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Interest rate rises are low now and controlled
Swanson 6/14 Ana Swanson covers the economy, trade and the Federal Reserve for The Washington
Post. “Fed raises interest rate, signaling confidence in the economy”, Washington Post, 6/14/17. Ghs-cw
https://www.washingtonpost.com/news/wonk/wp/2017/06/14/fed-raises-interest-rate-signaling-
confidence-in-the-economy/?utm_term=.0b13d8d54665

The Federal Reserve raised its benchmark interest rate by a quarter-point Wednesday, the third such
increase in six months and a message of confidence in the strengthening of the U.S. economy. The
increase, which brought the Fed funds rate to between 1 percent and 1.25 percent, was highly anticipated by the markets. On Wednesday morning before the rate increase,
Fed futures pointed to a 93.5 percent chance of a rate hike. The rate hike "reflects the progress the economy has made and is expected

to make toward maximum employment and price stability," Fed Chair Janet Yellen said Wednesday in a press conference. The Fed also laid out plans to begin
rolling back the more than $4 trillion balance sheet it accumulated in an effort to prop up the economy after the financial crisis. On Wednesday, Yellen said the process was designed to be as

predictable and orderly as possible, and that the Fed hoped it would be as exciting as "watching paint dry." The increase was the second rate hike this year and the fourth since the Federal
Reserve began raising rates in December 2015. As such, consumers will begin to feel the impact of higher costs for lending — especially those with large mortgages or those who carry credit-card debt, said Greg McBride, chief
financial analyst at Bankrate. “For a lot of people, they don’t even notice,” he said. “But for those where budgets are tight and their debt burdens have been growing the last few years, this is where the signs of strain begin to

The Fed described the rate hike as evidence of a stronger economy. It said that job gains had “moderated” but were still “solid, on average,
emerge.”

The Fed is mandated by

since the beginning of the year.” As it has in previous months, it said its interest rate remains “accommodative,” meaning that it is still low enough to help fuel economic activity.

Congress to consider two goals: Maintaining a healthy labor market where Americans who want jobs are
able to find them, and restraining potentially destabilizing increases in prices. [These banks have been sweetening their savings accounts
as the Fed has raised rates] The U.S. job market has been growing robustly, and the unemployment rate reached a 16-year low in May. Yet metrics of inflation, including the Fed’s favored measure, have consistently come in below

the Fed said it expected inflation to remain

the Fed’s target, convincing some that the Fed should put off future interest rate hikes. In its news release Wednesday,

somewhat below its 2 percent target in the near term but to eventually rise to meet that goal. It added that it was
“monitoring inflation developments closely.” “The rate hike signals that the Fed believes the economy is improving and is going to

be resilient to those hikes,” said Tara Sinclair, a professor at George Washington University and a senior fellow at the jobs website Indeed. During the press conference on Wednesday, Yellen argued
that a gradual path of rate increases was the best way to avoid a more damaging scenario for the economy. " We want to keep the expansion on a sustainable path

and avoid the risk that ... we find ourselves in a situation where we've done nothing, and then need to
raise the funds rate so rapidly that we risk a recession," she said. "But we are attentive to the fact that inflation is running below our 2 percent objective." Board
members didn’t alter their projections for the economy and their own actions much compared with what they had expected in March. They continued to predict one more rate

increase this year, as well as three rate increases next year. Their projections indicate that the Fed expects the economy
to grow 2.2 percent in 2017 and 2.1 percent in 2018 -- far below the 3 percent growth that the Trump administration is targeting. Board members did lower their
estimates for the unemployment rate and inflation, metrics that have consistently fallen below their expectations. The Fed’s decision was nearly unanimous. Eight members of the deciding Federal Open Market Committee voted in

The Fed also laid out a plan to gradually roll back

favor of the rate increase. Only one, Neel Kashkari, the president of the Minneapolis Federal Reserve, voted against it.

its balance sheet before the end of the year, a change that many analysts expect could lead longer-term
interest rates to rise, potentially raising costs for mortgage holders. The Fed currently uses the principal from maturing bonds to buy new ones, but under the new plan, it will gradually phase that out. For
Treasury securities, the Fed said it will begin reinvesting only those payments that exceed a cap of $6 billion a month, initially. Then it will lift the cap by $6 billion every three months over a period of a year, until the cap reaches a
level of $30 billion per month. For agency debt and mortgage-backed securities, the cap will be $4 billion per month initially, rising in steps of $4 billion every three months until it reaches $20 billion per month. After that, the Fed
plans to hold the caps in place “until the Committee judges that the Federal Reserve is holding no more securities than necessary.” Eventually, it said, the amount will decline to a level below that of recent years, but more than
before the financial crisis. Madhavi Bokil, a vice president at Moody’s Investor Services, said her group was closely monitoring information about how the Fed will roll down its balance sheet, to analyze what the effect might be on

We think that if the same gradual approach is followed, then any potential negative spillover
credit conditions. “

would be limited,” she said.

The plan requires massive federal spending

McCluskey 11 Neal McCluskey is the director and a policy analyst for Cato’s Center for Educational
Freedom. “Education Waste: We Have Only Ourselves to Blame”, CATO Institute, 2/15/11. Ghs-cw
https://www.cato.org/publications/commentary/education-waste-we-have-only-ourselves-blame
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
It’s a bankrupting contradiction, but don’t get angry at Obama: We only have ourselves to blame. Educational
$77 billion.

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

Both parties have used

of students in four-year programs completing their studies in six years. Wasting federal dollars on schools is not, importantly, exclusively a Democratic problem.

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

because federal money does no

concerns that make analyzing education policy hugely cost prohibitive — recoil at the idea of taking money from schools. But take we must,

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

federal politicians must be rewarded not for giving away dollars

the public’s attitude so that what’s in politicians’ self-interest will also change. Ultimately,

in the name of education, but for leaving them in the hands of hardworking taxpayers

Interest rate hikes crush the economy

Boccia 2013, Romina is a leading fiscal and economic expert at The Heritage Foundation and focuses on
government spending and the national debt, February 12th 2013, How the United States’ High Debt Will
Weaken the Economy and Hurt Americans, http://www.heritage.org/budget-and-spending/report/how-
the-united-states-high-debt-will-weaken-the-economy-and-hurt

Debt overhang reduces economic growth significantly and for a prolonged period of time in three main ways. 1.
Higher Interest Rates. Creditors may lose confidence in the country’s ability to service its debt and
demand higher interest rates to offset the additional risk. Or, interest rates may rise simply because the
government is attempting to sell more debt than private bondholders are willing to buy at current
prices. Either way, higher interest rates raise the cost of the debt, and the government must then either tax
its citizens more, which would reduce economic activity; reduce government spending in other areas; or
take on even more debt, which could cause a debt spiral. Higher interest rates on government bonds
also lead to higher rates for other domestic investments, including mortgages, credit cards, consumer
loans, and business loans. Higher interest rates on mortgages, car loans, and other loans would make it more costly for families to borrow money.
Families may then have to delay purchasing their first home and other means of building financial security. For many Americans, the dream of starting a business
would no longer be in reach. Higher interest rates have a real and pronounced impact on the lives of ordinary citizens and translate into less investment and thus
slow growth in the rest of the economy. A weaker economy in turn would provide fewer career opportunities and lower wages and salaries for workers. However,
higher interest rates do not always materialize in countries suffering a debt overhang. According to Reinhart, Reinhart, and Rogoff, in 11 of the 26 cases where
public debt was above 90 percent of GDP, real interest rates were either lower, or about the same, as during years of lower debt ratios. Soaring debt
matters for economic growth even when market actors are willing to absorb it at low interest.[14] Interpreted
another way, in more than half of debt overhang cases, interest rates rose. In the case of the U.S., the Federal
Reserve’s policy of repeated quantitative easing has contributed to interest rates dropping to historical
lows. Interest rates will likely rise at some point over the next several years. The Congressional Budget Office predicts that interest costs on the debt will more
than double before the end of the decade, rising from 1.4 percent of GDP in 2013 to 2.9 percent as early as 2020.[15] High levels of U.S. public debt could push
interest rates even higher with severe impacts for the American economy.

Economic decline causes global nuclear war

Stein Tønnesson 15, Research Professor, Peace Research Institute Oslo; Leader of East Asia Peace
program, Uppsala University, 2015, “Deterrence, interdependence and Sino–US peace,” International
Area Studies Review, Vol. 18, No. 3, p. 297-311

Several recent works on China and Sino–US relations have made substantial contributions to the current
understanding of how and under what circumstances a combination of nuclear deterrence and economic
interdependence may reduce the risk of war between major powers. At least four conclusions can be drawn from the
review above: first, those who say that interdependence may both inhibit and drive conflict are right.
Interdependence raises the cost of conflict for all sides but asymmetrical or unbalanced dependencies and
negative trade expectations may generate tensions leading to trade wars among inter-dependent states
that in turn increase the risk of military conflict (Copeland, 2015: 1, 14, 437; Roach, 2014). The risk may increase if one of the
interdependent countries is governed by an inward-looking socio-economic coalition (Solingen, 2015); second, the risk of war between China
and the US should not just be analysed bilaterally but include their allies and partners. Third party countries could drag China or the US into
confrontation; third, in this context it is of some comfort that the three main economic powers in Northeast Asia (China, Japan and South
Korea) are all deeply integrated economically through production networks within a global system of trade and finance (Ravenhill, 2014;
Yoshimatsu, 2014: 576); and fourth, decisions for war and peace are taken by very few people, who act on the basis
of their future expectations. International relations theory must be supplemented by foreign policy analysis in order to assess the
value attributed by national decision-makers to economic development and their assessments of risks and opportunities. If leaders on either
side of the Atlantic begin to seriously fear or anticipate their own nation’s decline then they may blame this on
external dependence, appeal to anti-foreign sentiments, contemplate the use of force to gain respect or
credibility, adopt protectionist policies, and ultimately refuse to be deterred by either nuclear arms or
prospects of socioeconomic calamities. Such a dangerous shift could happen abruptly , i.e. under the
instigation of actions by a third party – or against a third party. Yet as long as there is both nuclear deterrence and interdependence, the
tensions in East Asia are unlikely to escalate to war. As Chan (2013) says, all states in the region are aware that they cannot count on
support from either China or the US if they make provocative moves. The greatest risk is not that a territorial dispute leads to

war under present circumstances but

that changes in the world economy alter those circumstances in ways that
render inter-state peace more precarious. If China and the US fail to rebalance their financial and trading relations (Roach, 2014)
then a trade war could result, interrupting transnational production networks, provoking social distress, and exacerbating nationalist emotions.
This could have unforeseen consequences in the field of security, with nuclear deterrence remaining the
only factor to protect the world from Armageddon, and unreliably so . Deterrence could lose its
credibility : one of the two great powers might gamble that the other yield in a cyber-war or conventional
limited war, or third party countries might engage in conflict with each other, with a view to obliging Washington or Beijing to intervene.
uniqueness
 econ stable now

The economy is stable now--- Job employment rising, interest rates stable.
POST EDITORIAL BOARD 3/10/17 , Post Editorial Board, Trump’s economy is off to a good start,
March 10th 2017, http://nypost.com/2017/03/10/trumps-economy-is-off-to-a-good-start/

It may be too early to claim that, after just seven weeks as president, Donald Trump has already made the economy great again. But Friday’s
jobs numbers — along with other indicators — are certainly grounds for optimism. The Labor
Department said non-farm payroll employment grew by 235,000 in February. That’s a larger gain than
expected — and more than twice the average monthly jobs growth under President Barack Obama.
Construction jobs, in particular, shot up by 58,000 — the biggest jump in almost 10 years. And that came on top of a
January surge of 40,000 new construction jobs. Overall unemployment, meanwhile, held steady at a reasonable 4.7
percent. And notably, labor-force participation among a key age group, 25- to 54-year-olds, ticked up a point — to 81.7 percent in February,
from 80.6 percent in September 2015, a low not seen since 1984. That may mean working-age folks who gave up looking for a job under Obama
may now be starting to jump back into the game. And
all this is taking place as the stock market has hit record highs:
The Dow closed Friday up more than 13 percent since Trump won the November election. There’s more.
Consumer confidence is at a 15-year high. And the Federal Reserve is apparently upbeat, too: It’s widely
expected to raise interest rates this moth. Trump’s critics pooh-pooh all the good news. They note — rightly — that February
was unusually warm and that job growth actually began under Obama. And, again, it’s a bit early to give Trump too much credit here. Yet it’s
also hard to deny that Trump’s approach — deregulation that’s already under way, the promise of tax cuts coming reasonably soon, the move
to replace ObamaCare and his heavy focus on the economy generally — is striking a sweet note with both businesses and consumers. Heck, if
the numbers keep improving, at some point even Trump’s critics will have to give him some points.

The economy is good now--- Slow growth but on the right track.
Gillespie 4/27/17, Patrick Gillespie is a reporter at CNNMoney. He covers the U.S. economy, stocks and emerging markets. Before
CNNMoney, Patrick reported for McClatchy Newspapers and Mashable. He graduated from the University of Delaware and received a Masters
from the CUNY Graduate School of Journalism. Patrick lived in Argentina after college, teaching English in Buenos Aires. Now he lives in
Brooklyn.

President Trump's economy isn't bursting out of the gates.All signs are that it is starting 2017 with more of the same sluggish
growth the U.S. experienced during President Obama's term. But as with the final years of Obama's presidency, there's reason to be
optimistic about the current state of the economy under Trump. The government will publish the first report of economic growth in the Trump era on Friday. The Atlanta

Federal Reserve is predicting 0.5% annual growth in the first three months of the year; private
economists are forecasting 1.1%. The Trump administration isn't really responsible for the slow growth yet. The reason: Many of his policies
haven't become law, and none of them have had enough time to work through the economy. "What happened in
the first quarter of the year is entirely beyond credit or blame of the Trump administration or the 115th Congress," says Joseph Brusuelas, chief economist at RSM, an accounting firm. "That'll
be a 2018 story." Trump's proposals -- from tax cuts to infrastructure spending -- likely won't have an impact on the economy until next year if they get passed through Congress. That's a big

"if," too. Related: Trump relies on magic wand of growth to pay for tax cuts But Friday's figure will illustrate Trump's uphill battle ahead. He's promised 4% annual growth . The Fed
forecasts 2% growth for the next few years. America's economic growth has been glacial since the Great Recession
ended in 2009, averaging about 2% a year since 2010. During the late 1990s, annual growth hit a strong 4% a year. Many factors have held down U.S. growth

over that time. To name a few: A weak global economy, a strong dollar that hurt U.S. trade, and Americans who have become too hesitant to spend after a scarring recession. One big

difference so far this year is that Americans' optimism in the economy's future has improved
dramatically. Confidence -- from consumers to big business -- has shot up, partially because of the hope
underpinning Trump's policies. But so far there's no evidence that it's leading to actual spending. Consumer
spending, the real engine of growth, has been sluggish so far this year. Related: Fast track to the middle class: Become a dental hygienist Some say that's a post-election wake up call. "What
we're seeing in this first quarter is the beginning of some genuine skepticism that all that optimism was overdone," says Bernard Baumohl, chief economist at the Economic Outlook Group, a
research firm. The problem isn't so much that things are getting worse. Experts stress the U.S. economy is in good shape overall: Unemployment is low, at 4.5%. Job growth is solid. Gas prices
are low. Wage growth has picked up. Global economic risks are low for now too, which also helps boost business confidence. The issue is whether the GOP-controlled White House and
Congress can quickly pass new economic reforms this year that will truly boost the economy out of this slow-growth phase. Related: Trump promised big infrastructure bill. His budget cuts it
"That looks unlikely now," adds Bauhmohl. "There's this undercurrent of real concern that Washington is still broken." One of Trump's proposals, infrastructure spending, could provide
America with the shot in the arm it needs. New infrastructure -- improving America's roads, bridges and rails -- would create construction jobs and help other workers (we're looking at you,
morning commuters) get from point A to point B faster. Less time traveling means more time at work or at home -- more productive time. Related: Trump wants billionaire developers lead
infrastructure plans But a grand infrastructure bill from Trump and Republicans in Congress isn't on the horizon this year. Repealing Obamacare, renegotiating NAFTA and cutting taxes are

So at least to start the Trump era, economic growth looks to be more of the same. It's important to
2017 priorities.

remember that the first quarter number is notoriously low and often gets revised up a bit. And keep in mind: overall, America is in solid shape. "The economy is
doing just fine," says Paul Ashworth, chief US economist at Capital Economics, a research firm. "I don't think there's any serious concerns about the US economy."

The economy is doing well– inflation and unemployment are at sustainable levels
Economist 6/10/2017 “Why the Federal Reserve should leave interest rates unchanged”
http://www.economist.com/news/leaders/21723112-central-bank-should-respond-lower-inflation-
keeping-policy-loose-why-federal//

NO STATEMENT from the Federal Reserve is complete without a promise to make decisions based on the data .
In each of the past two years, a souring outlook for the world economy prompted the Fed to delay interest-rate rises. And quite right, too. Yet if
the Fed raises rates on June 14th in the face of low inflation, as it has strongly hinted, it would bring into question its commitment both to the
data and also to its 2% inflation target. The central bank has raised rates three times since December 2015 (the latest rise came in March). It is
good that monetary policy is a little tighter than it was back then. The unemployment rate, at 4.3%, is lower than at any time since early 2001.
A broad range of earnings data shows a modest pickup in wage growth. The Fed is right to think that it is
better to slow the economy gradually than be forced to bring it to a screeching halt later, if wage and
price rises get out of hand. The rate increases to date have been reasonable insurance against an
inflationary surge. But no such surge has yet struck. Unexpectedly low inflation in both March and April has left consumer prices no
higher than they were in January. According to the Fed’s preferred index, core inflation—that is, excluding volatile food and energy prices—has
fallen to 1.5%, down from 1.8% earlier this year. It is now well below the 2% target. Nor does a surge seem imminent. For a while, Donald
Trump’s promises to cut taxes and spend freely on infrastructure made higher rates appear all the wiser. But fiscal
stimulus looks less
likely by the week. Tax cuts are stuck in the legislative queue behind health-care reform, and Mr Trump’s administration has tied itself in
knots over whether it will increase the deficit. Meanwhile, the current “infrastructure week” in Washington may generate more headlines than
proper plans. Even so, the Fed is expected to go ahead and raise rates this month. The markets think there is a 90% probability of an increase of
25 basis points (hundredths of a percentage point). It is possible that more inflation is coming. An economy that is stimulated will eventually
overheat. The central bank may believe that low unemployment is about to cause inflation. But the truth is that nobody is sure how far
unemployment can fall before prices and wages soar. Not many years ago some rate-setters put this “natural” rate of unemployment at over
6%; the median rate-setter’s estimate is now 4.7%. Advertisement The only way to find the labour market’s limits is to feel them out. Falling
inflation and middling wage growth both suggest that these limits are some way off, for two possible reasons. First, higher wage growth could
yet tempt more of the jobless to seek work (those who are not actively job-hunting do not count as unemployed). The proportion of 25- to 54-
year-olds in employment is lower than before the recession, by an amount representing almost 2.4m people. By this measure, which fell in
May, joblessness is worse in America than in France, where the overall unemployment rate stands at 9.5%. Second, even the moderate pickup
in wage growth to date might encourage firms to invest more, lifting productivity out of the doldrums and dampening inflationary pressure. I
like hike Jobs growth in America has already slowed from a monthly average of 187,000 in 2016 to 121,000
in the past three months. That is enough to reduce slack in the economy, but only just. Slowing it still
further is needless so long as inflation remains quiescent. It makes still less sense when you consider the asymmetry of
risks before the Fed. If tighter money tips the economy into recession, the central bank has only a little bit of room to cut
rates before it hits zero. But if inflation rises, it can raise them as much as it likes.

Econ strong now- recent job increase proves

Gara 7/07 Antoine Gara is a staff writer on Forbes’ investing team. “U.S. Economy Posts Strong Jobs
Gains In June, Keeping Fed On Track To Exit Crisis-Era Playbook”, Forbes, 7/7/17. Ghs-cw
https://www.forbes.com/sites/antoinegara/2017/07/07/u-s-economy-posts-strong-jobs-gains-keeping-
fed-on-rate-hiking-path-as-crisis-era-fades/#57a0aa8dd867
The U.S. economy added 222,000 jobs The strong jobs report, from the in June and monthly employment statistics from May and April were revised higher.

Bureau of Labor Statistics, means the U.S. economy is consistently adding nearly 200,000 jobs a month
and unemployment remains low, allowing the Federal Reserve to continue hiking interest rates in the second half of the

Economists had predicted an increase of 178,000 jobs

year. the June report beat high in June according to Bloomberg data, signaling

expectations steady growth in the U.S. has positioned the Fed as a

. The monthly report is currently the most watched piece of economic data by investors because

first mover among major global central banks in moving away from the rock-bottom interest rates that carried markets out of the the 2008 crisis. Since late 2016, the Fed has hiked interest rates three times

Friday's jobs report will give Federal Reserve chair Janet Yellen the ability
on account of low unemployment, steady growth, and signs of stabilizing inflation.

to plot a deliberate course on rate hikes and a trimming of the central bank's balance sheet.. "We think
that the Fed will see this wage data as satisfactory and clearly can execute a September decision (and quick implementation) on initiating balance-sheet reduction," said Rick Rieder, chief investment

officer of fixed income at BlackRock and portfolio manager of three of the firm's bond funds. "This also allows the Fed a good deal more time to decide on a December rate hike after having begun its balance sheet reduction program," he added of the Fed's options. Payrolls in April and
May were revised higher by a total of 47,000 jobs, putting three month job gains at an average of 194,000. The national unemployment rate was unchanged at 4.4%, slightly higher than predictions of 4.3%, as some workers returned to the job market. This data means investors around
the world will continue to adjust their portfolios to account for a moderate step off from the crisis-era tools like zero rates and central bank bond buying that kept fears of deflation at bay. Instead, there are signs of steady inflation and gross domestic product growth years into the
economic recovery, a boon to confidence. Economists at Deutsche Bank characterized Friday's jobs report as "perfect" for risk assets like stocks. U.S. equities Friday trading with the S&P 500 closing up 0.64% at $2,425.18, while safe haven assets like the 10-year Treasury and gold fell.

The job market remains in good shape eight years into the economic expansion
" The ," said Gus Faucher, chief economist at PNC Financial. "

big increase in jobs in June, with upward revisions to job growth in April and May, has alleviated
concerns in recent months about slowing job growth ," he added. Average hourly earnings rose by 4-cents in June to $26.25, meaning wages have risen 2.5% in the past year. This wage growth,

. Data continued to show strong hiring in sectors like professional

which fell slightly behind expectations, is being closely watched by the Fed as a proxy on inflation

services, home healthcare, finance, and food services, which have carried the recovery and put
unemployment solidly below 5%. Other more cyclical parts of the U.S. economy are such as mining, construction and oilfield services

also showing hiring gains as commodity prices stabilize and manufacturing expands. Retail , a new trouble spot in the economy

added 24,500 jobs reversing months of net losses.

due to the rise of e-commerce, In Washington, policymakers may look to Friday's report as evidence there continues to be slack in the U.S. economy.

. Business friendly policies

The labor force participation rate was 62.7% and 1.6 million Americans were marginally attached to the workforce. There were also 5.3 million part-time workers, who would have preferred full-time work proposed

have been pitched as further bolstering overall employment

by the Trump administration, from tax cuts to deregulation and fiscal stimulus, . There were no major surprises in Friday's

the U.S. economy continues to be the ballast for predictions on an economic return to
bullish report. For now,

normalcy. "This June report, with positive revisions in April and May, keeps the Fed on its current path
for another rate hike in [the second half of 2017] and starting to slowly unwind the Fed’s $4.5 trillion balance sheet," said Phil Orlando, chief e quity strategist at Federated Investors. In Europe, Mario Draghi, head of the European Central Bank, is
offering signs of following in Yellen's footsteps as growth returns to the region. Some of the world's smartest investors are looking at current economic data as paradigm shift for markets. "We think that longer-term interest rates now pivot more off of international rate policy, such as
that stemming from the European Central Bank and the Bank of Japan, and not solely on what the Fed is doing," said BlackRock's Rieder. Ray Dalio, chief investment officer of the world's largest hedge fund Bridgewater Associates, believes it is "mission accomplished" for central bankers
like Yellen and Draghi who've overseen the near-decade-long move from crisis. "Generally speaking (depending on the country), it is appropriate for central banks to lessen the aggressiveness of their unconventional policies because these policies have successfully brought about beautiful

at this point of transition, we should savor this accomplishment and thank the policy makers
deleveragings. In my opinion,

who fought to bring about these policies . They had to fight hard to do it and have been more maligned than appreciated. Let’s thank them," Dalio said on LinkedIn on Thursday. Of the new paradigm, Dalio added:

For the last nine years, central banks drove interest rates to nil and pumped money into the system
creating favorable carries and abundant cash . These actions pushed up asset prices, drove nominal interest rates below nominal growth rates, pushed real interest rates on cash negative, and drove real bond

That era
yields down to near zero percent, which created beautiful deleveragings, brought about balance sheet repairs, and led to more conventional economic conditions in which credit growth and economic growth are growing in relatively good balance with debt growth.

is ending the directions of policy are reversing

. Central bankers have clearly and understandably told us that henceforth those flows from their punch bowls will be tapered rather than increased—i.e., that

so we are at a) the end of that nine-year era of continuous pressings down on interest rates and pushing out of money that
created the liquidity-fueled moves in the economies and markets, and b) the beginning of the late-cycle phase of the business/short-term debt cycle, in which central bankers try to tighten at paces that are exactly right in order to keep growth and inflation neither too hot nor too cold,
until they don’t get it right and we have our next downturn. Recognizing that, our responsibility now is to keep dancing but closer to the exit and with a sharp eye on the tea leaves.

Current job increases prove renewed economic momentum

Graham 7/07 Jed Graham writes about economic policy for Investor’s Business Daily and the author of
A Well-Tailored Safety Net. “Strong Job Growth Signals Economic Momentum; September Rate Hike In
Play”, Investor’s Business Daily, 7/07/17. Ghs-cw http://www.investors.com/news/economy/why-
fridays-jobs-report-wont-make-markets-happy/

The U.S. economy added 222,000 jobs in June, as the jobless rate ticked up to 4.4%, the Labor Department reported on
Friday, the latest sign of renewed economic momentum. Along with an upward revision of 47,000 to April and May payrolls, it now looks like
the apparent slowdown in hiring never happened. The average monthly job gain over the past three months is 194,000, after preliminary data last month showed payroll
growth had slowed to a near five-year low of 121,000. Headline wage figures were tame, but key details suggest solid income gains. Although the jobless rate edged higher from June's 16-year low, as more people joined the
workforce, the labor market momentum could add pressure on the Federal Reserve to raise rates again at its September meeting. The jobs data follow strong reports on manufacturing and the service sector from the Institute for

Supply Management "The rebound in payrolls strongly supports (the Fed) view that the soft-looking spring data were 'transitory,'" wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics. " If payroll
gains are sustained at anything like their June pace," Shepherdson says, the Fed has every reason to expect that
the jobless rate will keep moving lower and wage pressures will finally pick up. He thinks the Fed may be forced to hike in September.
For now, markets aren't buying it, with just 14% odds of a September hike, according to the CME Group FedWatch tool. Treasury yields, which have rallied strongly over the past week, oscillated up and down slightly after the jobs

The major averages recovered

report. The sudden surge in recent days has had less to do with the Fed than the European Central Bank's readiness to begin scaling back its bond-buying program.

some lost ground on the stock market today, with the Dow Jones industrial average and S&P 500 index up 0.2% and the
Nasdaq composite 0.5%. The S&P 500 is just above its 50-day moving average after closing below that key level on Thursday. The Labor Department said that
the hard-hit retail sector added 8,100 jobs in June, after a string of monthly losses. Meanwhile, Amazon (AMZN) continues to hire
apace, recently holding job fairs in Tacoma, Wash., Las Vegas, and Kansas City, Kan. Amazon also announced in April that it will hire 5,000 part-time customer-service reps to work out of their homes. McDonald's (MCD) recently
said the fast-food chain and its franchisees will add 250,000 workers this summer — more than a year ago. McDonald's announced a partnership with Snap (SNAP) to recruit via its Snapchat social media site. Snap will connect users

The Institute for Supply Management service-sector and manufacturing

to an online application if they click on a McDonald's recruitment ad.

surveys both pointed to strong employment gains in June. It's a different story for the auto industry, which has seen slumping car sales lately from Ford (F),
General Motors (GM) and others. Ford and General Motors have both announced layoffs recently. Overall, the manufacturing sector added 1,000 jobs last month. IBD'S TAKE: IBD changed its market outlook to "uptrend under
pressure" on Tuesday, June 27, a signal to investors to exercise extra caution in buying stocks and to take some money off the table to deploy when the turbulence subsides. Make sure to read IBD's The Big Picture each day to get
the latest on the market trend and what it means for your investments. The one notable weak spot in the report was wage growth. Hourly average wages rose 0.2% on the month, below the 0.3% expected, putting the annual gain

the report contained pretty good overall news about income growth. Factoring in hours
at a tepid 2.5%. Yet despite that dreary news on hourly pay,

worked and wage levels, average weekly pay rose 2.8% in June, matching the best total since July 2011. Aggregate pay, which also factors in employment

growth, rose 4.5% from a year ago, tied for the best result since January 2016. One oddity from the report was a 35,000 rise in local government employment. That may have partly largely
related to seasonal issues tied to the school calendar. The Fed still has two more jobs reports to sift through before the September 19-20 meeting. Small business hiring will be important to watch between now and then. The
Paychex/IHS Small Business Employment watch showed that hiring by small firms is now growing at the slowest pace since 2011 after a four-month deceleration. Meanwhile, the National Federation of Independent Business said
its survey showed that the percentage of firms reducing employment overtook the share increasing payrolls in June. "Small business owners seem to be in a holding pattern while they wait to see what Congress will do with taxes

Over time, that tightness — full

and health care," said NFIB President and CEO Juanita Duggan. Of those looking to hire, 85% said they had trouble finding qualified workers.

employment, as the Fed sees it — is expected to feed through to higher wage inflation, justifying less
accommodative monetary policy.
 interest rates stable

Federal Reserve staying away from Fiscal Stimulus now

Applebaum 5/24/17, Binyamin Appelbaum is a writer for The New York Times. March 24th 2017,
https://www.nytimes.com/2017/05/24/business/economy/fed-interest-rates-minutes.html?mcubz=0//

WASHINGTON — Federal Reserve Board officials said at a meeting early this month that they wanted to see evidence of
stronger economic growth before continuing to increase the Fed’s benchmark interest rate, according to
minutes of the meeting published on Wednesday. But the account presented in the minutes did not shake a widespread conviction that the Fed will

raise rates at its next meeting, which is scheduled for mid-June. Analysts said recent economic data was
strong enough to reassure the Fed, and investors increased their bets on a June rate hike. Gus Faucher, chief
economist at PNC, noted that shortly after the May meeting, the government estimated that the economy had added 211,000 jobs in April and that the
unemployment rate had fallen to 4.4 percent. “That’s the kind of stuff they were looking for, that they were expecting, and they just wanted to see come to
fruition,” Mr. Faucher said, “and I think it did, and so now they can go ahead” with a rate hike at the June meeting. Investors also learned for the first time on
Wednesday how the central bank is likely to reduce its holdings of more than $4 trillion in Treasury and mortgage-backed securities. A reduction of those holdings
would be the last step in the Fed’s retreat from its economic stimulus campaign. The
account of the May meeting reiterated that the
Fed would probably begin taking that step later this year. The Fed raised its benchmark rate in March to
a range between 0.75 percent and 1 percent, the third increase since the 2008 financial crisis. Rates
remain at a low level that supports economic growth by encouraging borrowing and risk-taking. The Fed is
gradually reducing those incentives by raising rates because it believes the economy is expanding at roughly the maximum sustainable pace. Although the Fed left
the rate unchanged this month, its statement after the meeting was widely interpreted as setting the stage for a rate increase because of its reference to slow
growth in the first quarter as “likely to be transitory.” The account of the May meeting, published by the Fed after a standard three-week delay, generally reflects
that optimism, describing most officials as ready to raise rates “soon,” provided the economy shows signs of the expected rebound. But the minutes also offered an
unexpected note of caution. “Members generally judged that it would be
prudent to await additional evidence indicating that the
recent slowdown in the pace of economic activity had been transitory before taking another step in
removing accommodation,” the account said, referring to the members of the Federal Open Market Committee, which determines monetary policy.
The account noted that job growth remained strong, and it described anecdotal evidence of a tightening
labor market, including companies’ raising wages and investing in training programs. It also noted that
the global economy, a drag on domestic growth in recent years, was showing signs of renewed strength.
The continuing decline in the unemployment rate is likely to weigh in favor of raising rates more quickly. The May minutes also noted that financial conditions had
loosened since the last rate hike. Borrowing costs have declined since March, and the dollar has weakened, the opposite of what the Fed had intended. Before the
release of the minutes, the chances of a June rate increase stood at 78.5 percent, according to a measure derived from asset prices by CME Group; by the end of
Wednesday, the chances were 83.1 percent. The account of the meeting also noted that the government had regularly reported slow winter growth in recent years,
and there was some evidence to suggest that the problem was not the economy but the methodology. But inflation
has increased more slowly
than the Fed had hoped it would at the beginning of the year, remaining below the 2 percent annual
pace that policy makers regard as healthy. The share of Americans who are working also remains significantly lower than before the
recession. Some Fed officials see the combination as evidence that the economy is still benefiting from low interest rates. Robert S. Kaplan, president of the Federal
Reserve Bank of Dallas, said Monday that he still expected the Fed to raise rates twice more this year. “I intend to be patient in critically assessing upcoming data to
evaluate whether we are continuing to make progress in reaching our inflation objective,” Mr. Kaplan wrote in a paper on current policy. The plan to reduce the
Fed’s asset holdings, which help to hold down borrowing costs, was presented by Fed staff members, and the minutes said it was viewed favorably by “nearly all” of
the board’s policy makers. The Fed plans to reduce its holdings without selling securities. Instead, as securities mature, the Fed will keep the proceeds rather than
following its current policy of investing in new securities. Under the proposed plan, the
Fed would begin by keeping a fixed amount of
the monthly proceeds and then increase the cap every three months until proceeds were no longer
being reinvested. The schedule, including the caps, would be detailed in advance.

