough time for a global meltdown. Climate change legislation is also likely to become a stalking horse for protectionism as legislatures enthusiastically embrace punitive tariffs against Chinese or Indian goods that are

produced outside of the framework for reducing greenhouse gas emissions. Finally, competitive devaluation - already being

pursued by China in the view of some economists - could intensify international protectionism and friction.

Global trade has already contracted for the first time in over two decades and governments have only just begun exploring unilateral measures that could cause further barriers . Meanwhile,

trade liberalization has stalled in the Doha Round of the WTO and the Obama administration has come into office expressing strong reservations about major bilateral free trade agreements already negotiated with allies like South Korea and

Columbia. Even if the clarion call of protectionism does not lead to the kind of autarkic blocs that contributed to war in the 1930s, it could still distract governments from collaboration on common threats and slow the prospects for more rapid recovery.

UQ

UQ – Fiscal Discipline Now

Deficit hawks are pushing fiscal discipline nowKevin Williamson, 6/4/17, National Review, "can republicans stand together on spending?" http://www.nationalreview.com/article/448259/republicans-budget-rare-opportunity, mm

Members of Congress hate budget drama. But there is budget drama coming. Representatives and senators of both parties generally dislike voting on budget resolutions, because doing so is an all-pain, no-gain exercise. That is one of the reasons why, for example, the Democrats in 2010 did not pass a budget in spite of their controlling the House, the Senate, and the presidency. Budget resolutions are like little fiscal Paris Agreements: non-binding statements of policy goals. Members of Congress have to vote for or against a package of spending proposals that is bound to be unpopular with someone, with Democrats fearful of looking like spendthrifts and Republicans shy about grandma-over-the-cliff ads. But budgets don’t actually have any meaningful force of law, and they don’t control how Congress actually spends money. So members of Congress can end up paying a fairly high political price for a

vote that in reality amounts to approximately squat. But there is a way to use budget resolutions to limit spending — budget reconciliation — that some congressional Republicans want to employ in the upcoming budget negotiations. If you’ll indulge an itty-bitty bit of budget wonkery, here’s what’s happening: In 1974, a Congress worried about mounting debt and deficits passed the Congressional Budget Act, which, among other things, created a

legislative process known as “budget reconciliation,” about which you have heard a great deal in recent years. Reconciliation can be used to expedite certain bills involving taxes, spending, and debt limitation . Reconciliation

tends to be popular with the majority party, because reconciliation bills are immune to filibuster. When the Democrats weren’t sure they could get the Affordable Care Act through the Senate, they considered putting it in a budget-

reconciliation bill to expedite its passage. (Which they kinda-sorta did and kinda-sorta didn’t.) The process is supposed to make it easier to make Congress behave in a fiscally responsible way. Results have been mixed at best. Congress is full of congressmen. There is at the moment a movement afoot among congressional Republicans to use reconciliation in the way it is supposed to be used. Passing a budget resolution does not force the various committees with authority over specific spending items to adopt any particular policy, but including reconciliation directives in the budget can force spending cuts: A reconciliation directive can tell a committee to cut $x out of a certain spending area under its jurisdiction, and that is binding, even if it cannot force the committee to achieve those savings in any particular way. But if the committee’s members cannot agree on a way of meeting their requirements under the reconciliation directive, then legislative rules are invoked that empower the budget committee (House or Senate) to effectively make those decisions for them. It is the only real source of power that the budget committees have at their disposal, which is why being on Ways and Means is a lot more prestigious than being on the House Budget

Committee. What some congressional Republicans are considering is using reconciliation to impose $400 billion to $500 billion in spending cuts, spread out over ten years, to so-called mandatory spending. Usually, “mandatory spending” refers to the big-ticket entitlement programs: Social Security, Medicare, etc. But because Washington is full of crazy people, Social Security is specifically exempted from the reconciliation process, so that’s off the table. But there is a lot more than the popular retirement entitlements in mandatory spending: There’s also SNAP and TANF and other welfare programs, agriculture subsidies, federal pension and retirement-benefit programs, some grant programs, and much else. Those outlays together add up to an enormous bucket of money, but each of those programs also has a built-in constituency that makes it difficult to impose cuts. It’s the old problem of concentrated benefits vs. dispersed costs: The few thousand people getting big farm-subsidy checks every year will fight a lot harder to keep them than the 300 million people funding those programs will fight to keep the few pennies a year that each of them pays in taxes to support them. While using reconciliation to impose cuts is not universally popular, there are some in Congress who would absolutely love to have reconciliation force them to do the right thing that they don’t have the huevos to do on their own initiative. The problem is that for a gang of mindlessly conformist right-wing automatons all taking their marching orders from the same cabal of nefarious billionaires, congressional Republicans are an awfully independent-minded bunch, and getting them to agree on a single approach is not easy. “Some have argued, rightly or wrongly, that over the past five or six years, we haven’t got much done,” says one Hill staffer close to the process. “But we have significantly reduced non-defense discretionary spending.” That’s true: Non-defense discretionary spending has in real terms been cut by about a fifth since 2010. But that category covers only about 19 percent of spending. “Other members may think we can cut further, but discretionary spending is not the driver of the debt. Mandatory spending is. We’ve done our job on discretionary spending, but those with jurisdiction over mandatory spending haven’t.” The issue is that Republican leaders are afraid that using reconciliation to force cuts to mandatory spending will lead to an ugly political brawl that might endanger what they really want to get done this time around: using

reconciliation for tax reform. But some deficit hawks are ready to dig in, and they are reminding the leadership that if the budget fails to get out of committee, then that will imperil tax reform, too. The question is how much of a fight they are willing to put up and how far Republican leaders are ready to go in pursuit of a united front.

Budget negotiations prove Congress will utilize fiscal discipline Maya Macguineas, 6/8/17, The Hill, "tough budget choices for congress, the president," http://thehill.com/blogs/congress-blog/economy-budget/336846-tough-budget-choices-for-congress-the-president, mm

Given that Republicans control the House, Senate and White House, Congress will have to pass a budget this year. Getting the budget done without punting, delaying or circumventing the requirements to lay out a fiscal

roadmap will be necessary to show they can lead effectively. But that doesn’t mean it will be easy. Because they are of the same party, President Trump’s budget is the natural symbolic starting point for Congress . But it can’t be the ending point, both because it doesn’t align with traditional GOP priorities and because the numbers don’t add up. Still, Congress should start where the President did, with adopting a fiscal goal. The president’s budget aims to reach balance within 10 years - something Congressional budgets have done, at least on paper, since 2015. If anything, this goal may be too aggressive—admittedly, a surprising view for a deficit hawk. It is far more important, however, that the budget set a meaningful and realistic fiscal goal accompanied by serious policies likely to get enacted than for it to set a lofty goal with no real intention of follow up. The first major test of seriousness for the Congressional budget will be whether it includes reconciliation instructions. Recent budget resolutions have assumed trillions of dollars in spending cuts on which Congress never acted. In fact, Congress has enacted legislation increasing the deficit. Reconciliation instructions are necessary to turn promises of deficit reduction into legislative reality by requiring Committees to produce legislation achieving the savings called for in the budget. The second step is to rely on credible assumptions. In their budget, the administration assumes sustained 3 percent growth by the second half of the decade, which well exceeds what nearly all serious economists think is plausible. The over-reliance on economic growth – an important objective that we should pursue through things like tax reform, regulatory reform, increased investment and debt reduction – came from an unwillingness to put forth enough actual policies to get to their desired balance. Instead, Congress should stick with the Congressional Budget Office’s growth assumptions and close our deficit gap with specific spending policies. And while we’re on reality, the administration’s handling of tax reform in the budget falls somewhere between nonexistent and duplicitous. Bizarrely, the budget plan does not include tax reform, despite the fact this is perhaps the president’s top priority for the year. Yet the OMB Director claimed the growth stemming from tax reform would be used to help balance the budget. And at the same time, the secretary of the Treasury said it would be used to offset the cost of tax cuts. Huh? The growth from a missing plan will be used to pay for two different things? Details, please. Congress should follow the lead of OMB and develop a plan that offsets the cost of any tax cut and uses the increased revenue from growth spurred by tax reform to help close the fiscal gap. This approach is win-win because not only does it help achieve any fiscal goal, but also because tax reform that is paid for helps grow the economy more than reform that is not. Finally, there is entitlement reform. The president’s budget proposed some reforms of entitlement programs that should be considered, including reductions in agriculture subsidies, changes in federal retirement and reforms of disability and welfare programs. But it fails to address the key drivers of debt, the big issues of Medicare and Social Security. Medicare can be tackled through the budget. The program represents 16 percent of total spending and 22 percent of projected spending growth over the next decade. There are numerous options to reduce Medicare spending without harming beneficiaries through reforms to deliver care more efficiently, reducing excess payments and eliminating unnecessary subsidies. Social Security is not part of the budget process, but it also cannot be ignored. Congress could call for a commission or working group to deal with Social Security's impending insolvency, as was done in the 1980’s. The president has pledged not to make changes to Social Security, but he is just plain wrong to do so. Doing nothing will result in across-the-board benefit cuts of more than 20 percent, harming all participants who depend on the program. And delaying action until the 11th hour leaves lawmakers with less and more severe choices to save the program. The only reason to wait is political convenience. For Republicans who have been (wrongly) pledging not to raise taxes

but (rightly) promising to address Social Security’s shortfall, now is the moment. None of this is easy. But a budget that provides for smart, thoughtful entitlement reforms, responsible tax reform that reduces the deficit through growth and

enforcement provisions to achieve these goals would be a welcome step in restoring some fiscal sanity .

UQ – Growth NowGrowth is picking up nowLindsay Dunsmuir, 6/29/17, Reuters, "US first quarter economic growth revised up on jump in consumer spending," https://www.reuters.com/article/us-usa-economy-idUSKBN19K1NN, mm

The U.S. economy slowed less than feared in the first quarter due largely to a jump in consumer spending, providing a slightly more encouraging outlook for growth this year. Gross domestic product increased at a 1.4 percent annual rate instead of the 1.2 percent reported last month, the Commerce Department said in its final assessment for the period on Thursday. The reading was the worst since the second quarter of 2016 but above analysts' expectations, easing fears the economy had been hobbled at the start of this year. The government had pegged first-quarter growth at a paltry 0.7 percent in its first

estimate in April. "The upward revision occurred even with a downward revision to the inventory data, which has favorable implications for the adding up of second-quarter growth ," said Daniel Silver, an economist at J.P. Morgan. Economists polled by Reuters had expected GDP growth to be unrevised at 1.2 percent in the first quarter. The economy tends to underperform in that period relative to the rest of the year due to perennial issues with the calculation of the data. The government has said it is working to resolve those issues. The U.S. dollar .DXY briefly edged up after the release of the data before retracing earlier losses against a basket of currencies. Prices of U.S. Treasuries were trading lower and stocks on Wall Street were

down sharply. First-quarter economic growth was boosted by an upward revision to consumer spending, which accounts for more than two-thirds of U.S. economic activity. Consumer spending rose at a 1.1 percent pace, the weakest reading since the second quarter of 2013 but almost double the 0.6 percent reported last month.

US growth is increasing now – boosts the global economyPaul Wiseman, 6/5/17, USA Today, "world bank estimates 2.7% global economic growth this year," https://www.usatoday.com/story/money/2017/06/05/world-bank-estimates-27-global-economic-growth-year/102509542/, mm

The world economy will pick up speed this year and next, helped by steadier commodity prices and a pickup in

global trade, the World Bank said Sunday. The anti-poverty agency predicts 2.7 percent growth this year and 2.9 percent in 2018, improving on 2016 s 2.4 percent expansion. ′ The bank sees the U.S. economy growing 2.1 percent this year, up from 1.6 percent in 2016, and the 19-country eurozone expanding 1.7 percent, down a notch from 1.8 percent. Japan is expected to grow 1.5 percent, fastest pace since 2013 and up from 1 percent last year. China’s deceleration will continue — from 6.7 percent growth last year to 6.5 percent in 2017 to 6.3 percent in 2018 — as the country moves away from unsustainable growth fueled by often-wasteful investment and toward slower, steadier growth based on consumer spending. The bank’s outlook for global growth was unchanged from a forecast it published January — a surprising bit of good news: In the sluggish aftermath of the 2007-2009 Great Recession, the bank repeatedly had to downgrade its original forecasts as hoped-for improvements never arrived. But the environment worldwide is looking sunnier. Commodity prices are bouncing back from a freefall that began in 2014, taking down two years of growth. The bank sees oil prices rising 24 percent and non-energy

commodity prices climbing 4 percent this year. World trade is expected to grow 4 percent in 2017, the fastest in three years. Still, the bank calls the recovery “fragile” and warns of risks from protectionism, geopolitical conflict and possibly financial fallout from expected interest-rate increases in the United States. The world economy also faces long-term challenges, including a productivity slump that vexes economists and constrains improvements in living standards. World Bank economist Ayhan Kose, who directed the forecast, says countries should take advantage of relatively good times to enact reforms that might improve productivity, such as eliminating unnecessary regulations and promoting more competition between businesses. “This is a good time to undertake the types of policies that will make these economies more resilient,” he says. “Fix your roof when the sun is shining.”