Federal interest rate growth slow now--- High growth worsens the economy, messes up
manufacturing sector and increase inflation.
Mallaby June 2017, Sebastian Mallaby is the Paul A. Volcker Senior Fellow for International Economics at the Council on
Foreign Relations and the author of The Man Who Knew: The Life and Times of Alan Greenspan., JUNE 2017,
https://www.theatlantic.com/magazine/archive/2017/06/will-trump-destroy-the-dollar/524520//2
They are judged in large part according to how wages, jobs, and retirement nest eggs perform on their watch. Yet they have little control over that performance.
Growth, ultimately, is determined by long-term (and in some cases mysterious) factors: demographic trends, business innovation and technological progress, the
education level of the workforce. Under the right circumstances, some measures—tax cuts, government spending—can boost growth, at least for a while. But for
the most part, presidents cannot quickly influence the deeper elements that govern growth. There is, however, one lever that seems temptingly close to their grasp.
If the Fed can be persuaded to hold down interest rates, cheap loans can boost home purchases, car purchases, and business’s spending on factories and machines,
pumping up demand and juicing the economy. The Fed’s power is especially tantalizing because of the technocratic tidiness of its decisions—a single committee of
experts sets the short-term interest rate as it pleases, with no need to run the gantlet of lobbyists, advocates, and congressional committees. In the long run, of
course, lower interest rates are not a magic elixir. The extra demand may run ahead of the economy’s ability to supply things, causing scarcity that leads buyers to
bid up prices, thus boosting inflation; and inflation, once permitted, can be tamed only by means of painful job losses. But in the short run, a Fed-created sugar high
can transform a president’s fortunes. Now,
after years of rock-bottom interest rates following the 2008 crisis, the
possibility of hiring bottlenecks and price pressures has reappeared on the horizon. Having recovered painfully and slowly
from the crash, the U.S. economy is expected to grow by more than 2 percent this year—not very fast, but faster than the

roughly 1.8 percent that the Fed considers to be sustainable without increasing the rate of inflation. The labor market,
after all, is tight: Headline unemployment stands at 4.5 percent, considerably below its average of 6.2 percent since the start of 2000. The broader measure of
unemployment—including workers who have given up looking for jobs and part-time workers who’d prefer to work full-time—tells a similar story. With
workers now relatively scarce, companies must offer more to attract them. Higher wages, when matched by
higher productivity, are a good thing. But if wages rise merely because of worker scarcity, companies may have

to pass on the costs to consumers, stoking inflation. Given these facts, the Fed has little choice but to hike the short-term interest rate
from its current low level—if inflation is allowed to accelerate too much, workers will pay a terrible price later. Sure enough, the Fed has already

started down that path, lifting borrowing costs in December and then again in March; two more hikes are expected before
2017 is over. In a normal political climate, this might feel routine. After all, the Fed is still paying people to borrow, in the sense
that its lending rate is negative after accounting for inflation. But today’s political climate is far from normal. If Trump believes
even part of his own rhetoric, his reaction to Fed tightening could well become aggressive. Trump officially maintains that the economy can grow at an annual rate
of 4 percent. Some of his advisers have tried to dial back this expectation: Mnuchin has said that growth of 3 percent is achievable. But even that is way above the
Fed’s 1.8 percent estimate of sustainable growth. If the Fed, acting on its judgment of the safe speed limit, continues to raise interest rates, it will be announcing
that the administration’s growth ambitions are delusional. The president, for his part, can be expected to believe that the monetary gurus are conspiring to frustrate
his promises to voters. Higher
interest rates do not merely dampen growth; they do so through specific channels. Interest-rate-
sensitive parts of the economy get squeezed first; the prime example is real estate, which may not be welcome news to this particular
president. The tradable parts of the economy also suffer, because higher interest rates attract capital from

abroad, putting upward pressure on the dollar and hence making it more expensive for foreigners to buy
American goods. That will appeal even less to Trump, because The tradable parts of the economy also suffer , because higher
interest rates attract capital from abroad, putting upward pressure on the dollar and hence making it more expensive for foreigners to buy American goods. That
will appeal even less to Trump, because the most tradable sector of all is manufacturing. During his campaign, Trump pledged to protect blue-collar workers in the
industrial swing states. If the Fed sustains a strong dollar, precisely those workers will suffer. Trump likewise pledged to cut the trade deficit. A strong dollar may
cause its expansion. Even Trump’s election promises about immigration may be undone. The stronger the dollar, the greater the incentive for a Mexican worker to
earn wages in the U.S. and send money home to relatives. In
sum, the White House and the Fed are likely to find themselves
at loggerheads. The question is how the parties to this conflict will choose to behave. Trump may indulge his
belligerent instincts, or he may listen to his pragmatic counselors. The Fed, for its part, may cave in to pressure, as it did under Martin and then Burns. Or it may
resist, following the Greenspan model. As a street-fighting defender of the Fed’s independence, Greenspan was a master. During his showdown with George H. W.
Bush’s administration, the Treasury tried to get a bill through Congress that would have curbed the Fed’s regulatory power; Greenspan used his relationships with
lawmakers to bury the initiative. When Bush’s lieutenants came after him, whispering slanders to the press, they got a taste of their own medicine: Greenspan was
on friendly terms with journalists, and he could plant stories better than anyone. So skillfully did Greenspan manage his reputation that he proved impossible to
unseat. The Bush team reluctantly appointed him to a second term, fearing that removing him might shake Wall Street’s confidence. Janet Yellen will struggle to
replicate some parts of the Greenspan model. Whereas Greenspan had strong ties to both Republicans and Democrats, Yellen lacks Republican allies—a
vulnerability, given the makeup of today’s Congress. Whereas Greenspan operated in pre-Twitter Washington, Yellen faces a vicious media free-for-all. Yet there is
one big historical lesson that Yellen can apply. And she holds an ace, if she is willing to use it. The lesson is that it pays to manage the Fed’s board ruthlessly. In the
1980s, Ronald Reagan’s team undermined Greenspan’s predecessor, the redoubtable Paul A. Volcker, by appointing administration loyalists as Fed governors.
Toward the end of his tenure, Volcker lost votes on three occasions; with at least four of the seven governors on the Fed’s board prepared to gang up against him,
he no longer fully controlled his own institution. Greenspan applied the dark arts of bureaucratic politics to avoid this fate. When Clinton appointed a potential
challenger as Fed vice chairman, Greenspan sidelined him so firmly that he eventually left (some possibly not-coincidental press criticism may have encouraged his
departure). When Clinton tried to appoint a troublemaker in his stead, Greenspan used his Senate connections to block confirmation. Since Greenspan’s retirement
in 2006, fashion has swung against his domineering style; Fed governors feel free to express their views in public, and the power of the interest-rate-setting Federal
Open Market Committee is less concentrated in the chair. But now, with the Fed’s independence in peril, the pendulum must swing back. Three of the seven
governorships currently stand empty. Trump will get the Fed he wants unless Yellen actively resists. The ace that Yellen holds is that, although her term as chair
expires in February, her appointment as a governor runs to 2024. Fed chairs usually resign from the board when their term expires, but they are not obligated to do
so. If Trump refuses to keep her in the driver’s seat, she could remain on the Fed’s board and do some vigorous back-seat driving. The last chair to stay on—
Marriner S. Eccles, in 1948—proved devastatingly effective. By force of character and intellect, he remained an influential voice, achieving his full revenge in 1951,
when he helped lead a Fed revolt against the president who had demoted him. If, despite recent conciliatory signals, Trump were to drop Chair Yellen, a back-seat-
driving Governor Yellen could be formidable. Her public pronouncements might sway markets more than those of the new chair; she could lead a posse
within the interest-rate-setting committee, and her backers might include the heads of the regional
Feds, whose appointments are largely free of presidential influence. The mere prospect that Yellen might do this could be
enough to cause the administration to back down. The Fed’s independence is not enshrined in law, but a determined central banker with the stomach for a fight can
find ways to sustain it.

The Federal Reserve will maintain slow interest growth

Wearden and Fletcher 6-14-2017, Guardian, “US Federal Reserve raises interest rates and says recovery is on track - as
it happened”, https://www.theguardian.com/business/live/2017/jun/14/pound-uk-unemployment-real-wages-us-interest-rate-
decision-business-live//

That’s all for today. Here’s a quick round-up.The US Federal Reserve has pressed on with the normalisation of interest rate
policy, by hiking borrowing costs for the second time this year. The Fed funds rate is now 1% to 1.25%. The Fed is also broadly sticking to its
previous guidance for interest rate rises over the next couple of years. Chair Janet Yellen tried to cool speculation that recent weak inflation might make the central bank more dovish. The Fed remains

confident that the US economy is recovering, saying: The Committee continues to expect that, with gradual
adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and
labor market conditions will strengthen somewhat further. Economists said the move shows that the Fed believes the recovery is on track. Ian Kernohan, senior
economist at Royal London Asset Management, says: “The Fed made little changes in the language or projections for further interest

rate hikes. They acknowledged that inflation was running below target, but also that job gains have been solid. We expect another rate hike and some balance sheet normalisation before the end of the year.” In another
sign of confidence, the Fed outlined its plans to start selling off some of the assets bought during its stimulus programme. During a press conference, Janet Yellen said she’d not discussed her future with president Trump. She
remains committed to serving her full term (to February 2018). Wall Street took the news in its stride, with the Dow Jones ending the day at a new high thanks to rising financial stocks. The US dollar also strengthened during
Yellen’s press conference, as traders anticipated further rate hikes down the line. Scott Minerd of investment firm Guggenheim Partners sums it up: That’s all for tonight. Thanks for reading and commenting. GW

Fed’s raising interest rates slowly in SQ- means econ strong now
Rushe 6/14 Dominic Rushe is US business editor for the Guardian. He was part of the Guardian team
that won the 2014 Pulitzer prize for public service journalism. “Fed raises interest rates again in further
sign of confidence in US economy”, The Guardian, 6/14/17. Ghs-cw
https://www.theguardian.com/business/2017/jun/14/federal-reserve-interest-rates-increase-us-
economy

The US Federal Reserve announced it was raising short-term interest rates by a quarter percentage point
on Wednesday as the central bank continued to unwind the huge economic stimulus plan brought in after the great recession. After a two-day meeting, the Fed

raised the target range of the federal funds rate from 1% to 1.25%, the third consecutive quarterly
increase. The move follows a record run of jobs growth in the US that has driven the unemployment rate down to its lowest level in 16 years.
“Information received since the federal open market committee met in May indicates that the labor market has continued

to strengthen and that economic activity has been rising moderately so far this year,” the Fed said in a statement.
The committee signaled that more rises were on the horizon and that it “expects that economic
conditions will evolve in a manner that will warrant gradual increases in the federal funds rate”. One member
of the Fed’s committee objected to the rate rise. Neel Kashkari, chair of the Federal Reserve Bank of Minneapolis, wanted to maintain the existing target range for
the federal funds rate. Kashkari, who has been tipped as a potential successor to the current chair, Janet Yellen, has consistently warned against raising rates,
fearing that it might harm the recovery. “We are still coming up short on our inflation target, and the job market continues to strengthen, suggesting that slack
remains,” Kashkari wrote after objecting to a rate rise earlier this year. The
Fed also put out a statement about its plans to unwind
its gigantic bond portfolio, bought as part of its bid to restart the US economy after the 2007-09
recession. In the wake of that recession, the Fed went on an enormous spending spree, buying bonds in order to keep interest rates down and encourage
spending to kickstart the economy. After three rounds of so-called quantitative easing, the Fed acquired $4.5tn worth of bonds, including $1.8tn in mortgage
securities. The committee said it planned to “gradually reduce the Federal Reserve’s securities holdings”. In a press conference, Yellen said the Fed intended the sale
to be a quiet process that her colleague Patrick Harker, the Philadelphia Fed president, joked should be like “watching paint dry”.
The latest move by
the Fed shows that the central bank continues to believe that the US economy is strengthening.
Economic activity has “been rising moderately so far this year”, household spending has “picked up” and and hiring remains
“solid”, the Fed said. The Fed’s meeting was the first since May’s job report was released. Continued hiring brought the unemployment rate down to a level unseen
since 2001 and it was the 80th consecutive month of jobs growth. Hiring has, however, “moderated”, as the Fed pointed out, and Yellen has expressed concern
about the high number of people still in part-time work who are looking for full-time employment. Greg McBride, Bankrate’s chief financial analyst, said: “ As
expected, the Federal Reserve followed through with an interest rate hike – the third in the past six months and fourth in
the past 18 months. “But this could be the last hike for a while. Until we see a reversal of the recent weakness in economic growth, retail sales and inflation, the Fed
will be on the sidelines.”
 spending low now

The FG will decrease spending now--- Key to a well sustained economy

Edwards 6-23-2017, Chris Edwards is a Economic associate at Pace Harmon, Cato Institute, Penn State
UniversityBachelor of Science (B.S.), Economics "A Plan to Cut Federal Government Spending,"
Downsizing the Federal Government, https://www.downsizinggovernment.org/plan-to-cut-federal-
spending//

Federal spending cuts would spur economic growth by shifting resources from lower-valued government
activities to higher-valued private ones. Cuts would expand freedom by giving people more control over their lives and reducing the
regulations that come with spending programs. The federal government has expanded into many areas that should be

left to state and local governments, businesses, charities, and individuals. That expansion is sucking the
life out of the private economy and creating a top-down bureaucratic society that is alien to American
traditions. So cutting federal spending would enhance civil liberties by dispersing power from
Washington. The Congressional Budget Office (CBO) projects that federal spending will rise from 20.7 percent of gross domestic product (GDP) in 2017 to
23.4 percent by 2027 under current law.1 Over the same period, tax revenues are expected to rise much more slowly, reaching 18.4 percent of GDP by 2027. As a
Policymakers should change course. They should cut
consequence, fast-growing spending will produce increasingly large deficits.

spending and eliminate deficits. The plan presented here would balance the budget within a decade and generate growing surpluses after that.
Spending would be reduced to 18.0 percent of GDP by 2027, or almost one-quarter less than the CBO projection for that year. Some economists claim that cutting
government spending would hurt the economy, but that notion is based on faulty Keynesian theories. In fact, spending
cuts would shift
resources from often mismanaged and damaging government programs to more productive private
activities, thus increasing overall GDP. Markets have mechanisms to allocate resources to high-value activities, but the government has no
such capabilities.2 It is true that private businesses make many mistakes, but entrepreneurs and competition are constantly fixing them. By contrast, federal
agencies follow failed and obsolete approaches decade after decade.3 So moving resources out of the government would be a net
gain for the economy. Consider Canada's experience. In the mid-1990s, the federal government faced a debt crisis caused by overspending, which is
similar to America's current situation. But the Canadian government reversed course and slashed spending from 23 percent of GDP in 1993, to 17 percent by 2000,
to just 15 percent today.4 The Canadian economy did not sink into a recession from the cuts as Keynesians would have expected, but instead grew strongly during
the 1990s and 2000s. Thus policymakers should not think of spending cuts as a necessary evil to reduce deficits. Rather, the U.S.
government's fiscal
mess is an opportunity to make reforms that would spur growth and expand individual freedom. The plan
proposed here includes a menu of spending reforms for policymakers to consider. These and other reforms are discussed further at
www.DownsizingGovernment.org. Spending Cut Overview This section describes how cutting spending would eliminate the federal deficit within a decade and
generate growing surpluses after that. The starting point for the plan is the CBO's baseline projection from January 2017.5 Figure 1 shows CBO projections for
revenues (black line) and spending (red line) as a percent of GDP. The gap between the two lines is the federal deficit, which is expected to grow steadily without
reforms. › The blue line shows projected spending under the reform plan proposed here. Under the plan, spending would decline from 20.7 percent of GDP today to
18.0 percent by 2027. The deficit would be eliminated by 2024 and growing surpluses would be generated after that. Under the plan, spending cuts would be
phased in over 10 years and would total $1.5 trillion annually by 2027, including about $225 billion in reduced interest costs that year.6 Falling spending and deficits
would allow room for tax reforms. One reform would be to repeal the tax increases under the 2010 Affordable Care Act.7 Another reform would be to slash the
federal corporate tax rate from 35 percent to 15 percent, which would match the reformed Canadian rate. Such a cut would spur stronger economic growth and
the best fiscal approach would be to cut spending and reform the most
lose little revenue over the long term.8 In sum,

damaging parts of the tax code. That would end the harmful build-up of debt, expand personal freedom, and generate benefits for all Americans
from a growing economy. Spending Cut Details Tables 1 and 2 below list proposed cuts to reduce federal spending to 18.0 percent of GDP by 2027. Table 1 shows
the cuts for health care and Social Security. These reforms would be implemented right away, but the value of savings would grow larger over time. The figures
shown are the estimated annual savings by 2027, generally based on CBO projections.9 Table 2 shows cuts to discretionary programs and entitlements other than
health care and Social Security.10 These cuts would be valued at $499 billion in 2017, but the plan assumes that they would be phased in one-tenth each year over
the next decade.11 The reforms listed in Tables 1 and 2 are deeper than the savings from "duplication" and "waste" often discussed by federal policymakers. We
should cut hundreds of billions of dollars of "meat" from federal departments, not just the obvious "fat." If the activities cut are useful to society, then state
governments or private groups should fund them, and those entities would be more efficient at doing so. The proposed cuts are illustrative of how to start getting
The important
the federal budget under control. Further reforms are needed in addition to these cuts, such as major structural changes to Medicare.

thing is to start cutting as soon as possible because the longer we wait, the deeper will be the debt hole
that is dug.
Federal funding for education low now- it has dropped since 2011
Bidwell 15 Allie Bidwell is an education reporter for U.S. News & World Report. “Report: Federal
Education Funding Plummeting”, US News, 6/24/15. Ghs-cw https://www.usnews.com/news/blogs/data-
mine/2015/06/24/report-federal-education-funding-cut-by-5-times-more-than-all-spending

Over the last five years, Congress has cut federal funding for K-12 education by nearly 20 percent, about
five times more than overall spending cuts, according to a new report. In an analysis of the federal budget
released Wednesday, the bipartisan advocacy organization First Focus found federal spending that affects
children – including funding aimed at preventing child abuse and neglect, for housing allocated to
children, and for programs targeted toward homeless youths, as well as education funding – has dropped
9.4 percent since 2011, when federal stimulus funds ran out. Overall federal spending dropped 4 percent
in the same time. The decreases have been compounded by across-the-board sequestration cuts, and
education was hit the hardest of any children's investment, the report says. "When families face tough
budget choices, parents' first priority is to protect the kids," First Focus President Bruce Lesley said in a
statement. "But Congress is actually cutting funding for children more than twice as fast as spending
overall." Although some years saw nominal increases, funding levels for education dropped from year to
year after adjusting for inflation in most cases. Overall, cuts to education spending – including to
programs like Title I grants (6.8 percent), Impact Aid for districts housed on American Indian or federal
lands (5.3 percent), the Advanced Placement program (38.4 percent) and civic education (100 percent) –
resulted in an overall 19.8 percent decrease between 2011 and 2015. Congress has cut millions of dollars
for Title I grants to school districts serving low-income students. And after hundreds of millions of dollars
were cut from several education programs, schools suffered, according to the report. "Districts were
forced to lay off teachers and support staff, increase class sizes, and cut services like tutoring, athletics
and before- and after-school programs," the report says. "Some school districts even contemplated
limiting their school bus routes." Education spending as a percentage of all government spending has also
consistently decreased over the last five years, down to just over 1 percent in 2015 from 1.27 percent in
2011. The report additionally compares how President Barack Obama's 2016 budget proposal stacks up
against previous years. Overall, there would be a slight increase to many programs that have seen
significant cuts or that have been entirely defunded. At the same time, the House and Senate both have
appropriations bills in the works that make further education-related cuts, such as to the Obama
administration's Investment in Innovation Fund, or i3. "From schools to hunger to homelessness,
Congress is cutting investments in nearly every aspect of children's lives," Lesley said. "If Congress is going
to turn this around next year, they've got to raise the budget caps for kids, not just weapons systems."
 debt – brink
Debt is on the brink- recent report- any more debt breaks the safety net
Madsen 7/1 Sue Lani Madsen writes for the Spokesman-Review. “Sue Lani Madsen: The national debt
has a chokehold on freedom”, The Spokesman-Review, 7/1/17. Ghs-cw
http://www.spokesman.com/stories/2017/jul/01/sue-lani-madsen-the-national-debt-has-a-chokehold-/

Legislative sources Friday morning reported the $1.1 billion budget

We have a state budget, and if the Legislature does it right, everyone will be a little bit unhappy.

stabilization account is untouched, but this year’s $400 million in extraordinary revenue growth will be used to
increase education spending instead of going into the rainy day fund per the normal rules. Tax system changes will
result in higher taxes for some, lower for others and more for the state. And there will still be a few sweeps of excess funds in what are supposed to be dedicated fund accounts, but with less
impact than previous years. Budget season reminds me of a movie catchphrase from the original version of “Fun with Dick and Jane,” starring George Segal and Jane Fonda. Upper-class father, mother, son and daughter are seated
at the dinner table. The maid silently brings in the food. Dick has lost his cushy vice president job at an aerospace corporation and breaks the news to the family as the plates are delivered. He announces a few economies. No more
French wine, no more ski lessons, they won’t heat the swimming pool. The kids groan. The maid snorts. Jane spritely says, “I’ll drop the Book of the Month Club.” The camera cuts to the kitchen, where the maid pragmatically

We
thumbs through the help wanted ads. Dropping ski lessons and subscriptions isn’t going to cut it. Dick and Jane continue to spend like they have it. Dick and Jane eventually decide bank robbery is a viable solution.

approach state and federal budgeting like Dick and Jane. We keep spending money when we don’t have
it. And that’s a collective we, because we’re the ones who put the pressure on our elected officials to protect our personal Book of the Month Club. The U.S. Congress has treated the
Social Security Trust Fund like an easily robbed bank since it began in 1935. Works for awhile, but
eventually there are consequences. According to the National Debt Clock, every citizen of the United States is carrying $61,364 in debt as of June 30. Every citizen of Washington carries an
additional $12,467 in state debt for unfunded liabilities, the IOUs written to pensions and other dedicated accounts. If you’re a classic family of four, it’s over a quarter-million dollars. If we stopped accumulating debt today, that’s

Reagan said, “We don’t have a trillion-dollar debt

still a hefty extra mortgage payment worth of debt for every family for the next 30 years. In the 1980s, President Ronal

because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.” Thirty
years later, we’re approaching $20 trillion in debt. The last time the national debt went down was under Presidents Calvin Coolidge and Herbert Hoover. Under Reagan,
Social Security payroll taxes went up to pre-fund the baby boomer bulge, but the borrowing kept apace through the Clinton and Bush years. The debt inevitably accelerated its growth under President Barack Obama because

We’re continuing to run up the credit card while making

nothing has changed except raised expectations for more federal health care spending.

minimum payments. According to the Congressional Budget Office, the difference in economic impact between closing the gap with higher taxes or reduced spending are less significant than the
unsustainable trajectory of federal debt growing faster than the economy. The CBO projected in its 2007 report that by 2029 our total revenues collected will only

cover the interest. We’ll be totally debt financing our government. That’s not sustainable. Fix the Debt, a
bipartisan group of former legislators, governors and pragmatists, is blunt in their warnings: If we don’t
control growing health care costs, including Medicare and Medicaid, we will have less to spend on investments in infrastructure and research for the next generation, and a
broken safety net. Every graduate facing a mountain of student loan debt understands how debt diminishes freedom. President Thomas Jefferson said, “The principle of spending money to be paid by posterity,
under the name of funding, is but swindling futurity on a large scale.” If we truly want to live the pursuit of happiness on this Independence

Day, we need to fix the debt.

 school funding low
The Administration is cutting public school funding to decrease federal intervention
Brown and Douglas-Gabriel 17 Emma Brown is Danielle Douglas-Gabriel is “Trump seeks to slash
Education Department but make big push for school choice”, The Washington Post, 3/16/17. Ghs-cw
https://www.washingtonpost.com/local/education/trump-seeks-to-slash-education-department-but-
make-big-push-for-school-choice/2017/03/15/63b8b6f8-09a1-11e7-b77c-
0047d15a24e0_story.html?utm_term=.4c95bd9270ed

The Trump administration is seeking to cut $9.2 billion — or 13.5 percent — from the Education Department’s budget, a
dramatic downsizing that would reduce or eliminate grants for teacher training, after-school programs
and aid to -low-income and first-generation college students. Along with the cuts, among the steepest the agency has ever sustained,
the administration is also proposing to shift $1.4 billion toward one of President Trump’s key priorities: Expanding charter
schools, private-school vouchers and other alternatives to traditional public schools. His $59 billion
education budget for 2018 would include an unprecedented federal investment in such “school choice” initiatives, signaling a push to reshape K-12 education in
America. The president is proposing a $168 million increase for charter schools — 50 percent above the current level — and a new

$250 million private-school choice program, which would probably provide vouchers for families to use at private or parochial
schools. Vouchers are one of the most polarizing issues in education, drawing fierce resistance from Democrats and some Republicans, particularly those in rural states. Trump also wants an

additional $1 billion for Title I, a $15 billion grant program for schools with high concentrations of poor children. The new funds would be used to
encourage districts to adopt a controversial form of choice: Allowing local, state and federal funds to
follow children to whichever public school they choose. That policy, known as “portability,” was rejected in the Republican-
led Senate during deliberations over the main K-12 education law in 2015. Many Democrats see portability as the first step toward federal vouchers for private

schools and argue that it would siphon dollars from schools with high poverty and profound needs to those in more affluent
neighborhoods. The slim budget summary released Thursday frames the new spending as the first step toward meeting Trump’s campaign pledge to invest $20 billion in school-choice initiatives. The document
makes no mention of another policy Trump is expected to promote through a tax bill: a new tax credit for donations to private-school scholarships. The budget summary also is silent on the department’s Office for Civil Rights, which
many in the civil rights community fear will be targeted for deep cuts. A host of programs aimed at -low-income students are slated for cuts. Federal work-study funds that help students work their way through college would be

The Federal
reduced “significantly.” The proposal also calls for nearly $200 million in cuts to federal TRIO and Gear Up programs, which help disadvantaged students in middle and high schools prepare for college.

Supplemental Educational Opportunity Grant, a $732 million program that provided aid to 1.6 million students in the 2014-15 academic year, is also on the
chopping block. Rather than pour those savings into Pell Grants — which the document describes as a better way to deliver need-based aid — the
budget maintains the current funding level for Pell grants and calls for the “cancellation” of $3.9 billion in Pell
reserves, money that lawmakers on both sides of the aisle had hoped would be used to help students take summer classes. The department would also eliminate
$2.4 billion in grants to states for preparing and training teachers and school leaders, along with
$1.2 billion in funding for after-school and summer enrichment programs. In addition, it would shrink or kill 20
programs the administration deemed duplicative or outside the scope of the agency. They include $43 million in grants to
colleges for teacher preparation and $66 million in “impact aid” to offset tax revenue losses that communities face when
they have federal property within their bounds. . There would be no significant change to one of the department’s largest outlays, a $13 billion program that provides money to educate students with disabilities. Advocates and some
key lawmakers have long sought to increase that aid. Congress has promised for decades to give states 40 percent of the cost of special education, but has never come close to paying that much.

DeVos and Trump are undermining federal funding for schools

Weingarten 17 Randi Weingarten is president of the American Federation of Teachers, a member of the
AFL-CIO and the former president of the United Federation of Teachers. “AFT President: Betsy DeVos and
Donald Trump Are Dismantling Public Education”, Time, 5/3/17. Ghs-cw
http://time.com/4765410/donald-trump-betsy-devos-atf-public-education/

Donald Trump may say teachers are important, but he spent his first 100 days undermining the schools most educators
work in —America’s public schools. One of President Trump’s first acts was to appoint the most anti-public education
person ever to lead the Department of Education. Betsy DeVos has called public schools a “dead end” and bankrolled a private school voucher measure in
Michigan that the public defeated by a two-to-one ratio. When that failed, she spent millions electing legislators who then did her

bidding slashing public school budgets and spreading unaccountable for-profit charters across the state. The result? Nearly half of
Michigan’s charter schools rank in the bottom of U.S. schools, and Michigan dropped from 28th to 41st in
reading and from 27th to 42nd in math compared with other states. Now DeVos is spreading this agenda
across the country with Trump and Vice President Mike Pence’s blessing. They’ve proposed a budget that takes a meat cleaver to

public education and programs that work for kids and families. After-school and summer programs —
gone. Funding for community schools that provide social, emotional, health and academic programs to
kids — gone. Investments to keep class sizes low and provide teachers with the training and support they
need to improve their craft — gone. Their budget cuts financial aid for low-income college students grappling with student debt at the same time
the Trump administration is making it easier for private loan servicers to prey on students and families. The Trump/DeVos budget funnels more than $1 billion to new
voucher and market strategies even though study after study concludes those strategies have hurt kids. Recent studies of voucher programs in Ohio and Washington,
D.C., show students in these programs did worse than those in traditional public schools. Further, private voucher schools take money away from neighborhood public
schools, lack the same accountability that public schools have, fail to protect kids from discrimination, and increase segregation. It’s dangerous in education when the
facts don’t matter to people. But it doesn’t stop there. Schools must be safe and welcoming places for all children, and that’s a belief shared both by parents who
send their kids to voucher schools and those who send their kids to public schools. But Trump and DeVos have acted to undermine the rights of kids
who look or feel different, and to cut funding for school health and safety programs.

In SQ, big K-12 education programs would be cut

Kamenetz 17 Anya Kamanetz is NPR's lead education blogger and the author of several books about the
future of education, including Generation Debt, Edupunks, Edupreneurs, and the Coming Transformation
of Higher Education, and The Test. “President Trump's Budget Proposal Calls For Deep Cuts To Education”,
NPR, 5/22/17. Ghs-cw http://www.npr.org/sections/ed/2017/05/22/529534031/president-trumps-
budget-proposal-calls-for-deep-cuts-to-education

President Trump's full budget proposal for fiscal year 2018, to be released Tuesday, calls for a $9.2 billion, or 13.5 percent,
spending cut to education. The cuts would be spread across K-12 and aid to higher education, according to documents released by the White House. None of this can be finalized without Congress. And
the political track record for Presidents who want to reduce education funding is not promising, even in a
far less poisoned atmosphere than the one that hovers over Washington right now. Student loans This proposal
calls for big changes to federal student aid: The federal government would stop subsidizing the interest on student loans, for a cut of $1 billion in the next fiscal year. This would add
thousands of dollars to the cost of college, primarily for low-income graduates. Simplifying student loan repayment plans — a proposal that enjoys broad, bipartisan support. Currently, borrowers have a dizzying array of options:

standard repayment (a 10-year term), graduated, extended, pay-as-you-earn, income-based, income-contingent and public service loan forgiveness. Trump's budget would create just one
repayment plan that caps monthly payments at 12.5 percent of discretionary income. For undergraduate borrowers, the balance would be forgiven after 15 years. In the process of that simplification, the budget
would phase out the program known as public service loan forgiveness, which erases student loans after 10 years of employment for the government or a qualifying nonprofit. Almost half a million people are enrolled in this program.
Those with graduate, not bachelor's, degrees, have the largest balances, such as teachers, doctors and lawyers. It's not yet clear whether the program would be sunset or canceled immediately. The first group of participants was set
to have their loans forgiven this coming October. Another proposal in this budget with broad support: making Pell Grants, which provide tuition aid for low-income students, available year-round. Currently you can only get one in the
fall and one in the spring. Lauren Asher is a college affordability advocate with the Institute for College Access and Success. That group has supported simplifying student loan repayment. However, she says, all told, this budget
amounts to, "multiple cuts that will exacerbate student debt by increasing the need to borrow, and increase the cost of repayment for many but not all students." Medicaid This budget calls for major cuts to Medicaid. This would
affect public schools and students in several ways. For both special-needs students, as well as millions of poor students, public schools provide services, from vision screening to speech therapy, to the tune of $4 billion in
reimbursements a year, or 1 percent of all Medicaid dollars. "It does represent quite a bit of money for schools and it's significant for them in terms of what they're able to use it for," says Jessica Schubel of the left-leaning Center on

Budget and Policy Priorities. School choice Title I is the biggest K-12 federal education program. It supports high-poverty
schools. Under Trump's budget, regular Title I funding would be flat. And $1 billion more would be
dedicated to a new grant program for states that allow poor students to leave neighborhood schools for
other public schools, and take that extra money with them. This concept is known as "portability," or as it's
sometimes known, the "backpack of cash" idea. It's controversial, because in practice it means redistributing funds

from poorer schools and potentially poorer districts to richer ones. In addition, $250 million would go to create vouchers for private schools, and $167
million for charter schools. The administration is also expected to unveil — outside this budget process — a tax credit scholarship program (sometimes called neo-vouchers), as part of tax reform. Cuts Some of the
biggest axes would fall on a $2.3 billion program for teacher training and class-size reduction, and a $1.2
billion after-school program, which serves nearly 2 million children, many of them poor. A $190 million literacy program would also be cut.

Education funding low now- Recent cut to education budget

Malkus 17 Nat Malkus is a research fellow in education policy studies at the American Enterprise
Institute (AEI), where he specializes in K–12 education. “Trump’s education budget has priorities, but not
a plan”, AEI, 5/24/17. Ghs-cw http://www.aei.org/publication/trumps-education-budget-has-priorities-
but-not-a-plan/

On Tuesday, the Trump administration released its 2018 budget. Those hoping for a clearer picture of the
administration’s plans for K-12 education were likely disappointed, as little changed between the “skinny budget” and the longer version (on the latter,
you can find a summary here and details here). Congress is likely to ignore much of the budget, but it is worth reviewing because it’s an opportunity for the administration to flesh out its ideas in some detail. The bottom

line remained a $9 billion (13%) cut in federal education spending. More than half of that came from cuts to postsecondary spending, but there
were sizable decreases in K-12 spending as well. The budget calls for big-ticket decreases from dropping
teacher and principal development funding ($2 billion), 21st Century Community Learning Centers ($1.2 billion), a block
grant under Title IV part A ($400 million), and Comprehensive Literacy Development grants ($190 million). Preschool development grant funding
($250 million) was cut from the Department of Education (ED) budget and moved to the Department of Health and Human Services. Funding for K-12 and adult career and

technical education was cut by about $260 million, and funding for dozens of smaller programs, including
gifted and talented education, was trimmed or eliminated. These spending reductions don’t follow a clear-cut logic. The published budget justifications repeatedly
contended that cut programs were not proven to be effective and could be replaced by other federal, state, local, or private funds. Of course, that logic can be applied to almost any program. The cuts the administration chose are
what would follow from setting a target and then picking programs to ax to get there. Whether one thinks these cuts are a good thing largely depends on one’s priors. Those with a desire for smaller government, and less government

to those inclined to believe most ED programs are effective and prudent,

spending, may see cost cutting as an appropriate end in itself. But

the cuts may seem stingy and shortsighted. Without explicit rationales to support them, the
administration’s cuts look more like ploys to cut spending than actual plans for reshaping the role of ED.
Notably, almost all of Trump’s budgeted K-12 spending increases focus on school choice. The biggest increase is $1 billion in Title I spending to fund Furthering Options for Children to Unlock Success (FOCUS) grants. These competitive
grants would push districts to adopt weighted student funding formulas and open enrollment policies so that funding can follow students to their choice of district schools. (The Trump budget leaves out the $550 million increase in
Title I funding that Congress passed this year, meaning the $1 billion should probably be viewed as a reallocation of $550 million to FOCUS grants, with a net addition of $450 million.) A $250 million increase in Education Innovation
and Research (EIR) funding would create competitive grants to provide private school choice and research outcomes. Charter school funding would also increase by $167 million. The increases total over $1.4 billion, a far cry from the

Do these increases suggest a clear and coherent plan for

$20 billion Trump promised for school choice during the campaign, but still a significant down payment.

ED? Both Trump and Secretary DeVos have fervently explained that they support increasing school choice, but the added detail in this budget doesn’t get us much
closer to understanding how the administration expects the programs to work. For instance, the $1 billion FOCUS grants are included
under Title I, even though that is a poor fit. Title I’s purpose is to support low-income students. FOCUS grants would let Title I funds follow low-income students to their chosen schools, but the primary change would be to district
policies affecting all students, not poor students specifically. In addition, funding is not enough because Title I law doesn’t include space for this program. Congress would have to change Title I legislation to create FOCUS grants—no
small feat in the current political environment. Even if that succeeded, it’s unclear how FOCUS grants would effectively improve choice, and it all depends on what “open enrollment” would entail. Complete open enrollment that ends
all residential assignment could be a game changer, if any district would take on such a disruption. If it simply increased access to existing schools that are not full, and empty seats in high quality schools are hard to come by, the
upside is pretty limited. Without a viable legislative strategy, a real focus on poor students, and a clarified operational approach, FOCUS grants are more a pipe dream than a plan for increasing choice. The $250 million

increase would triple EIR funding, with the whole increase devoted to private school choice programs and
research. Traditionally, this vein of funding has been supplemental, supporting innovations and associated research. Next to $2 billion in total state private choice spending, a $250 million (or 12.5%) increase suggests EIR
will be a conduit for federal funding to go directly to private school choice programs, with research requirements as a secondary consideration. Such an approach may boost school

choice in the short run, and add to the research base, but it’s not a sustainable foundation for long term
programs. The $166 million increase for charter funding would clearly promote school choice, and charter schools have a strong track record. Compared to the hope for legislation enabling FOCUS grants, or an open-ended
EIR increase, charter funding has the most established base to build on. Curiously, though, it is the smallest of the three increases. These three funding increases are choice-centered, but don’t reflect any more coherence than the

with
cuts. Each promotes choice as a simple good: more is better, so find a way to spend on public school choice, private school choice, and charters, even if the logic behind the funding increases is full of holes. Likewise,

the administration’s cuts, the logic appears to be that if education spending is too high, cut wherever you
can. On first glance, it might appear that those who want to rein in federal education spending or support
school choice should celebrate the administration’s budget. But absent a compelling and convincing underlying logic, it is unlikely that Congress will take this budget seriously in the short term. In
turn, that will make it even harder to gain traction on these issues in the long run, potentially harming the very causes it seeks to promote.
links
 link – education is expensive
Education reform is expensive especially if it is to be effective.
Boland 2013, Mike Boland is a Illinois House of Representatives (1995-2011) Boland is a former Democratic member of the Illinois House of
Representatives, representing the 71st District from 1995 to 2011. He’s dealt on Elections & Campaign Reform, Health & Healthcare Disparities, Higher Education
(Chair), and State Government Administration

A recent column by Ruben Naverette took teachers to task for supposedly being against testing of students. As a former 30-year teacher, former school board
member, former college instructor and college trustee, I can assure the public that there is and always has been testing of students, both teacher-made and
standardized. We need to wake up to the fact that just adding more testing will not improve education. In fact, unless we are willing to add days to the school year
or more hours to the school day, with commensurate pay, more testing will take away from valuable teaching and learning time and stretched school budgets.
Critics who blame teachers for all of our educational problems and call for more testing are looking for simplistic answers to vast and complicated societal problems.
This is not to let teachers off the hook; too often we hear some in the education field blame it all on the parents. Yes, it would be nice if all teachers and parents
were perfect, but moaning and groaning will not help one young person. What is needed are time, money and energy put into those
things that will make a difference in young people’s lives: more math and reading specialists for those who
have problems, since those two skills are crucial to success in school and life; smaller class sizes so students can get the individual attention they need;
elementary school counselors to catch early problems; parenting classes for those wanting help; all-day
kindergarten for all who want it for their child; preschool programs; after-school programs for
remediation and enrichment; safe schools; strong support for extra-curricular activities; and decent pay
to attract and keep talented, caring people in the classroom. As a former employer I cannot emphasize too much the importance
of a strong curriculum, including English and the social sciences incorporating writing and critical thinking skills. Want reform? There it is, but it

won’t be easy or cheap. The good thing is that economists tell us education is the best investment a society can make, with each dollar spent enriching
the economy and society many times over.

Only 51% of funding makes it into classrooms; aff putting aside more money doesn’t help
Rhee and Combs 14 Michelle Rhee, a former chancellor of the Washington, D.C., school system, is
founder and CEO of Students First, a grassroots educational reform movement. Susan Combs is Texas
comptroller of public accounts, a statewide elected position. “Rhee/Combs: Are education funds being
wasted?”, USA Today, 2/9/14. Ghs-cw https://www.usatoday.com/story/opinion/2014/02/09/michelle-
rhee-susan-combs-wise-school-spending/5259291/

Too much money is going to overhead. We need to measure where funds most help students. We're
professionals from different backgrounds: one a Democrat and education reformer, the other a Republican comptroller of public accounts for Texas. We may not
agree on everything, but we are coming together around two common beliefs. We both believe that nothing
is more important to America's
economic future than a world-class public education system. We also believe that limited education dollars
should be invested in proven programs that benefit kids, not in unnecessary administration, overhead or
red tape. Today we're spending more than $600 billion a year in public schools across the country, and few of us
are happy with the results. Over the last five decades, in fact, U.S. education spending has skyrocketed by
350%, yet achievement levels have remained stagnant. It is hard to argue that those dollars are being spent in a way that prioritizes
children. Between 1992 and 2009, administrative staffing rose nearly three times as fast as the number of students. There's no evidence that this astonishing
increase in administrative overhead did anything to improve student achievement. Nationwide, schools report that only 51% of education dollars
actually make their way into classrooms. This has to change.
Currently, a lot of education is paid with local dollars from property taxes
Rado 16 Diane Rado is an education watchdog reporter for the Chicago Tribune. “Local taxpayers picking
up a greater share of school district funding”, Chicago Tribune, 12/2/16. Ghs-cw
http://www.chicagotribune.com/news/ct-school-finances-met-20161202-story.html

Almost every cent flowing into affluent Butler School District 53 in Oak Brook comes from local dollars,
roughly $10.1 million. Most comes from property taxes paid by homeowners and businesses that cover
everything from teacher salaries to school building projects. State and federal dollars coming in are
minimal by comparison. The local share represents 97 percent of all revenue for Butler, illustrating just
how heavily many communities are investing in public schools. Throughout Illinois, the reliance on local
taxpayers is growing. Local taxes and school fees now make up 67.4 percent of revenue for districts
statewide — the highest percentage in at least 15 years, according to the most recent state finance data.
The state contributes 24.9 percent — one of the lowest shares in the country — and the federal
government 7.7 percent. The local portion for education has slowly climbed since 2001, when local
dollars covered, on average, 61.9 percent of K-12 public school expenses in Illinois. A confluence of
factors affects the figures, including rising and falling levels of state aid. Some school administrators say
local tax dollars are making up for what they say is a lack of funding from the state. At the same time,
some districts are leaning on local taxpayers to make a steeper investment in education. Whatever the
reasons, the investment in education from local tax dollars is on the rise, sparking concerns from Gov.
Bruce Rauner — who has called for a freeze on local property taxes — and anti-tax advocates. The
reliance on local dollars also has exacerbated the unequal funding for schools, as wealthy districts pump
in local revenue to spend more on students, while less affluent districts can't keep up. The gap in per-
pupil spending has grown wider in Illinois: The highest-spending school district now spends five times
more per student than the bottom district, based on 2015 data. A decade ago, it was about four times
more. Bob Anderson, who owns a barber shop in McHenry County's Wonder Lake and recently helped
launch the Illinois Tax Revolution group, lamented the property taxes in his community. "It's terrible,"
Anderson said. "People are leaving my barber shop. They're leaving Wonder Lake ... they're tired of these
property taxes. Every five minutes someone is leaving the state because of property taxes," Anderson
said. Like many residents, most of his annual property tax bill is for schools. Anderson serves on the
Harrison School District 36 board and wants to merge districts in the area to cut costs that could reduce
the burden on taxpayers. Reliant on local dollars The Tribune reviewed 2015 state finance data in about
850 public school districts that were included in the annual Illinois Report Card made public in October. In
nearly 100 districts, local taxpayers contributed 90 percent or more of the funding to their schools,
mostly in the Chicago region. Affluent communities such as Winnetka, Lake Forest, Libertyville, Hinsdale
and Oak Brook have high property values that can easily generate local property tax dollars for schools.
That means those districts will get fewer state dollars, based on the complex formula the state uses to
divvy up money to districts. For example, revenue flowing into Winnetka's New Trier Township High
School District totaled $107.4 million in 2015. Of that, $102.9 million came from local dollars, about 96
percent. The state share was close to $3 million, and the federal $1.5 million. The district was able to
spend $23,571 per student in 2015, almost entirely from the influx of local dollars. Likewise, Hinsdale
Township High School 86 in DuPage County took in $82.4 million in local dollars in 2015 — 94 percent of
all revenue. The state share was about $4 million and the federal share $1.3 million. The local dollars
largely pushed up per-student spending to $18,804. About 330 districts in all, including many that are less
affluent, are getting at least 75 percent of revenue from property taxes and other local dollars, the state
data show. In the massive Chicago Public Schools district, about $2.7 billion in local dollars made up 51.6
percent of school revenue in 2015, a relatively low percentage compared with many statewide districts.
CPS gets more state dollars because of its high-poverty student population and large number of pupils,
among other factors. In 2015, the district got about $1.8 billion from the state, and about $776 million
from the federal government. Total state funds sent to CPS divided by the district's student population
show that state dollars provided $4,553 per student in the massive school system, according to 2015
data. In contrast, New Trier received $742 per student in state dollars, Hinsdale 86 got $907 and Butler 53
collected $521. Overall, the state share of contribution to schools — 24.9 percent — is low compared
with what most other states provide for their schools, according to national school finance data. And
educators and lawmakers long have complained the figure conflicts with language in the Illinois
Constitution, which states: "The State has the primary responsibility for financing the system of public
education." State and federal contributions have risen and fallen with little consistency over the past
decade. Education funding from the state was roughly $5.8 billion in 2006, according to Illinois State
Board of Education school finance data. It dipped to about $5.6 billion in 2009, rose to nearly $7 billion in
2011 and was about $6.7 billion in 2015, the most recent year available in the statewide data. The
contribution from local taxpayers, for the most part, has steadily increased every year since 2006, starting
near $13.8 billion and climbing to more than $18 billion in 2015. Administrators acknowledge that many
residents may not know that local funds have become so dominant in the school financial pie. "The
everyday citizen looks at their tax bill, but they're not looking at it comparatively in terms of what
percentage of those dollars comprise their (school) budget," said Jenny Wojcik, superintendent in the
one-school Rondout District 72 in Lake County. "Illinois has really become much more reliant on local
resources to support their schools," Wojcik said. Her tiny district has about 140 students, and high
property values generated 97.4 percent of the district's revenue — about $5 million in 2015. The rest
came from state dollars, about $89,000, and federal dollars, $45,000. The district's influx of local dollars
pushed up per-student spending to $31,412 — the largest per-pupil figure in the state. The lowest per-
pupil figure was $6,235, in a downstate grade-school district where local funds totaled 54.5 percent. The
average per-pupil spending statewide is about $12,820. The gap in spending between Rondout and the
downstate district has widened in the past decade. In 2006, those same two districts were at the top and
bottom of per-pupil spending in Illinois, with Rondout spending $22,050 per child compared with $5,154
per child in the downstate district.

Past administrations have failed at large scale education funding reforms

Brown 17 Emma Brown writes about national education for the Washington Post, and covers schools in
the DC/Virginia area. “Obama administration spent billions to fix failing schools, and it didn’t work”, The
Washington Post, 1/19/17. Ghs-cw https://www.washingtonpost.com/local/education/obama-
administration-spent-billions-to-fix-failing-schools-and-it-didnt-work/2017/01/19/6d24ac1a-de6d-11e6-
ad42-f3375f271c9c_story.html?utm_term=.e0e94d06ff13

One of the Obama administration’s signature efforts in education, which pumped billions of federal
dollars into overhauling the nation’s worst schools, failed to produce meaningful results, according to a federal analysis.
Test scores, graduation rates and college enrollment were no different in schools that received money through the School Improvement Grants
program — the largest federal investment ever targeted to failing schools — than in schools that did not. The Education Department published the findings on the website of its research division on Wednesday, hours before President

Obama’s political appointees walked out the door. “We’re talking about millions of kids who are assigned to these failing schools, and
we just spent several billion dollars promising them things were going to get better,” said Andy Smarick, a resident fellow at the
American Enterprise Institute who has long been skeptical that the Obama administration’s strategy would work. “Think of what all that money could have been spent

on instead.” The School Improvement Grants program has been around since the administration of President George W. Bush, but it received an enormous boost under Obama. The administration funneled $7 billion into
the program between 2010 and 2015 — far exceeding the $4 billion it spent on Race to the Top grants. The money went to states to distribute to their poorest-performing schools — those with exceedingly low graduation rates, or
poor math and reading test scores, or both. Individual schools could receive up to $2 million per year for three years, on the
condition that they adopt one of the Obama administration’s four preferred measures: replacing the principal and at least half
the teachers, converting into a charter school, closing altogether, or undergoing a “transformation,” including hiring a new principal and adopting new instructional strategies, new teacher evaluations and a longer school day. The

Education Department did not track how the money was spent, other than to note which of the four
strategies schools chose. Arne Duncan, Obama’s education secretary from 2009 to 2016, said his aim was to turn around 1,000 schools every year for five years. “We could really move the needle, lift the
bottom and change the lives of tens of millions of underserved children,” Duncan said in 2009. Duncan often said that the administration’s school-improvement efforts did not get the attention they deserved, overshadowed by more-
controversial efforts to encourage states to adopt new standards and teacher evaluations tied to tests. The school turnaround effort, he told The Washington Post days before he left office in 2016, was arguably the administration’s

as a large-
“biggest bet.” He and other administration officials sought to highlight individual schools that made dramatic improvements after receiving the money. But the new study released this week shows that,

scale effort, School Improvement Grants failed. Just a tiny fraction of schools chose the most dramatic
measures, according to the new study. Three percent became charter schools, and 1 percent closed. Half the schools chose transformation, arguably the least intrusive option available to them. “This outcome reminds us
that turning around our lowest-performing schools is some of the hardest, most complex work in education and that we don’t yet have solid evidence on effective, replicable, comprehensive school improvement strategies,” said
Dorie Nolt, an Education Department spokeswoman. Nolt emphasized that the study focused on schools that received School Improvement Grants money between 2010 and 2013. The administration awarded a total of $3.5 billion to
those schools, most of it stimulus funds from the American Recovery and Reinvestment Act of 2009. “Since then,” she said, “the program has evolved toward greater flexibility in the selection of school improvement models and the
use of evidence-based interventions.” Some education experts say that the administration closed its eyes to mounting evidence about the program’s problems in its own interim evaluations, which were released in the years after the

The latest interim evaluation, released in 2015, found mixed results, with students at one-
first big infusion of cash.

third of the schools showing no improvement or even sliding backward. Even then, Duncan remained
optimistic about the School Improvement Grants, which he said had — along with the Race to the Top grants — unleashed innovation across the country. Speaking about the
two grant programs at a fast-improving high school in Boston in 2015, he argued that it would take time to see and measure their full effects. “Here in Massachusetts, it actually took several years to see real improvement in some
areas,” Duncan said at the time. “Scores were flat or even down in some subjects and grades for a while. Many people questioned whether the state should hit the brakes on change. But you had the courage to stick with it, and the

results are clear to all.” Smarick said he had never seen such a huge investment produce zero results. That could end up being a gift, he said,
from Duncan to Betsy DeVos, President-elect Donald Trump’s nominee for education secretary and a prominent proponent of taxpayer-supported vouchers for private and religious schools. Results from the School Improvement

Grants have shored up previous research showing that pouring money into dysfunctional schools and systems does not work, Smarick said: “I can
imagine Betsy DeVos and Donald Trump saying this is exactly why kids need school choice.”

Historically, funding programs have failed and wasted more than $7 billion
Singman 17 Brooke Singman is a Reporter for Fox News. “Education Department report finds billions
spent under Obama had 'no impact' on achievement”, Fox News, 1/25/17. Ghs-cw
http://www.foxnews.com/politics/2017/01/25/education-department-report-finds-billions-spent-under-
obama-had-no-impact-on-achievement.html

The Obama administration pumped more than $7 billion into an education program, first authorized under
President George W. Bush, that had no impact on student achievement – according to a report released by the

Department of Education in the final days of the 44th president’s term. The Department of Education’s findings were contained in its “School Improvement Grants: Implementation and Effectiveness”
report. The study could energize the debate over national education policy just as the Senate considers President Trump’s controversial pick to lead the
department, Betsy DeVos, an outspoken school choice advocate who has questioned the way federal education dollars are spent. “The timing of this report is so important and so interesting – this could have a positive influence on

(SIG) program, first introduced in 2001 under the Bush administration, was
her confirmation,” American Enterprise Institute resident fellow Andy Smarick told Fox News. The School Improvement Grants

created to fund reforms in the country’s lowest-performing schools with the goal of improving student
achievement in test scores and graduation rates. The program directed money to schools with low academic achievement and graduation rates below 60 percent for high
schools, among other factors. SIG was canceled under recently passed legislation, though similar funding can still be sought by school districts. SIG was first funded in 2007, receiving $616 million under Bush. But it wasn’t until 2009,

The administration continued to pump more than

when the Obama administration designated $3.5 billion to the program through the stimulus, that funding soared.

$500 million annually to the program for the rest of his presidency. The report, though, focused on data from nearly 500
schools in 22 states that received SIG funding, and concluded the program had “no significant impact” on
reading or math test scores; high school graduation; or college enrollment. “Overall, we found that the SIG program
had no impact on student achievement,” co-author of the report Lisa Dragoset told Fox News. The authors are “non-partisan” researchers in the Education Department, according to
Tom Wei, project officer from the department’s Institute of Education Sciences. “We focused on districts with larger samples of schools, and so these schools tended to be more urban and more disadvantaged,” Wei told Fox News.
“We looked at the schools that were on the cusp of being eligible to receive SIG funding.” A department spokesperson not involved in drafting the report told Fox News they are “continuing to review the study.” Smarick said then-
Secretary Arne Duncan had approached SIG as a big bet, considering the “body of research out there for years that if you put more resources into failing districts and failing schools, you’re not going to get better student
achievement.” In the end, he said, “They decided to go ahead and put as much money as possible into the program to make it work, which led us to this dramatic report: what happened was what has always happened in the past.”
Neither Duncan nor previous education secretaries under Obama and Bush responded to requests for comment on the billions spent and the report’s findings. But Nina Rees, deputy education undersecretary under the Bush

Some of these schools received huge injections of

administration -- and now CEO of the National Alliance of Public Charter Schools -- called the results no surprise. “

cash and had an absent leader who did not know how to leverage the money constructively, and that is
not a good recipe for success,” Rees told Fox News. “The premise of the program was extremely sound, but it is simply
human nature to pick things that are easier to implement as opposed to a more aggressive approach.” Rees,
who is a proponent of school choice, also supports Betsy DeVos for education secretary in the Trump administration and believes charter schools need more funding and full autonomy. Smarick suggested, in light of the new findings,
DeVos’ approach could be helpful. “DeVos’ career has been trying to answer these questions differently than SIG – Betsy’s approach is to empower the low-income families by pumping resources to expand the number of schools
available so that the families can have the option of school choice,” he said. Charter schools, at the heart of the school choice movement, are publicly funded schools run by independent groups. President Trump has suggested
pumping an additional $20 billion into school choice -- with the funds redirected from existing federal accounts. The Trump/DeVos approach faces scrutiny from some Democrats, who chided DeVos during her confirmation hearing
and suggested charter schools are held to a different standard. "There are times when it appears that charter schools are used as a wedge to attack public education, and the signals of that tend to be that failing charter schools are
protected compared to failing public schools," Sen. Sheldon Whitehouse, D-R.I., said in the hearing. "The standards really aren't there."

Educational reform wastes taxpayer dollars

Patrick 17 John Patrick is a graduate of Canisius College and Georgia Southern University and a
contributor to Red Alert Politics. “Report: Obama wasted $7 billion on failed federal education plan”, Red
Alert Politics, 1/26/17. Ghs-cw http://redalertpolitics.com/2017/01/26/report-obama-wasted-7-billion-
failed-federal-education-plan/

A new report by the Department of Education indicates that the billions of dollars pumped into education
by the Obama Administration had absolutely no impact on improving student achievement. The main focus of the

report, titled School Improvement Grants: Implementation and Effectiveness, was the School Improvement Grants (SIG) program, a
program first proposed by President Bush in 2001 as a way of funding reform efforts in the U.S. schools with poor academic performance by students. A large focus of
After assessing data from nearly 500
the program was to improve student test scores in math and science, as well as student graduation rates.

schools in 22 states that received SIG funding, independent researchers employed by the Department of Education
concluded the program had “no significant impact” on reading or math test scores, high school
graduation, or college enrollment. SIG was ended under recently passed legislation; however, school districts can still request similar types of
educational grants through other types of government funding. While President Bush initially funded the program in 2007 with $616 million of

taxpayer dollars, President Obama poured $3.5 billion of taxpayer dollars from the federal stimulus into the program in
2009. The report comes as the Senate considers the nomination of Betsy Devos as Education Secretary. Ms. Devos is a strong advocate of charter schools, and has
also questioned the Obama administration’s approach in spending education money. Her views on reforming education have put her at odds with Democrats and
teachers unions who have benefited dramatically from education stimulus funds. While overall student achievement failed to improve,
states were given $100 billion in education stimulus funds in 2009 in a measure approved by Congress. Approximately half of the stimulus went to help states avoid
laying off teachers. As a result, teachers remained on the public-sector payroll, and the teachers unions continued to soak teachers for dues. In return, the nation’s 2
largest teachers’ unions, the American Federation of Teachers and the National Education Association, gave $19.2 million dollars to Obama and other Democrats in
the 2012 elections.
 link – inflation/deficit spending
Even IF aff is a worthwhile policy change, enacting it increases debt and interest rates further
CRFB 16 “The Cost of Rising Interest Rates”, Committee for a Responsible Federal Budget, 12/14/16.
Ghs-cw http://www.crfb.org/papers/cost-rising-interest-rates

Fiscal Irresponsibility Would Make Interest Costs Much Worse While interest costs are already the
fastest growing part of the budget under current law, they would grow much faster if policymakers further add to the
debt. Whereas interest spending would almost triple under current law, we estimate it could quadruple or even quintuple under President-elect Donald Trump’s $6 trillion campaign
plans.2 Policies that add to the federal debt increase interest costs for two reasons. First, these policies

increase the government’s debt holdings, which it must then pay further interest on. Second, higher
levels of federal debt tend to push up interest rates themselves –even more so when additional
borrowing is used to finance productivity-increasing policies such as infrastructure projects or certain changes to the business tax code. By our estimates,
Trump’s tax and spending plans would increase the primary deficit by $5.2 trillion. That would lead directly to an $800 billion increase in

interest costs over a decade, including over $150 billion in FY 2026 alone. If that higher debt led interest rates to rise 1 percent above projections – a very rough but
likely conservative estimate – interest costs would increase by $2.5 trillion over a decade, including over $450 billion in 2026 alone. Conclusion Even with today’s low

interest rates, deficits are already on the rise. As debt continues to grow and interest rates return toward more normal levels, interest spending is slated
to be the fastest growing part of the budget and will ultimately crowd out other important priorities. Adding to the debt, even for worthwhile policy

changes, would only accelerate the growth in interest costs. There is an argument for some borrowing at today’s low interest rates so long as
this borrowing is accompanied by a plan to pay down the new debt over the next few years before interest rates rise. Ultimately, however, the best way to minimize the cost of rising interest
rates and prevent against interest-rate risk is to enact a thoughtful mixture of tax and spending reforms that put the debt as a share of the economy on a clear downward path over the long

run. Low interest rates have made the debt very manageable over the recent past, but as we’ve seen in recent weeks, interest rates have the ability to rise
again quickly. It’s important to be prepared.

Increased deficit spending through the aff leads to slower economic growth
Boccia 13 Romina Boccia is a leading fiscal and economic expert at The Heritage Foundation and
focuses on government spending and the national debt. “How the United States’ High Debt Will Weaken
the Economy and Hurt Americans”, The Heritage Foundation, 2/12/13. Ghs-cw
http://www.heritage.org/budget-and-spending/report/how-the-united-states-high-debt-will-weaken-
the-economy-and-hurt

Crowding Out Private Investment. Economic growth, especially increasing per capita income, depends
on the proper functioning of prices to signal and markets to respond, but it also depends fundamentally
on increasing the amount and quality of productive capital available to the workforce. The amount of
capital employed in the economy needs to increase at least to keep pace with the growth in the labor
force to maintain current living standards, and must grow even faster—to increase the amount of
capital per worker—to raise worker productivity and thus wages and salaries. Government deficit
spending and its associated debt subtracts from the amount of private saving available for private
investment, leading to slower economic growth. Unlike what staunch believers of government spending
for economic stimulus claim, government stimulus spending does the opposite of growing the economy.
Less economic growth caused by high government spending and debt results in fewer available jobs,
lower wages and salaries, and fewer opportunities for career advancement. Prolonged debt overhang in
the United States, even at low interest rates, would be a massive drag on economic growth, leading to
significantly reduced prosperity for Americans. In the words of Reinhart, Reinhart, and Rogoff: “This
debt-without-drama scenario is reminiscent for us of T. S. Eliot’s (1925) lines in The Hollow Men: ‘This is
the way the world ends / Not with a bang but a whimper.’”[17]
Aff increases interest rates- That causes further increases, leading to a feedback loop
Bennett and Tanzer 17 Johanna Bennett is a staff writer at Barron’s. Andrew Tanzer is a CFA, Senior
Researcher, Portfolio Strategist, and Investment writer for Gerstein Fisher Investment Strategy Group.
“A $20 Trillion National Debt: Trouble Ahead?”, Barron’s, 2/22/17. Ghs-cw
http://www.barrons.com/articles/a-20-trillion-national-debt-trouble-ahead-1487787564

the U.S. will surpass $20 trillion in total

Almost a month ago, the Dow Jones Industrial Average hit its 20,000 milestone. Now another “20” is looming ahead. Any day now,

public debt -- or as it is commonly called, “the national debt.” It’s a truly vast number. Over the past 20 years, then national debt has
quadrupled, far outstripping the rate of growth of the U.S. economy to become the biggest pile of debt in the world. Thanks to low interest rates,
the cost of maintaining that debt has fallen compared to overall Fed spending over the same time period. Of that $20 trillion, $14.4
trillion is held by the public, and nearly half of that sum in the hands of foreign investors such as the Japanese and Chinese governments. But China and Japan have both recently cut their exposure to U.S. Treasuries, fueling worries

of a major drop in bond prices. But there’s another sticky issue, namely rising interest rates, says Andrew Tanzer of Gerstein Fisher,
(http://gersteinfisher.com/viewpoints/whats-20-trillion-debt-among-friends/) a New York advisory firm. We do not make any specific predictions, but it does seem prudent for investors

to be prepared for potentially higher volatility in bond markets, stemming from the strong possibility of
the confluence of rising rates, higher US government debt levels, and much higher annual interest
expenses in the federal budget, which could change investors’ perception of Treasuries and risk. For our
elected officials, burgeoning interest payments would require some tough decisions on government
spending programs. Tanzer goes into more detail: The days of a low interest-rate environment, with 10-year US Treasury bonds yielding 2% or less and
the government able to service $20 trillion of debt with a relatively manageable portion of the total budget may soon be in the past. Interest rates are rising (the yield on 10-year Treasuries rose by 70

basis points to 2.47% in the year to February 16, 2017), and the market’s expectation for the Trump Presidency is for higher economic

growth, inflation and interest rates, which could dramatically change the current equilibrium. ...The CBO projects that
debt held by the public will increase from $15 trillion at the end of 2017 to $25 trillion by 2027, largely due to swelling budget deficits. This would raise the public debt/GDP ratio from 77% to 89%, which the CBO notes would be the

highest level since 1947 and more than twice the average over the past five decades in relation to GDP. For its ten-year projection, the CBO assumes economic growth and inflation rates of about 2% and a
rise in interest rates on the 10-year Treasury from 2.1% in the fourth quarter of 2016 to 3.6% in the latter part of the next decade. It estimates that the combination of rising interest rates and growing
federal debt held by the public will cause government interest payments on that debt to nearly triple in nominal terms and almost double relative to GDP. The CBO thinks rising interest

payments will lead to a drop in government discretionary spending from 6.3% of GDP in 2017 to 5.3% by 2027, the smallest ratio since comparable
data was kept from 1962. The CBO scenario projection doesn’t need to be exactly right to observe the substantial risk of much higher debt-servicing costs in the federal budget. A one-percentage point

rise in rates now implies a $200 billion annual increase in interest payments, and more in future years as
the stock of outstanding debt expands from $20 trillion. The question of how sustainable this level of
debt is for the United States is complicated somewhat by the use of the US dollar as the world’s reserve currency, and by the extensive and intensive use of US Treasuries as a highly liquid, low-risk
investment by banks, funds, and governments around the world. There are many possible scenarios, but one is the possibility of a “negative feedback loop,” wherein

rising interest rates increase the cost of US debt to the government, shaking the confidence of investors
that the debt level is sustainable and causing them to sell their US bonds, further driving up rates.

Spending causes increase in interest rates – results in higher inflation

Mitchell 5, Daniel J. Mitchell, Ph.D. is McKenna Senior Research Fellow in the Thomas A. Roe Institute for
Economic Policy Studies at The Heritage Foundation, “The Impact of Government Spending on Economic Growth,”
http://www.heritage.org/budget-and-spending/report/the-impact-government-spending-economic-growth/
If government spending is zero, presumably there will be very little economic growth because enforcing contracts, protecting property, and
developing an infrastructure would be very difficult if there were no government at all. In other words, some government spending is necessary
for the successful operation of the rule of law. Figure 1 illustrates this point. Economic activity is very low or nonexistent in the absence of
government, but it jumps dramatically as core functions of government are financed. This does not mean that government costs nothing, but
that the benefits outweigh the costs. Costs vs. Benefits. Economists will generally agree that government spending
becomes a burden at some point, either because government becomes too large or because outlays are misallocated. In such
cases, the cost of government exceeds the benefit. The downward sloping portion of the curve in Figure 1 can exist for a
number of reasons, including: The
extraction cost. Government spending requires costly financing
choices. The federal government cannot spend money without first taking that money from
someone. All of the options used to finance government spending have adverse consequences .
Taxes discourage productive behavior, particularly in the current U.S. tax system, which imposes high tax rates on work, saving, investment, and
other forms of productive behavior. Borrowing
consumes capital that otherwise would be available for
private investment and, in extreme cases, may lead to higher interest rates . Inflation debases a
nation's currency, causing widespread economic distortion .

Current spending is key to maintain current economic recovery--- High spike in stimulus
spending like the aff leads to a recession and interest spikes
Ponnuru & Beckworth 6/29/2017, Both Ramesh ponnuru and David beckworth are residents fellow at
the University of Chicago's Institute of Politics. Ponor graduated summa cum laude from Princeton's
history department. 2., against higher inflation,
http://www.nationalreview.com/article/449065/federal-reserve-monetary-policy-nominal-spending-
target-preferable-inflation-target//

The economists’ advice shouldn’t be rejected out of hand, but it should be rejected. They make some valid points in their diagnosis of the ills of the current monetary regime. But the Fed can and should address these problems

But the extent to

without raising inflation. For most people it is probably puzzling that anyone should want inflation to rise. They consider inflation a hit to their standard of living and don’t want more of it.

which inflation reduces standards of living depends mostly on what drives it. If an oil embargo raises costs throughout the economy, it will
indeed tend to raise prices and cut into real incomes. An inflation driven by the central bank’s creation of extra money , on the other hand,

should increase prices and wages very close to proportionally. (We’re using the term “inflation” the way most people and economists do, as a rise in the
general price level.) This kind of inflation is unpopular mostly because people assume that they have earned their

inflated wages but resent paying inflated prices. Which is not to say such inflation is costless. If inflation is unpredictable,
businesses and households will have difficulty making long-term economic plans — in part because it
creates arbitrary wealth transfers. When inflation comes in higher than expected, the bank that provided your fixed-rate mortgage will take a bath; when it comes in lower, you will. Inflation
also raises the burden of taxes on capital, since our laws do not adjust for it: It is possible to pay a capital-gains tax on an asset even when it has not appreciated at all in real terms. Then there are the costs of having to adjust prices
to keep up with a constantly changing price level: what economists, thinking of the restaurant business as a good example, call “menu costs.” When inflation is both low and stable, however, these costs are manageable. Central
banks the world over have converged on a 2 percent target rate for inflation during the last few decades partly as a matter of happenstance, but economists have generally considered 2 percent a reasonable number. The costs
mentioned above would not rise much higher with year after year of 2 percent inflation than they would with year after year of 0 percent inflation. (And they would be lower still if our capital-gains taxes adjusted for inflation.) The
slightly higher rate has a few advantages over the lower one. It can make economic transitions smoother. Employees are more hostile to wage cuts of 2 percent with 0 percent inflation than they are to stable wages with 2 percent

A little inflation therefore makes it easier for employers to lower labor

inflation, even though these outcomes are economically identical.

costs by not giving pay raises rather than by laying people off. One of the other reasons central banks
preferred 2 percent to 0 percent inflation is that it gave them more flexibility. During a recession, central
banks usually cut interest rates in order to stimulate the economy. The higher the interest rate is at the
start of the recession, the more they can cut it. Since interest rates are composed of both a real return to savings — the real interest rate — and compensation for expected inflation, a 2 percent inflation
target will keep interest rates higher than a 0 percent one. A 2 percent inflation target will keep interest rates higher than a 0 percent one. ________________________________________ And that brings us to the case for an even
higher inflation target. The supporters note that a higher inflation target would give the Fed even more room to maneuver. International comparisons bolster this case: Countries that have tolerated higher inflation over the past
decade have fared better than we have. Australia had some of the same vulnerabilities we did before the Great Recession — a real-estate boom and a surge in household debt — and was more exposed than we were to swings in
commodity prices. Yet its economy continued to grow during the crisis. It came into the crisis with a core inflation rate of 4 rather than 2 percent, which meant higher interest rates. Australian monetary authorities could thus cut
interest rates more than we did. Israel did not avoid the recession, but it had a more robust recovery than we did. Higher inflation played a role there too, albeit a different one than in Australia. After Israeli interest rates fell close

inflation eventually caused interest rates to rise, its

to 0 percent, monetary authorities allowed the inflation rate to go as high as 5 percent in 2009. Although this

immediate effect while interest rates were stuck near 0 percent was to push real interest rates deep
into negative territory and thus spur more spending. The argument, then, is that both Australia and Israel did better than the United States during the crisis by
tolerating higher inflation. Why not tolerate a bit more inflation here, the advocates say, through a higher inflation target? The proponents also argue that a higher inflation target is needed because real interest rates have been
headed downward for decades. Many economists, especially those who want a higher target, say that slowing productivity growth and an aging population are bringing real interest rates down. Over the decades before the Great
Recession, inflation averaged 2 percent and the real interest rate roughly 3 percent, making for an interest rate a little above 5 percent. These days it is often estimated that the economy can sustain real interest rates near 1

. These arguments for a higher inflation

percent. To get interest rates above 4 percent again would therefore require raising the inflation target to the 3 to 4 percent range

target are reasonably strong if you accept the premise that keeping inflation stable should be the Fed’s
principal task in the first place. There is, however, a superior alternative. That alternative would stabilize
the growth of nominal spending: the total amount of dollars spent throughout the economy. The growth
rate of nominal spending equals the sum of the rates of inflation and of real economic growth. (In 2015, for example,
inflation ran at 1.2 percent and the economy grew by 1.6 percent in real terms, so nominal spending grew by 2.8 percent.) Under a level target for nominal spending, the Fed would commit to keeping total spending growing at a

This
steady rate, say 4 percent. It would commit, further, to correcting for any failure to hit the target. If nominal spending grew by 4.5 percent one year, that is, the Fed would shoot for 3.5 percent the following year.

policy would capture the benefits of inflation targeting, such as facilitating long-term economic planning
by households and businesses. It would arguably serve that purpose a little better than inflation targeting, since most debt and labor contracts are written in nominal terms. It would
be compatible with keeping inflation low and fairly stable. , such as facilitating long-term economic planning by households and businesses. It would arguably
serve that purpose a little better than inflation targeting, since most debt and labor contracts are written in nominal terms. It would be compatible with keeping inflation

low and fairly stable. If the economy’s real growth rate over the long term averages 2 percent, then
hitting a 4 percent nominal-spending target implies achieving a 2 percent average inflation rate too. If the
economy’s real growth rate over the long term averages 2 percent, then hitting a 4 percent nominal-spending target implies achieving a 2 percent average inflation rate too.