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AT Thumper – “Federal Spending Now”Federal spending for K-12 education is being reigned in now – ESSA reauthorization provesNeal McCluskey, 4/21/16, D.F.G., “Cutting federal aid for K-12 Education,” https://www.downsizinggovernment.org/education/k-12-education-subsidies, mm

Federal control over K-12 education has risen dramatically in recent decades. Elementary and secondary spending under the Department of Education and its predecessor agencies rose from $4.5 billion in 1965 to $40.2 billion in 2016, in

constant 2016 dollars.1 The Department of Education funds more than 100 subsidy programs, and each

comes with regulations that extend federal control into state and local education.2¶ A substantial amount of funding for K-12 education comes from other federal agencies as well. For example, the Department of Agriculture will spend $22 billion in 2016 on school lunches and related programs.3 Across all federal departments, constant-dollar K-12

spending rose from $13.5 billion in 1965 to $80.1 billion in 2014.4¶ Congress may have taken a step back on federal control with its recent reauthorization of education spending called the Ensuring Student Success Act of

2016 (ESSA). On the surface, ESSA would decrease much of the prescriptive federal control asserted under the No Child Left Behind Act of 2002 (NCLB). But as of this writing, it is too early to know what ESSA regulations will look like, and there is a real danger of sustained federal micromanagement of the nation’s schools.¶ Over the years, the states have been happy to receive federal funds, but they have chafed under the mandates imposed by Washington. NCLB provoked a backlash because of its costly rules for academic standards, student testing, unrealistic proficiency demands, and other items. The Race to the Top program (RTTT), passed in 2009, provided grant money to states that agreed to additional federal micromanagement of their schools, including adopting national curriculum standards.5 The Obama administration imposed further requirements on states that desired waivers from parts of NCLB, such as waivers for NCLB’s utterly unrealistic requirement that all

students be “proficient” in math and reading by 2014. The accumulation of federal rules has suppressed innovation, diversity, and competition in state education systems, while generating vast paper-pushing bureaucracies.¶ Despite the large increases in federal aid since the 1960s, public school academic performance has ultimately not improved. While scores on the National Assessment of Educational Progress have improved for some groups and younger ages, math and reading scores for 17-year-olds—essentially, the school system’s “final products”—have been stagnant. In addition, America’s performance on international exams has remained mediocre, yet we spend more per-pupil on K-12 education than almost any other country.6 Federal funding and top-down rules are not the way to create a

high-quality K-12 education system in America.¶ Congress should phase out federal funding for K-12 education and end all related regulations. Policymakers need to recognize that federal aid is ultimately funded by the taxpayers who live in the 50 states, and thus provides no free lunch. Indeed, the states just get money back with strings attached, while losing billions of dollars from wasteful bureaucracy. There is no compelling policy reason, nor constitutional authority, for the federal government to be involved in K-12 education. In the long run, America’s schools would be better off without it.

Trump is cutting education spending nowAria Bendix, 3/16/17, The Atlantic, "trump's education budget revealed," https://www.theatlantic.com/education/archive/2017/03/trumps-education-budget-revealed/519837/, mm

Although President Trump stayed mum on his plans for the U.S. Department of Education, one policy has been clear: Trump plans to cut nonmilitary spending. The administration’s new “America First” budget, released Thursday, follows through on this

promise by slashing funds for the Education Department by 13.5 percent, or $9.2 billion. It’s worth noting that the proposed budget is merely a blueprint. Congressional lawmakers will draft their own budget proposals, and the plan Congress passes will form the basis of the appropriation bills that fund the government. That, as my colleague Russell Berman pointed out, won’t come until May. To start, Trump’s budget plan would remove $2.4 billion in grants for teacher training and $1.2 billion in

funding for summer- and after-school programs. It also curtails or eliminates funding for around 20 departmental programs “that are not effective, that duplicate other efforts, or that do not serve national needs.” Although decreased funding for the Education Department will have repercussions for students and educators across the country, low-income students are particularly vulnerable. In addition to eliminating Supplemental Educational Opportunity Grants (SEOG), which offer need-based aid to around 1.6 million low-income undergraduates each year, the Trump administration wants to “significantly” reduce Federal Work-Study. Although work-study programs have been criticized for disproportionately aiding private institutions, they are typically successful at helping students graduate and find employment post-college. The budget proposal also calls for around $200 million in cuts to federal TRIO programs, which benefit low-income, first-generation, and disabled students, and GEAR UP, a program that helps prepare low-income middle and high-school students for college. Pell Grants are safe for now. They retain their $22.5 billion in discretionary funds, although the budget proposes $3.9 billion in cuts from the program’s $10.6 billion surplus. Many Republicans and Democrats anticipated this surplus funding would go toward helping students attend summer school. The new budget also ensures that students with disabilities have continued access to special education by maintaining $13 billion in funding for IDEA programs. Furthermore, the administration will offer $492 million in funding for minority institutions and historically black colleges—a similar, yet slightly smaller, sum than was previously allotted. Overall, decreased funding will make room for one of Trump’s top education priorities: school choice. Under the new budget, the Trump administration wants to spend $1.4 billion to expand vouchers in public and private schools, leading up to an eventual $20 billion a year in funding. About $250 million of these funds will go toward a private school-choice program, while $168 million will be set aside for charter schools. An additional $1 billion would go toward Title I, a program for disadvantaged students whose current structure is opposed by many lawmakers. The Trump administration wants

to allow federal, state, and local funding to follow students to the public schools of their choice. All together, the budget has many moving parts, but its message is straightforward: Under the Trump administration, federal aid is out and school choice is in. Whether this stays the case moving forward is unclear. As a recent analysis from the Washington, D.C.-based New America Foundation puts it, “This budget request is nothing more than that—a request to Congress, unlikely to be heeded and subject to the tinkering and votes of hundreds of members of Congress.” Still, its authors argue, “it’s an indication of the priorities of the Trump Administration.”

Links

Link – Education SpendingMaintaining cuts to education is key to sustaining fiscal disciplineNeal McCluskey, 1/25/11, CATO, "for the nation's sake, cut education spending," https://www.cato.org/publications/commentary/nations-sake-cut-education-spending, mm

If President Obama cares about restoring sanity to federal finances, he will demand deep cuts to education spending. That’s right: In tonight’s State of the Union address, he will call to axe most of Washington’s educationally worthless outlays. Unfortunately, Mr. Obama is likely to prove that he doesn’t care all that much about attacking the nation’s crushing debt. According to several sources, he’ll not only place education spending off limits, he might make increasing it a focal point of tonight’s address. But wait: Debt or no debt, isn’t having an educated citizenry crucial to the nation’s future? Isn’t he

right to protect education funding? Education is, indeed, very important. But while Washington spends huge sums on things that are education-related, the riches produce almost nothing of educational value . If

anything, the feds keep stuffing donuts into an already obese system. Federal elementary and secondary education spending has risen mightily since the early 1970s, when Washington first started immersing itself in education. In 1970, according to the federal Digest of Education Statistics, Uncle Sam spent an inflation-adjusted $31.5 billion on public K-12 education. By 2009 that had ballooned to $82.9 billion. On a per-pupil basis, in 1970 the feds spent $435 per student. By 2006 — the latest year with available data — it was $1,015, a 133 percent increase. And it’s not like state and local spending was dropping: Real, overall, per-pupil spending rose from $5,593 in 1970 to $12,463 in 2006, and today we beat almost every other industrialized nation in education funding. What do we have to show for this? Certainly more public school employees: Between 1969 and 2007, pupil-to-staff ratios were close to halved. Not coincidentally, these same people politick powerfully for ever more spending and against reforms that will challenge their bloated monopoly. They also routinely defeat efforts to hold them accountable for results. This

constant feeding of special interests is why we’ve gotten zilch in the outcome that really matters — learning. Since the early 1970s, scores on the National Assessment of Educational Progress — the “Nation’s Report Card” — have been utterly stagnant for 17-year-olds, our schools’ “final products.” In 1973 the average math score was 304 (out of 500). In 2008 it was just 306. In reading, the 1971 average was 285. In 2008 it was up a single point, hitting 286. The higher education tale is much the same, especially for student aid, the primary college dumping ground for federal dollars. According to the College Board, in 1971 Washington provided $3,814 in inflation-adjusted aid per full-time equivalent student. By 2009-10 that figure had more than tripled, hitting $12,894. By most available indicators this has been money down the drain. For instance, only about 58 percent of bachelor’s seekers finish their programs within six years, if at all. Literacy levels among people with degrees are low and falling. And colleges

have raised their prices at astronomical rates to capture ever-growing aid. What’s the total damage? It’s impossible to know exactly because so many federal programs touch on education, but the Digest provides a decent estimate. In the 2008-09 academic year, Washington spent roughly $83 billion on K-12 education and $37 billion on higher education. (The latter, notably, excludes student-loan funds that fuel the tuition skyrocket but generally get repaid, as well as federally funded research conducted at universities.) Add those together and you get $120

billion, a sum that’s doing no educational good and, therefore, leaves no excuse for not applying it to our $14 trillion debt. And yet, it seems President Obama will not only protect education spending, he might fight to increase it. Why? He could certainly believe that huge spending on education is a good thing. That, though, might mean he hasn’t looked at

all at what we’ve gotten for our money. Unfortunately, it might also be that education is the easiest of all issues through which to buy political capital, whether from special interests like teachers’ unions, or busy parents who don’t have time to research what

education funds actually produce. It is also ideal for demonizing opponents who might demand discomfiting fiscal discipline. Of course, misguided intentions and political exploitation have been at work for decades in education, so this isn’t

new. We are now well past the point where we can ignore results. Today, we simply cannot afford to keep throwing money away.

Boosting education funding will undermine fiscal disciplineLindsey Burke, 10/15/12, Heritage Foundation, "how escalating education spending is killing crucial reform," http://www.heritage.org/education/report/how-escalating-education-spending-killing-crucial-reform, mm

A recent survey conducted by the Fordham Institute found that 69 percent of respondents supported “reducing the number of district level administrators to the bare minimum” if their school district was facing a budget shortfall. Parents and taxpayers have good reason to want to trim bureaucracy in their local public schools.[21] From 1970 to 2010, student enrollment increased by a modest 7.8 percent, while the number of public-school teachers increased by 60 percent. During that same time period, non-teaching staff positions increased by 138 percent, and total staffing grew by 84 percent. Not surprisingly, the more than doubling of non-teaching staff since 1970 has meant that teachers are a smaller proportion of school payrolls. Since 1970, the percentage of teachers as a portion of school staff

has declined by 16.5 percent. Teachers now comprise just half of all public-school employees. More teachers are teaching fewer students, as the student–teacher ratio has continued to decline. According to the NCES, the student–teacher ratio for fall 2012 will be slightly greater than 15:1. The Obama Administration’s call for $25 billion in new federal funding for education salaries is based on a small snapshot of data (for 2008–2010) that shows overall reductions in education staff, which it

then conflates with teaching positions specifically. Another federal education bailout will act as a disincentive for state and local education leaders to making the changes necessary for long-term reform and balanced budgets, and further obliges taxpayers to fund policies of dubious value.