A key difference between the two policies is that a nominal-spending target would allow inflation to fluctuate over the short term

in response to movements in productivity. A negative supply shock, such as the oil embargo we mentioned earlier, will push prices up and output down. A strict inflation-targeting
central bank would try to keep prices from rising by raising interest rates — at the cost of harming an already weak economy. Something like that happened in 2008: Rising commodity prices led the Fed to refrain from cutting rates

in the early months of the recession. A nominal-spending target would have had more tolerance for a short-run increase in
inflation. A positive supply shock, on the other hand, will pull prices down. In that case, an inflation-targeting central bank, whatever inflation rate it has chosen, will be tempted to lower interest rates to keep inflation
from falling. If it does it will overstimulate the economy. This appears to have happened in 2002–04, when a productivity boom made the Fed fear deflation and it responded by holding interest rates too low for too long.

Under a nominal-spending target, on the other hand, the Fed would have allowed productivity to reduce
inflation. A key argument for a higher inflation rate, you will recall, is that real interest rates have declined as the economy’s productive potential has. But those interest rates can move rapidly. The San Francisco Fed
uses a measure of the “natural” real interest rate — the rate justified by the economic fundamentals — that fell from 2.12 percent at the end of 2007 to 0.34 percent a year later. That was a rapid decline tied to the business cycle.
There is no reason in principle that the real interest rate could not rise rapidly as well. If it did, the argument for a higher inflation target would go into reverse: A lower one would be justified. But changing the target with every

change in productivity would nullify the advantage of stability. A nominal-spending target, on the other hand, would not need to alter in response to
changes in productivity. Changes in productivity would change the composition of nominal spending — the more productivity grows, the higher the
ratio of real economic growth to inflation — but not the total. As for Australia and Israel, it’s worth noting that in both countries nominal spending grew at a steady pace.
Spikes in inflation may have been helpful, that is, only insofar as they enabled the stabilization of
nominal spending. We have not yet mentioned one peculiarity of the argument for a higher inflation target. Even though Yellen signaled her openness to that argument, we have actually been below 2
percent inflation for eight years — which is to say, before, during, and after the Fed’s formal adoption of that target. In some quarters the Fed’s failure to hit its target has led to

doubt about whether the Fed even has the capacity to raise inflation any more, in which case its
capacity to increase nominal spending would also have to be questioned. This doubt is unjustified: The Fed has
repeatedly refrained from taking steps that would have increased inflation further, and taken steps that
reduced it. A nominal-spending target would make for a stabler macroeconomic environment than an
inflation target, for the reasons we have described, and would not require enduring higher inflation
rates on average. But no target is going to work as well as it could if the Fed is unwilling to take it seriously. And no blue-ribbon commission is going to supply that willingness.

Perception of spending will determine fed increase in interest rate

Dunsmuir 1/31/17, Lindsey is the Finance Director of the World Design and Trade limited company., Fed likely to keep
rates steady as it awaits Trump economic plan, http://www.reuters.com/article/us-usa-fed-idUSKBN15F0E8/

WASHINGTON (Reuters) - The U.S. Federal Reserve is expected to keep interest rates unchanged on Wednesday in its first
policy decision since President Donald Trump took office, as the central bank awaits greater clarity on his economic policies. Trump has promised a

large infrastructure spending program, tax cuts, a rollback of regulations and a renegotiation of trade
deals but has offered few details or a timeline for their roll out since his victory in the Nov. 8 election. The central bank's latest policy decision is scheduled to be
released at 2 p.m. EST (1900 GMT) on Wednesday at the conclusion of a two-day meeting. Fed Chair Janet Yellen is not due to hold a press conference. The policy
decision will come a week after Yellen underscored that the
U.S. economy is near full employment and warned of a "nasty
surprise" on inflation if the Fed is too slow with its rate hikes. Economists polled by Reuters have all but ruled out a rate increase
at this week's meeting. Investors next see an interest rate rise in June, according to Fed futures data compiled by the CME Group. The Fed raised its benchmark
interest rate at its last policy meeting in December, the second such move in a decade, to a target range between 0.50 percent and 0.75 percent. It forecast a
further three rate increases this year. Wait-and-See Mode Despite encouraging U.S. economic data, Fed
policymakers are currently
hampered in assessing how quickly inflation might rise until they have more information on Trump's
economic plans. "At the moment there's incredible uncertainty surrounding fiscal policy and the potential for
stimulus and the composition of that," said Paul Ashworth, an economist at Capital Economics. "The Fed can't react until it
knows what to react to." With the U.S. economy already bumping up against full employment, Trump's promises on fiscal stimulus and tax reform
could quickly spur higher inflation as would imposing tariffs on Mexican imports. That may cause Fed policymakers to raise rates faster. Other policies, such as an
immigration crackdown, go against what the Fed argues the U.S. economy needs to grow over the long term. U.S. stocks fell on Monday after Trump curtailed travel
and immigration to the United States from seven predominantly Muslim countries. The S&P 500 index is still up roughly 6 percent since Trump's victory and the
robustness of the domestic economy makes the United States increasingly divergent from Japan, the euro zone and Britain, none of which are expected to raise
rates anytime soon. The Fed will likely only make minor tweaks in its policy statement on Wednesday to reflect a string of positive recent economic reports.
"Changes to the ... statement should be mostly upbeat," Roberto Perli, an economist at Cornerstone Macro LLC, said in a note to clients. The U.S. unemployment
rate is 4.7 percent and business investment has improved, despite a slowdown in fourth-quarter economic growth caused mostly by a widening trade deficit.
Consumer spending, which accounts for more than two-thirds of the nation's economic activity, rose solidly in December, according to Commerce Department data
released on Monday. In the same report, the Fed's closely-watched inflation gauge also edged up to 1.7 percent.
 link – displacement
Spending causes displacement--- Every dollar matters
Mitchell 5, Daniel J. Mitchell, Ph.D. is McKenna Senior Research Fellow in the Thomas A. Roe Institute for
Economic Policy Studies at The Heritage Foundation, “The Impact of Government Spending on Economic Growth,”
http://www.heritage.org/budget-and-spending/report/the-impact-government-spending-economic-growth/

The displacement cost. Government spending displaces private-sector activity. Every dollar that the government
spends necessarily means one less dollar in the productive sector of the economy. This dampens growth
since economic forces guide the allocation of resources in the private sector, whereas political forces dominate when
politicians and bureaucrats decide how money is spent. Some government spending, such as maintaining a well-functioning legal system,

can have a high "rate-of-return." In general, however, governments do not use resources efficiently,
resulting in less economic output.
internal link
 2nc – rate hikes bad
Repeats 2008 financial crisis.
Rowley 2/6 [Anthony Rowley, February 6, 2017, The toxic mix of massive debt built up over a decade of
record low interest rates and the start of higher rates suggest a crisis might be brewing,
http://www.atimes.com/article/trump-spending-policies-may-fuel-emerging-market-debt-crisis/]

Global debt has reached US$217 trillion, equal to a record 325% of global gross domestic product with
the build-up particularly marked among business corporations in the world’s leading emerging
economies as well as among some governments in mature economies.

“The sheer size of global debt raises the risk of unprecedented [debt] deleveraging that could hamper
growth worldwide,” said Tim Adams, former US Treasury Under-Secretary for International Affairs and
now head of the Institute of International Finance (IIF) in Washington.

In similar vein, the IMF suggested that “the sheer size of global debt raises the risk of unprecedented
deleveraging that could hamper growth worldwide.” At the World Economic Forum in January, David
Rubenstein, co-chief executive officer of The Carlyle Group, warned of a repeat of the 1990s emerging-
market crisis.

In absolute money terms, debt is largest in advanced or “mature’ economies where the figure across the
household, central government, financial, and non-financial corporate sectors has reached $165 trillion
or 390 per cent of GDP. Government debt has risen especially sharply.

Meanwhile, total emerging market debt has reached around $53 trillion or 217 per cent of GDP and
nearly a half of this or $25 trillion is concentrated in the non-financial corporate sector.

According to the IIF’s Global Debt Monitor, the highest ratios of non-financial sector corporate debt to
GDP among emerging markets are found in Hong Kong, China, Singapore, Thailand, Chile, Saudi Arabia,
Turkey, Indonesia, Mexico. Malaysia. Czech and South Korea.

High levels of debt do not in themselves indicate an impending crisis. But when a dramatic surge in
borrowing is followed by a quite sudden and sustained rise in interest rates, the cost of servicing the
debt can outrun the ability of borrowers to repay.

The potential crisis that is building now is not really like past events. It is very much a “monetary”
phenomenon where borrowers have succumbed to the lure of ultra-cheap (even free) credit made
available in vast quantities by the world’s leading central banks.

The so-called “Great Recession” that followed the 2008 Global Finance Crisis was prevented from
developing into a Great Depression by a massive official bailout, mostly from US financial institutions,
with only Lehman Brothers directly “going to the wall.”

The bail-out funds were supplied largely by central banks (notably the US Federal Reserve”) but it was
really the follow-up action of the banks — in particular the Bank of Japan and the European Central
Bank as well as the Bank of England — that sparked the big debt build-up.
Under the so-called quantitative easing (QE) programmes, central banks bought trillions of dollars worth
of financial assets from governments and from the private sector to drive down the cost of money and
so avert bankruptcies, repair balance sheets, and restore credit creation.

Not only did credit become historically cheap in “real” or inflation adjusted as well as nominal terms, but
also capital began to be re-routed globally.

Funds fled the US where yields on government bonds and Treasury Bills fell to derisory low levels
under the impact of the Fed’s assaults. The “hunt for yield” was on and it was to be had in emerging
markets.

Funds fled the US where yields on government bonds and Treasury Bills fell to derisory low levels
under the impact of the Fed’s assaults. The “hunt for yield” was on and it was to be had in emerging
markets.

Emerging market companies took advantage of this and many borrowed up to the hilt. Not only that,
but some have borrowed in dollars while their revenues are in local currencies — creating a classic
“currency mismatch” situation.

Global investors have been eager to snap up corporate bonds issued by emerging market companies
during the era of low, zero and even negative interest rates. This despite the fact that credit ratings
were often very low on such bonds.

Investors in Brazil, South Korea, Thailand, Chile, Czech and Malaysia especially have been big
borrowers. While most of this has been in local currencies, corporates in India, Saudi Arabia, Turkey and
Russia as well as Hong Kong and Singapore have borrowed heavily in foreign currency.

Companies need to renew or roll over their debt and if banks raise lending rates or even deny fresh
loans — borrowers are going to be in trouble. If bond market borrowing rates rise or credit dries up,
we’ll have the elements needed for the next crisis.

Causes trump to blow everything up with protectionism.

The Economist 12/3 [“Why a strengthening dollar is bad for the world economy,” 12-3-16,
http://www.economist.com/news/leaders/21711041-rise-greenback-looks-something-welcome-ignore-
central-role]
The dollar has been gradually gaining strength for years. But the prompt for this latest surge is the prospect of a shift in the economic-policy mix in America. The
weight of investors’ money has bet that Mr Trump will cut taxes and spend more public funds on fixing America’s crumbling infrastructure. A big fiscal boost would

lead the Fed eral Reserve to raise interest rates at a faster rate to check inflation. America’s ten-year bond yield has risen to 2.3%, from almost 1.7%
on election night. Higher yields are a magnet for capital flows (see article). Zippier growth in the world’s largest
economy sounds like something to welcome. A widely cited precedent is Ronald Reagan’s first term as president, a time of widening
budget deficits and high interest rates , during which the dollar surged. That episode caused trouble abroad and this time could be more
complicated still. Although America’s economy makes up a smaller share of the world economy, global financial and credit markets have exploded in size. The

greenback has become more pivotal. That makes a stronger dollar more dangerous for the world and for America. Novus ordo
seclorum America’s relative clout as a trading power has been in steady decline: the number of countries for which it is the biggest export market dropped from 44

in 1994 to 32 two decades later. But the dollar’s supremacy as a means of exchange and a store of value remains unchallenged . Some
aspects of the greenback’s power are clear to see. By one estimate in 2014 a de facto dollar zone, comprising America and countries whose currencies move in line
with the greenback, encompassed perhaps 60% of the world’s population and 60% of its GDP. Other elements are less visible. The amount of dollar
financing that takes place beyond America’s shores has surged in recent years. As emerging markets grow richer and hungrier for
finance, so does their demand for dollars . Since the financial crisis, low interest rates in America have led pension funds to look for decent
yields elsewhere. They have rushed to buy dollar-denominated bonds issued in unlikely places, such as Mozambique and Zambia , as well as those
issued by biggish emerging-market firms. These issuers were all too happy to borrow in dollars at lower rates than prevailed at home. By last year
this kind of dollar debt amounted to almost $10trn, a third of it in emerging markets, according to the Bank for International Settlements, a forum for central

bankers. When the dollar rises, so does the cost of servicing those debts . But the pain caused by a stronger greenback stretches
well beyond its direct effect on dollar borrowers. That is because cheap offshore borrowing has in many cases caused an increased supply of

local credit . Capital inflows push up local asset prices , encouraging further borrowing. Not every dollar borrowed by emerging-market
firms has been used to invest; some of the money ended up in bank accounts (where it can be lent out again) or financed other firms. A strengthening
dollar sends this cycle into reverse . As the greenback rises, borrowers husband cash to service the increasing cost of their own debts. As
capital flows out , asset prices fall . The upshot is that credit conditions in lots of places outside America are bound ever more
tightly to the fortunes of the dollar . It is no coincidence that some of the biggest losers against the dollar recently have been currencies in countries, such as
Brazil, Chile and Turkey, with lots of dollar debts. The eye of providence There are lurking dangers in a stronger dollar for America ,
The trade deficit will widen as a strong currency squeezes exports and sucks in imports. In the Reagan era a soaring deficit stoke d
too.

protectionism . This time America starts with a big deficit and one that has already been politicised, not least by Mr Trump , who sees it as evidence
that the rules of international commerce are rigged in other countries’ favour. A bigger deficit raises the chances that he act on his
threats to impose steep tariffs on imports from China and Mexico in an attempt to bring trade into balance. If Mr Trump succumbs
to his protectionist instincts, the consequences would be disastrous for all. Much naturally depends on where the

dollar goes from here . Many investors are sanguine. The greenback is starting to look dear against its peers. The Fed has a record of backing away
from rate rises if there is trouble in emerging markets. Yet currencies
often move far away from fundamental values for long
periods. Nor is it obvious where investors fleeing America’s currency might run to. The euro and the yuan, the two pretenders to the dollar’s crown, have deep-
seated problems of their own. The
Fed, whose next rate-setting meeting comes this month, may find it harder than before to avoid
tightening in an economy that is heating up. If the dollar stays strong, might protectionist pressure be defused by co-ordinated
international action? Nascent talk of a new pact to rival the Plaza Accord, an agreement in 1985 between America, Japan, Britain, France and West Germany to push
the dollar down again, looks misplaced. Japan and Europe are battling low inflation and are none too keen on stronger currencies, let alone on the tighter monetary
policies that would be needed to secure them (see article). Stockmarkets in America have rallied on the prospect of stronger growth. They are being too cavalier.

The global economy is weak and the dollar’s muscle will enfeeble it further .

Triggers US recession.
Adam Shell 17, 3-17-2017, "What milestones could spook markets as the Fed raises rates," USA TODAY,
http://www.usatoday.com/story/money/markets/2017/03/17/markets-spooky-signs/99245514/

2) Fed
speeding up hikes: Yellen said Wednesday the Fed was still on track for three rate increases this year.
But market pros say stocks could get upended if the Fed ups its rate-hike count. "Four rate hikes are not
completely dead," says Christopher Rupkey, chief economist at MUFG Union Bank. For the Fed to hike more,
inflation for consumers (currently hovering just below 2%) would have to spike above 2% faster than expected. The economy would also have
to undergo a growth spurt powered by President's Trump's plans to slash corporate taxes and spend heavily on infrastructure. "The stock
market would react negatively to any whiff of four hikes," says Scott Wren, senior global equity
strategist for Wells Fargo Investment Institute. For now, the economy isn't strong enough for the Fed to
get too aggressive, he says. First-quarter economic growth, or GDP, is now tracking at 1.4%, down from a
2% estimate on March 1, according to Barclays. A recent drop in oil prices and still-small wage gains for workers mean there's no
immediate threat of surging inflation. The economy must be strong enough to handle sharply higher borrowing
costs, adds Perkin. "Too much too soon could cause the economy to become strained and risk falling into
recession," he says. Another potential shock is this: The Fed surprises investors by hiking rates by a bigger-
than-expected amount. "If the pace picked up to a half-a-percentage-point increase that would catch
the market's attention," says Nick Sargen, senior investment advisor at Fort Washington Investment Advisors.

Fast raise in rates collapses emerging economies: causes capital flight and increases costs on
dollar-denominated debt.
Lachman 1/17 [Desmond Lachman, Resident Fellow at AEI, joined AEI after serving as a managing
director and chief emerging market economic strategist at Salomon Smith Barney. He previously served
as deputy director in the International Monetary Fund’s (IMF) Policy Development and Review
Department and was active in staff formulation of IMF policies, America’s global vulnerability, January
17, 2017, https://www.aei.org/publication/americas-global-vulnerability/]

Another way in which Trump seems to be undermining China’s growth prospects is his proposed
expansionary fiscal policy. Although the US economy is at or very close to full employment, Trump is
pushing for deep tax cuts and increased public expenditure on infrastructure and defence. Those
policies would almost certainly force the Federal Reserve to raise interest rates several times in 2017 to
contain inflation. This would in turn encourage the redirection of capital to the US from emerging
markets, including China, and propel the dollar ever higher.

As the Bank for International Settlements keeps warning, emerging market economies pose a major
risk to the global recovery because they have allowed their corporate sectors to increase their dollar-
denominated debt by more than $3.5tn over the last eight years. Rising interest rates and a strong
dollar could challenge major emerging economies like Brazil, Russia and South Africa, particularly at a
time when commodity prices remain subdued.
 2nc – bad for emerging markets

Fed rate hikes cause capital flight from emerging markets

Sid Verma, 17, Bloomberg News, 3-14-2017, "Emerging markets look stable, compared to Trump,"
Financial Post, http://business.financialpost.com/news/trump-bark-bigger-than-bite-guards-emerging-
markets-from-fed-1
And that’s giving him the confidence to recommend buying local-currency assets in countries like Russia and Brazil, ignoring the wreckage of
previous Federal Reserve tightening cycles. With
economies in the strongest position they’ve been in years to
withstand higher U.S. interest rates, investors are counting on developing countries to keep offering big
returns, and they’re skeptical U.S. President Donald Trump will deliver enough of his protectionist agenda to
stand in their way. “Investors are concerned about being underweight emerging markets if materially
protectionist policies aren’t introduced and the rally continues,” Trivedi, Goldman’s chief emerging-market macro
strategist in London, said by phone. “Emerging markets are in a better position to absorb our projection of three
Federal Reserve rate hikes this year.” It hasn’t been that long since the prospect for higher U.S. rates
sent investors rushing for the exits. The MSCI Emerging Markets Index of equities slid 14 per cent in the
month after then Fed Chairman Ben S. Bernanke first signaled in May 2013 that he’d start scaling back
stimulus, and currencies tumbled for three years straight with the phasing out of easy money. But as the
Fed looks set to hike its benchmark to 1 per cent for the first time since 2008, asset managers are
looking past the external risks because they like what’s going on inside emerging countries. For one, as Brazil
and Russia emerge from recessions, developing economies are poised to grow more than twice as fast as advanced nations this year. At no
point since 2010 have more economic data out of emerging markets exceeded forecasts, according to a Citigroup Inc. surprise index. Current-
account deficits for South Africa, Brazil, Turkey, India and Indonesia are also less than half the size they were in 2013, when Morgan Stanley
dubbed the group the Fragile Five for their vulnerability to outflows as the U.S. tightens policy. Inflation, meanwhile, is at multi-year lows, giving
investors in London or New York larger returns once consumer-price growth is stripped out. In Russia, the real rate on 10-year debt is 3.5
percent and in Brazil it’s 5.5 percent, compared with less than 1 percent in the U.S. and negative returns across the euro-area. With little
upward pressure on longer-dated U.S. yields, emerging-market bonds will stay attractive, according to Goldman’s Trivedi. “The
Fed hiking
cycle this year won’t have a violent impact on emerging markets compared with previous years,” said Dirk
Willer, a New York-based emerging-market fixed-income analyst at Citigroup. The proof is in the numbers: flows into bond funds that invest in
developing nations jumped to a five-week high of $2.1 billion in the first week of March, according to data of fund-tracker EPFR Global. The
This doesn’t mean
MSCI equities gauge is having its best start to a year since 2012, while a gauge tracking 20 currencies is up 2 percent.

emerging markets will be unscathed by U.S. policy decisions. Even in the past month as odds for the
Fed to hike in March soared from 30 per cent to a done deal, currencies in Colombia, Chile, Russia and
Brazil slumped 1.3 per cent or more. If Trump is able to get his policy agenda on track — including plans
to tear up trade deals, discourage imports and spend more at home — the risk is that U.S. inflation gallops
and the Fed raises rates faster than expected. That would undermine the case for chasing yields in
developing nations. Already, the premium an investor gets to hold emerging-market debt over
Treasuries is near the smallest since 2014, at 310 basis points, according to a JPMorgan Chase & Co. index. “A faster-than-
expected pace of U.S. monetary tightening could trigger a shake-out in Treasuries and a selloff in
emerging markets,” said Ben Sarano, a London-based money manager at hedge fund Emso Asset Management. For now, this isn’t
a prevailing worry. If anything, the broad-based improvement in global economies from Germany to China may cap gains in the dollar
and support emerging-market currencies, which are showing nearly the smallest price swings since mid-2015 measured by a JPMorgan index.
impact
 2nc – yes econ impact
Nuclear wars
Lieberthal, Brookings John L. Thornton China Center director, 2012
(Kenneth, “The Real National Security Threat: America's Debt”, 7-10,
http://www.brookings.edu/research/opinions/2012/07/10-economy-foreign-policy-lieberthal-ohanlon)
Alas, globalization and automation trends of the last generation have increasingly called the American dream into question for the working
classes. Another decade of underinvestment in what is required to remedy this situation will make an isolationist or populist president far more
likely because much of the country will question whether an internationalist role makes sense for America — especially if it costs us well over
half a trillion dollars in defense spending annually yet seems correlated with more job losses. Lastly, American economic weakness
undercuts U.S. leadership abroad. Other countries sense our weakness and wonder about our purport 7ed
decline. If this perception becomes more widespread, and the case that we are in decline becomes more persuasive, countries will begin to
take actions that reflect their skepticism about America's future . Allies and friendswill doubt our
commitment and may pursue nuclear weapons for their own security, for example; adversaries will
sense opportunity and be less restrained in throwing around their weight in their own neighborhoods. The
crucial Persian Gulf and Western Pacific regions will likely become less stable . Major war will become more likely. When
running for president last time, Obama eloquently articulated big foreign policy visions: healing America's breach
with the Muslim world, controlling global climate change, dramatically curbing global poverty through
development aid, moving toward a world free of nuclear weapons. These were, and remain, worthy if
elusive goals. However, for Obama or his successor, there is now amuch more urgent big-picture issue:
restoring U.S. economic strength. Nothing else is really possible if that fundamentalprerequisite to
effective foreign policy is not reestablished .

Extinction
Haass 13 (Richard N, President of the Council on Foreign Relations, 4/30/13, “The World Without
America,” http://www.project-syndicate.org/commentary/repairing-the-roots-of-american-power-by-
richard-n--haass)

The most critical threat facing the United States now and for the foreseeable future is not a rising China, a
Let me posit a radical idea:

North Korea, a nuclear Iran, modern terrorism, or climate change. Although all of these constitute potential or actual threats, the biggest
reckless

challenges facing the US are its burgeoning debt, crumbling infrastructure, second-rate primary and secondary schools, outdated immigration system, and slow
economic growth – in short, the domestic foundations of American power . Readers in other countries may be tempted to react to this judgment with a
dose of schadenfreude, finding more than a little satisfaction in America’s difficulties. Such a response should not be surprising. The US and those representing it have been guilty of hubris (the US may often be the indispensable
nation, but it would be better if others pointed this out), and examples of inconsistency between America’s practices and its principles understandably provoke charges of hypocrisy. When America does not adhere to the principles
that it preaches to others, it breeds resentment. But, like most temptations, the urge to gloat at America’s imperfections and struggles ought to be resisted. People around the globe should be careful what they wish for.

America’s failure to deal with its internal challenges would come at a steep price. Indeed, the rest of the world’s stake in American
success is nearly as large as that of the US itself. Part of the reason is economic. The US economy still accounts for about one-quarter of global output. If US growth accelerates, America’s

capacity to consume other countries’ goods and services will increase, thereby boosting growth around the
world. At a time when Europe is drifting and Asia is slowing, only the US (or, more broadly, North America) has the potential to
drive global economic recovery . The US remains a unique source of innovation. Most of the world’s citizens communicate with mobile devices based on technology developed in Silicon Valley;
likewise, the Internet was made in America. More recently, new technologies developed in the US greatly increase the ability to extract oil and natural gas from underground formations. This technology is now making its way
around the globe, allowing other societies to increase their energy production and decrease both their reliance on costly imports and their carbon emissions. The US is also an invaluable source of ideas. Its world-class universities

the US has long been a leading example of what market economies and
educate a significant percentage of future world leaders. More fundamentally,

democratic politics can accomplish. People and governments around the world are far more likely to become
more open if the American model is perceived to be succeeding. Finally, the world faces many serious challenges,
 from the need to halt the spread of weapons of mass destruction, fight climate change, and maintain a functioning
ranging

world economic order that promotes trade and investment to regulating practices in cyberspace, improving
global health, and preventing armed conflicts These problems will not simply go away or sort
.

themselves out . While Adam Smith’s “invisible hand” may ensure the success of free markets, it is powerless in the world of geopolitics .
Order requires the visible hand of leadership to formulate and realize global responses to global
challenges. Don’t get me wrong: None of this is meant to suggest that the US can deal effectively with the world’s problems on its own. Unilateralism rarely works. It is not just that the US lacks the means; the very
nature of contemporary global problems suggests that only collective responses stand a good chance of succeeding. But multilateralism is much easier to advocate than to

design and implement. Right now there is only one candidate for this role: the US. No other country has the

necessary combination of capability and outlook. This brings me back to the argument that the US must put its house in order –
economically , physically, socially, and politically – if it is to have the resources needed to promote order in the world . Everyone should
hope that it does: The alternative to a world led by the US is not a world led by China, Europe, Russia, Japan, India, or any other

country, but rather a world that is not led at all. Such a world would almost certainly be characterized by chronic crisis and
conflict . That would be bad not just for Americans, but for the vast majority of the planet ’s inhabitants.

Draws in great powers – goes nuclear

Harris and Burrows, 9 – *counselor in the National Intelligence Council, the principal drafter of Global Trends 2025, **member of
the NIC’s Long Range Analysis Unit “Revisiting the Future: Geopolitical Effects of the Financial Crisis”, Washington Quarterly,
http://www.twq.com/09april/docs/09apr_burrows.pdf)

Increased Potential for Global Conflict Of course, the report encompasses more than economics and indeed believes the future is likely to be
the result of a number of intersecting and interlocking forces. With so many possible permutations of outcomes, each with ample opportunity
for unintended consequences, there is a growing sense of insecurity. Even so, history may be more instructive
than ever. While we
continue to believe that the Great Depression is not likely to be repeated, the lessons to be drawn from
that period include the harmful effects on fledgling democracies and multiethnic societies (think Central
Europe in 1920s and 1930s) and on the sustainability of multilateral institutions (think League of Nations
in the same period). There is no reason to think that this would not be true in the twenty-first as much
as in the twentieth century. For that reason, the ways in which the potential for greater conflict could
grow would seem to be even more apt in a constantly volatile economic environment as they would be if change would be
steadier. In surveying those risks, the report stressed the likelihood that terrorism and nonproliferation will remain priorities even as resource
issues move up on the international agenda. Terrorism’s appeal will decline if economic growth continues in the Middle East and youth
unemployment is reduced. For those terrorist groups that remain active in 2025, however, the diffusion of technologies and scientific
knowledge will place some of the world’s most dangerous capabilities within their reach. Terrorist groups in 2025 will likely be a
combination of descendants of long established groups inheriting organizational structures, command and control processes, and training
procedures necessary to conduct sophisticated attacks and newly emergent collections of the angry and disenfranchised that become self-
radicalized, particularly in the absence of economic outlets that would become narrower in an economic downturn. The most
dangerous casualty of any economically-induced drawdown of U.S. military presence would almost certainly be the Middle
East. Although Iran’s acquisition of nuclear weapons is not inevitable, worries about a nuclear-armed Iran could lead
states in the region to develop new security arrangements with external powers, acquire additional
weapons, and consider pursuing their own nuclear ambitions. It is not clear that the type of stable deterrent
relationship that existed between the great powers for most of the Cold War would emerge naturally in the
Middle East with a nuclear Iran. Episodes of low intensity conflict and terrorism taking place under a nuclear umbrella could lead to an
unintended escalation and broader conflict if clear red lines between those states involved are not well established. The close proximity of
potential nuclear rivals combined with underdeveloped surveillance capabilities and mobile dual-capable Iranian missile systems also will
produce inherent difficulties in achieving reliable indications and warning of an impending nuclear attack. The lack of strategic depth
in neighboring states like Israel, short warning and missile flight times, and uncertainty of Iranian intentions may
place more focus on preemption rather than defense, potentially leading to escalating crises. Types of
conflict that the world continues to experience, such as over resources, could reemerge, particularly if
protectionism grows and there is a resort to neo-mercantilist practices. Perceptions of renewed
energy scarcity will drive countries to take actions to assure their future access to energy supplies. In the
worst case, this could result in interstate conflicts if government leaders deem assured access to energy resources, for example,
to be essential for maintaining domestic stability and the survival of their regime. Even actions short of war, however, will have important
geopolitical implications. Maritime security concerns are providing a rationale for naval buildups and modernization efforts,
such as China’s and India’s development of blue water naval capabilities. If the fiscal stimulus focus for these countries indeed turns inward,
one of the most obvious funding targets may be military. Buildup of regional naval capabilities could lead to increased tensions,
rivalries, and counterbalancing moves, but it also will create opportunities for multinational cooperation in protecting critical sea lanes.
With water also becoming scarcer in Asia and the Middle East, cooperation to manage changing water resources is likely to be increasingly
difficult both within and between states in a more dog-eat-dog world.
 2nc – stats
Stats prove our impact
Royal 2010
Jedediah, Director of Cooperative Threat Reduction at the U.S. Department of Defense, “Economic Integration, Economic Signaling and the
Problem of Economic Crises,” in Economics of War and Peace: Economic, Legal and Political Perspectives, ed. Goldsmith and Brauer, pg. 213-
215

Less intuitive is how periods of economic decline may increase the likelihood of extern conflict. Political science literature
has contributed a moderate degree of attention to the impact of economic decline and the security and defense behavior 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 crisis could usher in a redistribution of
relative power (see also Gilpin, 1981) that leads to uncertainty about power balances, increasing the risk of miscalculation
(Fearon, 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). Seperately, 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 behavious 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
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. Crisis could potentially be the trigger for decreased trade expectations either on
its own or because it triggers protectionist moves by interdependent states. 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
favor. Moreover, the presence of a recession tends to amplify the extent to which international and
external conflict self-reinforce each other. (Blomberg & Hess, 2002. P. 89) Economic decline has 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 increase 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 correlated 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. This implied connection between integration,
crisis and armed conflict has not featured prominently in the economic-security debate and deserves more attention.
 2nc – at: 08 disproves
Resiliency won’t be true for the next collapse – a bunch of warrants
Isidore ‘11 (Chris, writer at CNNMoney, “Recession 2.0 would hurt worse,” 2011,
http://money.cnn.com/2011/08/10/news/economy/double_dip_recession_economy/index.htm)