Maintaining cuts is key – new education spending explodes the debtNeal McCluskey, 7/25/12, CATO, "sequestration needed for federal education programs," https://www.cato.org/publications/congressional-testimony/sequestration-needed-federal-education-programs, mm

Cuts such as those that would be made to federal education programs through sequestration are both necessary and overdue. Not only does the federal government have no constitutional authority to fund and administer education programs — no mention is made of education in the specific, enumerated powers given to the federal government in Article I, Section 8 — but the last forty-plus years of federal involvement in education provide a clear demonstration of futility. Start with preschool. The primary federal preschool program is Head Start, which in FY 2012 received almost $8 billion. The program has existed since 1965 and has cost roughly $180 billion through its lifespan. Despite its longevity, the program has failed to demonstrate lasting benefits. Indeed, a 2010 federal study found that the program had only two statistically significant positive cognitive effects that lasted through first grade, and negative mathematics effects for kindergarten students who entered Head Start when three years old.1 In the vast majority of measures no meaningful effects were found one way or the other. Unfortunately, the essentially nonexistent positive effects of Head Start are not the program’s only problem. As reports from the Government Accountability Office, local media outlets, and other sources have revealed, Head Start has long suffered from serious waste and abuse. Indeed, GAO reports in 2000, 2005, and 2008 found widespread noncompliance with financial management standards and very poor efforts to remediate

the problem.2 Next there are federal elementary and secondary education programs, a category that

according to the federal Digest of Education Statistics accounted for almost $79 billion in 2011.3 As Figure 1 illustrates,

on a per-pupil basis inflation-adjusted federal spending on K-12 education has grown immensely over the last several decades, ballooning to 375 percent of its 1970 value by 2010. And this increase did not just compensate for funding losses in at the state and local levels. As Figure 2 shows, overall per-pupil expenditures through high school graduation have nearly tripled since 1970. Meanwhile, mathematics, reading, and science scores on the National Assessment of Educational Progress — the federal testing regime often called “The Nation’s Report Card” — have been almost completely stagnant for 17-year-olds, the “final products” of our elementary and secondary education system. Rightly, the primary concern for many people is that sequestration would deal a crippling blow to academic achievement. The NAEP and spending data, however, simply do not justify this. Indeed, they powerfully illustrate that we haven’t gotten any lasting bang for our federal or overall education bucks, and those

expenditures could be reduced considerably without ill achievement effects. Indeed, it is quite likely that federal education dollars keep recipient districts from having to take politically difficult, but necessary, actions to

increase the efficiency of their operations. Directly connected to the efficiency question, it seems that the most pressing concern for some people is not the academic effect that sequestration might have on education but the employment effect. And job losses would ensue: High-end estimates of elementary and secondary job losses from sequestration in 2013 published by the National Education Association predict decreases of 46,000 jobs.4 That certainly appears to be a large number, and no one

wants to see anyone lose employment. But the federal government has an immense, nearly $16 trillion debt, and as Figure 3 shows, huge increases have occurred in school staffing relative to enrollment. Coupling that with the achievement data in

figures 1 and 2, it is clear that much heftier staffing has not created better outcomes. Public schooling is supposed to educate

children efficiently and effectively, but it has very much been treated as a jobs program instead. That has done no discernible educational good and contributed to the nation’s mammoth debt . Originally, federal K-12 funding was meant to operate in a compensatory fashion. But at least the recent evidence suggests that no major, nationwide funding inequities exist. According to the federal Condition of Education, districts with the highest levels of poverty have spent essentially the same amount on a per-pupil basis as have those with the lowest level of poverty since 1997-98. And both have appreciably outspent districts with middling levels of poverty since 1995-96 (the first year for which data is available).5 Those numbers should be updated — the final school year with data is 2006-07 — but there is no meaningful evidence that the pattern has appreciably changed. Our public schools have, essentially, been on a decades-long hiring binge with ultimately no gains to show for it. And a reduction of 46,000 jobs would be miniscule compared to overall public-school staffing, which well exceeds 6 million people.6 Last, let’s turn to higher education. Regrettably, Pell Grants have been exempted from sequestration, taking roughly $42 billion off the table. This might be understandable were Pell Grants shown to effectively enable low-income students to enter and complete college without pushing sticker prices higher, but such is not the case. While conclusive data are not available, The Center for College Affordability and Productivity estimates that only around 40 percent of first-time, full-time students receiving Pell grants complete bachelor’s degrees within six years.7 In addition, a growing body of research indicates that schools either raise their prices or lower institutional aid in response to Pell Grants.8 While Pell is off-limits, sequestration will translate into higher fees on student loans. This might seem like it would make college less affordable for students, but it would be a very small move in an absolutely necessary direction for federal student aid: towards aid that places more of payment burden on the people consuming the education. The huge ill effects of too much third-party money in higher education — especially from the federal government — are plain to see: “sticker price” inflation that eclipses even that even in health care9; dismal completion rates10; and one-third of bachelor’s degree holders occupying jobs that do not require the credential.11 Federal financial aid, by making students less sensitive to the real costs of their education and enabling colleges to briskly raise prices, defeats both the affordability goal of the aid and has helped to render higher education extremely inefficient. Any moves in the direction of having students bear more of the cost of their education would, perhaps counter intuitively, result in greater long-term college affordability by forcing schools to lower prices and cut abundant waste. In addition to increasing fees for student loans, sequestration would require that cuts be made to aid that Washington provides to institutions, and well as to research occurring in colleges and universities. The former cuts should be of little concern: not only does federal funding mainly appear to translate into inefficiency, but Washington provides only a small sliver of overall funding directly to institutions. In 2011 such federal aid tallied just slightly over $1 billion, versus the roughly $85 billion state and local governments furnished to public colleges for general operating expenses in the 2011-12 academic year.12 Trimming just part of this relatively tiny federal amount would have a negligible effect. Regarding research, while much research is of value, it is very difficult to say it is of greater value than getting the nation’s shambles of a fiscal house in order. In addition, research by Austan Goolsbee, the former chairman of the Obama Administration’s Council of Economics Advisors, found that a large portion of federal funding for research and development translates not into greater innovation, but higher salaries for researchers.13 Like aid to students, the benefits seem largely to accrue to those employed by the money, not to society or the people the aid is

intended to help. The federal government has accumulated an almost unimaginably huge debt, and sequestration offers only a small first step toward addressing spending recklessness. Thankfully, significant cuts can almost certainly be made to discretionary spending without adversely affecting the activities that federal money

is supposed to advance. Education is a perfect example of this, with overwhelming evidence revealing that federal spending has, at best, done no overall good, and has quite likely caused appreciable harm. It has insulated Head Start providers, schools and districts, and colleges from pressures to become efficient and effective, and has taken funds from taxpayers in order to greatly increase education employment and the comfort of those working in colleges

and universities. Trimming such wasteful funding, as sequestration would do, would be but an opening move in the right direction.

Link Magnifier – Lobbying/LitigationFederal education spending leads to follow on lobbying and litigation costs – that drags down the economyNeal McCluskey, 4/21/16, D.F.G., “Cutting federal aid for K-12 Education,” https://www.downsizinggovernment.org/education/k-12-education-subsidies, mm

Federal education programs have also generated large lobbying and litigation activities, which are a drag on the U.S. economy. Consider, for example, that the National Education Association-the nation’s largest teachers union-has a staff of about 500 and in 2015 received more than $360 million in dues and agency fees, the latter being forced payments from non-members who fall under collective bargaining agreements.57 The NEA influences federal policy through

publications, conferences, meetings with legislators, and contributions to candidates. The NEA and American Federation of Teachers are some of the largest lobbyists and political spenders in Washington .58

Other than these unions, there are other education groups that lobby in Washington, D.C., including the American Association of School Administrators, the Council of Chief State School Officers, the National Association of Secondary

School Principals, the National Association of School Nurses, and the list goes on.¶ Many lobby groups focus on particular education programs in the federal budget, such as the National Head Start Association.59 This organization, which has an annual budget of more than $5 million, pushes for increased Head Start spending every way it can, such as publishing a 16-page “Voter Participation and Lobbying Guide for Head Start Staff, Parents, and Friends.”60 The association even has its own Legal Advisory Service to provide legal training and legal guidance for the recipients of Head Start subsidies.61 Similarly, the Afterschool Alliance-in part created by the U.S. Department of Education-defends the 21st Century Community Learning Centers program and advocates for other afterschool programs and funds.62

AT Link Turn – “Education Spending -> Growth”Education spending doesn’t promote growth – history and case studies proveJonah Goldberg, 2/5/13, AEI, "education spending that isn't smart," http://www.aei.org/publication/education-spending-that-isnt-smart/, mm

Not long after President Obama proclaimed in his second inaugural that “an economic recovery has begun,” we learned that the U.S. economy actually shrank in the last quarter. Many economists believe this is a temporary setback. This recovery may be the weakest in American history, but the economy isn’t cratering either. Still, you can bet that if the economy continues to contract, Obama will propose the same remedy he always has: more “investments” in education, infrastructure and various industries of the future. It seems that whatever the ailment, Dr. Obama always writes the same prescription. This is hardly shocking: Building roads and schools is a big reason why God created Democrats in the first place. And identifying the Next Big Thing — and taking credit for it — is

something of a vocation for many liberal policymakers. But are these really the drivers of economic growth? Higher education in particular is almost universally championed as the key to “winning the future” — a buzz phrase the president

borrowed from Newt Gingrich awhile back. New York Times economics columnist David Leonhardt calls education the “lifeblood of economic growth.” Often channeling such writers as Thomas Friedman, whose fondness for the Chinese economic model borders on the perverse, Obama routinely elevates education to a national security issue. “There’s an educational arms race taking place around the world right now — from China to Germany, to India to South Korea,” Obama said in 2010. “Cutting back on education would amount to unilateral disarmament. We can’t afford to do that.” Now, obviously, education is

important and necessary for a host of reasons (and nobody is calling for “disarmament,” whatever that means). But there’s little evidence it drives growth. British scholar Alison Wolf writes in “Does Education Matter?”: “The simple one-way relationship … — education spending in, economic growth out — simply does not exist. Moreover, the larger and more complex the education sector, the less obvious any links to productivity.” Nasim Taleb, author of “Antifragile: Things That Gain From Disorder,” argues that education pays real benefits at a micro level because it allows families to lock in their economic status. An entrepreneurial father can ensure his kids will do OK by paying for them to become doctors and lawyers. But

what is true at the micro level is not always true at the macro level. Think about it this way: Growing economies spend a lot on education, but that doesn’t necessarily mean that spending makes them grow . During the so-called Gilded Age, the U.S. economy roared faster and longer than ever before or since, while the illiteracy rate went down. But the rising literacy didn’t cause the growth. Similarly, in the 20th century, in places like China, South Korea and India, the economic boom — and the policies that create it — always come first while the investments in education come later .

AT “Small Part of Federal Budget”The proportion of the federal budget is irrelevant – federal education spending is growing and wasteful Loan Albright, 2/11/17, Conservative Review, “5 smart reasons to abolish the department of education,” https://www.conservativereview.com/articles/5-smart-reasons-to-abolish-the-department-of-education, mm

The Department of Education comprises more than 80 subagencies, employs more than 4,000 people, and has an annual

budget of nearly $70 billion. When you include other federal spending like Head Start and the School Lunch

Program, that number swells to more than $100 billion.¶ With a national debt rapidly hurtling toward $20 trillion, this may be a drop in the bucket, but as a wise man once said, a few billion here and there eventually adds up to real money . It’s insane to think we couldn’t find better, more productive uses for $100 billion a year. Just off the top of my head, how about giving it back to the taxpayers?

Internal Links

Fiscal Discipline key to the EconomyFiscal discipline is key to economy growthPeter Orszag and William Gale, 12/17/2002, Brookings, "The economic effets of long-term fiscal discipline," https://www.brookings.edu/research/the-economic-effects-of-long-term-fiscal-discipline/, mm

Over the past two years, the long-term budget outlook has deteriorated markedly. Although many policy-makers and economists have expressed concern that this fiscal deterioration will reduce future national income and raise interest rates, Bush Administration

officials and others have publicly denied the existence of such adverse effects. This paper examines the relationship between long-term fiscal discipline and economic performance, with two main results. First, as almost all economic research and standard textbooks suggest, declines in budget surpluses (or increases in budget deficits) reduce national saving and therefore reduce future national income, regardless of

their effect on interest rates. Second, simple correlations, careful empirical research, macro-econometric models, and

the views of leading economists and policymakers all indicate that increases in expected future deficits raise long-term interest rates. Based on the literature, a reasonable estimate is that a reduction in the projected budget surplus (or increase in the projected budget deficit) of one percent of GDP will raise long-term interest rates by between 50 and 100 basis points. These findings suggest that the costs of increased deficits are significant over the long run, and need to be compared carefully to the potential benefits of the tax and spending programs that result in larger long-term deficits.

The link only goes our way – fiscal discipline is key to long-run growthWilliam Gale and Peter Orszag, April 2003, "The economic effects of long-term fiscal discipline," http://www.urban.org/sites/default/files/publication/58901/310669-The-Economic-Effects-of-Long-Term-Fiscal-Discipline.PDF, mm

The debate over deficits and interest rates, however, is at least partially a red herring. The more fundamental point is that long-term budget deficits reduce national saving and impose substantial long-run costs on the economy , regardless of whether interest rates are affected. As long as an increase in the budget deficit is not fully offset by an increase in private saving—and such a full offset is a theoretical possibility that almost all economists reject in practice —the expanded budget deficit will manifest itself in some combination of reduced domestic investment and an expanded current account deficit. Either way, and

regardless of the effect of deficits on interest rates, increased budget deficits reduce future income. That reduction in future income is the true cost of a failure of long-term fiscal discipline .