The risk of double dip recession is rising. And while economists disagree on just how likely the U.S. economy is to fall into another downturn, they generally agree
on one thing -- a new recession would be worse than the last and very difficult to pull out of. "Going back
into recession now would be scary, because we don't have the resources or the will to respond, and our
initial starting point is such a point of weakness," said Mark Zandi, chief economist at Moody's Analytics.
"It won't feel like a new recession. It would likely feel like a depression." Zandi said the recent sell-off in stocks have caused
him to raise the odds of a new recession to 33% from 25% only 10 days ago. Other economists surveyed by CNNMoney are also raising
their recession risk estimates. The survey found an average chance of a new recession to be about 25%, up from a 15% chance only three months ago. Of the 21
economists who responded to the survey, six have joined Zandi in increasing their estimates in just the last few days. The main reason: the huge slide in stocks.
Standard & Poor's downgrade of the U.S. credit rating is another concern. "The correction in equity markets raises the risk of recession due to the negative hit to
wealth and confidence," said Sal Guatieri, senior economist for BMO Capital Markets. Even with a 430-point rebound in the Dow Jones industrial average Tuesday
following the Federal Reserve meeting, major U.S. stock indexes have lost more than 11% of their value over the last 12 trading days. Recovery at risk A plunge in
stocks doesn't necessarily mean a new recession. The economy avoided a recession after the stock market crash of 1987. "Stock price declines are often misleading
indicators of future recessions," said David Berson, chief economist of BMI Group. But with the economy already so fragile, the shock of another stock market drop
and resulting loss of wealth could be the tipping point. "It really does matter where the economy is when it gets hit by these shocks," said Zandi. "If we all pull back
on spending, that's a prescription for a long, painful recession," he said. Most economists say they aren't worried that S&P's downgrade makes recession more
likely, although a few said any bad news at this point increases the risk. "The downgrade has a psychological impact in terms of hurting consumer confidence," said
Lawrence Yun, chief economist with the National Association of Realtors. On shakier ground Another recession could be even worse than
the last one for a few reasons. For starters, the economy is more vulnerable than it was in 2007 when the
Great Recession began. In fact, the economy would enter the new recession much weaker than the start
of any other downturn since the end of World War II. Unemployment currently stands at 9.1%. In November 2007, the month before
the start of the Great Recession, it was just 4.7%. And the large number of Americans who have stopped looking for work in the

last few years has left the percentage of the population with a job at a 28-year low. Various parts of the economy also have yet to recover
from the last recession and would be at serious risk of lasting damage in a new downturn. Home values continue to lose ground and are

projected to continue their fall. While manufacturing has had a nice rebound in the last two years, industrial production is still
18% below pre-recession levels. There are nearly 900 banks on the FDIC's list of troubled institutions, the highest
number since 1993. Only 76 banks were at risk as the Great Recession took hold. But what has economists particularly worried
is that the tools generally used to try to jumpstart an economy teetering on the edge of recession aren't
available this time around. "The reason we didn't go into a depression three years ago is the policy
response by Congress and the Fed," said Dan Seiver, a finance professor at San Diego State University.
"We won't see that this time." Three times between 2008 and 2010, Congress approved massive spending or temporary tax cuts to try to
stimulate the economy. But fresh from the bruising debt ceiling battle and credit rating downgrade, and with elections looming, the federal government has shown
little inclination to move in that direction. So this new recession would likely have virtually no policy effort to
counteract it.
 2nc – at: econ resilient
No resilience – domestic and international unrest are converging and the next economic
collapse will be much worse than the Great Recession
Armstrong 14 (Martin Armstrong is the former chairman of Princeton Economics International Ltd.
Cited by Greg Hunter, “Violent War Cycles—Global Economic Decline—Martin Armstrong,” USA Watch
Dog, http://usawatchdog.com/violent-war-cycles-global-economic-decline-martin-armstrong-4/,
September 14, 2014)

Global economic expert Martin Armstrong says two big violent cycles are happening for the first time in 300 years.
Domestic and international unrest is consuming the world. Armstrong contends, “Both of these cycles are
converging at the same time, and this hasn’t happened since the 1700’s . That was the American Revolution, the French
Revolution and etcetera. That was the revolution against monarchies, so to speak. This is not just Ukraine, Russia and the U.S. You

have the Middle East going crazy. Gaza is starting up again with Israel. You go over to Asia and you have civil
unrest in Thailand, and the overwhelming part of the population in China wants to go to war with Japan as payback.”
Why all the violence around the world? Armstrong contends, “When everyone is fat and happy, nobody cares.
Everybody lives together peacefully. When you turn the economy down , that’s when people start getting
mad. They lost something, and they want to blame somebody else for whatever injury they suffered. We look at the entire world...what you
are looking at on a global scale is the emerging markets: China, Russia, South America, Brazil, South East Asia, their stock markets peaked in 2007. They have been in
a declining economic trend . . . so you have the economic pressure building. This is what’s going on in Russia as well. We are making a serious mistake by thinking
that Russia can’t fight. My sources say that they anticipated the sanctions on Putin would make the oligarchs turn against him and force him to back out. That’s not
going to happen. We
are going into a period of economic decline, and whenever that happens, government
needs an external enemy.” So, when markets crashed in 2007, what did Congress do? They did investigations and went after Wall Street. They never
admit it has anything to do with them. . . . If Putin were to back off, they would eat him for lunch. He would be overthrown within Russia.” On the subject of new
sanctions from the U.S. and EU, Armstrong says, “Europe is already in an economic decline, and it is a very, very serious one. Even the IMF has come out and said
there are major problems with deflation, which is what you get from a Great Depression, and that is really what the EU is going through. I don’t see any hope of the
EU bottoming out before 2020. It’s going to get worse.” So, is this going to lead to war between NATO and Russia? Armstrong says, “That seems to be what’s
happening.” On the Middle East, Armstrong charges, “The United States has made a complete mess of the Middle East. The real truth behind the Benghazi affair,
that ambassador that was killed . . . he was effectively an arms dealer. They were providing all the arms in Libya to overthrow Gadhafi. When that was done, those
same arms were sent to this group called ISIS who was against Syria. You have to realize that Saudi Arabia was really the one behind the funding of all of this. Why?
They wanted a pipeline through Syria. The problem now is that everyone was trying to fund somebody else to do their dirty work, and now you have an Islamic
State that is rising and it is taking territory from both sides.” On the direction of the price of gold, Armstrong predicts, “I personally think you are going to see gold
emerge as a currency of the underground economy. It’s not a hedge against inflation, and we have done every study imaginable. So, why are countries like China
buying all this gold? Armstrong says, “People are buying gold, not because they think it will be going up, but simply as a hedge against government.” On the recent
strength of the U.S. dollar, Armstrong says, “The central banks only have the dollar, that’s it. It is the reserve currency. We had a former Obama economist who just
came out a few days ago and said the risk to the United States is a strong dollar, and we should give up the reserve currency position. Why? Because they realize
there is no other choice. What are you going to do, put your retirement money in rubles? How about Yuan? There is no place you can go. It’s only dollars.” So, is the
dollar is not going to fall out of bed anytime soon? Armstrong says, “Not yet. You have to take the dollar up, and that will bring gold down short term. Also, as war
begins to happen, you have to realize that capital flees from wherever conflict is. The more conflict you have in the Middle East and Europe, the more money is

going to come this way (to the U.S.)” In closing, Armstrong gave an ominous prediction and said, “ The next decline we will see is going to be far
worse than the last one. Each one is building in intensity.”

Low threshold for global collapse

David Parkinson 14 (global econ reporter for the globe and mail, “Debt risk, market turmoil threaten
financial crisis” http://www.theglobeandmail.com/report-on-business/are-we-on-the-verge-of-another-
financial-crisis/article20850810/)

Nagging debt risks, heated currency wars and renewed market turmoil are making the global economy a
precarious place , six years after the financial crisis. On the sixth anniversary of the S&P 500’s biggest one-day drop in history – a 106-point plunge on
Sept. 29, 2008, that marked the beginning of one of the worst market collapses of all time – the respected annual Geneva Report on the

World Economy is raising concerns about a “poisonous combination” of record and still-rising global
debts and chronically slow growth. It warned that this leaves the world exposed to a heightened risk of further
economic stagnation and even another potential financial crisis. The report comes in the midst of a
disquieting September funk in global financial markets, as the sharp divergence between the
accelerating U.S. economy and stagnation in much of the rest of the world has fuelled growing
nervousness and rising volatility. Deepening concerns about slowdowns in China and Europe have sent
some commodity prices to eight-month lows, and a flight to the U.S. dollar has roiled currency and bond
markets. The straw stirring the entire murky mix is the likelihood that the U.S. Federal Reserve Board will start
raising interest rates next year even as other central banks are leaning the other way – raising considerable
uncertainty about how well the global economy and financial markets can weather such a pivotal policy
change. The report, by the Centre for Economic Policy Research, a leading European economic think tank, warned that raising interest rates too quickly while
the world is still so heavily in debt “would risk killing the recovery. Beyond pushing the economy into a prolonged period of stagnation, this would also put at risk
the deleveraging process which is already very challenging.” The report said that “contrary to widely held beliefs, the world has not yet begun to de-lever.” It
estimated total debt of all kinds (government, corporate and consumer) at a record 212 per cent of annual global gross domestic product, up from about 185 per
cent in 2008. While the world’s advanced economies have curbed the pace of debt accumulation since the crisis, emerging markets have
accelerated debt growth amid historically low global interest rates – with China leading the way. “This group of countries are a
main source of concern in terms of future debt trajectories, especially China and the so-called ‘fragile eight’ [Argentina, Brazil, Chile, India, Indonesia,

Russia, South Africa and Turkey], which could host the next leg of the global leverage crisis,” the authors said. Meanwhile, many

advanced economies are caught in a “vicious loop” of high debt and slow growth. Debt reduction
through austerity reduces spending and thus slows growth; slower growth reduces incoming revenues
and thus limits the ability to reduce debt. This is a factor in the stubborn lack of global capital investment that has been limiting
economic expansion – and Canada is no exception.
 at: spending good turn
The aff is wrong government spending isn’t a short term boon for the economy--- Federal
spending cannot accurately target the projects where it would be most productive means
they can’t access the turn.
Stratmann and Okolski 2010, Thomas Stratmann is a senior research fellow at the Mercatus Center and university professor of
economics and law at George Mason University. His primary research interests are political economy, fiscal policy, law and economics, health
economics, and experimental economics, Gabriel Okolski is an alumnus of the Mercatus Center MA Fellowship at George Mason University. He
worked with the Regulatory Studies Program on issues related to state fiscal transparency and government accountability, and participated in
projects for the Financial Markets Working Group., June 2010, Does Government Spending Affect Economic Growth?,
https://www.mercatus.org/publication/does-government-spending-affect-economic-growth

Proponents of government spending claim that it provides public goods that markets generally do not,
such as military defense, enforcement of contracts, and police services.1 Standard economic theory holds that individuals
have little incentive to provide these types of goods because others tend to use them without paying.
John Maynard Keynes, one of the most significant economists of the 20th century, advocated government spending,
even if government has to run a deficit to conduct such spending.2 He hypothesized that when the economy is in a
downturn and unemployment of labor and capital is high, governments can spend money to create jobs and employ capital that have been
unemployed or underutilized. Keynes's theory has been one of the implicit rationales for the current federal stimulus spending: it is needed to
boost economic output and promote growth.3 These
views of spending assume that government knows exactly
which goods and services are underutilized, which public goods will be value added, and where to
redirect resources. However, there is no information source that allows the government to know where
goods and services can be most productively employed.4 Federal spending is less likely to stimulate
growth when it cannot accurately target the projects where it would be most productive.

Government spending bad--- leads to spending distorts, less effective services, and inhibits
innovation all independently bad for the economy.
Mitchell 5, Daniel J. Mitchell, Ph.D. is McKenna Senior Research Fellow in the Thomas A. Roe Institute for
Economic Policy Studies at The Heritage Foundation, “The Impact of Government Spending on Economic Growth,”
http://www.heritage.org/budget-and-spending/report/the-impact-government-spending-economic-growth/

The market distortion cost. Government spending distorts resource allocation. Buyers and sellers in competitive
markets determine prices in a process that ensures the most efficient allocation of resources, but some
government programs interfere with competitive markets. In both health care and education, government
subsidies to reduce out-of-pocket expenses have created a "third-party payer" problem. When individuals use
other people's money, they become less concerned about price. This undermines the critical role of competitive markets, causing significant

inefficiency in sectors such as health care and education. Government programs also lead to resource misallocation because individuals, organizations,
and companies spend time, energy, and money seeking either to obtain special government favors or to minimize their share of the cost of government. The
inefficiency cost. Government spending is a less effective way to deliver services. Government directly provides many services
and activities such as education, airports, and postal operations. However, there is evidence that the private sector could provide

these important services at a higher quality and lower cost. In some cases, such as airports and postal services, the improvement
would take place because of privatization. In other cases, such as education, the economic benefits would accrue by shifting to a model based on competition and
choice. The stagnation cost. Government spending inhibits innovation. Because of competition and the desire to increase income and
wealth, individuals and entities in the private sector constantly search for new options and
opportunities. Economic growth is greatly enhanced by this discovery process of "creative destruction." Government programs, however,
are inherently inflexible, both because of centralization and because of bureaucracy. Reducing government-or
devolving federal programs to the state and local levels-can eliminate or mitigate this effect.
When interest rates go up consumer confidence drains--- hurts the economy.
Maverick 2015, J.B. Maverick is a former commodity futures broker and stock market analyst, J.B. Maverick has
been an active trader since 2001. He began writing articles on forex trading in 2007, and has written extensively on
trading, finance and business since then. In addition to authoring hundreds of articles on the stock, futures, and
forex markets, as well as a book on futures trading, July 15th 2016, How do changes in interest rates affect the
spending habits in the economy, http://www.investopedia.com/ask/answers/071715/how-do-changes-interest-
rates-affect-spending-habits-economy.asp

An increase in interest rates may lead consumers to increase savings, since they can receive higher rates
of return. An increase in interest rates is often accompanied by a corresponding increase in inflation, so
consumers may be influenced to spend more if they believe the purchasing power of their dollars will be eroded by inflation. Decreases in
interest rates typically incline consumers toward increased spending. The current level of rates and expectations regarding the future rate
trends are factors in deciding which way consumers lean. If, for example, rates fall from 6 to 5%, and further rate declines are expected,
consumers may hold off on financing major purchases until lower rates are available. If rates are already at very
low levels, however, consumers will usually be influenced to spend more to take advantage of good financing terms. Consumer Confidence
The overall health of the economy impacts consumer reaction to interest rate changes. Even with rates at
attractively low levels, consumers may not be able to take advantage of financing in a depressed economy. Consumer confidence
about the economy and future income prospects also affect how much consumers are willing to extend
themselves in spending and in financing obligations.
****aff****
uniqueness
 UQ- econ weak now
Economy shows signs of instability- short term investments, stagflation, Greenspan proves
Ross 16 Sean Ross is Director of Business Development at Financial Poise. “Why Greenspan Is Getting
Worried About U.S. Interest Rates”, Investopedia, 9/06/16. Ghs-cw
http://www.investopedia.com/articles/insights/090616/why-greenspan-getting-worried-about-us-
interest-rates.asp

According to Alan Greenspan, U.S. interest rate policy has created an unstable investing environment
and set the future economy up for an inflation problem. Combine that with what Greenspan sees as irresponsible fiscal policy, and his
outlook is very bearish indeed. The former chairman of the Federal Reserve said he is not optimistic
about the economy and worries the sluggishness in the American economy will not be remedied until the
private economy is able to save more and rely on accurate interest rates. Interest Rates Distorting the Capital Market In July 2016, Greenspan told Bloomberg

that the gap between long-duration debt yields (20+ years) and shorter-duration yields (five years or fewer) was
encouraging companies to overspend their capital on short-term investments, such as software. This
means not enough capital is being spent on longer-term capital structures, setting the economy up for a
future imbalance. These concepts are not new. Economists have been warning for over 100 years that
artificially low interest rates distort the capital market. The foundations of real business cycle theory (RBCT) and Austrian capital theory are rooted
in the long-term dangers of low interest rates. Greenspan points out that today's corporate leaders have to discount future

investments heavily, because the prospect of rising taxes or compliance costs make long-term planning
extremely difficult. As Greenspan points out, "Human time preferences drive discount rates, and those have not changed." Relying on Bank of England daily data and other
historical sources, the historical discount interest rate stayed between 5 and 10% since the 17th century. "To believe that we can keep rates down here for very much longer is something I

When asked if there

would not bet on." The Bond Market Is in a Bubble Greenspan spoke at length on the troubles in the bond market, both domestically and internationally.

was any concern regarding financial stability, he responded, "It's obvious that you ought to be looking at
the price/earnings (P/E) ratio in bonds to income. We get very nervous when the stock price index goes
to high P/E. We ought to be somewhat nervous when the bond rate does the same." Greenspan essentially means that
bond investors should be very nervous about how much they are paying for bonds right now, because the income derived from bond investments does not justify those prices. The
fundamentals don't line up. Eventually, an overpriced bond market will reach a peak in demand and give way. "It hasn't happened yet," Greenspan warned, "but it will." In an overvalued or

Greenspan also
bubble-like market, investors may reach for low-yielding bonds without realizing they are setting up for large capital losses. Concerned About Stagflation

indicated he is worried about stagflation, a simultaneous increase of inflation and stagnant growth. "I
think we are seeing the very early signs of inflation beginning finally to pick up as the issue of deflation
fades," he told Bloomberg. The underlying economy is not healthy, said Greenspan, in large part because neither political party is willing to tackle the
enormous entitlement programs that are rising too fast and crowding out domestic savings and investment. Since investment is the crucial determinant

of productivity, which is the most important determinant of wages and the standard of living, the economy is stuck in a stagnant position.
Entitlement spending in the United States has grown at an average annual rate of 9% since 1965. The U.S. economy does not and arguably cannot increase productivity at 9% per year to match
that. For example, productivity growth was less than 1% per year between 2011 and 2015. Without an influx of new immigrants to offset the aging population, governments must either

low U.S. interest rates

borrow, tax or print their way to cover those costs. Each method harms the ability of the private economy to save and produce growth. To simplify,

and entitlements are preventing Americans from saving enough. Corporations are putting a bias on
short-term investing at the same time that long-term capital investment needs to take place to cover
future entitlement issues. Finally, when asked if Americans should be more concerned about inflation
than they appear to be, Greenspan simply said, "Very much so."

The economy is unstable now- yield curve proves

Wayne 7/7 Russell Wayne is a Certified Financial Planner and President and Chief Investment Officer of
Sound Asset Management, Inc. “Is a Recession Coming? Watch the Yield Curve”, Investopedia, 7/7/17.
Ghs-cw http://www.investopedia.com/advisor-network/articles/recession-coming-watch-yield-
curve/?utm_source=news-to-
use&utm_campaign=www.investopedia.com&utm_term=10019993&utm_medium=email

After more than eight years of recovery from the Great Recession of 2008-9, it seems increasingly
unlikely that the U.S. economy will continue to expand without a temporary pullback. Although the
current expansion has been at a relatively modest pace, the odds are that we are steadily nearing time
for at least a mild slowdown. In recent weeks, stock prices have continued to flirt with record highs. Part
of the reason is better-than-expected profits from domestic businesses. Another part is hopes for a
reduction in taxes, which would add further stimulus to the upward march in companies' bottom lines.
There's little doubt about the former, but there's increasing concern that Congressional action on taxes
will be delayed or just may not happen. That's not surprising in view of the questionable prospects for
major health care legislation. It's quite clear that tax reform opportunities will be tied in to what
happens to health care. (For more from this author, see: The Truth About Stock Market Highs and Lows.)
Add to that the fact the market valuations have gotten even richer. Based on an aggregate S&P 500
estimate of about $135 a share for the next four quarters, we still get a price to earnings multiple of
nearly 18 times. That would have been a stretch with interest rates at the rock bottom levels prior to the
recent hikes and it's even more so now that that key indicator has been raised a few notches. The Yield
Curve So what does all of this have to do with the yield curve? The yield curve is nothing more than a
line illustrating the interest rates available over different periods. During times of economic expansion,
the yield curve of Treasury securities shows a marked upward angle from the shortest period (one
month) to the longest (30 years). It's not unlike an accelerating car, with the front rising and the rear
falling. When you hit the brakes, the front falls while the rear rises. At the beginning of 2016, the one-
month rate was 0.17% while the 30-year rate was 2.98%. That was a pretty steep angle. Fast forward a
year and a half and things have changed significantly. The one-month rate is now 0.81%, but the 30-year
rate has fallen to 2.70%. The upward angle has moderated, though it's still pointing in the direction of
growth. As the angle moderates further, or flattens, the acceleration will slow. Economic problems
develop when short-term rates are higher than long-term rates. That's what's known as an inverted
yield curve. When you have an inverted yield curve, the brakes are on the economy, which may well be
in recession. We're nowhere near an inverted yield curve yet, but with more interest rate hikes on the
horizon, we may see a flattening in a year or two. Perhaps sooner. With this possibility looming,
investors would be well advised to dial down risk and prepare for more difficult times. Doing so may
dampen prospects for further gains, but they may also limit exposure to whatever market weakness lies
ahead. Corrections are an integral part of the market's DNA. The next one may be around the corner.

Assumptions that the economy will stay strong are wrong- means no UQ for the DA
Hill 17 Jeremy Hill is currently Managing Partner of Old Blackheath Companies; co-founder TF Market
Advisors; and, COO of Research & Strategy at Societe Generale. “The U.S. Economy Is Weaker Than You
Think”, Forbes, 2/28/17. Ghs-cw https://www.forbes.com/sites/jeremyhill/2017/02/28/the-u-s-
economy-is-weaker-than-you-think/2/#41a2289d749a

The consensus among Wall Street economists is that the U.S. economy is poised for moderate growth. U.S.
GDP is forecast to grow from 1.9% to 2.3% in both 2017 and 2018. That may seem muted, but the U.S. is largely assumed to be at the vanguard of a global reflation trend. Yeah, American economic engine!

Unfortunately, it’s rarely that simple. Economists and markets have merely focused on the fact that
change is possible, rather than the timing or the scope of prospective change. The summary halcyon
scenario is that the U.S. economy will benefit from synchronous fiscal stimulus, gentle monetary
changes including inflation, and higher levels of global growth. These bullish assumptions consist of a
combination of continued jobs gains, benign inflation which will include wage gains, sustained high levels of consumer
and corporate confidence, and renewed capital expenditures all occurring while financial conditions are
level and the Trump administration delivers huge new fiscal stimuli and favorable tax regime changes. If all
those things happen at once, the better question might be why the U.S. economy can’t grow at 3.5% per year? Looking at current economic indicators there is a sense that the U.S. economy has turned a corner – that the U.S.
economy will finally get what it has been missing since the Great Recession – consistent GDP growth. The chart below is the Bloomberg economic surprise index. There is no quarrel that U.S. corporations had a great fourth quarter,
job gains continue, and the Federal Reserve remains vaguely willing to overshoot their inflation mandate before raising interest rates. Right now, markets are paying up for that economic growth. So what’s the downside?

Where is the U.S. economy weak? It’s the fact that the timing of fiscal, tax and regulatory changes is
unknown and completely subject to mystifying governmental delay. It is also the fact that core inflation numbers are
low the world over and the U.S. does not have an exceptional capacity to boost prices absent destructive border tax policies.
It is also the fact that reflation assumes monetary policies that do not tighten fiscal conditions. Lastly, it
is the assumption that geopolitics and event risk are minimal (e.g., how insulated is the U.S. economy from the prospect of a breakup of the Eurozone?).
The bullish case assumes that Trump’s changes in tax, regulation and fiscal spending excel in both
substance and timing. Those are huge assumptions. This is an administration that has been unable to articulate details about its fiscal and tax policy changes and has
already blundered badly in the policies that it has implemented. What happens to all of that consumer confidence if tax changes are pushed to the end of 2017 and fiscal stimulus is roundly a 2018 event? More importantly, the

Those in favor of robust spending

fiscal multiplier is likely to be a giant unknown. The fiscal multiplier is the return on investment. This is the crux of the entire fiscal stimulus argument.

programs either assume it will boost economic output and therefore necessarily believe in a decent
fiscal multiplier (i.e., above 1) or desire stimulus for political reasons. Unfortunately, the “science of economics”
has not settled the fiscal multiplier effect. There is much academic research pointing to the underlying
conditions of an economy as the determinate of the fiscal multiplier. For example, countries with large debt burdens may not benefit from a
stimulus program. Other conditions that may control the results of a stimulus program are interest rates and slack in the labor force. There is an uncertainty that U.S.

government spending will equate to economic growth across all segments of the economy. Another sobering issue is that
growth has been lackluster even with relatively constructive conditions. With monetary policy a huge tailwind, corporate earnings very healthy and citizens generally employed, the Fed’s preferred inflation measure of Core PCE is
just 1.7%, (year over year) and GDP is growing at 1.9%. See the chart below of U.S. GDP growth year of year. Admittedly, fiscal, tax and regulatory reforms are in the future, but it bears to remember that U.S. monetary policy has
been anchored close to zero rates for some time now. Even with exceedingly cheap money, growth has been muted, capital expenditures very low, and inflation vanilla. That is to say, the U.S. economy notwithstanding its size, is a

Another element of the

participant in global markets. U.S. prices, growth and policy are affected by the global economy in significant ways and in magnitude. See the chart below of G10 inflation.

faulty economic theme of “pricing the scope, but not the timing” is Fed rate hikes. The market assumes the Fed will be true to its
word and raise interest rates three times in 2017. That same market conveniently forgets the fact that the Fed’s forecast assumes much looser fiscal policy towards the end of 2017. However, the timing of

fiscal policy changes is far from certain. This means that the glide path of interest rates might ultimately be more chunky than anticipated. There is a risk that the market for interest
rates becomes disassociated with the Fed’s reaction function. It is impossible to fully diagnose the U.S. economy in this short article. It is curious however, that the consensus has run so quickly from respecting, if not disagreeing
with, Larry Summers’ dystopian “Secular Stagnation” to a newfound reflation theme. Surely, it is possible to envisage core prices over 2.0% and GDP growing at 2.5% annually. Yet, neither of those numbers would align with the

idea of a new, great, bullish U.S. economy. There are significant weaknesses in the U.S. economy. Just ask a Trump voter.

The economy is weaker than people think- Buffett says so

La Monica 16 Paul R. La Monica is a digital correspondent at CNNMoney. He writes daily about the
markets, economy and technology. “Warren Buffett says economy is weaker than people think”, CNN
Money, 11/11/16. Ghs-cw http://money.cnn.com/2016/11/11/news/economy/warren-buffett-
economy-income-inequality/index.html

Warren Buffett is worth $70 billion. He is the second-most wealthy person in the world. But he recognizes that the growing
income inequality gap in the United States is a big problem. And it may have helped Donald Trump defeat Hillary Clinton. "The
Forbes 400 had $93 billion in 1982, and they got $2.4 trillion now. And that's 25 times as much," Buffett told
CNN's Poppy Harlow in an exclusive interview in Omaha on Thursday. "If you've been working 40 hours a week, maybe holding a second job, and, you know, you work with the Little League
and you've been a good parent, and you're really struggling, you think, 'What's wrong with this picture?'" he added. "You wanna change the picture, and apparently, more went into the voting

Later in the interview, when Harlow asked him who was winning in
booth and decided that Trump was the answer," Buffett said.

this economy, Buffett was blunt. "The rich. Guys like me," he said. But even though Buffett is doing well,
he admitted the economy isn't in fantastic shape. And that probably helped fuel the rise of Trump, as well as Bernie Sanders, the Democratic senator
from Vermont who challenged Clinton for the nomination. "Bernie Sanders said to a good bit of American people, 'You're getting the short end of the stick. And it isn't your fault,'" Buffett said.
But he added that he did not think Sanders would have a better shot of beating Trump than Clinton did. He even cast doubt on recent numbers showing that the U.S. economy grew at a nearly
3% annualized pace in the third quarter. " It's softer than I think people think it is," Buffett said about the economy. "I don't mean
it's weak, but it's softer than people think." "The GDP, you know, comes out of the third quarter 2.9%. I don't think it was a 2.9% quarter," he added with a chuckle. "If I had to bet, if they end
up revising the third quarter, you know, it'll get revised downward." Still, Buffett remained optimistic that things will change for the better. He said the focus needs to be on improving incomes
for average, working class Americans. "Capitalism, the market system works," he said. "You want to keep a system where the goose lays more golden eggs every year. We've got that. Now, the
question is: How do those eggs get distributed? And that is where the system needs some adjusting."

Economic growth will lag- bold policies on education actually can LEAD to growth
Smith 16 Noah Smith is a Bloomberg View columnist and an assistant professor of finance at Stony
Brook University. “The Heart of the U.S. Economy Is Weaker Than It Looks”, Bloomberg View, 11/15/16.
Ghs-cw https://www.bloomberg.com/view/articles/2017-07-09/republicans-won-t-stop-fighting-with-
each-other

Growth will lag without higher birth rates, new immigrants, more startups and increased infrastructure
spending. A few years ago, I was among the many people arguing that the fundamentals of the U.S.
economy were strong. I believed that the slow recovery from the Great Recession wasn't a new normal,
and that the U.S. would return to something close to the steady levels of growth it enjoyed during the
20th century. I’m now reconsidering that position. Some fundamentals look considerably weaker than
they did a decade ago. Others are now uncertain, and depend heavily on what President-elect Donald
Trump does once he takes office. The U.S.’s greatest strength has always been immigration. Because of
the country's extraordinary willingness to take in newcomers, the U.S. population has grown by a factor
of more than 120 since 1776. The U.K.’s population, in contrast, has grown by only a factor of 10. More
recently, a relatively young U.S. population helped the country avoid many of the economic problems
that plague Europe and Japan. Many immigration opponents point to the period before 1965, when
entry to the U.S. was strongly curtailed, as an example to follow. But there was a big difference between
then and now: fertility rates. From its low point during the Depression to 1965, U.S. fertility never went
below the replacement rate of 2.1, which is what a country needs in order to have a stable population in
the long term. For much of the period it was much higher, peaking at more than 3.5 during the baby
boom. In the early 2000s, U.S. fertility stayed at about the replacement rate, but since the 2008 crisis it
has fallen below the level, driven mainly by a collapse in Hispanic fertility. With each American woman
now expected to have fewer than 1.9 children in her lifetime, the native-born population is no longer
reproducing itself: So if Trump strongly curbs immigration, the U.S. will encounter problems similar to
those of Japan, Germany and other wealthy slow-growth nations. A smaller working population will
have to support an ever-increasing number of elderly people, putting a strain on Social Security, the
health care system and family finances. Of course, immigrants are important for reasons other than
population increase -- they are much more entrepreneurial than the native-born. Another of America’s
fundamental strengths, entrepreneurship, depends on taking in bold, risk-taking immigrants. Let’s hope,
therefore, that Trump’s September pledge to admit more high-skilled immigrants wasn’t just talk.
Economic dynamism is traditionally another fundamental U.S. strength. But this too is rapidly falling, as
the U.S. starts to look more like other rich countries. Economists have been observing simultaneous
drops in almost every measure of dynamism they can think of. Fewer business are being started, even in
the vaunted tech sector. Employees are switching jobs and moving less than they used to. The
traditional image of Americans as bold, self-starting, risk-takers no longer holds true, as people shift
toward working for big companies. No one knows exactly why this is happening, but the Barack Obama
administration was taking a few steps to try to counter the decline. It had begun to attack regulations
that hold back dynamism, from real-estate development restrictions to occupational licensing. It was
preparing to crack down on monopolies and noncompete agreements. Now, it’s unclear whether Trump
will carry on any of these policies, since his advisers will almost certainly include very few of Obama's
proposals. Other U.S. fundamentals had begun to decay long ago. The U.S. used to lead the world in
educational achievement, but is now in the middle of the pack, as soaring college tuition puts the brakes
on post-secondary education. The U.S. interstate highway system is the best in the world, but
excessively high infrastructure costs and a lack of willingness to spend money on repairs puts that at
risk. There are some signs Trump will attack these problems. He has suggested putting a cap on student-
loan payments, and has promised to spend much more on infrastructure. These would be positive
measures, though they won’t do much to rein in the inflated cost problems in either sector. A final
problem with U.S. fundamentals is health care. U.S. health spending far outstrips that of other rich
countries, despite similar quality of care. Obamacare looked like it was holding back health-care cost
growth. But the Republicans who now control Congress want to scrap Obamacare, and Trump might let
this happen. That could cause costs to start rising faster once again. So the U.S. fundamentals look
worse than they did in previous decades. Making America great again will require bold, smart policies, a
welcoming attitude toward immigrants and probably a bit of luck too.