Deficits Bad – Hurts GrowthLong-term deficits crush growth and create reinforcing cycles of economic declineRobert Rubin, Peter Orszag and Allen Sinai, 2004, The Andrew Brimmer Policy Forum, "Sustained budget deficits: longer-run US economic performance and the risk of financial and fiscal disarray," http://www.cbpp.org/archiveSite/1-13-04confpaper.pdf, mm

The U.S. federal budget is on an unsustainable path. In the absence of significant policy changes, federal government deficits are

expected to total around $5 trillion over the next decade. Such deficits will cause U.S. government debt, relative to

GDP, to rise significantly. Thereafter, as the baby boomers increasingly reach retirement age and claim Social Security and

Medicare benefits, government deficits and debt are likely to grow even more sharply. The scale of the nation’s projected budgetary imbalances is now so large that the risk of severe adverse consequences must be taken very seriously, although it is impossible to predict when such consequences may occur. Conventional analyses of sustained budget deficits demonstrate the negative effects of deficits on long-term economic growth. Under the conventional view, ongoing budget deficits decrease national saving, which reduces domestic investment and increases borrowing from abroad.1 Interest rates play a key role in how the economy adjusts. The reduction in national saving raises domestic interest rates, which dampens investment and attracts capital from abroad.2 The external borrowing that helps to finance the budget deficit is reflected in a larger current account deficit, creating a linkage between the budget deficit and the current account deficit. The reduction in domestic investment (which lowers productivity growth) and the increase in the current account deficit (which requires that more of the returns from the domestic capital stock accrue to foreigners) both reduce future national income, with the loss in income steadily growing over time. Under the conventional view, the costs imposed by

sustained deficits tend to build gradually over time, rather than occurring suddenly. The adverse consequences of sustained large budget deficits may well be far larger and occur more suddenly than traditional analysis suggests, however. Substantial deficits projected far into the future can cause a fundamental shift in market expectations and a related loss of confidence both at home and abroad. The unfavorable dynamic effects that could ensue are largely if not entirely excluded from the conventional analysis of budget deficits. This omission is understandable and appropriate in the context of deficits that are small and temporary; it is

increasingly untenable, however, in an environment with deficits that are large and permanent. Substantial ongoing deficits may severely and adversely affect expectations and confidence, which in turn can generate a self-reinforcing negative cycle among the underlying fiscal deficit, financial markets, and the real economy.

Deficits Bad – Hurts Global EconomyUnsustainable deficit spending spills over and wrecks the global economySilvia Ardagna, Francesco Caselli and Timothy Lane, 2006, The BE Journal of Macroeconomics, "fiscal discipline and the cost of public debt service: some estimates for OECD countries," https://dash.harvard.edu/bitstream/handle/1/2579739/Ardagna_FiscalDiscipline.pdf?sequence=2, mm

This paper has used cross-country empirical analysis to establish that fiscal deficits and the accumulated public debt affect interest rates. The effects are both statistically and economically significant, and

they are robust to a variety of specifications. These effects are non-linear, becoming stronger as a country’s debt grows and its fiscal balance becomes weaker. The dynamic analysis presented also shows that the long-run

effects of sustained deficits are much larger than the immediate impact of a one-time deficit. These results imply that the return to fiscal laxity that has taken place in several major industrial countries in recent years is potentially worrisome. Fiscal policy has important effects at the worldwide level, but it also has important effects at the level of the individual country. These results suggest that, while each country’s fiscal imbalance has its greatest impact at home, it is also a legitimate concern at the level of the world economy.

Deficits Bad – AT Keynesianism The past recession proves deficits and government spending won’t boost growthRobert Barro, 7/27/11, Hoover Institute, "Robin hood can't lead us out of the debt hole," http://www.hoover.org/research/robin-hood-cant-lead-us-out-debt-hole, mm

The Obama administration has consistently overestimated the beneficial effects of government spending by using an unrealistically high spending "multiplier" of two or more. According to this Keynesian logic, government expenditure is more than a free lunch. By spending a dollar, we not only get back that dollar but also another dollar of free consumption or investment. This idea, if correct, would be even more brilliant than

the magic of creating mounds of AAA mortgage-backed paper out of heaps of underlying garbage. With unemployment at

9.2% and consumption still at abysmal levels, it's clear the Keynesian magic did not work.

Moreover, the Obama administration's deficit financing has led to a sharp increase in our debt-to-GDP ratio, which the Congressional Budget Office now projects will soar to 70% by the end of this year—the highest percentage since

shortly after World War II. This much public debt eventually requires higher taxes (unless future spending is cut

by even more). But higher taxes lead to additional decreases in future economic growth. While running budget deficits was appropriate during the Great Recession, reductions in marginal tax rates—to enhance incentives for investment and economic growth—would have been better than more spending. Unfortunately, the Obama administration's only recognition of the importance of marginal tax rates came in the December 2010 agreement. This preserved the income tax rate structure enacted by President Bush in 2001-03 and introduced a reduction in the Social Security payroll tax. So where do we go from here? The excellent report released last December by the bipartisan National Commission on Fiscal Responsibility and Reform—and the pressure from widespread fears about fiscal instability—provide some hope that the U.S. government will eventually reach a rational agreement. Reductions in the long-term path of entitlement outlays have to be central, with increases in ages of eligibility for Social Security and Medicare a part of any solution. Nevertheless, the inevitable growth of the main entitlement programs means that federal revenues will have to increase in the future. To be sure, a return to healthy economic growth will supply some of this, but there will have to be tax reforms as well. One possible package of reforms would include setting the U.S. corporate and estate tax rates permanently to zero. These taxes are inefficient and generate little revenue. Also, to restore a more efficient allocation of capital across the economy, we should phase out—gradually—tax preferences for home-mortgage interest, state and local income taxes, and employee fringe benefits. Marginal income tax rates should also be lowered across the board. Finally, to raise additional revenue to meet entitlement obligations, we could adopt some kind of broad-based, flat-rate consumption tax such as a value-added tax of the kind used in Europe. In this country, a rate of 10% with few exemptions should raise around 5% of GDP annually. The political danger of a value-added tax is that it is so efficient at raising money it will encourage governments to grow even larger. That's why it only makes sense as one component of a fiscal reform, including reductions in the long-term path of entitlement

outlays. We also need sharp reductions in spending programs initiated or expanded by Mr. Obama and his

extravagant predecessor, President Bush. Obvious candidates for cutting include ethanol and farm subsidies,

education spending under No Child Left Behind, outlays for high-speed rail, and expansions of Medicare and Medicaid.

AT “Deficits High Now”Current deficits require fiscal discipline – key to sustain the recovery Alan Auerback and William Gale, September 2009, "The economic crisis and the fiscal crisis: 2009 and beyond," http://eml.berkeley.edu//~auerbach/fiscal_future2.pdf, mm

For many years, serious observers of U.S. fiscal policy have understood that the country faced a long-term fiscal problem. But, until now, this long-term problem has been one that policy makers could ignore, and largely did, even though delays in addressing the problem could only make the eventual policy responses more

difficult for the U.S. economy. Recent developments, however, have caused a change in circumstances.

Huge short-term deficits have accelerated the arrival of the future that policy makers have been choosing to ignore. And capital market disruptions have reduced the likelihood that growing U.S. fiscal imbalances will be tolerated. Thus, the United States will soon enter a new phase of fiscal policy decision-making. Although huge deficits are not desirable in the short term, they are nonetheless understandable.

Once – or as – the economy recovers, though, the need to impose fiscal discipline will be a short-term and urgent problem that will require difficult choices that policy makers have so far refused to make. Worse still, if the economy recovers only very slowly or not at all, those decisions will still need to be faced, but in the context of a weaker economic situation.

Impacts

Turns Case – Future CutsUnsustainable deficit spending turns the case – causes future cuts which rollback the affChris Edwards, 6/30/2010, CATO, "approaches to cutting federal spending," https://www.cato.org/publications/congressional-testimony/approaches-cutting-federal-spending, mm

The federal government should start shedding properly state and local activities. A good place to start would be the Department of Education.8 The department funds about 150 different subsidy programs, which come with an array of regulations that extend federal control over local schools, as under the No Child Left Behind law.9 Despite an enormous increase in federal K-12 spending in recent decades, national academic performance has generally not improved. Math and reading scores have been largely flat, graduation rates have stagnated, and researchers have found serious shortcomings with many federal education programs. Having quality K-12 education is a concern of most Americans, but that does not justify having a federal Department of Education. Canada provides an interesting comparison. It is a high-income nation with an advanced economy, yet it has no federal department of education. Public education in Canada is the sole concern of provincial and local governments. That decentralized approach has resulted in experimentation and innovation, including school vouchers and charter schools. International achievement data suggest that Canadian students generally outperform U.S. students in reading, math, and science.10 The states need to recognize that federal aid is ultimately funded by the taxpayers who live in the 50 states, and thus it provides no free lunch. There is no important policy reason for the federal government to be involved in K-12 education and other local

activities. Ending federal K-12 education spending would save about $60 billion annually . Privatization Governments on every continent have sold off state-owned assets to private investors in recent decades.11 Airports, railroads, and many other assets have been privatized. The U.S. government privatized some activities during the 1980s and 1990s, but we lag behind other nations in realizing the potential of this type of reform. Germany and the Netherlands, for example, have privatized their postal services, while Chile, Australia, and other nations have privatized their Social Security systems. The Department of Transportation is a good target for privatization reforms.12 Rising federal control over transportation has resulted in the political misallocation of funds, bureaucratic mismanagement, and costly one-size-fits-all regulations on the states. The solution is to devolve DOT activities back to state governments and the private sector. The federal government should end highway aid, and the states should seek private funding for their highways. Virginia is adding toll lanes on the Capitol Beltway, which are partly privately financed, and that state is also home to the Dulles Greenway, a 14-mile private highway in operation since 1995. Ending federal highway aid would accelerate the trend toward such innovative projects. The federal government should end subsidies to Amtrak and high-speed rail. Amtrak has a poor on-time record, its infrastructure is in bad shape, and it carries only a tiny fraction of intercity passengers. Politicians prevent Amtrak from making cost-effective decisions regarding its routes, workforce polices, and capital investments. Amtrak should be privatized to save money and give the firm flexibility to operate efficiently. As for high-speed rail, even in countries such as Japan and France virtually all high-speed rail lines are money losers, and they carry only a small fraction of intercity passengers. The federal government should end aid to airports, which are owned by state and local governments. State and local governments should be encouraged to privatize their airports and have them operate without subsidies. In recent decades, many airports have been partly or fully privatized in major cities such as Amsterdam, Auckland, Frankfurt, London, Melbourne, Sydney, and Vienna. Finally, the air traffic control system should be privatized. The Federal Aviation Administration has a poor record in implementing new technologies in a timely and cost-effective manner. Many nations have moved towards a commercialized ATC structure, and the results have been very positive. Canada privatized its ATC system in 1996 in the form of a nonprofit corporation,

NavCanada, which has a very good record on safety and innovation. To some policymakers, the sorts of cuts discussed here will seem drastic. But rising debt will eventually force policymakers to make radical budget changes whether they like it or not. However, it would be better to make needed reforms now before the federal government’s debt grows even larger. Policymakers may hesitate to make budget reforms because of concerns regarding possible negative effects. But experience shows that we usually underestimate the ability of individuals and communities to adjust after the withdrawal of government subsidies. Before the 1996 welfare reform, for example, opponents in Congress made apocalyptical warnings about the supposed harm that would come to low-income families. Yet the

1996 welfare reform turned out to be a huge success, as most policymakers now concede. Other nations have made dramatic fiscal reforms, and they emerged stronger for it. New Zealand, for example, ended virtually all its farm subsidies in 1984, which was a bold stroke because the country is far more dependent on farming than the United States.13 The changes were initially met with resistance, but New Zealand farm productivity, profitability, and output have soared since the reforms.14 New Zealand’s farmers have cut costs, diversified their land use, and developed new markets. Another example is Canada, which allowed government spending to soar to 53 percent of gross domestic product in the early 1990s. The high spending in turn caused government debt to jump to more than 70 percent of GDP. But policymakers changed course and undertook dramatic

reforms, which caused government spending and debt to fall rapidly.15 The Canadian government cut programs, privatized assets,

consistently balanced its budget, and began to pre-fund its retirement system. There is no reason why America can’t undertake similar reforms. Budget cuts would strengthen the U.S. economy and expand personal freedom to everyone’s benefit. America became so prosperous because of our system of limited and decentralized government - not because of federal subsidy programs.

Turns Case – Wasted/Inefficient SpendingAudits prove education spending gets wasted – bloated and inefficient bureaucracy Terrance Ross, 1/30/15, The Atlantic, “where school dollars go to waste,” https://www.theatlantic.com/education/archive/2015/01/where-school-dollars-go-to-waste/384949/, mm

Meanwhile, audits regularly find wasted funds at the district level, including one last summer that identified more than $2.7 million in misspent technology funding for schools in Fort Worth, Texas.

Another audit—this one for Jefferson County Public Schools in Louisville, Kentucky—resulted in over 200 recommendations for improvement.* The revelations were so damning that the state auditor, Adam

Edelen, was quoted blaming the problem on "an unchecked bureaucracy that has become bloated and inefficient at the expense of the classroom. " It's undeniable that the burden on taxpayers to foot the bill for education is a heavy one, especially when research shows that the quality of a school district directly correlates with the amount of tax dollars families put into their local economies.

Turns Case – Chilling Effect/State-Local OffsetsFederal funding reduces state and local spending on K-12 education – leads to worse outcomesNeal McCluskey, 4/21/16, D.F.G., “Cutting federal aid for K-12 Education,” https://www.downsizinggovernment.org/education/k-12-education-subsidies, mm

A basic effect of all federal programs is to redistribute income from taxpayers to the beneficiaries of programs and the bureaucracy

that supports them. The tens of billions of dollars a year spent on federal K-12 programs could have

otherwise been retained by families and used for education or other private purposes. The higher their taxes, the less income families have to spend on private schools, tutors, saving for college, or other educational expenses. In addition,

without federal involvement, state and local governments-which are much closer to the people the schools are

supposed to serve-could decide what they felt was the best use of public education dollars , whether reducing class sizes, paying teachers more, or giving parents more control by implementing choice programs.¶ Federal intervention

has long been supported on “equity” grounds, or redistributing funds toward less-advantaged schools. But studies have found that the federal government is not very successful at such redistribution , even if it were a good

idea. When you compare per pupil federal K-12 financing per state with state poverty rates, it reveals only a weak correlation, and comparing funding to states’ median household income has an even smaller

correlation.49¶ Perhaps more importantly, federal funds are often offset at the state and local levels by reduced state and local funding. A statistical analysis by Nora Gordon of the University of California, San Diego, found

that while Title I is supposed to steer money to poor school districts, the actual effect is quite different.50 She found that within a few years of a grant being given, state and local governments used the federal funds to displace their own funding of poor schools. Thus, poor schools may be no further ahead despite the federal grant money directed at them.

AT “Moral Obligation/Ethical Imperative”The moral obligation goes our way – deficit spending violates intergenerational equity and federal education funding fails anyway Neal McCluskey, 5/25/2017, The Hechinger Report, “Yes - you absolutely can, in good conscience, cut the federal education budget,” http://hechingerreport.org/opinion-yes-%C2%AD%C2%AD%C2%AD-absolutely-can-good-conscience-cut-federal-education-budget/, mm

Release of the Trump administration’s education budget proposal, which would make about $9 billion in cuts, has been met with unfortunately predictable moral condemnation. Randi Weingarten, president of the American Federation of Teachers, declared the budget proposal “manifestly cruel to kids.” President Obama’s second education secretary, John King, called it “an assault on the American dream” and said, “no one in good conscience could … say this budget makes sense for the interests of students and the long-term interest of the country.”¶ Simply out of fairness to those with whom we disagree, and to make our national dialogue less poisonous, it is time to cease such incendiary, politically weaponized rhetoric. People can have

other views than we do without being heartless or evil. We must also steer clear of debate-ending condemnation, for the sake of good policy: While the intent behind most federal education spending is laudable, the consequences far too often do not seem to be.¶ Consider student aid programs, which Trump’s budget would cut by, among other things, limiting the growth of Pell Grants, reducing Work-Study, and ending Public Service Loan Forgiveness.¶ A normal, gut reaction is that such cuts would make college less affordable, and in the short-term they might. But logic, and considerable empirical evidence, make a potent case that aid programs are a major reason that college is so expensive. Federal aid has enabled institutions to raise their prices at breakneck rates, often driven by a desire to do things they think are valuable, but also to make the lives of employees more comfortable, and to furnish sometimes extraordinary amenities that heavily subsidized student demand. “Aid,” in other words, may well be self-defeating … or worse.¶ Or take the 21st Century Community Learning Centers program, a $1.2 billion effort to fund after-school programming. Again the intention is laudable, and proposing to end the program at first blush sounds cruel. But just as with student aid, we need to ask if the program works, among other things, before declaring elimination to be good

or bad. What federal studies have found is essentially no positive outcomes and a negative impact on student behavior.¶ There is, indeed, little evidence that the overall federal role in education has been positive . While federal spending has ballooned over the last several decades, test scores for 17-year-olds — essentially the K-12 system’s

“final products”—have been stagnant. In higher education, prices have ballooned and debt along with them, while the percentage of low-income students completing four-year degrees has remained tiny and credentials have been rendered

increasingly hollow.¶ Even if programs work, there can be many morally fine reasons to trim or eliminate them.¶ One is how we pay for them. By constantly deficit spending we have been funding programs for today in part with money taken from future generations. It is hard to see that as self-evidently the morally right thing to do.¶ How things are done is also important, unless we believe that the end — or even just good intentions — always justifies the means. For policymaking, the means must be the rule of law, and that requires obeying the Constitution. But nowhere in the Constitution, including the enumerated powers, is education mentioned, much less authority given to Washington to get involved. And no, the “general welfare” clause and other seemingly broad warrants of power do not give sanction to federal education programs. As James Madison wrote in Federalist no. 41:¶ For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars.¶ Maintaining the rule of law is a major reason to object to the budget’s roughly $1.4 billion in school choice provisions. Choice is good, empowering families and communities to decide for themselves what education truly means and how they will get it. But outside of the District of Columbia, for military-connected children, and for Native American communities, this does not make funding it any more the purview of the federal government than the myriad other things Washington does in the name of

education.¶ The case for cutting federal education spending is powerful, with federal programs often producing poor outcomes with money taken from future generations and without Constitutional

authority. But even if you disagree with that case, it is time to at least be fair: There is nothing immoral about it.

Decline Causes War - StudiesDecline causes conflict – numerous academic studies proveNamsuk Kim and Pedro Conceicao, Spring/Summer 2010, (Kim works for the UN Department of Economic and Social Affairs; Conceicao works for the UN Development Programme), International Journal of Peace Studies, 15(1), p. 30-31, Project Muse, mm

A recent strand of literature, reviewed in some detail in this paper, suggests that ¶ economic conditions are important determinants of the outbreak and recurrence of¶ conflict . In particular, wars often start following growth collapses (Collier et al., 2009, p.¶ 15). Sharp economic slowdowns and low levels of income per

capita appear to increase¶ the likelihood of conflicts . In this context, it is opportune to explore insights from this¶ literature, linking it also with the human development implications of both growth¶ slowdowns and conflict. In particular, the paper highlights the risks of the emergence of¶ low human development/conflict traps.¶ When it comes to the consequences of conflict, there is no doubt that violent¶ conflict is one of the most extreme forms of suppressing choices and advancing rights, and therefore a major threat to human development (UNDP, 2005, p. 151). Since 1990,¶ more than 3 million people have died in armed conflicts in developing countries¶ (Marshall, 2005). The total war deaths are far more than the battle deaths. For example,¶ the total war deaths are estimated as 1.2 million in Ethiopia during 1976-1991, but only¶ 2% of them were directly engaged in the battles. (Lacina and Gleditsch, 2004). Conflict¶ has also non-lethal consequences that may last across generations (UNDP, 2008a). The¶ conflict becomes even more hazardous if conflict results in a persistent conflict trap. A¶ typical country reaching the end of a civil war faces a 44 percent risk of returning to¶ conflict within five years (Collier et al., 2003, p. 83). Whether or not a country will¶ experience a new

civil war can be best predicted by whether the country experienced¶ wars in the past (Collier et al., 2004).¶ As far as drivers of conflict are concerned, one of the most robust findings in the ¶ literature is that many economic conditions (low income, slow growth, and especially¶ severe economic downturns) are correlated with the outbreak of conflict , with some ¶ evidence strongly suggesting that the causal direction runs from economic conditions to ¶ conflict (Collier and Hoeffler, 2004). There is also a rich literature on the impact of¶ horizontal inequality and dependence on natural resources as drivers of increases in the¶ risk of conflict.

Economic decline is the most important factor for explaining conflictNamsuk Kim and Pedro Conceicao, Spring/Summer 2010, (Kim works for the UN Department of Economic and Social Affairs; Conceicao works for the UN Development Programme), International Journal of Peace Studies, 15(1), p. 32-33, Project Muse, mm

While there are a number of factors that could cause conflict , empirical studies ¶ find that poor economic performance is associated with higher incidence of conflict . ¶ Being a poor country is correlated with most forms of violence (UNDP, 2008a). Growth¶ rates are also strongly associated with risks of conflict in developing countries. If the¶ growth rate in developing countries is increased by 1 percentage point from the mean, the¶ risk of conflict decreases by 0.6 percentage points to 4.0 percent (Collier et al., 2009).¶ Kang and Meernik (2005) show that the growth rate in conflict countries in the five years¶ prior to conflict, including cases of conflict recurrence, was on average 0.5 percent¶ compared

to 2 percent in the countries that remained peaceful. Figure 2 shows that economic development and conflicts are observed to be¶ clearly related . The level of GDP is negatively correlated with observing a new conflict.¶ Collier et al. (2009) finds that the predicted risk for a hypothetical country with¶ characteristics set at the study's sample mean was 4.6 percent. If the level of per capita¶ income were to be halved from this level, the risk would be increased to 5.3 percent. Growth rates are also strongly associated with risks of conflict in developing¶ countries. If the growth rate in developing countries is increased by 1 percentage point¶ from the mean, the risk of conflict decreases by 0.6 percentage points to 4.0 percent¶ (Collier et al., 2009). Kang and Meernik (2005) show that the growth rate in conflict¶ countries in the five years prior to conflict, including cases of conflict recurrence, was on¶ average 0.5 percent compared to 2 percent in countries that remained peaceful.

Decline Causes War – AT “Bad Data/Data Limitations”Robust academic studies with careful research methodologies prove decline causes conflictNamsuk Kim and Pedro Conceicao, Spring/Summer 2010, (Kim works for the UN Department of Economic and Social Affairs; Conceicao works for the UN Development Programme), International Journal of Peace Studies, 15(1), p. 33-34, Project Muse, mm

Empirical analysis of growth and conflict has inherent data limitations , but some ¶ recent studies using more careful methodology shows a strong causal link running from ¶ poor economic performance to conflict. One problem is that the direction of impact¶ between the income per capita and conflict can run both ways. Assuming a priori one-¶ way causality - that is, ignoring endogeneity - in regression analysis can result in biased estimates. Other information used in the empirical studies, such as income inequality,¶ population, ethnic distribution, are also subject to difficulties of econometric¶ identification and data quality (Hegre and

Sambanis, 2006; Sambanis, 2004).To address¶ the endogeneity problem , some studies adopt instrumental variable analysis, using a¶ strictly exogenous variable that moves with income per capita, but not with conflict. For¶ instance, Miguel, Satyanath and Sergenti (2004) use annual changes in rainfall data as an¶ instrument for income growth. They find that the rainfall data predicts growth fluctuation¶ in agricultural economies in Africa, and that income shocks are drivers of conflict. Besley¶ and Persson (2008) and Bazzi and Blattman (2008) use international commodity price and trade shocks as the exogenous variables, but they find that the evidence on the¶ relationship between economic shocks as drivers of conflict is mixed.