“Econ good” predictions have never materialized- economy is stagnant now

Durden 17 Tyler Durden is a pseudonym for a group of online authors writing for ZeroHedge. “11
Reasons Why US Economic Growth Is So Bad”, ZeroHedge, 5/1/17. Ghs-cw
http://www.zerohedge.com/news/2017-05-01/11-reasons-why-us-economic-growth-so-bad

Those that were predicting that the U.S. economy would be flying high by now have been proven wrong.
U.S. GDP grew at the worst rate in three years during the first quarter of 2017, and many are wondering
if this is the beginning of a major economic slowdown. Of course when we are dealing with the official numbers that the federal government puts out, it is important to acknowledge that they

are highly manipulated. There are many that have correctly pointed out to me that if the numbers were not being doctored that they would show that we are still in a recession. In fact, John Williams of shadowstats.com has shown that if honest numbers were being used that U.S. GDP

even if we take the official numbers

growth would have been consistently negative going all the way back to 2005. So I definitely don’t have any argument with those that claim that we are actually in a recession right now. But

that the federal government puts out at face value, they are definitely very ugly… Economic growth
slowed in the first quarter to its slowest pace in three years as sluggish consumer spending and business
stockpiling offset solid business investment The nation’s . Many economists write off the weak performance as a byproduct of temporary blips and expect healthy growth in 2017.

gross domestic product increased at a seasonally adjusted annual rate of 0.7%

— the value of all goods and services produced in the USA — , the

below the tepid 2.1% pace clocked both in the fourth quarter and as an average
Commerce Department said Friday,

throughout the nearly 8-year-old recovery. .7 percent Economists expected a 1% increase in output, according to a Bloomberg survey. Even if you want to assume that it is a legitimate number, 0

economic growth is essentially stall speed, and this follows a year when the U.S. economy grew at a rate of just 1.6 percent. So why is this happening? Of course the “experts” in the mainstream media are blaming

all sorts of temporary factors… Economists blamed the weather. It was too warm this time around, rather than too cold, which is the usual explanation for Q1 debacles. And they blamed the IRS refund checks that had been delayed due to last year’s spectacular identity theft problem.
Everyone blamed everything on these delayed refund checks, including the auto industry and the restaurant industry. But by mid-February, a veritable tsunami of checks went out, and by the end of February, the IRS was pretty much caught up. So March should have been awash in

They always want us to think that “boom times” for the U.S.
consumer spending. But no. So we’ll patiently wait for that miracle to happen in second quarter.

economy are right around the corner, but those “boom times” have never materialized since the end of
the last financial crisis. Instead, we have had year after year of economic malaise and stagnation, and it
looks like 2017 is going to continue that trend. The weak economic The following are 11 reasons why U.S. economic growth is the worst that it has been in 3 years… #1

growth in the first quarter was the continuation of a long-term trend . Barack Obama was the only president in history not to have a single year when the U.S. economy

Consumer
grew by at least 3 percent, and this is now the fourth time in the last six quarters when economic growth has been less than 2 percent on an annualized basis. So essentially this latest number signals that our long-term economic decline is continuing. #2

spending drives the U.S. economy more than anything else, and at this point most U.S. consumers are
tapped out. three-fourths of all U.S. consumers have to “scramble to cover their living
In fact, CBS News has reported that

costs The job market appears to be slowing. The U.S. economy only added about 98,000 jobs in
” each month. #3

March, and that was approximately half of what most analysts were expecting The flow of credit . #4

appears to be slowing as well there has been no growth for commercial and
. In fact, this is the first time since the last recession when

industrial lending for at least six months. .S. factory output dropped at the fastest pace that we #5 Last month, U
have witnessed in more than two years We are in the midst of the worst “retail apocalypse” in U.S. . #6

history. The auto

The number of retailers that has filed for bankruptcy has already surpassed the total for the entire year of 2016, and at the current rate we will smash the previous all-time record for store closings in a year by nearly 2,000. #7

industry is also experiencing a great deal of stress. This has been the worst year for U.S. automakers since the last recession, and seven out of the eight largest fell short of their sales projections in

Used vehicle prices are falling “dramatically

March. #8 Commercial ”, and Morgan Stanley is now projecting that used vehicle prices “could crash by up to 50%” over the next several years. #9

bankruptcies are rising at the fastest pace since the last recession The . #10 Consumer bankruptcies are rising at the fastest pace since the last recession. #11

student loan bubble is starting to burst . It is being reported that 27 percent of all student loans are already in default, and some analysts expect that number to g o much higher. And of course some areas of the country

are being harder hit than others. The following comes from CNBC… Four states have not yet fully recovered from the Great Recession. As of the third quarter of last year, the latest data available, the economies of Louisiana, Wyoming, Connecticut and Alaska were still smaller than when
the recession ended in June 2009. Other states that have recovered have seen their economic recoveries stall out. Those include Minnesota, North Dakota, New Mexico, Oklahoma, South Dakota and West Virginia. We should be thankful that we are not experiencing a full-blown

economic meltdown just yet, but it is undeniable that our long-term economic decline continues to roll along . And without a doubt the storm clouds are

building on the horizon, and many believe that the next major economic downturn will begin in the not too distant future.
 Interest rates will remain low
Uniqueness overwhelms the link- Interest rates will continue to be low- dual mandate, high
expectations, long-lasting recession
Reeves 16 Jeff Reeves is the editor of InvestorPlace.com. “Why U.S. interest rates will stay low forever”,
Market Watch, 6/7/16. Ghs-cw http://www.marketwatch.com/story/why-investors-can-expect-us-
interest-rates-to-stay-low-forever-2016-06-07

When the Federal Reserve raised interest rates a measly 0.25% last December, some investors thought
it was about time. After all, pundits had been warning of rising rates. Consider this Wall Street Journal piece from the beginning of 2014, when the 10-year yielded almost 3%, compared to about 1.7% currently.
But other investors were skeptical that the U.S. economy was ready for liftoff. Instead, they saw a failure to launch. Mizuho Securities
chief economist Steven Ricchiuto, for example, has dismissed the idea of higher rates for some time. He told Reuters the December hike “was very, very
stupid” and that the U.S. is more likely to see a rate rollback akin to the European Central Bank’s retreat on rates after a brief experiment with tighter monetary policy in 2011. And it’s pretty clear which side turned out to be
correct in that fight. Investors are now acting like another rate hike is nigh impossible. After an ugly May jobs report, the probability of a June rate hike is now in the low single digits, according to the CME’s FedWatch measure of
Fed Fund futures — down dramatically from about 30% just a few weeks ago. Gold rallied on the prospect of low rates and a weak U.S. dollar DXY, +0.00% , bond yields fell across the board, and now it seems over but for the Fed’s

inevitable-but-always-cryptic press conference on June 15. Such inertia has plagued the Fed since the early days of the recovery, and yet
investors still haven’t gotten the memo: Get used to low rates. A case for lower rates For those who appreciate central banks’ role in the global economy,
or even if you believe that central banks are flawed organizations which simply can’t be removed from the system, the case for low interest rates should be an easy sell. In 1977, an amendment to

the Federal Reserve Act set the policy objectives that govern the institution today. Specifically, a key part of
that amendment dictates that the Fed should “promote effectively the goals of maximum employment,
stable prices and moderate long-term interest rates.” That balance between modest inflation and low
unemployment is often referred to as the “dual mandate” of the Fed — and, simply put, is the entire purpose of the institution. Inflation nowadays
is hovering around the Fed’s 2% target for core inflation, with a 2.1% inflation rate for the core Consumer Price Index and a 1.6% rate for the core Personal Consumption Expenditure index. But as I observed several weeks ago, the
confusion in long-term trends and among individual readings makes it hard to truly say with confidence whether inflation is heating up or simply seeing a short tick higher while it remains relatively modest in the long-term. In fact,
Chicago Fed President Charlie Evans recently predicted that it may be three years before inflation is acute enough of a problem to prompt central bank action. So on item No. 1, inflation, things are at best inconclusive. But on item

May saw the weakest job growth in more than five years, significantly
No. 2, there isn’t much confusion at all after the recent jobs report;

missing expectations and suffering downward revisions to prior job totals. Even hawks looking for any
excuse to boost rates must admit that these two items don’t add up to a strong case for a rate hike. No
wonder Fed Chairwoman Janet Yellen used her final press conference before the FOMC meeting to do damage control rather than drive home the likelihood of an increase in interest rates. Rate predictions are always too

aggressive The reality is that expectations about rate hikes have been way too aggressive. Like clockwork, policymakers and pundits
predict higher rates in the medium-term — and are always proven wrong. Consider the so-called “dot plot” that polls Federal Reserve officials on where they expect rates to be in the future. Policymakers in December 2015
expected the benchmark fed funds rate to be around 1.375% at the end of 2016 with a median forecast of 2.375% at the end of 2017. That was actually down significantly from just six months prior, with previous “dot plot”
forecasts in June 2015 predicting a 1.625% rate by the end of 2016 and 2.875% by 2017’s close. And a year before, in December 2014, the Fed predicted a 2.5% rate at the end of 2016 and 3.625% at the end of 2017. It’s not just the
Fed that is wildly wrong. The interest rate market has been just as consistently bad at predicting when and how much rates will go up, always expecting more aggressive monetary policy than we see. To be sure, the vast majority of

But like it or not, the U.S.

investors are hopeful that the recovery will stick, so it’s natural to believe the economy is stronger and more prepared for tighter monetary policy than it actually is.

continues to suffer the overhang from an unusually deep and long-lasting recession — a “secular
stagnation” where output and employment measures remain weak in the long-term despite aggressive
monetary policies. The fact we haven’t seen inflation-adjusted GDP growth above 3% for a decade, and still may not see a growth rate that robust for several more years is a bitter pill We also live in a new
technological and globalized era, where the economic models of 2016 tend to conserve much more capital than in ages past when there was more demand for big investments in labor and brick-and-mortar facilities. The
Amazon.coms and Ubers of the world help us access goods and services more quickly and at lower cost, but there isn’t the same level of capital investment as there was under the old model of big-box stores and Yellow Cab buying

The sad reality is that until and unless the U.S. posts employment metrics that are
a fleet of Crown Victorias.

consistently strong, or inflation rises significantly and stays elevated, there simply isn’t a case for hiking
interest rates this month, this year — and even next year.

Interest will stay low- Fed is not impervious to political pressure and incentive to keep rates
low
Dorfman 15 Jeffrey Dorman is a professor of economics at The University of Georgia and consultant on
economic issues. “18 Trillion Reasons Why Interest Rates Will Stay Low”, Forbes, 2/17/15. Ghs-cw
https://www.forbes.com/sites/jeffreydorfman/2015/02/17/18-trillion-reasons-why-interest-rates-will-
stay-low/#5296f2d77e54
The Federal Reserve has continued to announce its intention to begin raising its interest rates sometime
this spring, yet the market remains skeptical. U.S. government 10 year bonds have risen about 40 basis points in the last two weeks, so the
bond market might believe the Fed a little. However, 30 year fixed rate mortgage rates are at or near six month lows and seem to be heading lower. That mortgage
lenders are willing to lock in low rates for 30 years suggests they don’t believe the Fed will raise rates, or that higher Fed rates will not lead to any particular increase
in inflation or their cost of funds for the foreseeable future. Given that the Fed has been as explicit as ever in its history about its intentions, why
are the
markets so unsure about interest rates rising? There are 18 trillion reasons. In the decade since the last
time the Federal Reserve started to tighten its monetary policy in June 2004, the national debt has more
than doubled. Back then, the national debt stood at $7.3 trillion dollars. Today, it is more than $18.1
trillion. Politicians hate spending money on interest payments on the debt because it does not buy them any votes. That means the government has an
enormous incentive to keep interest rates low, and while the Fed is officially independent it is not impervious to

government pressure (particularly when the Fed chair hopes to be reappointed). The effect of Fed policy on the national debt,
the deficit, and the federal budget cannot be overestimated. The Fed has, in fact, served as the largest-scale enabler in history,
assisting the President and Congress to run a series of the six largest budget deficits the nation has ever seen. Historically, normal interest rates for U.S. government
debt is in the range of 4 to 6%. In fact, before the recent recession both 2 and 10 year government bonds had been between 4.5 and 5.25% for the preceding two
years. Rates now are approximately 0.5% for the 2 year note and 2% for the 10 year bond. The difference between the cost of the national debt at current rates and
historically average ones is enormous. For the fiscal year 2014 that ended last September, the federal government paid $430.8 billion in interest on the national
debt. Back
in 2004 with “only” $7.3 trillion in debt, the interest bill added up to $321.6 billion. With only
40% as much debt, the government was paying 75% as much in interest. If the federal government was currently paying an
historically average interest rate on the debt, instead of $431 billion in interest the annual bill would be around $900 billion. In other words, normal interest rates
would double the current federal budget deficit and make any effort to contain the national debt far more difficult. The Fed has enabled out-of-control federal
spending and borrowing in a second way. As part of its quantitative easing policy (commonly known as QE) the Fed has bought
up trillions of dollars in government bonds. While the federal government pays the Fed interest on these bonds, the Fed refunds its annual
operating profit to the Treasury so essentially the interest on all those bonds is returned to the Treasury. Because the Fed is basically allowing

the government to borrow several trillion dollars interest free, the Fed’s QE programs have saved the
government several hundred billion dollars, thereby lowering both the deficit and national debt. For example,
in 2014 the Fed refunded $98.7 billion to the Treasury. At least for now the Fed has ended QE, but it has announced no plans to shrink its balance sheet. Thus,

the Fed’s subsidy to the government apparently will continue to hold down the deficit for a while longer.
What all this means is that even if rates rise, they won’t rise much. The Washington politicians do not
want to see deficits spike by $500 billion per year unless they get to spend that money on programs of their choice. There may be value
in reading the Fed’s regular policy statements in order to properly position your investment portfolio, but when they promise higher interest rates I would take that
part with a grain of salt. So if you are a saver weary of the paltry interest you have been earning on bank accounts, certificates of deposit, and many bonds, you

probably are looking forward to the Fed raising rates. Unfortunately, there are 18 trillion reasons why
rates may never return to normal levels. Given the current economic condition and the potential impact
on the deficit, if the Fed did actually put serious effort into raising interest rates, the President would
likely tell them to stop. Wall Street wisdom says never to fight the Fed, but on interest rates we have a
battle the markets seem to think they will win.

Due to macro trends, interest rates won’t rise

Berman 17 Larry Berman is co-founder of ETF Capital Management. He is a Chartered Market
Technician, a Chartered Financial Analyst charterholder, and is a U.S.-registered Commodity Trading
Adviser. “Why interest rates won’t likely rise much”, The Globe and Mail, 2/23/17. Ghs-cw
https://www.theglobeandmail.com/globe-investor/funds-and-etfs/etfs/why-interest-rates-wont-likely-
rise-much/article34124477/

Having followed global financial

This week I will be addressing the Manning Centre Conference in Ottawa on the topic of debt, demographics and the long-term implications for Canada.

markets for the past three decades, I’ve seen several bulls and bears. The one thing that has never
changed in 30 years of ups and downs in equity markets is the disinflation trend and that on average
interest rates have been declining. The essence of these secular long-term trends are demographics –
what we collectively all do together to drive aggregate demand. I recall back in October, 2001, the last time investors were calling the end of the bond bull
market, when the U.S. Treasury had a surplus and declared the entire debt would be paid off in less than a decade. They cancelled the new issuance of long-term bonds and the bond market rallied sharply. I was shorting long
bonds at the time and that one black swan announcement cost me half my portfolio gains that year. Turn the clock forward a decade and a half and debt as a percentage of the U.S. economy is 105 per cent – and it will never be

. Governments have a way of deficit financing their way to re-election and until the idea of fiscal
paid off

policy changes as a major policy tool, debt as a percentage of the economy will likely continue to grow.
Japan has been the poster child for deficit spending that intends to stimulate the economy. The country has been monetizing debt (central bank buying the debt with creation of money) for two decades and they are worse off

The headwinds of an aging population, low birth rates, and massive government debts are
today than they were in 1997.

simply toxic for economic growth – if you do not see that you are blind to the reality of structural debt.
Political influencers like Paul Krugman and others that suggest the debt is not a problem are only fuelling the issue. U.S. President Donald Trump’s infrastructure spending and economic stimulation plans, while not addressing the
massive entitlement issue, will only add to the long-term structural debt obligation. I was excited to see that the findings of Canadian Finance Minister Bill Morneau’s Growth Commission have highlighted some of these important
demographic challenges that policies need to address. But they did not go far enough in terms of recommendations that will really move the needle. Increasing household incomes is nice to say, but not an easy task to be sure. It
sounds like they will just expand the government, which will not solve the problem – it is the problem. Over 100 per cent of world gross domestic product since the Lehman Bros. bankruptcy on Sept. 15, 2008, has been fuelled by
government debt and expansion of corporate and personal debt – these policies, if they continue, will make it far worse for our grandchildren. Politicians don’t want to talk about it because it is hard to get elected by telling people

– but that is the reality we face. The world has a fundamental

we have lived beyond our means and that we have to start making tough choices

growth problem. According to estimates by the World Bank, population growth in the world will take us
to around nine billion by Canada’s 200th birthday. The vast majority of that growth will be in India, sub-Saharan Africa, and parts of the Middle East where the average
age of the population is twenty-something. Japan, Germany, China, Canada, the United States and most of the developed world

have much older populations. In Canada, the average age of the population is about 38; in Japan, it’s 48, the oldest economy in the world. At that age, you just do
not have the natural population growth. The International Monetary Fund’s world GDP calculation has
been falling on average over the past few decades while use of debt has been accelerating, largely due
to 36 years of declining interest rates, to offset the natural slowing in birth rates and productivity. All
these macro trends tell me that interest rates are likely to stay low for decades to come because we
cannot afford for them to go up. The yield to maturity of the entire world of fixed-income is under 2 per cent and after inflation and tax you are worse off each year. There is no real return in
the safety of fixed-income. The current market narrative is about Mr. Trump’s policies goosing inflation, economic growth and corporate profitability and thus bearish for bond yields. Bonds still have a place in portfolios, not
because we love them for income or growth, but because during the next recession, they will likely save your portfolios. At the moment, my largest bond position is in short-term Canadian corporate bonds (ZCS). It has a
distribution yield of about 3.07 per cent because of higher bond coupons, but the yield to maturity is about 1.80 per cent. We do not see the Bank of Canada raising rates for several years and this is the best place in the short term.
But if we do see the Federal Reserve manage to raise rates again this year and bond yields in the United States 10-year hit 3 per cent, buying U.S. Long Bonds (TLT) would be the best way to protect your portfolio in the next

recession. All the talk about Mr. Trump’s policies driving inflation higher might be possible, but the economy cannot handle the higher rates.
 School funding high now
Federal school spending is high now- 80.1 bil across all fed gov
McCluskey 16 Neal McCluskey is the director and a policy analyst for Cato’s Center for Educational
Freedom. “Cutting Federal Aid for K-12 Education”, Downsizing Government 4/21/16. Ghs-cw
https://www.downsizinggovernment.org/education/k-12-education-subsidies

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.

Federal Spending on education is at an all-time high

Lips and Watkins 08 Dan Lips is a Senior Policy Analyst for Heritage. Shanea Watkins is a Policy Analyst
in Empirical Studies. “Does Spending More on Education Improve Academic Achievement?”, Heritage,
9/8/08. Ghs-cw http://www.heritage.org/education/report/does-spending-more-education-improve-
academic-achievement
Debates about how to improve public Education in America often focus on whether government should spend more on education. Federal and state policymakers proposing new Education programs often base their arguments on
the need to provide more resources to schools to improve opportunities for students. Many Americans seem to share this view. Polling data show that many people believe that government allocates insufficient resources to

While this view

schools. A poll conducted annually from 2004 through 2007 found that American adults list insufficient funding and resources as a top problem facing public schools in their communities.[1]

may be commonly held, policymakers and citizens should question whether historical evidence and
academic research actually support it. This paper addresses two important questions: How much does the United States spend on
public Education? What does the evidence show about the relationship between public Education spending and students' academic achievement? The answers to these questions should inform federal and state
policy debates about how best to improve education. Twenty-nine states and the District of Columbia face budget shortfalls totaling approximately $48 billion for fiscal year 2009.[2] Even more states could face shortfalls in the
near future. At the federal level, long-term budgets face a challenging fiscal climate. Projected growth of entitlement programs is expected to place an ever-increasing burden on the federal budget, limiting the resources available
for other purposes, including education.[3] Simply increasing government spending on education may no longer be a viable option for federal and state policymakers. Furthermore, as this paper demonstrates, simply increasing
Education spending does not appear to improve American students' academic achievement. To improve learning opportunities for American children, policymakers should refocus on allocating resources more efficiently and
effectively. U.S. Spending on Public Education Answering whether spending more on public Education improves academic achievement begins with establishing how much the United States spends on public education. The National
Center for Education Statistics in the U.S. Department of Education publishes extensive data on Education in its annual Digest of Education Statistics, including the following important facts: Total spending on K-12 public education.

The United States spent $553 billion on public elementary and secondary Education in 2006-2007,[4] which is 4.2 percent of
gross domestic product.[5] Average per-student spending in public school. In 2004-2005 (the most recent school year for which data are available), an average of $9,266 was spent

per pupil in American public schools.[6] This means that a student entering first grade in 2004 could
expect approximately $111,000 to be spent on his or her elementary and secondary Education if the
student completes high school.[7] Spending by level of government. Public education revenue is drawn from three sources of government: federal, state, and local. In 2004- 2005, state
government provided the largest share of public education revenues: 46.9 percent. Local governments provided 44.0 percent, and the federal government provided 9.2 percent.[8] Federal spending on education. In 2007, the
federal government spent $71.7 billion on elementary and secondary Education programs. These funds were spent by 13 federal departments and multiple agencies. The Department of Education spent $39.2 billion on K-12
education. The largest programs in the Department of Education's elementary and secondary budget were "Education for the disadvantaged" ($14.8 billion) and "Special Education" ($11.5 billion).[9] Historical Trends in Public

but historical trends show that American spending on

Education Spending Many people believe that lack of funding is a problem in public education,[10]

public education is at an all-time high. Between 1994 and 2004, average per-pupil expenditures in
American public schools have increased by 23.5 percent (adjusted for inflation). Between 1984 and 2004, real
expenditures per pupil increased by 49 percent.[11] These increases follow the historical trend of ever-
increasing real per-student expenditures in the nation's public schools. In fact, the per-pupil expenditures in 1970-1971 ($4,060) were less than
half of per-pupil expenditures in 2005-2006 ($9,266) after adjusting for inflation.[12] Appendix A presents the growth of per-pupil expenditures by state compared to the national average. Over the past decade, real expenditures
per pupil have increased in all 50 states and the District of Columbia, increasing the most in Vermont (47.5 percent) and the least in Alaska(5.9 percent). Federal spending on Education has also increased dramatically, as shown in

On a per-pupil basis,
Chart 2. Combined federal support and estimated federal tax expenditures for elementary and secondary education has increased by 138 percent (adjusted for inflation) since 1985.

real federal spending on K-12 education has also increased significantly over time. (See Chart 3.) In 2005, the
federal government spent $971 per pupil, more than three times its level of spending in 1970 ($311) after
adjusting for inflation.
 Interest rates will rise
Interest rates will raise now
Associated Press 4/5/2017, Fed minutes reveal debate over inflation and Trump,
http://www.latimes.com/business/la-fi-fed-minutes-inflation-trump-20170405-story.html

Federal Reserve officials struggled last month to come to grips with two big uncertainties facing the U.S. economy: whether it would be
safe to let inflation rise faster for a while and how to assess the impact of President Trump's ambitious economic stimulus plans. Minutes of
the Fed's discussion at their March meeting, released Wednesday, showed near-unanimous support for the quarter-point increase in its key policy rate, the second
rate hike in three months. But there was less agreement over the issues of inflation and Trump's economic plans. The
group decided to keep signaling that future rate increases would be gradual but be prepared to respond quickly to changes in the economic outlook. Many analysts
believe the Fed will hold rates steady at its May meeting. The minutes also showed that Fed
officials had a briefing from staff over the
central bank's $4.5-trillion balance sheet, which quadrupled during the financial crisis and its aftermath as the central bank engaged in
successive rounds of bond purchases as a way to lower long-term interest rates and give the weak economy a boost. The minutes said Fed officials agreed that if the
the Fed
economy continued to perform as expected, “a change in the committee's reinvestment policy would likely be appropriate later this year.” Currently,

has been keeping the level of the balance sheet steady at $4.5 trillion. But financial markets have been
closely watching for any Fed signal on the timing of when the Fed would begin reducing the level of its
bond holdings by halting its current practice of replacing any maturing bonds. The minutes indicated that this change
could be announced later this year. The minutes showed that several Fed officials believed that Trump's stimulus plans would probably not begin until next year.
The minutes said that because of the “substantial uncertainties” about the outlines of the program that will eventually emerge from Congress, about half of the Fed
officials had not included any assumptions about Trump's efforts in their economic forecasts. While most believed Trump's plans had the potential to boost growth,
some said there were also downside risks from a possible adverse economic reaction from Trump's measures to limit immigration and to increase trade barriers to
protect U.S. workers. On
inflation, the minutes showed that some Fed officials worried that if unemployment, currently at a low of 4.7%, fell even further, it
could pose a “significant upside risk” of higher inflation. The Fed's two goals are to achieve maximum employment and moderate
inflation. Unemployment is below the Fed's 4.8% goal, while inflation has remained below the Fed's 2% inflation goal for several years. Although some Fed officials
argued that the inflation target might be achieved by the end of this year, other Fed
officials argued that because inflation had run
below 2% for so long, it would do no harm to allow prices to rise above 2% for a time. “A few members expressed
the view that the committee should avoid policy actions or communications that might be interpreted as suggesting the committee's 2% inflation objective was
actually a ceiling,” the minutes said. The Fed's decision to boost its key policy rate by a quarter of a point left it in a range of 0.75% to 1%. The
Fed
continued to signal that it expected to boost rates three times this year, and many private economists
believe that the upcoming rate hikes might occur at the June and September meetings. The next meeting is May 2 and 3. The minutes
were released with the customary three-week delay after the March meeting.
link
 Squo triggers
The status quo will trigger the DA it’s inevitable--- Proposed education funding proves.
Ujifusa 3/1/17, Andrew Ujifusa is an education week reporter and co-author of the PoliticsK12 blog.,
Budget Deal for 2017 Includes Increases for Title I, Special Education,
http://blogs.edweek.org/edweek/campaign-k-
12/2017/05/budget_deal_2017_title_I_special_education_spending.html

Title I spending on disadvantaged students would rise by $100 million up to $15.5 billion from fiscal 2016
to fiscal 2017, along with $450 million in new money that was already slated to be shifted over from the now-defunct School
Improvement Grants program. And state grants for special education would increase by $90 million up to
$12 billion. However, Title II grants for teacher development would be cut by $294 million, down to about
$2.1 billion for the rest of fiscal 2017. The bill would also provide $400 million for the Student Support and
Academic Enrichment Grant program, also known as Title IV of the Every Student Succeeds Act. Title IV is a block grant that districts can use for
a wide range of programs, including health, safety, arts education, college readiness, and more. Total U.S. Department of Education

spending, including both discretionary and mandatory spending covering K-12 and other issues, would fall by $60 million from fiscal
2016, down to $71.6 billion. Congress is expected to vote on this budget deal early this week, the Washington Post reported. The federal
government has been operating on a resolution that kept fiscal 2017 funding at fiscal 2016 levels. This resolution was slated to expire on April 28, leading to the
possibility of a government shutdown, but Congress passed a one-week extension late last week to provide time for a budget deal. Lawmakers appear to be sending
early signals of independence from the Trump administration on education budget issues. For example, in the fiscal 2018 budget proposal Trump released several
weeks ago, the president also sought to eliminate just over $1 billion in support for 21st Century Community Learning Centers in fiscal 2018. However, this budget
deal for fiscal 2017 would give the program a relatively small boost of $25 million up to nearly $1.2 billion. Trump had also wanted to cut Title II funding in half in
fiscal 2017, far more than this agreement, before eliminating it entirely in fiscal 2018. And programs designed to serve needy students like TRIO and GEAR UP would
also get small increases in this fiscal 2017 deal. Several of Trump's proposed fiscal 2017 cuts were to programs that had already been consolidated under ESSA. The
budget deal doesn't appear to include a new federal school choice program, a top K-12 priority for the Trump administration, although Trump's request for such a
program appears in his fiscal 2018 proposal and not his fiscal 2017 blueprint. One more thing about that Title IV funding: The $400 million in funding in the bill is a
lot less than the $1.6 billion envisioned for Title IV under ESSA. To make sure that the grants will still be useful to districts, the bill would allow states to distribute
them competitively. Just like under ESSA, at least 20 percent of the funding would have to be spent on activities that would help students become safer and
healthier and at least 20 percent would be used for activities aimed at helping children become more well-rounded, such as arts education. The big difference from
ESSA is that these percentages would apply at the state level, rather than to individual grants. The change is only supposed to be in place for one year. Lawmakers
are hoping that they can provide more money for the program after that. And in a shift from ESSA, districts that choose to spend the money on technology could
dedicate up to 25 percent to technology infrastructure. (That's up from 15 percent in the original law.) Here are some other numbers from the budget deal: The

department's office for civil rights would get a small increase of $1.5 million up to $109 million. Pell Grants would
be flat-funded at $22.5 billion, and year-round Pell Grants would be supported. Head Start programs, which are administered by the Department of

Health and Human Services, would get an $85 million increase to $9.3 billion. The Education Innovation and Research fund would be cut

by $20 million down to $100 million. Impact Aid for schools affected by federal activities would get $1.3 billion, a $25 million increase. The
District of Columbia's voucher program would also be extended through the rest of 2017. You can read additional figures here, starting on page 20. The overall deal
is disappointing in several respects because it doesn't contain more cuts and actually contains several K-12 funding increases, said Neal McCluskey, the director of
the Center for Educational Freedom at the Cato Institute, a libertarian Washington think tank. "You'd think there'd be more enthusiasm for cutting K-12 with this
Congress and White House," McCluskey said. (Both are controlled by Republicans.) He said that the increase for Title I aid is disappointing, and he said the increase
for 21st Century programs is mystifying, while the extension of the D.C. voucher program is a win in McCluskey's book. By contrast, American Federation of
Teachers President Randi Weingarten said in a statement that while the deal is "by no means our ideal budget," she praised it for increasing funds to Head Start,
community schools, and special education grants. "Congress should follow this blueprint to invest in public schools in the 2018 budget as well," Weingarten said.
Both Weingarten and the Education Trust, a civil rights advocacy group, also praised the budget for re-instituting year-round Pell Grants. Assistant Editor Alyson
Klein contributed to this post.
 USFG doesn’t influence fed
Aff’s governmental action does not influence Fed policy
Harris 15 Katherine Clark Harris is a Former policy worker at the U.S. Department of Treasury. “Hidden
in Plain Sight: The Federal Reserve’s Role in U.S. Foreign Policy”, Yale Journal of International Law, 2015.
Ghs-cw http://digitalcommons.law.yale.edu/yjil/vol40/iss2/5/

Legal scholars long have struggled to draw a precise line between policy creation and implementation. 91
When an independent agency like the FRB takes actions with foreign policy implications, it does not fit
neatly into this traditional “creation-implementation” paradigm. The FRB is neither subordinate to, nor
working in service of, the political branches. It is deliberately shielded from political influence. How do independent agencies fit in the U.S.
foreign policy process, which is traditionally led by the political branches? Whereas the Department of State is an agent of the President

that executes his or her priorities, the FRB is a principal actor that makes its own policy judgments. This
“principal-agent” 92 distinction provides a useful heuristic through which to understand the FRB’s unique role.
It is truly “ independent” in all its decisions —foreign affairs or otherwise. There are several independent agencies whose actions
also have substantial bearing on U.S. foreign policy such as the Central Intelligence Agency, Securities and Exchange Commission, and U.S.

International Trade Commission. However, all three agencies differ from the FRB in significant ways. Their actions affecting

foreign affairs are intentionally directed or heavily influenced by political actors.93 They are not truly “independent” in
the realm of foreign policy. These comparisons underscore the FRB’s role as a uniquely independent agency

acting as a principal, not merely an agent , in U.S. foreign policy matters.94

Fed itself says independence from political influence is key- aff’s action wouldn’t influence
monetary policy
The Fed 17 “Why is it important to separate Federal Reserve monetary policy decisions from political
influence?”, The Federal Reserve, 3/1/17. Ghs-cw https://www.federalreserve.gov/faqs/why-is-it-
important-to-separate-federal-reserve-monetary-policy-decisions-from-political-influence.htm

Policymakers, academics, and other informed observers around the world have reached broad consensus that
the goals of monetary policy should be established by the political authorities, but the conduct of monetary policy in pursuit of those goals should be
free from political influence. Careful empirical studies support the view that central banks able to conduct day-to-
day monetary policy operations free of political pressure tend to deliver better inflation outcomes,
without compromising economic growth (see "Further Reading" below). And, while it is important to keep politics out of monetary policy decisions, it is equally
important, in a democracy, for those decisions--and, indeed, all of the Federal Reserve's decisions and
actions--to continue to be undertaken in a strong framework of accountability and transparency. The public and
our elected representatives have a right to know how the Federal Reserve carries out its responsibilities. To achieve its congressionally mandated goals of price stability, maximum employment, and moderate long-term interest

Because monetary policy

rates, Federal Reserve policymakers must attempt to guide the economy, over time, toward a growth rate consistent with the expansion in its underlying productive capacity.

works with time lags that can be substantial, achieving this objective requires that monetary
policymakers take a longer-term perspective when making their decisions. Policymakers in an independent central bank, with a mandate to
achieve the best possible economic outcomes in the longer term, are best able to take such a perspective. In contrast, policymakers in a central bank subject to short-term political influence may face pressures to

overstimulate the economy to achieve short-term output and employment gains that exceed the economy's underlying potential. Such gains may be popular at first, but they

are not sustainable and soon evaporate, leaving behind only inflation that worsens the economy's
longer-term prospects. Thus, political interference in monetary policy can generate undesirable boom-bust
cycles that ultimately lead to both a less stable economy and higher inflation. Political influence on monetary policy decisions can also
impair the inflation-fighting credibility of the central bank, resulting in higher average inflation and, consequently, a less-productive economy. Central banks regularly commit to maintaining low inflation in the longer term; if such a
promise is viewed as credible by the public, then it will tend to be self-fulfilling, as inflation expectations will be low and so increases in wages would be the result of factors other than a need for households to adjust to a higher
cost of living. Therefore, if inflation expectations are low, workers may temper their demands for higher wages, and then, if labor costs remain stable, firms may temper their demands for higher prices. On the other hand, a central
bank subject to short-term political influences would likely not be credible when it promised low inflation, as the public would recognize the risk that monetary policymakers could be pressured to pursue short-run expansionary
policies that would be inconsistent with long-run price stability. When a central bank's deliberations and actions are not deemed credible, businesses and consumers will expect higher inflation and, accordingly, workers will
demand higher wages, and businesses will demand more-rapid increases in prices. Thus, a lack of central bank independence can lead to higher inflation
and inflation expectations in the longer run, with no offsetting benefits in terms of greater output or
employment. This outcome occurs because the maximum sustainable levels of output and employment are largely determined by non-monetary factors that affect the structure and dynamics of the economy.
Additionally, in some situations, a government that controls the central bank may face a strong temptation to abuse the central bank's money-creation powers to help finance government budget deficits. Abuse by

the government of the power to issue money as a means of financing its spending inevitably leads to
high inflation and interest rates and a volatile economy.
 AT magnifier
Opposite feedback loop is true- Raising interest rates hampers future interest rates (aff card)
Udland 16 Myles Udland was Business Insider's markets correspondent, and joined in 2014.
“DEUTSCHE BANK: The Fed is probably screwed”, Business Insider, 5/25/16. Ghs-cw
http://www.businessinsider.com/deutsche-bank-on-the-federal-reserves-negative-feedback-loop-2016-
5

The Federal Reserve wants to do two things right now: Prepare markets for future interest rates hikes Raise interest rates But the
problem, according to Deutsche Bank's global economics team, is that by preparing markets for future
interest rate hikes the Fed potentially hampers its ability to actually carry out those hikes in the future. Said another
way, the Fed appears stuck in a negative feedback loop wherein suggestions that higher rates are coming

create the unsettled conditions that ultimately force the Fed to keep rates right where they are. And so on.
Deutsche Bank's latest note looks most closely at the Fed's relationship to financial conditions and whether a tightening of these conditions — basically, interest rates rising, credit issuance

there are a number of

slowing — would prevent an interest rate hike. The short answer is maybe. But in my view the main takeaway from the report is that right now

tides the Fed is swimming upstream against, making its prospects for carrying out future rate hikes a
potential challenge. Almost the least of which are how tight financial conditions either are or are not. Here's Deutsche Bank (emphasis added): The
recent drumbeat of hawkish commentary from the Fed, along with last week’s release of the minutes from the April FOMC meeting, has
triggered a sharp re-pricing of expectations for Fed rate hikes by the market. While the market was only pricing about 4% odds
of a rate increase in June less than two weeks ago, those odds now stand close to one-third. It is believed that this shift in rhetoric toward a more hawkish

message will ultimately be self-defeating. By signaling rate hikes, interest rates adjust higher, the dollar
strengthens, and risk assets may come under pressure. This produces tighter financial conditions, which
ultimately prevent, or at least limit, the eventual rate increase. This natural tightening of financial conditions in
response to rate hikes is expected. But there are reasons to believe that this negative feedback loop may be more severe
in the current environment: a stronger dollar is likely to increase pressure on China’s currency and weigh on

commodity prices, thereby re-introducing the key elements of stress that led to a sharp tightening of
financial conditions earlier this year. If this view is correct, the scope for further rate increases by the Fed is reduced. So again, by saying higher
rates are coming the Fed creates a sort of chain reaction in financial markets that lead, among other things, to
tighter financial conditions, a strong dollar pressuring commodity prices, and stock markets potentially
getting rattled. This is the thinking that undergirds the idea that the Fed can never really raise interest
rates. If you view the Fed's ultimate goal as raising interest rates from current levels, this is a problem. But
if you view the Fed's posturing as merely that, well, none of this is really a surprise. In the end, Deutsche Bank's conclusion is really just mealy-mouthed economist speak (again, emphasis
mine): The evolution of financial conditions will be critical for whether the Fed will be able to raise rates in the coming months. Our analysis finds evidence that a negative feedback loop does
exist between the market’s expectations for the Fed and financial conditions. However, we believe that, absent a shock from China in the months ahead – which is clearly difficult to predict – it
is unlikely that a negative feedback loop that tightens financial conditions will prevent the Fed from hiking. Alternatively: here is a problem for the Fed, except right now it isn't a problem,
unless it becomes a problem. So as tends to be the case with Fed-related forecasting, whatever you were already thinking can probably be justified. The next Fed meeting is June 15.