Decline Causes War – Royal evEconomic decline causes war—strong statistical support. Royal 10 — Jedidiah Royal, Director of Cooperative Threat Reduction at the U.S. Department of Defense, M.Phil. Candidate at the University of New South Wales, 2010 (“Economic Integration, Economic Signalling and the Problem of Economic Crises,” Economics of War and Peace: Economic, Legal and Political Perspectives, Edited by Ben Goldsmith and Jurgen Brauer, Published by Emerald Group Publishing, ISBN 0857240048, p. 213-215)

Less intuitive is how periods of economic decline may increase the likelihood of external conflict. Political science literature has contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of interdependent states. Research in this vein has been considered at systemic, dyadic and national levels. Several notable contributions follow. ¶ First, on the systemic level, Pollins (2008) advances Modelski and Thompson's

(1996) work on leadership cycle theory, finding that rhythms in the global economy are associated with the rise and fall of a pre-eminent power and the often bloody transition from one pre-eminent leader to the next. As such, exogenous shocks such as economic crises could usher in a redistribution of relative power (see also Gilpin. 1981) that leads to uncertainty about power balances, increasing the risk of miscalculation (Feaver, 1995). Alternatively, even a relatively certain redistribution of power could lead to a permissive environment for conflict as a rising power may seek to challenge a declining power (Werner. 1999). Separately, Pollins (1996) also shows that global economic cycles combined with parallel leadership cycles impact the likelihood of conflict among major, medium and small powers, although he suggests that the causes and connections between global economic conditions and security conditions remain unknown.¶ Second, on a dyadic level, Copeland's (1996, 2000) theory of trade expectations suggests that 'future expectation of trade' is a significant variable in understanding economic conditions and security behaviour of states. He argues that interdependent states are likely to gain pacific benefits from trade so long as they have an optimistic view of

future trade relations. However, if the expectations of future trade decline, particularly for difficult [end page 213]

to replace items such as energy resources, the likelihood for conflict increases , as states will be inclined to use force to gain access to those resources. Crises could potentially be the trigger for decreased trade expectations either on its own or because it triggers protectionist moves by interdependent states.4 ¶ Third, others have considered the link between economic decline and external armed conflict at a national level. Blomberg and Hess (2002) find a strong correlation between internal conflict and external conflict, particularly during periods of economic downturn. They

write,¶ The linkages between internal and external conflict and prosperity are strong and mutually reinforcing . Economic conflict tends to spawn internal conflict, which in turn returns the favour. Moreover, the presence of a recession tends to amplify the extent to which international and external conflicts self-reinforce each other. (Blomberg & Hess, 2002. p. 89) ¶

Economic decline has also been linked with an increase in the likelihood of terrorism (Blomberg, Hess, &

Weerapana, 2004), which has the capacity to spill across borders and lead to external tensions . ¶

Furthermore, crises generally reduce the popularity of a sitting government. “Diversionary theory" suggests

that, when facing unpopularity arising from economic decline , sitting governments have increased incentives to fabricate external military conflicts to create a 'rally around the flag' effect. Wang (1996), DeRouen (1995). and Blomberg, Hess, and Thacker (2006) find supporting evidence showing that economic decline and use of force are at least indirectly correlated. Gelpi (1997), Miller (1999), and Kisangani and Pickering (2009) suggest that the tendency towards diversionary tactics are greater for democratic states than autocratic states, due to the fact that democratic leaders are generally more susceptible to being removed from office due to lack of domestic support.

DeRouen (2000) has provided evidence showing that periods of weak economic performance in the United

States, and thus weak Presidential popularity, are statistically linked to an increase in the use of force. ¶ In summary, recent economic scholarship positively correlates economic integration with an increase in the frequency of economic

crises, whereas political science scholarship links economic decline with external conflict at systemic, dyadic and national levels.5 This implied connection between integration, crises and armed conflict has

not featured prominently in the economic-security debate and deserves more attention. ¶ This observation is not

contradictory to other perspectives that link economic interdependence with a decrease in the

likelihood of external conflict, such as those mentioned in the first paragraph of this chapter. [end page 214] Those studies tend to focus on dyadic interdependence instead of global interdependence and do not specifically consider the occurrence of and conditions created by economic crises. As such, the view presented here should be considered ancillary to those views.

Growth Prevents ConflictGrowth prevents conflict – stats proveReghr 13 [Ernie Reghr is Senior Fellow in Arctic Security at The Simons Foundation, 2-4-13, “Intrastate Conflict: Data, Trends and Drivers” http://www.isn.ethz.ch/Digital-Library/Articles/Special-Feature/Detail/?lng=en&id=158597&tabid=1453496807&contextid774=158597&contextid775=158627]

“The most robustly significant predictor of [armed] conflict risk and its duration is some indicator of economic prosperity. At a higher income people have more to lose from the destructiveness of conflict; and higher per-capita income implies a better functioning social contract, institutions and state capacity .”[3] This correlation between underdevelopment and armed conflict is confirmed in a 2008 paper by Thania Paffenholz[4] which notes that “since 1990, more than 50% of all conflict-prone countries have been low income states …. Two thirds of all armed conflicts take place in African countries with the highest poverty rates. Econometric research found a correlation between the poverty rate and likelihood of armed violence….[T]he lower the GDP per capita in a country, the higher the likelihood of armed conflict.” Of course, it is important to point out that this is not a claim that there is a direct causal connection between poverty and armed conflict. To repeat, the causes of conflict are complex and context specific,

nevertheless, says Paffenholz, there is a clear correlation between a low and declining per capita income and a country’s vulnerability to conflict . It is also true, on the other hand, that there are low income countries that experience precipitous economic decline, like Zambia in the 1980s and 1990s, without suffering the kind of turmoil that has visited economically more successful countries like Kenya and Cote d’Ivoire. Referring to both Zambia and Nigeria, Pafenholz says these are cases in which “the social compact” has proven to be resilient. Both have formal and informal mechanisms that are able to address grievances in ways that allowed them to be aired and resolved or managed without recourse to violence. A brief review of literature on economics and armed conflict, published in the Journal of the Royal Society of Medicine, indicates the complexity and imprecision behind the question, “does poverty cause conflict?” While many of the “world’s poorest countries are riven by armed conflict,” and while poverty, conflict and under-development set up a cycle of dysfunction in which each element of the cycle is exacerbated by the other, it is also the case that “conflict obviously does not just afflict the poorest countries” – as Northern Ireland and the former Yugoslavia demonstrate. “Many poor countries are not at war; shared poverty may not be a destabilizing influence. Indeed, economic growth can destabilize, as the wars in countries afflicted by an abundance of particular natural resources appear to show.”[5] Another review of the literature makes the

general point that “the escalation of conflict during economic downturns is more likely i n countries recovering from conflict, or fragile states.” That makes Africa especially vulnerable on two counts: economic deprivation and recent armed conflict are present in a relatively high number of states, making the continent

especially vulnerable to economic shocks. As a general rule, “weak economies often translate into weak and fragile states and the presence of violent conflict, which in turn prevents economic growth.” One study argues that “ the risk of war in any given country is determined by the initial level of incom e, the rate of economic growth and the level of dependency on primary commodity exports.” Changes in rates of economic growth thus lead to changes in threats of conflict. As unemployment rises in fragile states this can “ exacerbate conflict due to comparatively better income opportunities for young men in rebel groups as opposed to labour markets .”[6] The concentration of armed conflict in lower income countries is also reflected in the conflict tabulation by Project Ploughshares over the past quarter century. The 2009 Human Development Index ranks 182 countries in four categories of Human Development – Very High, High, Medium, Low. Of the 98 countries in the Medium and Low categories of human development in 2009, 55 per cent experienced war on their territories in the previous 24 years. In the same period, only 24 per cent of countries in the High human development category saw war within their borders, while just two (5 per cent) countries in the Very High

human development ranking had war on their territory (the UK re Northern Ireland and Israel). The wars of the recent past were overwhelmingly fought on the territories of states at the low end of the human development scale. A country’s income level is thus a strong indicator of its risk of being involved in sustained armed conflict. Low income countries lack the capacity to create

conditions conducive to serving the social, political, and economic welfare of their people. And when economic inequality is linked to differences between identity groups, the correlation to armed conflict is even stronger. In other words, group based inequalities are especially destabilizing.[7] These failures in human security are of course heavily shaped by external factors, notably

international economic and security conditions and the interests of the major powers (in short,

globalization),[8] and these factors frequently combine with internal political/religious/ethnic circumstances that create conditions especially conducive to conflict and armed conflict.

Aff Answers

AT UQ – No Fiscal DisciplineTrump has wrecked fiscal disciplineDavid Hawkings, 3/2/17, Roll Call, "how a tenet of GOP orthodoxy slipped away," http://www.rollcall.com/news/hawkings/trump-congress-budget-battle, mm

Nothing President Donald Trump said in his first speech to Congress, and nothing visible on this year’s budget battle horizon, will change the grim realities of the long-range federal fiscal forecast. Trump continues to sound like he’s out to refashion the Republicans as populist protectors of elderly Americans and their expansive government

safety net, and GOP leaders on the Hill newly sound like they aren’t going to do anything to stand in his way. That represents a fundamental retreat from three decades of party orthodoxy, which could revive the sort of ballooning annual deficits long derided by Republicans as the enemy of national economic stability. This has nothing to do with the 10 percent increase in military spending Trump is advocating, which he’d pay for by cutting an equivalent $54 billion from education, the environment and other domestic programs. That headline-inducing trade-off already looks dead on arrival at the Capitol — the boost rejected by defense hawks as too timid and the nonmilitary cuts spurned by lawmakers in both parties as impractically draconian. But at least the simplistic equation had the virtue of neutrality toward the budgetary bottom line. Not so the all-but-formalized decision by the Trump administration to propose no changes whatsoever for Medicare, Social Security, veterans benefits and the other big entitlements. These are otherwise known as “mandatory” programs because the government is mandated to cover whatever the beneficiaries are entitled based on formulas and eligibility rules that Congress is under no obligation to revisit each year. Just as he never mentioned North Korea or Russia, two of the nation’s most nettlesome overseas adversaries, in his address Tuesday night, neither did he say a word about entitlements, which are a comparably vexing and enormous challenge domestically. That’s because they already combine to account for three-fifths of the budget, and that is twice as much as the $1.2 trillion being spent this year on “discretionary” programs, from the Pentagon to the arts agencies, which are subject to annual appropriations decisions. (The rest is interest on the national debt.) Thanks mainly to the aging baby-boom population, annual entitlements will grow by almost $500 billion, or 18 percent, just during this presidential term unless Congress and Trump come up with a plan to curtail the outlays. Just 10 years from now, entitlements will have mushroomed 73 percent more than currently, cresting $4.3 trillion. That will be almost two-thirds of the entire federal budget, and also almost triple what the appropriators have to allocate assuming a continuation in the very slow pace of recent growth in discretionary spending. And unless taxes are increased along the way — which both Trump and the GOP Congress remain unalterably resistant to — the cost of doing nothing about entitlements will quickly grow stark. The nonpartisan Congressional Budget Office projected last month the annual deficit will rise

from $560 billion this year to $1 trillion in six years and $1.4 trillion in 2027, which would equal 5 percent of the economy. And the cumulative effect of those steadily widening budget imbalances would mean adding $10 trillion to the national debt in the next decade, the CBO estimates. Such dramatic trend lines are nothing new, but they do get slightly more alarming each time another year passes without any legislation to slow or shallow the trajectories — which would happen, perhaps dramatically, depending on how deeply entitlement benefits got curbed or how much eligibility was limited. By remaining silent on that score, Trump is absolutely staying true to his campaign promise to keep Medicare, Social Security and Medicaid just as they are. The much more newsworthy silence comes from Speaker Paul D. Ryan, whose rapid rise from young Wisconsin backbencher to the principal policy playmaker in the House was fueled by a passionate advocacy for entitlement curbs, which he views as the central ingredient for balancing the budget, and creating a new era of national fiscal health. “This is a once-in-a-generation moment,” Ryan said Tuesday of the legislative year ahead, because the first entirely Republican power structure in Washington in a decade creates “the opportunity to finally tackle big problems that have held us back for so long.” But the roster of a half-dozen topics he then enumerated made no mention of corralling the growth of entitlements. Asked if that meant the issue had been dropped for the year, the speaker quipped “I never give up a dream” and took no more questions at his news conference. He told some other reporters during the day that he believes Trump might still be someday persuaded to limiting Medicare and Social Security for people who retire in the future “because if you don’t start bending the curve in the out years, we are hosed.” But that night, Ryan nonetheless labeled Trump’s speech a “home run,” and to be sure, the president did come close to endorsing Ryan’s plan for taxing imports and embraced the House GOP leadership’s framework for replacing the 2010 health care law. Still, Ryan’s apparent willingness to back away from the central crusade of his congressional career is further evidence of his awkward position in the capital power structure of 2017. Having criticized Trump’s temperament and ideology repeatedly during the campaign, without ever flatly repudiating him, while at the same time enduring regular putdowns from the GOP nominee for having focused on fiscal austerity and then losing as the vice presidential candidate of 2012, Ryan is not in the best position to wage a war for the Republican Party’s philosophical soul. The president is the de facto head of his political party, no matter how improbable his victory or how low

his initial approval ratings. So if Trump sticks with his unusual recipe of nationalism and economic populism as a replacement for fiscal discipline and a smaller social safety net as the pillars of GOP orthodoxy, for now Ryan and the rest of the party hierarchy in Congress have little choice except to get with the program or

get castigated by the party’s base for undermining their top commander . Many Republicans on the Hill had been counting on two of their own now in the Cabinet — White House budget director Mick Mulvaney, previously a House Freedom Caucus stalwart from South Carolina, and Health and Human Services Secretary Tom Price, a Georgian who was previously the House Budget Committee chairman — to successfully sell Trump on the notion that pushing entitlement restraint in the name of long-term government solvency would be an important way to cement an economic legacy. Although the first written outline of Trump’s initial budget won’t be delivered to the Capitol for two weeks, his opening preview and his first congressional address have made clear that argument did not get very far.