Dollar strengthening bad- reverses beneficial credit cycles, leads to loss of capital flow
The Economist 16 “Why a strengthening dollar is bad for the world economy”, The Economist,
12/3/16. Ghs-cw https://www.economist.com/news/leaders/21711041-rise-greenback-looks-
something-welcome-ignore-central-role

Novus ordo seclorum America’s relative clout as a trading power has been in steady decline: the number
of countries for which it is the biggest export market dropped from 44 in 1994 to 32 two decades later.
But the dollar’s supremacy as a means of exchange and a store of value remains unchallenged. Some
aspects of the greenback’s power are clear to see. By one estimate in 2014 a de facto dollar zone,
comprising America and countries whose currencies move in line with the greenback, encompassed
perhaps 60% of the world’s population and 60% of its GDP. Other elements are less visible. The amount
of dollar financing that takes place beyond America’s shores has surged in recent years. As emerging
markets grow richer and hungrier for finance, so does their demand for dollars. Since the financial crisis,
low interest rates in America have led pension funds to look for decent yields elsewhere. They have
rushed to buy dollar-denominated bonds issued in unlikely places, such as Mozambique and Zambia, as
well as those issued by biggish emerging-market firms. These issuers were all too happy to borrow in
dollars at lower rates than prevailed at home. By last year this kind of dollar debt amounted to almost
$10trn, a third of it in emerging markets, according to the Bank for International Settlements, a forum
for central bankers. When the dollar rises, so does the cost of servicing those debts. But the pain caused
by a stronger greenback stretches well beyond its direct effect on dollar borrowers. That is because
cheap offshore borrowing has in many cases caused an increased supply of local credit. Capital inflows
push up local asset prices, encouraging further borrowing. Not every dollar borrowed by emerging-
market firms has been used to invest; some of the money ended up in bank accounts (where it can be
lent out again) or financed other firms. A strengthening dollar sends this cycle into reverse. As the
greenback rises, borrowers husband cash to service the increasing cost of their own debts. As capital
flows out, asset prices fall. The upshot is that credit conditions in lots of places outside America are
bound ever more tightly to the fortunes of the dollar. It is no coincidence that some of the biggest losers
against the dollar recently have been currencies in countries, such as Brazil, Chile and Turkey, with lots
of dollar debts.

Dollar strengthening bad- widens trade deficit

The Economist 16 “Why a strengthening dollar is bad for the world economy”, The Economist,
12/3/16. Ghs-cw https://www.economist.com/news/leaders/21711041-rise-greenback-looks-
something-welcome-ignore-central-role

The eye of providence There are lurking dangers in a stronger dollar for America, too. The trade deficit
will widen as a strong currency squeezes exports and sucks in imports. In the Reagan era a soaring
deficit stoked protectionism. This time America starts with a big deficit and one that has already been
politicised, not least by Mr Trump, who sees it as evidence that the rules of international commerce are
rigged in other countries’ favour. A bigger deficit raises the chances that he act on his threats to impose
steep tariffs on imports from China and Mexico in an attempt to bring trade into balance. If Mr Trump
succumbs to his protectionist instincts, the consequences would be disastrous for all. Much naturally
depends on where the dollar goes from here. Many investors are sanguine. The greenback is starting to
look dear against its peers. The Fed has a record of backing away from rate rises if there is trouble in
emerging markets. Yet currencies often move far away from fundamental values for long periods. Nor is
it obvious where investors fleeing America’s currency might run to. The euro and the yuan, the two
pretenders to the dollar’s crown, have deep-seated problems of their own. The Fed, whose next rate-
setting meeting comes this month, may find it harder than before to avoid tightening in an economy
that is heating up. If the dollar stays strong, might protectionist pressure be defused by co-ordinated
international action? Nascent talk of a new pact to rival the Plaza Accord, an agreement in 1985
between America, Japan, Britain, France and West Germany to push the dollar down again, looks
misplaced. Japan and Europe are battling low inflation and are none too keen on stronger currencies, let
alone on the tighter monetary policies that would be needed to secure them (see article). Stock markets
in America have rallied on the prospect of stronger growth. They are being too cavalier. The global
economy is weak and the dollar’s muscle will enfeeble it further.

Dollar strengthening’s impact has gotten worse due to expanded global markets
The Economist 16 “Why a strengthening dollar is bad for the world economy”, The Economist,
12/3/16. Ghs-cw https://www.economist.com/news/leaders/21711041-rise-greenback-looks-
something-welcome-ignore-central-role

THE world’s most important currency is flexing its muscles. In the three weeks following Donald Trump’s
victory in America’s presidential elections, the dollar had one of its sharpest rises ever against a basket
of rich-country peers. It is now 40% above its lows in 2011. It has strengthened relative to emerging-
market currencies, too. The yuan has fallen to its lowest level against the dollar since 2008; anxious
Chinese officials are said to be pondering tighter restrictions on foreign takeovers by domestic firms to
stem the downward pressure. India, which has troubles of its own making (see article), has seen its
currency reach an all-time low against the greenback. Other Asian currencies have plunged to depths
not seen since the financial crisis of 1997-98.

The dollar has been gradually gaining strength for years. But the prompt for this latest surge is the
prospect of a shift in the economic-policy mix in America. The weight of investors’ money has bet that
Mr. Trump will cut taxes and spend more public funds on fixing America’s crumbling infrastructure. A big
fiscal boost would lead the Federal Reserve to raise interest rates at a faster rate to check inflation.
America’s ten-year bond yield has risen to 2.3%, from almost 1.7% on election night. Higher yields are a
magnet for capital flows (see article).

Zippier growth in the world’s largest economy sounds like something to welcome. A widely cited
precedent is Ronald Reagan’s first term as president, a time of widening budget deficits and high
interest rates, during which the dollar surged. That episode caused trouble abroad and this time could
be more complicated still. Although America’s economy makes up a smaller share of the world
economy, global financial and credit markets have exploded in size. The greenback has become more
pivotal. That makes a stronger dollar more dangerous for the world and for America.
 Turn- increasing interest rates good
Continual low interest rates harm the economy
Fry 16 Robert Fry is Chief Economist of Robert Fry Economics LLC and teaches Econ at the University of
Delaware. “Low Interest Rates Are Hurting Growth”, Forbes, 10/4/16. Ghs-cw
https://www.forbes.com/sites/realspin/2016/10/04/low-interest-rates-are-hurting-
growth/#101b4188b605

The Federal Open Market Committee chose yet again not to raise its target Federal Funds Rate at its
September meeting, temporarily allaying the fears of those who think an interest-rate hike would
further slow an already-sluggish economy. But those who argue that rate hikes should be delayed and
that continued low interest rates are needed to stimulate growth and push inflation towards the Fed’s
2% target are wrong. Low interest rates boosted economic growth during the early stages of the
economic recovery, but contrary to the mainstream economic theory guiding the Fed, holding rates too
low for too long can actually hurt growth. In recent years, low interest rates have been a cause of slow
economic growth, not the cure. The low-, zero-, and negative-interest rate policies pursued by the
Federal Reserve and many of the world’s other central banks are based on the assumption that low
interest rates stimulate economic growth by boosting investment and consumption. This assumption
does not hold in today’s world. Low interest rates are doing little to boost investment and are actually
reducing consumer spending by more than enough to offset their meager stimulus to investment. The
theoretical and econometric models used by the Fed greatly overstate the impact of interest rates on
investment spending. Thirty-two years in the private sector have taught me that their impact on
investment in plant and equipment by large publicly traded companies is negligible. Ask a business
leader if he or she has ever made an investment decision – yeah or nay – that would have been reversed
by a two percentage-point move in interest rates, and you’ll get a one-word answer: “Never.” Low
interest rates are still good for housing starts and home sales, but the benefit is smaller than in the past.
Because of tight lending standards, many people can’t get mortgages at any interest rate, and because
of worker shortages, zoning regulations, and permitting fees, there are fewer new homes to buy.
Consequently, record low mortgage rates have failed to spark a strong recovery in housing. While the
impact of interest rates on investment is less than central bankers assume, the impact on consumer
spending can go in the opposite direction; low interest rates can hurt consumer spending. Economists
sometimes forget that the impact of interest rates on saving is theoretically ambiguous. Higher rates
give people an incentive to save more, but lower rates can force people to save more to adequately
fund their retirements. A temporary drop in interest rates might boost consumer spending, especially on
motor vehicles, but if the drop in interest rates lasts long enough that it is perceived as permanent,
consumers will dial back their spending so they can save more for retirement. With short-term interest
rates near zero since December 2008, we are long past the point where the impact of rate cuts on
consumer spending switched from positive to negative.

In fact, Fed NEEDS to raise rates quickly via the aff to boost the economy
Fry 16 Robert Fry is Chief Economist of Robert Fry Economics LLC and teaches Econ at the University of
Delaware. “Low Interest Rates Are Hurting Growth”, Forbes, 10/4/16. Ghs-cw
https://www.forbes.com/sites/realspin/2016/10/04/low-interest-rates-are-hurting-
growth/#101b4188b605
Another impact of interest rates on consumer spending is probably more important and certainly more
pernicious. While financially astute central bankers put their savings in stocks and bonds, risk-averse,
financially unsophisticated folks like my dad put their savings in savings accounts and certificates of
deposit. These folks planned to live off the interest on their savings during their retirement or at least to
use their interest income to slow the drawdown of their bank accounts. Instead, seven years of near-
zero interest rates have not only reduced their interest income, they have forced them to spend their
principal as well. The depletion of their principal will permanently reduce their level of consumer
spending; once the principal is gone, they will have to dial back their spending and live off their Social
Security checks. Central bankers believe that by boosting the prices of stocks, bonds, and houses, low
interest rates cause an increase in wealth that boosts consumer spending. But wealth effects are largely
an illusion. To the extent the Fed’s monetary policies have boosted stock, bond, and house prices, they
have enriched older people who already own stocks, bonds, and houses at the expense of younger
people who want to buy them. A positive wealth effect is at best a temporary phenomenon that lasts
only until the young figure out that they’re worse off because they’re paying too much for stocks, bonds,
and houses. Kurt Karl of Swiss Re told me a few years ago that because of the aging of the Italian
population, interest rate cuts were bad for economic growth in Italy. At the time, I didn’t believe that
the United States had gotten to that point. I do now. Too many years of excessively low interest rates
have raised the savings rate of young and middle-aged people saving for retirement and have severely
cut the income and spending of old people who had money in the bank. “Normalizing” interest rates
won’t hurt economic growth, even in the short run. In fact, if the fear of rising rates gets potential
homebuyers off the fence, it could boost growth. Longer-term, economic growth will be stronger if
savers can get a decent return. By keeping interest rates too low for too long, the Fed has hurt
economic growth. It needs to raise rates much more quickly than markets expect.
impact
 2ac – no econ impact
No impact to economic decline – prefer new data
Drezner 14 (Daniel Drezner, 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."43

Global econ is resilient

FSB ’14 The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the
global financial system – “FSB Plenary meets in London” – 31 March 2014
http://www.financialstabilityboard.org/press/pr_140331.htm

The global economy has been improving, and monetary policy in the US is in the early stages of a
normalisation process, after an extended period of exceptional accommodation. A comprehensive programme of
regulatory reforms and supervisory actions since the crisis has made the global financial system more
resilient. Currently, European authorities are putting in place a comprehensive set of measures to strengthen further the region's financial
system. Emerging markets have coped relatively well to date with occasional bouts of turbulence, in part
reflecting the positive impact of both past and more recent reforms.
US not key to the global economy
Peter Passell 12, Economics Editor of Foreign Policy’s Democracy Lab, Senior Fellow at the Milken
Institute, 4/4/12, “Decoupling: Ties that No Longer Bind,”
http://www.foreignpolicy.com/articles/2012/04/03/ties_that_no_longer_bind?print=yes&hidecommen
ts=yes&page=full

Everybody knows that the global economy is becoming more tightly integrated -- that factors ranging from the collapse of
ocean shipping costs, to the rise of multinational manufacturing, to the growth of truly international securities markets, have bound national
economies to each other as never before. This, of course, must
mean we're now all in it together. Booms and busts in
rich countries will reverberate ever more strongly through developing and emerging market economies.
Right? ¶ Sounds reasonable, but that's not what's happened . The big emerging market economies (notably, China,
India and Brazil ) took only modest hits from the housing finance bubble and subsequent recession in the U.S., Japan
and Europe, then went back to growth-as-usual . ¶ Hence the paradox: Emerging-market and developing
countries have somehow " decoupled" from the Western business cycle in an era of ever-increasing
economic integration. But the experts have yet to agree on why. Here are the two contending explanations:
 1ar – no war
Decline doesn’t cause war – new data from a broad range of conflicts and empirical studies
prove the overwhelming number of economic recessions don’t devolve into conflict –
especially true in the context of great powers – 2008 recession proves countries turn inward
instead of externalizing – their evidence is good in the theoretical sense but lacks examples –
that’s Drezner

Stats go neg
Miller 2k – Professor of Management, Ottawa (Morris, Poverty As A Cause Of Wars?, http://www.pugwash.org/reports/pac/pac256/WG4draft1.htm)
Thus, these armed conflicts can hardly be said to be caused by poverty as a principal factor when the greed and envy of leaders and their hegemonic ambitions provide sufficient cause.
The poor would appear to be more the victims than the perpetrators of armed conflict. It might be alleged that some dramatic event or rapid sequence of those types of events that lead
to the exacerbation of poverty might be the catalyst for a violent reaction on the part of the people or on the part of the political leadership who might be tempted to seek a diversion by

the Carnegie Endowment for International Peace,

finding/fabricating an enemy and going to war. According to a study undertaken by Minxin Pei and Ariel Adesnik of

there would not appear to be any merit in this hypothesis. After studying 93 episodes of economic crisis in 22 countries in Latin

America and Asia in the years since World War II they concluded that Much of the conventional wisdom about the political impact of

economic crises may be wrong... The severity of economic crisis - as measured in terms of inflation and negative growth - bore no
relationship to the collapse of regimes. A more direct role was played by political variables such as ideological polarization, labor radicalism, guerilla insurgencies and
an anti-Communist military... (In democratic states) such changes seldom lead to an outbreak of violence (while) in the cases of

dictatorships and semi-democracies, the ruling elites responded to crises by increasing repression (thereby using one form of violence to
abort another.

Empirics prove – their ev is fearmongering

Barnett ‘9 (Thomas, Senior Strategic Researcher – Naval War College, “The New Rules: Security Remains Stable Amid
Financial Crisis”, Asset Protection Network, 8-25, http://www.aprodex.com/the-new-rules--security-remains-stable-amid-
financial-crisis-398-bl.aspx)

When the global financial crisis struck roughly a year ago, the blogosphere was ablaze with all sorts of scary
predictions of, and commentary regarding, ensuing conflict and wars -- a rerun of the Great Depression leading to
world war, as it were. Now, as global economic news brightens and recovery -- surprisingly led by China and emerging markets -- is the talk
of the day, it's interesting to look back over the past year and realize how globalization's first truly worldwide recession has had

virtually no impact whatsoever on the international security landscape. None of the more than three-dozen
ongoing conflicts listed by GlobalSecurity.org can be clearly attributed to the global recession. Indeed, the last new
entry (civil conflict between Hamas and Fatah in the Palestine) predates the economic crisis by a year, and three quarters of
the chronic struggles began in the last century. Ditto for the 15 low-intensity conflicts listed by Wikipedia (where the latest entry is the Mexican
"drug war" begun in 2006). Certainly, the Russia-Georgia conflict last August was specifically timed, but by most accounts the opening
ceremony of the Beijing Olympics was the most important external trigger (followed by the U.S. presidential campaign) for that sudden spike in
an almost two-decade long struggle between Georgia and its two breakaway regions. Looking over the various databases, then, we see a most
familiar picture: the usual mix of civil conflicts, insurgencies, and liberation-themed terrorist movements. Besides the recent Russia-
Georgia dust-up, the only two potential state-on-state wars (North v. South Korea, Israel v. Iran) are both tied to
one side acquiring a nuclear weapon capacity -- a process wholly unrelated to global economic trends. And with the
U nited S tates effectively tied down by its two ongoing major interventions (Iraq and Afghanistan-bleeding-into-Pakistan), our
involvement elsewhere around the planet has been quite modest , both leading up to and following the onset of the
economic crisis: e.g., the usual counter-drug efforts in Latin America, the usual military exercises with allies across Asia, mixing it up with pirates
off Somalia's coast). Everywhere else we find serious instability we pretty much let it burn , occasionally pressing the
Chinese -- unsuccessfully -- to do something. Our new Africa Command, for example, hasn't led us to anything beyond advising and training
local forces. So, to sum up: No significant uptick in mass violence or unrest (remember the smattering of urban riots last
year in places like Greece, Moldova and Latvia?); The usual frequency maintained in civil conflicts (in all the usual places); Not a single
state-on-state war directly caused (and no great-power-on-great-power crises even triggered); No great
improvement or disruption in great-power cooperation regarding the emergence of new nuclear powers (despite all that
diplomacy); A modest scaling back of international policing efforts by the system's acknowledged Leviathan power (inevitable given the strain);
and No serious efforts by any rising great power to challenge that Leviathan or supplant its role. (The worst things we can cite are Moscow's
occasional deployments of strategic assets to the Western hemisphere and its weak efforts to outbid the United States on basing rights in
Kyrgyzstan; but the best include China and India stepping up their aid and investments in Afghanistan and Iraq.) Sure, we've finally seen global
defense spending surpass the previous world record set in the late 1980s, but even that's likely to wane given the stress on public budgets
created by all this unprecedented "stimulus" spending. If anything, the friendly cooperation on such stimulus packaging was the most notable
great-power dynamic caused by the crisis. Can we say that the world has suffered a distinct shift to political radicalism as a
result of the economic crisis? Indeed, no. The world's major economies remain governed by center-left or center-right political
factions that remain decidedly friendly to both markets and trade. In the short run, there were attempts across the board to insulate
economies from immediate damage (in effect, as much protectionism as allowed under current trade rules), but there was no great

slide into "trade wars." Instead, the W orld T rade O rganization is functioning as it was designed to function, and regional
efforts toward free-trade agreements have not slowed. Can we say Islamic radicalism was inflamed by the economic crisis? If it was, that
shift was clearly overwhelmed by the Islamic world's growing disenchantment with the brutality displayed by violent
extremist groups such as al-Qaida. And looking forward, austere economic times are just as likely to breed connecting evangelicalism as
disconnecting fundamentalism. At the end of the day, the economic crisis did not prove to be sufficiently frightening to provoke major
economies into establishing global regulatory schemes, even as it has sparked a spirited -- and much needed, as I argued last week -- discussion
of the continuing viability of the U.S. dollar as the world's primary reserve currency. Naturally, plenty of experts and pundits have attached
great significance to this debate, seeing in it the beginning of "economic warfare" and the like between "fading" America and "rising" China.
And yet, in a world of globally integrated production chains and interconnected financial markets, such "diverging interests" hardly constitute
signposts for wars up ahead. Frankly, I don't welcome a world in which America's fiscal profligacy goes undisciplined, so bring it on -- please!
Add it all up and it's fair to say that this global financial crisis has proven the great resilience of America's post-World War II international liberal
trade order. Do I expect to read any analyses along those lines in the blogosphere any time soon? Absolutely not. I expect the fantastic
fear-mongering to proceed apace. That's what the Internet is for.
 at: royal
Their studies are inconclusive—this card beats Royal
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 2008–2010 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.
 1ar – resilient
Econ’s resilient – new financial reforms and better accountability practices made the system
more robust after 08 – collapse won’t happen – that’s FSB

Tons of examples
Johnson ’13 (Robert , CFA, director of economic analysis with Morningstar, Morningstar.com, “U.S. Economy Not So Fragile After All” –
1/19 – http://news.morningstar.com/articlenet/article.aspx?id=581616)

No, the U.S. Economy Has Not Been Fragile After All¶ Although most economists got at least some things right about the
U.S. economy over the past two years, the one nearly universal error was the expectation that the economy was
fragile. The U.S. economy has proven to be anything but fragile.¶ I believe this to be the single biggest error that
economists have made over the last two years. During that time, the U.S. has survived the fallout from a major debt crisis
in Europe, a divisive election, temporarily going over the fiscal cliff, gasoline prices that have been on a yo-
yo, a tsunami in Japan, and Hurricane Sandy, which shut down New York and even the stock exchanges
for a couple of days. These are not signs of a fragile economy.

Assumes shocks
Daniel W. Drezner 12, Professor, The Fletcher School of Law and Diplomacy, Tufts University, October
2012, “The Irony of Global Economic Governance: The System Worked,”
http://www.globaleconomicgovernance.org/wp-content/uploads/IR-Colloquium-MT12-Week-5_The-
Irony-of-Global-Economic-Governance.pdf

Prior to 2008, numerous foreign policy analysts had predicted a looming crisis in global economic governance.
Analysts only reinforced this perception since the financial crisis, declaring that we live in a “G-Zero” world. This paper takes a closer look at
the global response to the financial crisis. It reveals a more optimistic picture . Despite initial shocks that
were actually more severe than the 1929 financial crisis, global economic governance structures responded quickly

and robustly. Whether one measures results by economic outcomes, policy outputs, or institutional flexibility, global economic
governance has displayed surprising resiliency since 2008. Multilateral economic institutions performed
well in crisis situations to reinforce open economic policies , especially in contrast to the 1930s. While there are areas
where governance has either faltered or failed, on the whole, the system has worked. Misperceptions about global economic
governance persist because the Great Recession has disproportionately affected the core economies – and because the efficiency of past
periods of global economic governance has been badly overestimated. Why the system has worked better than expected remains an open
question. The rest of this paper explores the possible role that the distribution of power, the robustness of international regimes, and the
resilience of economic ideas might have played.
 1ar – us not key
The US is decoupled from the global economy – empirics prove – when recession his the US,
brazil, china, and india were barely affected -- that’s Passell

More ev – 08 proves – and there’s general trends towards decoupling

Caryl ‘10 [Christian Caryl is a Editor at Foreign Policy and Newsweek and a Senior Fellow of the CSIS at the Massachusetts Institute of
Technology, “Crisis? What Crisis?” 4/5/10
http://www.foreignpolicy.com/articles/2010/04/05/crisis_what_crisis?print=yes&hidecomments=yes&page=full]

We went through a terrifying moment back in the fall of 2008. The financial system in the United States was imploding. It
was impossible to predict how the effects would ripple through the rest of the world, but one outcome seemed inevitable: Developing
economies were going to take a terrible hit. There was just no way they could escape the maelstrom without seeing millions of their citizens
impoverished. Many emerging-market countries did experience sharp drops in GDP. Their capital markets tanked. Dominique Strauss-
Kahn, managing director of the International Monetary Fund (IMF), sounded downright apocalyptic: "All this will affect
dramatically unemployment, and beyond unemployment for many countries it will be at the roots of social unrest, some threat to
democracy, and maybe for some cases it can also end in war." The Economist recently noted, "The Institute of International
Finance (IIF), a think-tank in Washington, DC, forecast that net private capital flows into poor countries in 2009 would be 72% lower than at
their peak in 2007, an unprecedented shrinkage." Virtually everyone expected to see the countries that had benefited so dramatically from
growth in the years leading up to the crisis to suffer disproportionately in its wake. An entirely rational assumption -- except it
hasn't
turned out that way at all. To be sure, there were far too many poor people in the world before the crisis,
and that still remains the case. Some 3 billion people still live on less than $2.50 a day. But the global economic crisis
hasn't added appreciably to their ranks. Just take China, India, and Indonesia, Asia's three biggest
emerging markets. Although growth in all three slowed, it never went into reverse. China's robust growth
through the crisis has been much publicized -- but Indonesia's, much less conspicuously. Those countries, as well as Brazil and
Russia, have rebounded dramatically. The Institute of International Finance -- the same people who gave that dramatically
skepticism-inducing estimate earlier -- now says that net private capital flows to developing countries could reach $672 billion this year (double
the 2009 amount). That's less than the high point of 2007, to be sure. But it
still seems remarkable in light of the dire
predictions. In short, the countries that have worked the hardest to join the global marketplace are
showing remarkable resilience. It wasn't always this way. Recall what happened back in 1997 and 1998, when the Thai
government's devaluation of its currency triggered the Asian financial crisis. Rioting across Indonesia brought down the Suharto government.
The administration of Filipino President Joseph Estrada collapsed. The turbulence echoed throughout the region and into the wider world,
culminating in the Russian government default and August 1998 ruble devaluation. Brazil and Argentina trembled. The IMF was everywhere,
dispensing advice and dictating conditions. It was the emerging markets that bore the brunt of that crisis. So
what's different this
time around? The answers differ from place to place, but there are some common denominators. Many of the BRICs (Brazil, Russia,
India, China) learned vital lessons from the trauma of the late 1990s, hence the IMF's relatively low-key
profile this time around. (The fund has been most active in Africa, where they still need the help -- unless you count Greece, of course.)
Many emerging economies entered the 2008-2009 crisis with healthy balance sheets. In most cases
governments reacted quickly and flexibly, rolling out stimulus programs or even expanding poverty-
reduction programs. Increasingly, the same countries that have embraced globalization and markets are
starting to build social safety nets . And there's another factor: Trade is becoming more evenly distributed
throughout the world. China is now a bigger market for Asian exporters than the United States. Some
economists are talking about "emerging market decoupling." Jonathan Anderson, an emerging-markets economist at the
Swiss bank UBS, showed in one recent report how car sales in emerging markets have actually been rising during this latest
bout of turmoil -- powerful evidence that emerging economies no longer have to sneeze when America
catches a cold .
military module
****neg****
topline
 1nc
Military spending boosts come at the expense for education programs
Richert 17 Kevin Richert is a writer and blogger for Idaho Education News. “TRUMP SEEKS EDUCATION
CUTS TO PAY FOR DEFENSE, BORDER WALL”, Idaho Ed News, 3/29/17. Ghs-cw
https://www.idahoednews.org/kevins-blog/trump-seeks-education-cuts-pay-defense-border-wall/

The Trump administration is proposing midyear budget cuts to boost military spending and build a wall
along the Mexican border. And education programs would absorb some of the prospective cuts. POLITICO.com outlined the

prospective $18 billion cuts Tuesday. The cuts would come more than halfway through the current federal budget year,
which runs through Sept. 30. According to various media reports, the proposed cuts appear to have little chance of passing Congress (details from the Associated
Press). The administration wants to apply the 3 percent cut in discretionary spending to defense, POLITICO reported. About $2 billion would go
toward the border wall, one of Trump’s earliest campaign promises. The impact on education cuts in Idaho is not easily
quantified. Some of the programs support grants that go to the states, or grants that pass through to
school districts. But Gov. Butch Otter and the Legislature have built the state’s K-12 budgets on a presumption of stable federal dollars — $264.3 million for
the state budget year, which ends June 30, and another $264 million in 2017-18. POLITICO posted an administration memo outlining the proposed cuts. The

biggest prospective cut to K-12 programs is a $1.2 billion cut in state Title II grants. The goal of the
“Supporting Effective Instruction” grant program is to improve instruction and reduce class sizes, but the
White House isn’t sold. “Funding is poorly targeted and supports practices that are not evidenced-based,” according to the White House memo. “Other
funding at (the U.S. Department of Education) can be used to support improved instruction.” Other prospective cuts with a K-12

connection: Striving Readers/Education for the Disadvantaged, a state grant program aimed to improve literacy in high-need
schools: $189 million. Mathematics and Science Partnerships, grants for teacher training: $152 million. Elementary and

secondary school counseling grants: $49 million. Physical education grants: $47 million. Advanced Placement and
International Baccalaureate grants: $28 million.

Strong defense spending is key to readiness – cuts compromise national security

Salam 2015, Reihan Salam is a columnist for Slate., NOV. 12 2015, The United States Doesn’t
Spend Enough on Its Military,
http://www.slate.com/articles/news_and_politics/politics/2015/11/military_spending_the_cas
e_for_spending_more_not_less.html
At Tuesday’s GOP presidential debate in Milwaukee, Rand Paul railed against Marco Rubio for calling for increases to the military budget: “How is it conservative to
add a trillion dollars in military expenditures? You can not be a conservative if you’re going to keep promoting programs that you’re not paying for.” Rubio replied
by arguing that “we can’t even have an economy if we’re not safe,” and that “the
world is a safer place when America is the
strongest military power in the world.” This brief exchange captures a debate that’s been dividing America's political class for years. Paul is
standing in for those, on the left and the right, who believe that the time has come for the U.S. to stop pretending it can be the world’s policeman, and to start
shifting money from our military to needs closer to home. Rubio speaks for those in both parties who see U.S. global leadership as more important than ever, and
who worry about the erosion of U.S. military power. Both sides make compelling arguments. But in the end, Rubio is right .
The United States does
not spend enough on its military, and the longer we go without increasing military expenditures, the
more dangerous the world is likely to become. Granted, Rand Paul makes a fair point about at least one thing. The U.S. defense budget is
already quite large. In 2015, the U.S. spent $610 billion on the military, making its defense budget the largest in the world by a wide margin. The U.S. spent more on
defense than the $601 billion that China, Russia, Saudi Arabia, France, Britain, and India—the countries with the next seven largest military budgets—spent
combined. If we limit our comparison to America’s NATO allies, the numbers still look quite stark. The U.S. alone accounts for a whopping 75 percent of the military
spending by all of NATO’s 28 current members. Under the two-year budget agreement that the Obama administration hammered out with the
Republican leadership in Congress, baseline defense spending will be $548 billion while spending on Overseas Contingency Operations will be
$59 billion, for a grand total of $607 billion. That’s hardly chump change. But it’s not enough. Keep in mind that backing a larger,

more formidable military is not the same thing as backing a more hyperactive military. Because our military has
been so formidable for so long, there are instances in which U.S. policymakers have resorted to using force when other tools of statecraft might have been just as
effective, and at lower cost. Over-relying on military force can have terrible consequences, especially when we don’t have a clear understanding of what we’re using
military force to achieve. The point of investing in a more capable military is not to topple foreign governments at
the drop of a hat, or to recklessly enmesh U.S. forces in conflicts that will have no meaningful impact on
U.S. national interests. To understand how much we ought to spend on the military, we first need to get a handle on what exactly we want our military
to be capable of doing. There is a large and growing gap between what we expect of our military and what it can

realistically accomplish, given the resource constraints it faces. Many Americans believe that what we really ought to do is lower our expectations for
what our military should be able to accomplish, which in turn would allow the U.S. to spend less. Yet many of the expensive things that the

U.S. military does are necessary if we are to live in a more peaceful world—and that is why the U.S. must
spend more. What do we expect of our military? First and foremost, it is the job of the U.S. military to protect the
homeland from foreign invasion. That’s a fairly straightforward job, as the U.S. is shielded from powerful rivals by the Atlantic and the Pacific
Oceans. In addition to protecting the homeland, the U.S. has long sought to possess what the MIT political

scientist has called “command of the global commons.” By the “commons,” Posen means the sea-lanes
and the airspace that are so central to global commerce, as well as low Earth orbit, a nearby region of
space that is thick with satellites. As Posen explains, command does not mean that the U.S. has exclusive use of the commons, or even that
others can’t make use of the commons for military purposes. Rather, it means that if the U.S. felt that it needed to deny the use of the

global commons to some rival state, it could so. Moreover, command means that if some rival state
were foolish enough to prevent the U.S. from making use of the commons, the U.S. could make them
regret they ever tried.