Current spending levels prove the government isn’t imposing fiscal discipline nowConstantin Gurdgiev, 6/14/17, Seeking Alpha, "4 months of the invisible fiscal discipline," https://seekingalpha.com/article/4081281-4-months-invisible-fiscal-discipline, mm

U.S. Treasury latest figures (through May 2017) for Federal Government’s fiscal (im)balance are an interesting read this year for a

number of reasons. One of these is the promise of fiscal responsibility and cutting of public spending, and deficits made by President Trump and the Republicans during last year’s campaigns. The promise that remains,

unfortunately, unfulfilled. In May 2017, cumulative fiscal year-to-date Federal Government receipts amounted to $2.169 trillion, which is $30 billion higher than over the same period of 2016. However, Federal Government’s gross outlays in the first 8 months of this fiscal year stood at $2.602 trillion, $57.345 billion above the same period of last year. As a result, Federal deficit in the first 8 months of FY 2017 rose to $432.853 billion, up 6.77% y/y or $27.44 billion. Given that 4 out of the 8 months of FY 2017 were under the Obama Presidency tenure, the above comparatives are incomplete. So consider the four months starting February and ending May. Over that period of 2017, Federal deficit stood at $274.274 billion, up 11.17% or $27.569 billion on February-May for FY 2016. In this period, in 2017, Trump Administration managed to spend $51.9 billion more than his predecessor’s presidency. You can see

more detailed breakdown of expenditures and receipts here. But the bottom line is simple: so far, four months into his presidency, Mr. Trump is yet to start showing any signs of fiscal discipline, which raises the question about his cheerleaders in Congress. Having spent the Obama White House years banging on about the need for responsible financial

management in Washington, the Republicans are hardly in a rush to start balancing the books now that their party is in control of both legislative and, with some hefty caveats, the executive branches.

Budget talks prove Republicans aren’t committed to fiscal disciplineMike Debonis, 6/28/17, Press Herald, "house republicans struggle to pass budget," http://www.pressherald.com/2017/06/28/republicans-struggle-to-pass-budget/, mm

As their counterparts in the Senate struggled Tuesday to advance a high-profile health-care bill, House Republicans confronted their own critical failure to agree on a fiscal 2018 budget resolution. Passing a budget is about much more than next year’s spending for Republican lawmakers. It also sets the stage for special budget procedures – known as reconciliation instructions – that will allow Republicans to pass major legislation without a filibuster from Senate Democrats. But

even the promise of tax reform and long-term spending cuts has not yet been enough to bring a fractious group of House Republicans together. A scheduled Thursday meeting of the House Budget Committee to prepare a budget resolution for a floor vote was canceled Tuesday amid continued infighting. Rep. Steve Womack, R-Ark., a Budget Committee member, lamented Tuesday that the budget “should have been put to bed a long time ago.” “It’s almost like we’re

serving in the minority right now,” he said. “We just simply don’t know how to govern.” House leaders struck an optimistic note last week after Republican defense hawks and deficit hawks appeared to agree on a compromise figure of $621

billion for defense spending in fiscal 2018. But another thorny issue has derailed the talks: how much entitlement spending to trim from the federal budget over the coming decade . Most Budget Committee Republicans are prepared to trim $200 billion from the federal budget over 10 years, but hard-line conservatives are pushing for even more cuts to federal spending that now totals roughly $4 trillion a year. Rep. Mark Meadows, R-N.C., chairman of the House Freedom Caucus, said he has personally identified $300 billion of potential cuts to mandatory spending – programs such as Medicare and Medicaid that are not appropriated on a regular basis by Congress. In particular, he said, conservatives want cuts to the federal Supplemental Nutrition Assistance Program – food stamps – as well as Temporary Assistance for Needy Families, the main welfare program. “To suggest that there’s no waste or inefficiencies in those areas would defy history,” he said. But the

chairmen of the House committees that would be charged with wringing out those inefficiencies are balking at being essentially ordered around by the Budget Committee, and that has talks in a fresh stalemate as a week-long July 4 holiday recess approaches. Under the typical yearly budget cycle, the House and Senate pass a budget resolution by April 15. Budget Committee spokesman Will Allison said the panel’s chairman, Rep. Diane Black, R-Tenn., “is 100 percent committed to getting a budget done” and “plans to keep this process moving after the July 4th recess.” House Minority Leader Nancy Pelosi, D-Calif., on Tuesday attacked what she described

as the Republicans’ fiscal irresponsibility. “Almost five months into the Trump Administration, House Republicans still haven’t met their most basic responsibility to pass a budget ,” she said in a statement. “Time is quickly running out to … avert a catastrophic default on the debt.”

Intraparty disputes wreck fiscal disciplineWashington Insider, 6/21/17, "Intensifying budget fight," https://www.dtnpf.com/agriculture/web/ag/perspectives/columns/washington-insider/article/2017/06/21/intensifying-budget-fight, mm

The Hill is reporting that Republicans on the House Budget Committee seemed close to rolling out their 2018 budget resolution, but now have fallen into discussions about increasing defense spending beyond the administration’s proposed $54 billion boost. This is leading to an impasse between defense hawks and deficit hawks, The Hill says. The fight has forced the committee to postpone the rollout of its 2018 budget resolution, a key element in moving Trump’s legislative agenda forward. The House GOP may have the opportunity to settle on a strategy when it meets for its weekly policy discussion today, a meeting that will focus on budget and appropriations. House GOP staff says it would be “a very strong possibility” that the defense cap proposed in the House budget resolution would be higher than Trump’s request of $603 billion for the next fiscal year. In his budget proposal, Trump cut $54 billion from nondefense discretionary spending to pay for the new defense spending. Defense hawks such as Sen. John McCain, R-Ariz. and House Armed Services Committee Chairman Mac Thornberry, R-Texas want to go further and have called for $640 billion in defense spending. Rep. Tom Cole, R-Okla., a House Budget Committee member close to GOP leadership, thinks there’s a good chance the number will be bigger than Trump's request. “I think the defense number could easily be more, because we have a lot of folks that think we could go further,” he said. Members of the conservative House Freedom Caucus, however, bristle at the idea of spending an additional $37 billion on defense and potential increases to non-defense spending without finding additional cuts elsewhere. “Conservatives are willing to entertain the idea of voting for higher spending levels on discretionary spending if we can get the right kind of reconciliation instructions,” said Rep. Jim Jordan, R-Ohio., a Freedom Caucus member. The reconciliation instructions in question would mandate that congressional committees achieve certain spending cuts, a vehicle to push for deeper reforms. And those reforms, Jordan said, would be enough of an achievement to persuade Freedom Caucus members to swallow increases on both defense and nondefense discretionary spending even if they increase the deficit in the short run. "Either that, or leadership can do what they’ve done the last six years, which is wait until Sept. 30 at 11:59 p.m. and negotiate a bad deal,” he said. During his campaign, Trump promised not to allow cuts to Medicare or Social Security, entitlement programs that congressional Republicans see as major sources of potential savings. Tax hikes would violate a pledge signed by almost every House Republican not to create

new taxes. The remaining sources of spending, welfare programs such as Supplemental Nutrition Assistance Program,

commonly known as food stamps, and Temporary Assistance for Needy Families, were already slashed in Trump’s proposal,

making more savings painful and difficult to find. The Budget Committee had set its sights on unveiling the resolution this week, but may now delay it until next week or even after the Fourth of July recess, which could gum up the tight

legislative agenda. Without a budget resolution in place, appropriators cannot go about the business of doling out spending authority to the government. Congress must pass its spending bills by the end of September if they want to avoid a government shutdown. Alternatively, Congress could pass a continuing resolution to keep the government funded at 2017 levels, but that would preclude any defense increases, as well as spending authority for Trump’s other priorities, such as building a border wall. On top of all that, without a budget resolution conferenced between the House and Senate, Republicans will not be able to put in place a special procedure that circumvents the Senate filibuster, which they will need in order to pass tax reform. House Minority Leader Nancy Pelosi, D-Calif., slammed her Republicans colleagues for failing to produce a budget resolution “Almost five months into the Trump administration, House Republicans still haven’t met their most basic responsibility to pass a budget,” Pelosi said. “The House GOP is now months behind the statutory budget deadline, deeply divided but unwilling to

abandon their budget giveaways to the richest few," she said. So, the budget fight is as bitter as ever, largely pitting Republicans against each other. This generally bodes ill for groups pushing for reforms of taxes and many other policies — and certainly is a fight producers should watch closely as it proceeds, Washington Insider believes.

AT UQ – Growth Low/Deficits HighDeficits are increasing and growth is slowing nowNiv Elis, 6/29/17, The Hill, "CBO: economic growth to stall at 1.9 percent, deficits to rise," http://thehill.com/policy/finance/340096-cbo-economic-growth-to-stall-at-19-percent-deficits-to-rise, mm

The economy will grow less quickly than projected, according to a new Congressional Budget Office (CBO) outlook released Thursday. Under current law, the economy would grow at 2.2 percent this year and drop in 2018 to a growth rate slightly above 2 percent before settling into a 1.9 percent growth rate over the course of the next decade, the CBO projects. President Trump’s budget proposal projected that under his policies, growth would rise to 3 percent over the course of a decade, a figure

some economists say is unrealistic. The projected deficit for 2017 rose to 3.6 percent of gross domestic product

(GDP ), a significant jump from the 2.9 percent projected in the CBO's January report. The office attributed the drop, in

part, to slowing revenues and increased mandatory outlays from subsidy accounts. The CBO report projects that deficits will grow to 5.2 percent of GDP in 2027, pushing the national debt held by the public from 77 percent of GDP today to 91 percent over the course of a decade.

CBO forecasts predict low growth and high deficits in the status quoAndrew Taylor, 6/29/17, US News and World Report,"debt deadline now october, CBO says as deficit spikes," https://www.usnews.com/news/business/articles/2017-06-29/debt-deadline-now-october-cbo-says-as-deficit-spikes, mm

The drop-dead deadline for Congress to increase the government's borrowing authority and avoid a devastating economic default is early to mid-October, says a government estimate released Thursday that delivered another challenge to Republican leaders.

Thursday's Congressional Budget Office report also predicts that the federal government's budget deficit will spike to $693 billion this year, $134 billion more than it predicted in January. The worsening deficit picture is mostly due to slipping projections of tax revenues. Congress must act by the October debt deadline or else risk an economy-rattling, first-ever default on U.S. obligations. The CBO report gives Congress slightly more time than Treasury Secretary Steven Mnuchin has estimated. He has asked lawmakers to increase the so-called debt ceiling before leaving Washington

for their August recess — but has also said the government can avert default through September. The national debt is almost $20 trillion. A 2015 debt limit law expired in March, and Mnuchin has been using accounting maneuvers to keep the government solvent. The upcoming votes in both the House and the Senate promise to be a challenge to GOP leaders such as Speaker Paul Ryan, R-Wis. Many Republicans refuse to vote to increase the borrowing cap, which means Republicans controlling Washington are sure to have to rely on Democrats to pass an increase. The breathing room offered by the CBO report and Mnuchin's recent statements probably mean that Congress won't act on the politically toxic debt limit issue until September. It would add to a crush of business that month, which includes stopgap legislation to avert a government shutdown when the budget year ends Sept. 30. If Congress doesn't raise the debt limit in time, CBO warns it would "ultimately lead to delays of payments for government programs and activities, a default on the government's debt obligations, or both." Asked about the latest estimate during a White

House news conference, Mnuchin said "the sooner that they do this the better." On the deficit, CBO says "one reason for the sharp rise in the deficit in 2017 is the slow growth in revenue collections ." It predicts that revenues will rise by only 1 percent this year, even as spending grows by 5 percent, mostly because of continuing growth in government benefit programs such as Social Security and Medicare. All told, CBO predicts that cumulative deficits will rise by $686 billion over the coming decade. CBO estimates are based on current law, so they don't reflect any assumptions about the course Republicans may take on repealing and replacing the so-called Obamacare law. But the projected $686 billion increase would dwarf the improvements to the government's deficit picture that would result from either the House or Senate health care legislation,

which blends benefit cuts and tax cuts to reduce deficits by up to $321 billion over the coming decade. The CBO also forecasts significantly slower growth in the economy than promised by Trump's budget, which many critics said was overly optimistic.

Link Turn – Education Spending Boosts the EconomyEducation spending is key to growth Paul Krugman, 10/8/2009, The New York Times, "The Uneducated American," http://www.nytimes.com/2009/10/09/opinion/09krugman.html?_r=1&bl, mm

If you had to explain America’s economic success with one word, that word would be “education.” In the 19th century, America led the way in universal basic education. Then, as other nations followed suit, the “high school revolution” of the early 20th century took us to a whole new level. And in the years after World War II, America established a commanding position in higher education. But that was then. The rise of American education was, overwhelmingly, the rise of public education — and for the past 30 years our political scene has been dominated by the view that any and all government spending is a waste of taxpayer dollars. Education, as one of the largest components of public spending, has inevitably suffered.

Until now, the results of educational neglect have been gradual — a slow-motion erosion of America’s relative position. But things are about to get much worse, as the economic crisis — its effects exacerbated by the penny-wise, pound-foolish behavior that passes for “fiscal responsibility” in Washington — deals a severe blow to education across the board. About that erosion: there has been a flurry of reporting recently about threats to the dominance of America’s elite universities. What hasn’t been reported to the same extent, at least as far as I’ve seen, is our relative decline in more mundane measures. America, which used to take the lead in educating its young, has been gradually falling behind other advanced countries. Most people, I suspect, still have in their minds an image of America as the great land of college education, unique in the extent to which higher learning is offered to the population at large. That image used to correspond to reality. But these days young Americans are considerably less likely than young people in many other countries to graduate from college. In fact, we have a college graduation rate that’s slightly below the average across all advanced economies. Even without the effects of the current crisis, there would be every reason to expect us to fall further in these rankings, if only because we make it so hard for those with limited financial means to stay in school. In America, with its weak social safety net and limited student aid, students are far more likely than their counterparts in, say, France to hold part-time jobs while still attending classes. Not surprisingly, given the financial pressures, young Americans are also less likely to stay in school and more likely to become full-time workers instead. But the crisis has placed huge additional stress on our creaking educational system. According to the Bureau of Labor Statistics, the United States economy lost 273,000 jobs last month. Of those lost jobs, 29,000 were in state and local education, bringing the total losses in that category over the past five months to 143,000. That may not sound like much, but education is one of those areas that should, and normally does, keep growing even during a recession. Markets may be troubled, but that’s no reason to stop teaching our children. Yet that’s

exactly what we’re doing. There’s no mystery about what’s going on: education is mainly the responsibility of state and local governments, which are in dire fiscal straits. Adequate federal aid could have made a big difference. But while some aid has been provided, it has made up only a fraction of the shortfall. In part, that’s because back in February centrist senators insisted on stripping much of that aid from the American Recovery and Reinvestment Act, a k a the

stimulus bill. As a result, education is on the chopping block. And laid-off teachers are only part of the story. Even more important is the way that we’re shutting off opportunities. For example, the Chronicle of Higher Education recently reported on the plight of California’s community college students. For generations, talented students from less affluent families have used those colleges as a stepping stone to the state’s public universities. But in the face of the state’s budget crisis those universities have been forced to slam the door on this year’s potential transfer students. One result, almost surely, will be lifetime damage to many

students’ prospects — and a large, gratuitous waste of human potential. So what should be done? First of all, Congress needs to undo the sins of February, and approve another big round of aid to state governments. We don’t have to call it a stimulus, but it would be a very effective way to create or save thousands of jobs. And it would, at the same time, be an investment in our future. Beyond that, we need to wake up and realize that one of the keys to our nation’s historic success is now a

wasting asset. Education made America great; neglect of education can reverse the process.

AT I/L – Deficits Good/Government Spending -> Growth

Deficit spending now is key to sustain the recovery – that solves long-term budget deficits better than fiscal discipline Jeff Madrick and Michael McCormack, 9/6/16, The Century Foundation, "we still need fiscal stimulus seven years after the recession," https://tcf.org/content/commentary/still-need-fiscal-stimulus-seven-years-recession/, mm

Fiscal stimulus had been significantly dampened in the United States and elsewhere once President Obama’s fiscal stimulus package of 2009 had been fully deployed. Though it is not often called austerity, America adopted an austerity program when Congress and the president signed the sequester agreement in 2011, which was implemented beginning in 2013. More severe fiscal austerity programs in Europe have ravaged working people and economic growth. Europe’s economic justification of austerity was based on two papers (Alesina and Ardagna 2009; Reinhart and Rogoff 2010) that turned out to be questionable. This situation is all too real for Puerto Ricans. The territory defaulted on its bond payment on July 1 and creditors are imposing serious austerity in return for restructuring debt. The Puerto Rico Oversight, Management, and Economic Stability Act, or PROMESA, cuts to the Puerto Rican minimum wage (now $4.25 for workers 24 and younger), and its proposals to roll back overtime protections and calls to close schools more closely resemble a colonial edict than a bailout. The imperative is to turn away from the legacy of austerity since 2011.

It is imperative now to avoid “the paradox of thrift.” This concept, popularized by John Maynard Keynes, which involves cutting social spending and making the labor market “competitive” (lowering wages and labor regulations, for example),

can cause a vicious cycle of saving, disinvestment, and unemployment. The theoretical answer we

subscribe to instead is a traditional one: Via a more activist fiscal policy, the paradox of thrift can be avoided; incomes can be bolstered through social programs, investments in infrastructure, jobs subsidies, training, and industrial policy. In America some alternatives have been described. The Congressional Progressive Caucus’s (CPC) “People’s Budget” is an alternative to the Obama budget and Congressional proposals. Proponents claim that its combination of investment in

infrastructure, jobs and occupational training, as well as rolling back the trend of economic inequality is the sort of fiscal action

that could make this recovery more robust. The budget favors deficit spending now to reach full employment, increased consumer spending, and wage growth that would allow us to reduce deficits in the long-term more sustainably than austerity and “fiscal discipline” now. Some of these ideas are taking broader hold, with Secretary Clinton advocating for a larger infrastructure program within her first 100 days in office and Donald Trump acknowledging the need to invest in infrastructure. Indeed, Mr. Trump’s has proposed spending double that of

Secretary Clinton’s $275 billion infrastructure plan. Deficit spending and demand-enhancing fiscal policy could set the stage for reducing deficits in the long run. As an economy reaches full employment, growing output, and increasing investment, more tax revenues can be collected by the state—which can offset some costs of government spending. But budget proposals might also include corresponding tax increases down the road on the rich and corporations designed to increase revenues while redressing economic inequality (something that has also made this recovery less robust than past business cycles).

AT Impact – Decline =/= WarNo impact to economic decline – new dataDrezner 2014 Daniel, IR prof at Tufts, The System Worked: Global Economic Governance during the Great Recession, World Politics, Volume 66. Number 1, January 2014, pp. 123-164

The final significant outcome addresses a dog that hasn't barked: the effect of the Great Recession on cross-border conflict and violence. During the initial stages of the crisis, multiple analysts asserted that the financial crisis would lead states to increase their use of force as a tool for staying in power.42 They voiced genuine concern that the global economic downturn would lead to an increase in conflict—whether through greater internal repression, diversionary wars, arms races, or a ratcheting up of great power conflict . Violence in the Middle East, border disputes in the South China Sea, and even the disruptions of the Occupy movement fueled impressions of a surge in global public disorder. The aggregate data suggest otherwise , however . The Institute for Economics and Peace has concluded that "the average level of peacefulness in 2012 is approximately the same as it was in 2007 ."43 Interstate violence in particular has declined since the start of the financial crisis, as have military expenditures in most sampled countries. Other studies confirm that the Great Recession has not triggered any increase in violent conflict , as Lotta Themner and Peter Wallensteen conclude: "[T]he pattern is one of relative stability when we consider the trend for the past five years."44 The secular decline in violence that started with the end of the Cold War has not been reversed. Rogers Brubaker observes that "the crisis has not to date generated the surge in protectionist nationalism or ethnic exclusion that might have been expected."

Decline doesn’t cause war – empirically denied and most conclusive data Brandt and Ulfelder 11—*Patrick T. Brandt, Ph.D. in Political Science from Indiana University, is an Assistant Professor of Political Science in the School of Social Science at the University of Texas at Dallas. **Jay Ulfelder, Ph.D. in political science from Stanford University, is an American political scientist whose research interests include democratization, civil unrest, and violent conflict. [April, 2011, “Economic Growth and Political Instability,” Social Science Research Network]

These statements anticipating political fallout from the global economic crisis of 2008–2010 reflect a widely held view that economic growth has rapid and profound effects on countries’ political stability. When economies grow at a healthy clip, citizens are presumed to be too busy and too content to engage in protest or rebellion, and governments are thought to be flush with revenues they can use to enhance their own stability by producing public

goods or rewarding cronies, depending on the type of regime they inhabit. When growth slows, however, citizens and cronies alike are presumed to grow frustrated with their governments, and the leaders at the receiving end of that frustration are

thought to lack the financial resources to respond effectively. The expected result is an increase in the risks of social unrest, civil war, coup attempts, and regime breakdown. Although it is pervasive, the assumption that countries’ economic growth rates strongly affect their political stability has not been subjected to a great deal of careful empirical analysis, and evidence from social science research to date does not unambiguously support it . Theoretical models of civil wars, coups

d’etat, and transitions to and from democracy often specify slow economic growth as an important cause or

catalyst of those events, but empirical studies on the effects of economic growth on these phenomena have produced mixed results. Meanwhile, the effects of economic growth on the occurrence or incidence of social unrest seem to have hardly been studied in recent years , as empirical analysis of contentious collective action has concentrated on political opportunity structures and dynamics of protest and

repression. This paper helps fill that gap by rigorously re-examining the effects of short-term variations in economic growth on the occurrence of several forms of political instability in countries worldwide over the past few decades. In this paper, we do not seek to develop and test new theories of political instability. Instead, we aim to subject a hypothesis common to many prior theories of political instability to more careful empirical scrutiny. The goal is to provide a detailed empirical characterization of the relationship between economic growth and political instability in a broad sense. In effect, we describe the conventional wisdom as seen in the data. We do so with statistical models that use smoothing splines and multiple lags to allow for nonlinear and dynamic effects from economic growth on political stability. We also do so with an instrumented measure of growth that explicitly accounts for endogeneity in the relationship

between political instability and economic growth. To our knowledge, ours is the first statistical study of this relationship to simultaneously address the possibility of nonlinearity and problems of endogeneity. As such, we believe this paper offers what is probably the most rigorous general evaluation of this argument to date. As the results show, some of our findings are surprising. Consistent with conventional assumptions, we find that social unrest and civil violence are more likely to occur and democratic regimes are more susceptible to coup attempts around periods of slow economic growth. At the same time, our analysis shows no significant relationship between variation in growth and the risk of civil-war onset, and results from our analysis of regime changes contradict the widely accepted claim that economic crises cause transitions from autocracy to democracy. While we would hardly pretend to

have the last word on any of these relationships, our findings do suggest that the relationship between economic growth and political stability is neither as uniform nor as strong as the conventional wisdom (s) presume (s) . We think these findings also help explain why the global recession of 20 08 –2010 has failed thus far to produce the wave of coups and regime failures that some observers had anticipated , in spite of the expected and apparent uptick in social unrest associated with the crisis.

Even massive economic decline has zero chance of war Robert Jervis 11, Professor in the Department of Political Science and School of International and Public Affairs at Columbia University, December 2011, “Force in Our Times,” Survival, Vol. 25, No. 4, p. 403-425

Even if war is still seen as evil, the security community could be dissolved if severe conflicts of interest were to arise. Could the more peaceful world generate new interests that would bring the members of the community into sharp disputes? 45 A zero-sum sense of

status would be one example, perhaps linked to a steep rise in nationalism. More likely would be a worsening of the current economic difficulties, which could itself produce greater nationalism, undermine democracy, and bring back old-

fashioned beggar-thy-neighbor economic policies. While these dangers are real, it is hard to believe that the conflicts could be great enough to lead the members of the community to contemplate fighting each other. It is not so much that economic interdependence has proceeded to the point where it could not be reversed – states that

were more internally interdependent than anything seen internationally have fought bloody civil wars. Rather it is that even if the

more extreme versions of free trade and economic liberalism become discredited, it is hard to see how without building on a pre-existing high level of political conflict leaders and mass opinion would come to believe that their countries could prosper by impoverishing or even attacking others. Is it possible that problems will not only become severe, but that people will entertain the thought that they have to be solved by war? While a pessimist could note that this argument does not appear as outlandish as it did before the financial crisis, an optimist could

reply (correctly, in my view) that the very fact that we have seen such a sharp economic down-turn without anyone suggesting that force of arms is the solution shows that even if bad times bring about greater economic conflict, it

will not make war thinkable.