Readiness is key responding to sudden conflicts in multiple hotspots

Dunn 13, Richard, private consultant on international security affairs, retired army colonel, “The Impact
of a Declining Defense Budget on Combat Readiness,” Heritage Foundation,
http://www.heritage.org/research/reports/2013/07/the-impact-of-a-declining-defense-budget-on-
combat-readiness

Combat readiness is defined as “[t]he ability of US military forces to fight and meet the demands of the national military strategy.”[1] This is the most important factor to our war
fighters , but as basic as it is to them, it remains a complicated subject for others to understand. Due to its multidimensional and s omewhat diffuse nature, it also has few natural supporters. For a state that builds ships, it is easy to support a policy that increases the number

of ships in the Navy, but it is difficult to construct a constituency to support the complex issue of military readiness. Therefore, readiness may suffer significant harm in the increasingly fierce competition for resources. To fight effectively, the armed forces must be manned, equipped, and
trained to operate under dangerous, complex, uncertain, and austere conditions—often with little warning. They require the right personnel operating the right equipment with the right training to win. Readiness is like a three-legged stool. The personnel, equipment, and training “legs”
need to be balanced and in sync to support the load. The most modern equipment is useless without highly trained personnel to operate and employ it. Conversely, outmoded or unreliable equipment can hamper the effectiveness of the most highly motivated and skilled personnel. To

Failure to maintain
fight effectively, personnel must train with their combat equipment, practicing their combat missions under realistic, demanding conditions. Quality personnel, equipment, and training are the essential dimensions of combat readiness.

an appropriate balance among these dimensions during the current period of budgetary uncertainty will significantly degrade America’s ability to
respond to threats to its interests This can lead to major strategic setbacks . and significant loss of life. The challenging balancing act requires wise and

unanticipated events catch us by surpris

effective leadership across all defense-related institutions. History repeatedly shows that often e and that as a nation, we have paid a high
price in blood and treasure to compensate for our lack of preparedness. Lower levels of defense resourcing have not been the sole cause of unpreparedness . In many cases, there is an inability to answer the fundamental question of “what

are we preparing to do?” Absent an effective answer that guides the allocation of resources, we can end up with forces that are inadequately manned, equipped, or trained to meet a comprehensive range of threats, some of them unanticipated. Answering the “what, when, and where”

U.S. relationships with

question is particularly challenging and complicated in the current era of strategic uncertainty. The world is still a violent and dangerous place, and major existential threats remain vague and unfocused. In the Pacific,

emerging powers and the future threats they may pose remain unclear. the political instability In the Middle East,

that accompanied the Arab Spring may vastly alter the geopolitical landscape established in the 1920s, creating opportunities for a wide spectrum of

Terrorism continues
Islamist parties to advance their undemocratic agendas. warfare is expanding into the
by non-state actors like al-Qaeda to metastasize. At the same time,

economically vital cyberspace domain, and revolutionary developments may be changing the in unmanned systems

very nature of conflict. Rapid reductions in the defense budget are leading to the restructuring or elimination of many programs. This will damage the ability to deter and, if necessary, defeat threats to vital U.S. national interests. Maintaining a

military posture capable of achieving these aims requires both sufficient forces of various types and the readiness of those forces for combat. History’s Painful Lessons All of these developments have the potential to harm U.S. interests significantly. Although we know that the fut ure may
hold significant dangers, they remain ill defined, creating a challenging analytical problem for national security policymakers. History can provide useful insights into how to approach strategic uncertainty. We know we cannot “get it entirely right.” Therefore, we should strive not to get it
so far wrong that we suffer unacceptable consequences when hit by unexpected threats. Under conditions of uncertainty, a hedging strategy that provides a range of options makes the most sense. Historically, maintaining effective balance among the different dimensions of readiness
and having some ready capability to deal with a wide range of potential threats have been an effective way to hedge strategic bets. In times of defense budgetary retrenchment, combat readiness of the armed forces often becomes one of the first casualties of fiscal tightening. This was
particularly true of the years between World War I and World War II, when the Great Depression and isolationism made military preparedness a very low national priority. Despite the threatening war clouds rapidly expanding in Asia and Europe, the U.S. was woefully unprepared for
global conflict. The shock of Pearl Harbor mobilized both the industrial capability and the moral determination to overcome the early, disastrous reversals in the Pacific and tactical defeats in North Africa. Once focused on military production, the U.S. economy rapidly produced
overwhelming quantities of ships, aircraft, tanks, ammunition, and other matériel needed for America to become the “Arsenal of Democracy.” However, U.S. forces quickly learned that training for combat, particularly in developing military leaders, was just as complex and demanding. It
took several years of internalizing battlefield lessons learned at high cost to train the leaders at all levels that brought the war to a victorious conclusion. After the war, “no more Pearl Harbors”[2] became the rallying cry of the supporters of a strong national defense. Regrettably, the
record of U.S. military preparedness following World War II has been rather checkered. Since then, the U.S. has had less than a year (often much less) to prepare for any of its major conflicts. One of the earliest shocks hit in June 1950 when Soviet-supported North Korea invaded South
Korea. After the Berlin Blockade in 1949, U.S. forces were focused on the Soviet threat to Europe. Less than five years after the defeat of Germany and Japan, they were ill prepared for more limited wars in areas of less than strategic interest. When the U.S. recognized that land forces
would be required to stem the rout of the South Korean military, a hastily assembled force from an Army division on occupation duty in Japan was quickly committed to block the advancing North Korean army. Named after its commander, Task Force Smith was poorly equipped with
World War II–era weapons and had no opportunity to train as a unit. In the opening battle between U.S. and North Korean forces, it was rapidly overrun and suffered disastrous losses.[3] Decades later, “no more Task Force Smiths” was still an object lesson in preparedness for U.S. Army
leaders.[4] After ending the war in Korea, and concerned with the economic costs of maintaining a large standing army, President Dwight D. Eisenhower relied on strategic air forces to deter Soviet aggression with the threat of massive nuclear retaliation.[5] The subsequent reduction in
ground forces contributed to the difficulty the U.S. faced in dealing with the “wars of national liberation” that cropped up in the early 1960s, most significantly in Southeast Asia. Committed to combat in Vietnam, the U.S. Army rapidly increased in size. This rapid expansion strained the
Army’s ability to induct and train new soldiers and junior officers. The conflict also strained the intellectual adaptability of the Army’s senior leaders, most of whom had their formative combat experiences in the firepower-intensive, large-unit operations prevalent during World War II and
the Korean War. Ultimately, this meant that leaders were slow in adapting to the different counterinsurgency requirements of Vietnam. U.S. forces adapted relatively quickly to the realities of the post-Vietnam situation and refocused on the massive Soviet conventional threat to Europe,
where combat readiness had suffered significantly during Vietnam. New equipment and doctrine prepared the new all-volunteer force to fight and win while outnumbered. Most notably, Army and Air Force leaders recognized the high value of synergistic air–land operations and
developed the appropriate war fighting concepts and organizations.[6] The apparent requirement for large conventional forces evaporated when the Berlin Wall came down in 1989, and planning was put in place for significant reductions. However, Saddam Hussein’s unexpected invasion
of Kuwait in 1990 put that on hold. Saddam’s decision not to press forward to seize Saudi Arabia gave the U.S. and its allies sufficient time to redeploy forces from Europe and elsewhere. During Operation Desert Storm in 1991, U.S. air and ground units that were trained, organized, and
equipped to fight the Soviets proved devastatingly effective against Iraqi forces armed with Soviet equipment.[7] This again proved to be the case in 2003 when U.S. air and ground forces swept into Iraq, seized Baghdad, and toppled Saddam Hussein’s government. However, when the
U.S. occupation proved longer and more complicated than first thought, the U.S. Army was again slow in adapting to the changing nature of the conflict after having worked hard to put its Vietnam counterinsurgency experiences in its past. While history never exactly repeats itself, we can
draw several useful insights from the historical record. First, our ability to predict rapidly emerging threats is imperfect at best. Even in cases in which employment of force was optional, such as the 2003 invasion of Iraq, we have had well less than a year to prepare. Thus, dependence on

having sufficient time to bring forces back up to the desired level of readiness before employing them can be a recipe for disaster. As a corollary to this point, readiness can degrade very quickly, so
maintaining it requires continuous attention . Readiness is also somewhat specific to each scenario. Forces prepared for one type of conflict may not be as capable in another. Additionally, leaders trained to

operate in one type of conflict may not have the mental agility to perform well in another. The Complexity of Military Operations Understanding the personnel, equipment, and training dimensions of combat readiness requires some understanding of the operations that military
organizations perform. Combat operations of almost any scale are exceptionally complex, requiring integration and synchronization of myriad activities ranging from individual actions to coordinated movements by large, geographically dispersed organizations. They are usually executed
under dangerous, uncertain, austere, and urgent conditions that compound the challenge. At the basic level of combat operations, individuals and crews must operate their equipment, ranging from individual w eapons to combat vehicles, aircraft, and ships. This involves operating all of
the systems for communications, situational awareness, etc. Then they must employ their equipment as part of larger unit teams, executing their part in tactical operations. Each smaller unit is part of an even larger team that incorporates many different functions ranging from fire
support to intelligence, surveillance, and reconnaissance to logistical and medical support. As required, these can be combined into joint task forces that include all of these functions in land, sea, air, space, and even cyberspace dimensions. All of these organizations, fro m the smallest
units to joint task forces, must be tied together by command, control, and communications networks that provide them with awareness of the friendly and enemy situations and orchestrate their individual activities to achieve the commander’s intended objectives. At the same time, they
all require support, including transportation, refueling, rearming with ammunition, maintenance, and medical evacuation and care. Joint forces are composed of interdependent “teams” at many different levels that are only as strong as their weakest members. For example, the Army
may have great airborne paratrooper units, but they are ineffective unless Air Force transport aircraft can deliver them to the right drop zone. These transports, in turn, may require tanker aircraft to refuel them in flight to reach the drop zone. Therefore, the readiness of a joint force to
conduct major combat operations is determined by the readiness of its individual components, in turn a function of their manning, equipping, training, and leadership and the balance among these dimensions. Because of their complexity, combat operations are often vulnerable to single
points of failure. The loss to enemy action or equipment failure of a key communications node, radar, or other “low density” but essential capability at a critical point can put an entire operation at risk.[8] The Dimensions of Readiness The readiness of military organizations to execute
these complex operations is a function of the personnel, equipment, and training dimensions of combat readiness and an appropriate balance among them. Regardless of service, combat organizations are designed to accomplish a specific range of tasks. For this purpose, they are
allocated specific numbers of personnel of appropriate ranks, skills, and skill levels to man and maintain the various types and numbers of equipment that they are authorized to have to accomplish thos e tasks. They also receive annual budgets to provide the resources (e.g., fuel,
ammunition, and replacement parts) to train with their equipment. Personnel. High-quality, well-trained, and motivated personnel in the necessary numbers and ranks are essential to combat readiness. In the U.S. all-volunteer force, the first task is to recruit sufficient numbers of citizens
with the required motivation and physical and mental capabilities to perform complex tasks under austere and often dangerous conditions. Here, the services compete with other opportunities afforded by the civilian economy. The challenge, then, is to provide appropriate incentives to
make military careers attractive. While patriotism should never be underestimated as a motive for service, the armed forces have found it necessary to provide salaries, educational opportunities, quality of life, retirement benefits, and health care to attract and retain the required
numbers of quality recruits. The recent economic recession has reduced civilian opportunities, and the reductions in force size have reduced the number of recruits required to sustain personnel numbers and quality. However, if the economy recovers and generates more civilian
opportunities, recruiting and retaining quality personnel may become increasingly more difficult. Once recruited, service personnel must be taught the individual skills unique to their military missions. Teaching all of these required skill sets is a task of immense scale and scope, ranging
from teaching rifle proficiency to Army privates to training naval aviators to operate high-performance aircraft from aircraft carrier flight decks. This requires relatively large training organizations staffed with the highest quality instructors, facilities, and equipment. Moreover, personnel
require individual training throughout their careers. Initially, junior officers must be taught basic tactics and leadership skills. As they become more senior and assume higher-level responsibilities, they must learn advanced skills ranging from organizational management techniques to
national-level strategy. Enlisted personnel must also progress to become effective and mature leaders and managers at higher and higher levels. As military operations and their enabling technologies become increasingly sophisticated and complex, the training required to master them
demands even more time and resources. Thus, it is more effective and efficient to retain trained personnel by motivating them to remain in the service than it is to recruit and train replacements. Recruiting and training activities are both resource and time intensive, and limited assets are
available to perform them. This reinforces the requirement to make continued military careers attractive by providing adequate salaries and benefits, especially for more mature personnel with families. Leadership is the catalyst for the personnel dimension of combat readin ess. It
depends on native ability honed by training and experience. Leadership is an irreplaceable force multiplier. It often spells the difference between disaster and victory under the most trying of circumstances. Thus, the selection, development, and retention of the best leaders, especially
those with combat experience, should be a top priority. Napoleon said, “The moral is to the physical as three to one.” This remains as absolutely true today as when he said it. Although intangible, morale is essential to readiness. It is very much a function of leadership, training, and the
overall condition of the force. Poorly led and trained personnel trying to operate unreliable equipment and living in substan dard conditions will most likely have low morale and not be very combat effective. Equipment. Based on their missions, military organizations are authorized to
have specific quantities of particular types of equipment. For example, armor battalions in the Army are authorized to have a certain number of tanks and the necessary support equipment, such as refueling and maintenance vehicles. Air Force fighter squadrons are authorized to have a
certain number of fighter aircraft of specific models and associated ground support equipment. Equipment readiness depends on two factors: the number and types of equipment in organizations and the operational status of that equipment. Service regulations authorize organizations to
have specific numbers of specific models of equipment. However, the equipment they actually have (their “equipment fill”) depends upon inventories of existing equipment and the procurement of new, usually more modern equipment to replace equipment that wears out, is destroyed,
or becomes obsolete. As procurement accounts decline, procurement of new equipment can be delayed, affecting readiness in two ways. First, older generations of equipment are less effective than the newer generations. Second, delayed modernization means using older existing
equipment, which is less reliable and more difficult and expensive to maintain. This tends to lower the operational status of equipment fleets. Maintenance and repair of equipment are essential to combat readiness. They are also tremendously time and resource intensive, requiring large
numbers of highly skilled personnel, technically sophisticated tools, and a steady, reliable supply of replacement parts. The scope of maintenance and repair ranges from the daily checks and services performed by operators and crews to repairs by unit maintenance personnel to detailed
refurbishing done by depots, shipyards, and commercial corporations. As available funding declines, equipment maintenance and repair can be one of the first bill payers. As such, it is often an early indicator of collapsing combat readiness. For example, reduced funding for repair parts
can lead to a vicious downward spiral in equipment operational readiness rates. Without replacement parts, units are tempted to cannibalize parts from equipment that is already non-operational. Removing parts to keep other equipment operating or flying not only places additional
demands on maintenance manpower, but also creates “hangar queens” missing so many parts that they become very expensive to repair. Because most military equipment is designed for a long service life, it usually is scheduled for depot, shipyard, or commercial refurbishment several
times during its “career.” This is essential for corrosion control in aircraft and ships and replacement of major sub-assemblies, such as suspensions in ground vehicles. It is also economically smart because it can significantly extend the useful service life of the equipment. As budgets
tighten, such maintenance may be deferred, creating large backlogs and leaving organizations with less reliable equipment that is prone to breakdown. Training. Advocates for demanding, realistic training often quote Field Marshall Erwin Rommel, who said, “The best form of welfare for
the troops is first-class training, for this saves unnecessary casualties.”[9] How well military organizations are trained for the full range of their assigned missions is a major determinant of success in combat. One reason that the U.S. armed forces have been world-class is that they trained
more and better than any other nation’s military. Institutions such as the Army’s National Training Center, the Navy’s Top Gun program, and the Air Force’s Red Flag have set exceptionally high standards for realistic, demanding training that incorporates almost all of the functions and
conditions of actual combat. Major large-scale joint exercises that include elements of all of the services and combined exercises with U.S. allies develop and refresh the critical abilities to deploy and sustain forces and train forces to operate together effectively. Realistic, demanding
training is a tremendous confidence builder. It not only gives personnel confidence in their own units’ capabilities, but also builds confidence in joint and combined teams. It is also a powerful leader development tool. Absent actual combat, intense training teaches invaluable lessons to
junior leaders and gives their superiors unique opportunities to observe their ability to lead under highly stressful conditions. Training is also very time and resource intensive, a major consumer of operations and maintenance funding. Although simulators have advanced significantly,
there is no substitute for operating actual equipment, and that can be very expensive. It consumes large amounts of fuel, and the resulting wear and tear significantly increase the requirement for repair parts. Training ammunition can be expensive as well. The service headquarters
provide their operating organizations with annual budgets authorizing them to operate their equipment for a fixed amount of miles for ground equipment, flying hours for aircraft, and at-sea time for ships. Operating organizations are then responsible for planning and executing the
training necessary to achieve proficiency in their assigned missions within these budgetary constraints. Time. Time is a major factor in all of the different dimensions of readiness. Recruiting and training personnel, acquiring and maintaining equipment, and training organizations from

Organizations providing strategic

small units to joint task forces all require time. Therefore, the readiness status that an organization maintains should be determined by when its capabilities might be required.

deterrence and defense immediate response to terrorist threats and attacks and other capabilities that
, ,

may be required on a moment’s notice obviously need to maintain high levels of personnel and
equipment fill and training The same is true of units that are forward deployed in crisis areas Korea
. , such as

or the Persian Gulf . Units whose capabilities are not as time sensitive and do not need to be deployed immediately can be kept at lower states of readiness, depending on the time available to bring them up to full readiness before they are needed. This is a

The
key factor in determining which missions should be assigned to active-duty forces and which can be assigned to Reserve components. During peacetime, Reserve forces have less time available to train; therefore, they usually require additional time to train during mobilization.

biggest challenge lies in knowing how much time might be available to raise readiness to required levels
before employing a force . Here, the historical record suggests erring on the side of caution. When we have unexpectedly found it necessary to employ force in defense of vital national interests, we have had to use the forces available regardless
of their readiness. Why Readiness May Be at Risk As noted earlier, the dimensions of readiness are like the legs of a three-legged stool that must be in balance to be effective. However, the way that we manage the resourcing for each dimension can make it difficult to maintain this
balance. This is compounded by the unpredictable length of time that might be available to increase readiness in a crisis. Personnel, procurement, and operations and maintenance accounts are managed separately, making it difficult to assess how reductions in funding for one dimension
may affect overall readiness. Additionally, the managerial and political natures of some aspects of readiness make them easier to reduce than others. For example, equipment replacement and modernization is largely governed by the procurement accounts. In many cases, these buy
large, major pieces of equipment, such as tanks and fighter aircraft. Expensive as these are, they become increasingly more expensive to produce if production rates are reduced below a certain economic optimum. This is particularly true in shipbuilding, in which it is impossible to buy a
fraction of a ship. Additionally, manufacturing large equipment often involves interrelated chains of defense-specific industrial activities geographically spread around the country and employing relatively large numbers of highly skilled people in well-paying jobs. This can create large
congressional constituencies who strongly support those programs. Operations and maintenance accounts are much easier to adjust downward. It is possible to reduce expenditures for training incrementally by decreasing the amount of fuel or repair parts purchased. Moreover, these
expenditures are widely distributed around the country and do not create the strong constituencies that support procurement. The same thing is true of the individual training base where much instruction is provided under contract. It is even more difficult to understand the impact of
reductions in personnel accounts. The challenge of sustaining the all-volunteer force through a decade of continuous conflict and deployment has significantly increased the per-person cost of personnel, not only in terms of salaries, but also in health care and retirement benefits. These
benefits also have powerful constituencies in the widespread and vocal military retiree communities. Maintaining balance across the dimensions of readiness requires significant personnel reductions, but politically, these are increasingly difficult to achieve. The challenge, then, is to

understand the relationships and interdependencies among the personnel, equipment, and training dimensions of readiness. Readiness clearly has tipping points unique to each organization, but they are
difficult to predict . At what point does the lack of funds for training and maintenance so discourage promising junior leaders that they leave the service? Do salaries and benefits counterbalance this? What is the minimal amount of training required to

sustain proficiency at mission-essential tasks at a sufficient level to avoid putting a unit in jeopardy in a crisis? These are difficult questions. Quantitative readiness reporting and analysis can help to a degree, but some answers lie only in well-reasoned professional judgment. What the U.S.
Should Do The U.S. has experienced significant downturns in defense spending many times. In almost every case, we have pledged to avoid repeating past mistakes that compromised the readiness of our armed forces. Our record in honoring those pledges is imperfect. During World War
II, the Korean War, the Vietnam War, and the Cold War, the size of U.S. armed forces increased significantly to meet the demands of those conflicts. Once those conflicts were resolved, the size of the armed forces and associated defense budgets declined to meet the perceived lower
level of threats. Our approach to the conflicts in Afghanistan and Iraq following the September 2001 terrorist attacks was different. While defense spending increased significantly, the size of our ground forces increased only modestly, with few changes in air and maritime forces. Most of
the increased spending was in overseas contingency operations funds to pay for the operations in Afghanistan and Iraq. These funds represented a significant percentage of the overall funding available to the services over the past decade, and their drying up has compounded the
challenge that the services now face in meeting the requirements of the Budget Control Act. Attempting to manage this amount of budgetary change over a compressed time frame makes it difficult to maintain effective balance among the different dimensions of readiness. The

exemption of some personnel accounts from sequestration has exacerbated this problem. Regrettably, world events and potential threats to U.S. strategic national interests are not driven by the same forces that drive the political and budgetary gridlock in Washington. North
Korea’s increasingly bellicose rhetoric and actions endanger regional stability in the economically vital Western Pacific. The maelstrom of

conflict in Syria threatens to engulf its neighbors as Iran continues to pursue a destabilizing nuclear
capability in the Middle East. The one-word descriptor for our strategic situation is “uncertain.”
2nc
 2nc – yes readiness impact
Yes readiness impact – declines cause lashout
Jack Spencer, 2k, Research Fellow in Nuclear Energy Policy at The Heritage Foundation's Roe Institute
for Economic Policy Studies. “The Facts About Military Readiness” Sep. 15, 2k. accessed July 31, 2010
http://www.heritage.org/Research/Reports/2000/09/BG1394-The-Facts-About-Military-Readiness//

Military readiness is vital because declines in America's military readiness signal to the rest of the world that the
U nited S tates is not prepared to defend its interests . Therefore, potentially hostile nations will be more likely
to lash out against American allies and interests, inevitably leading to U.S. involvement in combat. A
high state of military readiness is more likely to deter potentially hostile nations from acting
aggressively in regions of vital national interest, thereby preserving peace.
 link – trump’s budget
Trump is unpredictable- he may make cuts to large education programs- proves education and
defense trade-off
Ujifusa 17 Andrew Ujifusa is an Education Week reporter and co-author of the PoliticsK12 blog. “What
Could Trump's Broad Budget Plans Mean for Education?”, Education Week, 2/27/17. Ghs-cw
http://blogs.edweek.org/edweek/campaign-k-
12/2017/02/trump_education_department_cuts_proposed_budget.html

After months of speculation about how President Donald Trump would approach the budget, we now have at least a general idea: Trump will seek a $54 billion increase for
defense-related spending and a corresponding cut in other discretionary funding in fiscal 2018, according to published reports. So what
could that mean for the U.S. Department of Education budget. We don't know the crucial details yet, but one thing's for sure: Many education advocates are

concerned. First, remember that many funding advocates have been watching to see how the Trump administration
handles those mandatory budget caps on defense and nondefense discretionary spending imposed, which is
commonly called sequestration. Now we have a (perhaps unsurprising) answer: more money for defense and roughly a 10 percent
cut for discretionary spending at domestic agencies like the Education Department. Also keep in mind that Secretary of Education
Betsy DeVos said recently that she'll look for places to make cuts in the department's budget. The Education
Department's current budget is just over $68 billion, so a 10 percent cut would be roughly $6.8 billion. What are the biggest programs by dollar amount that

could lose money? Pell Grants to support low-income students attending college are funded at $22.5 billion. Title I funding for disadvantaged students is $14.9 billion.
Individuals With Disabilities Education Act money for students in special education is funded at $12.9 billion. Together, those three line items
in the budget account for $50 billion, or about 73 percent of the Education Department's total spending.
Earlier this month, Oklahoma Republican Rep. Tom Cole, the chairman of the House appropriations subcommittee that drafts the department's budget, indicated to us that Title I and IDEA funding are

crucial budget building blocks for many school districts. But it could be unsafe to assume that means the
big-ticket items will be left alone in Trump's budget proposal, which is expected some time in March. "We are concerned that this administration will not
prioritize the protection of Title I students," said Noelle Ellerson Ng, the associate executive director of AASA, the School Superintendents Association. Ellerson added that the increase in defense discretionary spending and
corresponding cut to domestic spending like education programs is a "complete departure" from the Obama administration's approach that sought parity between defense and nondefense discretionary spending in the context of

It's also possible that the Trump administration will achieve the 10 percent cuts at
sequestration. "It's inherently inequitable" she said.

the Education Department by completely eliminating or drastically cutting smaller programs. That means
things like Promise Neighborhoods ($73.3 million), the Education Innovation and Research program ($120 million), and
funding for state assessments ($378 million) could be on the chopping block. And the office for civil rights, which has been the subject of a lot of attention
under Trump and DeVos, is currently at $107 million. Before he was elected, Trump stated that he would end the sequester caps on discretionary defense spending—we analyzed what that would mean last September. We don't
know yet if the 10 percent cut in non-defense discretionary spending will apply equally to all agencies. The Education Department might get a bigger or smaller cut as a percentage of its overall discretionary budget.

Trump’s cuts to education may cause an unnecessary crisis

Epstein et Al 17 Jennifer Epstein is a Bloomberg White House reporter. Toluse Olorunnipa is also a White
House reporter for Bloomberg. Erik Wasson is a reporter for Congress for Bloomberg. “Trump Seeks
Research, Education Cuts to Offset Defense Boost”, Bloomberg, 3/28/17. Ghs-cw
https://www.bloomberg.com/news/articles/2017-03-28/trump-seeks-research-education-cuts-to-pay-
for-wall-military

‘Unnecessary Crisis’ Washington Senator Patty Murray, the top Democrat on the Senate Budget
Committee, said in a statement that after the failure of health-care legislation last week, Trump’s
proposed budget cut "seems intent on driving our country into another completely unnecessary crisis."
Republicans, she added, "need to do the right thing and ignore this absurd demand from President Trump
to renege on our bipartisan agreement, they need to push aside the extreme members of their caucus
who want to defund Planned Parenthood, and they need to work with us on a fair and responsible budget
for the rest of this year." Many of the cuts proposed in the Office of Management and Budget’s document
are aligned with reductions Trump has recommended in his budget for fiscal 2018, which begins Oct. 1.
They include slashing funding for education, health research, foreign aid and housing. Trump proposed
cutting the Education Department’s budget in fiscal 2017 by about $3 billion, including $1 billion each for
Pell Grant rescissions and funding for teacher training and class-size reduction.

Trump’s proposed budget cuts education to increase defense spending

Slack and Korte 17 Donovan Slack has been with the Washington bureau since June 2013, was a White
House reporter for POLITICO, and was a reporter at The Boston Globe. Gregory Korte is a White House
correspondent for USA TODAY. “Trump's first budget slashes education, health spending to make way for
military buildup”, USA Today, 3/16/17. Ghs-cw
https://www.usatoday.com/story/news/politics/2017/03/16/trump-first-budget-proposal-dramatic-cuts-
fund-military-buildup/99212718/

President Trump’s first formal budget proposal to Congress

WASHINGTON — seeks to “redefine the , one of the most ambitious ever proposed,

proper role” of the federal government by dramatically reducing its involvement in many domestic areas while boosting investments in security.

education
The proposal, dubbed the "America First" budget by the White House, increases defense spending by $54 billion and offsets that with cuts to non-defense spending, including steep cuts to , environmental protection, health and human services, and foreign aid.

The military, meanwhile, would get more personnel, munitions, ships and fighters. "There is no question, this is a hard-power budget. It is not a

some agencies would

soft-power budget,” said Trump's budget director, Mick Mulvaney. “And that was done intentionally. That’s what our allies can expect. That’s what our adversaries can expect.” Under the blueprint scheduled for release Thursday,

be disbanded altogether Dozens of programs would be eliminated,

, including those primarily responsible for supporting public broadcasting, legal aid and the arts.

including community learning centers

many with constituencies in states and cities across the country. They include community development block grants, and low-income heating assistance. The budget places a heavy

emphasis on measurable results, and budget officials say those programs don't make the cut. The heating program is “unable to demonstrate strong performance outcomes” and the community development block grant program is not "well-targeted to the poorest populations and has not
demonstrated results," the budget says. Programs supporting first-time home buyers, state and local affordable housing initiatives and neighborhood revitalization would be zeroed out. A job-training program for seniors would also be axed because one-third don't finish, and of those who
do, "only half successfully transition to unsubsidized employment." The budget also "returns the responsibility" for local environmental initiatives to state and local entities, cutting some $400 million for regional projects at the Environmental Protection Agency, including restoration of the
Great Lakes and Chesapeake Bay. Some of Trump's domestic policy priorities would see increases, including school choice and charter school programs, and an additional $500 million would go to expand treatment, recovery and prevention of opiate abuse. There's also $2.6 billion for the

budget staffers culled Trump's campaign speeches and

proposed border wall and $314 million for immigration enforcement agents. Mulvaney said that in addition to speaking with the president,

other material in putting together the budget. "If he said it in the campaign, it's in the budget ," he said. "We wanted to know

That proposal
what his policies were. And we turned those policies into numbers." The 2018 budget is for the fiscal year that begins Oct. 1. A separate 2017 supplemental request also being sent to Congress on Thursday asks for $15 billion more in spending this year.

includes $30 billion in defense spending and $3 billion for the border wall, offset by $18 billion in cuts to
other non-defense spending. The budget proposed Thursday is a "skinny budget" — less detailed than most years because the Trump administration

is just two months old. At 53 pages, Trump’s first budget is less detailed and comes later than similar first-year budgets by his predecessors. Stephen Ellis of Taxpayers for Common Sense noted that President Obama’s skinny budget was 140 pages, and George W. Bush’s was 175. Both were
sent to Congress on Feb. 28. Unlike full budget proposals, Trump's blueprint does not include tax proposals, long-term deficit projections or detailed staffing levels for every agency. Those will come in a more detailed budget proposal in May, Mulvaney said. But he said there would
unquestionably be fewer federal employees. "You can’t drain the swamp and leave all the people in it," Mulvaney said. Among the staffing changes in the blueprint budget are cuts of some 3,200 workers at the Environmental Protection Agency — roughly 20% of its workforce. "The president
wants a smaller EPA," Mulvaney said. "He thinks they overreach and the budget reflects that." The budget specifically proposes some new hiring: 1,500 new agents for Immigration and Customs Enforcement, with 60 more prosecutors to back them up. Trump is proposing 40 new deputy U.S.
marshals focused on criminal immigrants. And he wants 20 attorneys to defend his immigration executive actions in court, with 20 more to handle land acquisition for the border wall. Trump's budget proposal effectively blows up the 2011 budget compromise known as the Budget Control
Act, which imposed equal, across-the-board "sequestrations" of defense and non-defense spending that has largely held a budget armistice on Capitol Hill. The proposal will surely face some resistance on Capitol Hill, where lawmakers are responsible for passing the budget and spending bills.
The president’s proposal is a starting point and, as with any president, a reflection of administration priorities and something of a wish list. The Trump presidency: A new era in Washington Mulvaney said he expects pushback, and the White House is open to negotiating with lawmakers, as
long as he gets increases in spending on defense, law enforcement and border security without increasing the deficit. “If they have a different way to accomplish that, we are more than interested in talking to them,” he said. Some critics b egan blasting the blueprint before seeing what’s in it.
On Wednesday, NDD United, a coalition of federal, state and local organizations, said the expected cuts in the proposal will “punish” millions of Americans, including Trump voters, who depend on federal funding and programs that have already endured years of cuts. “You’re taking direct
aim at the voters who pulled the lever for you because their economic situation worried them and they believed you’d help,” said Emily Holubowich, co-chair of NDD, which stands for Non-Defense Discretionary spending. “Instead, you’re pulling the rug out from underneath them.”
 link – tradeoff – general

Funding for education compromises military spending

Jaeger 16 Kyle Jaeger is a Los Angeles-based reporter for ATTN. He's formerly written for VICE, The
Hollywood Reporter, and The Morning News, among other publications. “Here's How Military and
Education Spending Compare in America”, ATTN, 8/30/16. Ghs-cw
https://www.attn.com/stories/11036/how-military-and-education-spending-compare-america

if education is such a valuable investment, why do we spend

We spend a lot of time talking about the value of an education in America. But

more than eight times as much of our federal budget on the military than schooling? One indicator of a nation's priorities
lies in its federal budget. And by that logic, America's budget makes clear that we prioritize defense over all other

expenditures — by a wide margin. In 2015, military expenditures accounted for about 54 percent of our
discretionary spending, according to The National Priorities Project. In contrast, education accounted for only six percent of
the budget. It's true — as Forbes' Erik Kain points out — that state and local governments generally foot the bill when it comes to education spending in America. If you factor those
contributions in, the U.S. spent about $880 billion on education in 2011, compared to $966 billion total on defense. And a 2012 report from the Organization for Economic Cooperation and
Development found that America invested about $15,500 per student for primary, secondary and tertiary schooling — one of the highest in the world. But that doesn't change the fact that

federal spending on education pales in comparison to military expenditures. And it can certainly be argued that investing more in education at the federal
level could mitigate some of the problems — underfunded schools and underpaid teachers, for example — that continue to plague school districts across the
country. Perhaps that would require the U.S. to reevaluate its federal budget priorities, compromising some

of its military expenditures. But according to the White House's own estimates, investing in education (specifically in early childhood learning) yields profits later in life. For
every dollar invested in early childhood education programs, society benefits to the tune of $8.60, "about half of which comes from increased earnings for children when they grow up," a 2012
report from the Council of Economic Advisers found. What's more, studies show that putting more money into education also increases the chances that students (particularly low-income
students) will complete school. "[A] 10 percent increase in spending, on average, leads children to complete 0.27 more years of school, to make wages that are 7.25 percent higher and to have a
substantially reduced chance of falling into poverty," Bloomberg reports. "These are long-term, durable results. Conclusion: throwing money at the problem works."

Military Spending trades off with education

Foxworth 06 Rodney Foxworth is the Founder and CEO at Invested Impact. “"Liberals" Hate the
Military?”, ChickenBones, 4/19/06. Ghs-cw http://www.nathanielturner.com/liberalshatethemilitary.htm

"Every gun that is made," someone once declared "every warship launched, every rocket fired signifies, in the final sense, a
theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending
money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children." Mr. Anderson would have us all believe that the
person behind these words was some card carrying Green, a follower of Gandhi, or worse yet, Martin Luther King or Che Guevara. No, the person behind these words
is none other than Dwight D. Eisenhower, the 34th president of these United States and U.S. Army general of World War II, who stood before the American Society of
Newspapers Editors in 1953 to deliver his famous " Chance for Peace" address. Eisenhower was never accused of being a "liberal." What Eisenhower understood, and
what thousands, if not millions understand today, is that the nation actually has priorities outside of "national security," as defined
narrowly by pundits like Anderson, limiting national security concerns to military and defense. This is something that Anderson and his ilk are either unable to
understand or unwilling to acknowledge. It is very much a zero sum game: the
more resources placed into the militarized state, the
fewer the resources available for social welfare programs and education. Military expenditures increase
as drastic cuts are made to educational and social programs. While it is impossible to argue that we do not need a "strong" military,
no better question has been asked in regards to the military than the one posed by child advocate Marian Wright Edelman, president of the Children's Defense Fund:
“Is it really necessary for the U.S. to spend seven times more on the military than either China or Russia, the two next largest military spenders, and more than 40
times the expenditures of Iran and North Korea, the two remaining countries President Bush has labeled the 'axis of evil,' when so many children are terrorized by
sickness, poverty, illiteracy, homelessness, and food insecurity at home?”
 link – guns and butter

Trump’s new budget is a “guns and butter” relationship

Milligan 17 Susan Milligan is a political and foreign affairs writer and contributed to a biography of the
late Sen. Edward M. Kennedy. “Trump Proposes More Guns, but Not So Much Butter”, US News, 2/27/17.
Ghs-cw https://www.usnews.com/news/politics/articles/2017-02-27/donald-trump-proposes-more-guns-
but-not-so-much-butter

President Donald Trump Tuesday night plans to lay out a budget plan with big increases in defense
spending offset by large cuts in domestic programs – exactly, his budget director told reporters Monday,
what Trump promised to do on the campaign trail. But unlike his experience on the campaign, Trump will
have to clear several high hurdles to turn his ideas into law. Trump wants a $54 billion hike in military
spending, a 10 percent hike, budget director Mick Mulvaney said. But doing so will require Congress to do
two politically dicey things: suspend the 2011 Budget Control Act, which imposed a "sequester" on
spending, shared by military and non-defense programs, and accept deep cuts to domestic spending
programs that have fans on both sides of the aisle. The coming budget blueprint will be "a true America
first budget," Mulvaney, Trump's newly-installed director of the Office of Management and Budget, told
reporters at the White House. He declined to detail which domestic programs would take spending cuts
in double-digit percentages, saying each agency will be given a "top line" number to meet. Foreign aid
and the Environmental Protection Agency are considered targets for deep cuts.

Military spending and education trade off

Tasini 11 Jonathan Tasini has written about labor and economics for a variety of newspapers and
magazines including The New York Times Magazine, The Atlantic, Business Week, The Washington Post,
The Village Voice, The Los Angeles Times, and The Wall Street Journal. He is also the author of 4 books.
“Guns Versus Butter — Our Real Economic Challenge”, Huffington Post, 5/25/11. Ghs-cw
http://www.huffingtonpost.com/jonathan-tasini/guns-versus-butter-our-re_b_60150.html

Guns versus butter. It’s the classic debate that really tells us a lot about our priorities that we set for the
kind of society we can expect to live in — how much money a country spends on the military versus how
much money is expended on non-military, domestic needs. To perhaps explain the obvious, buying a gun
(or missile defense or a sophisticated bomber) means you don’t have those dollars for butter (or a
national health care plan or free college education). At some basic level, we all know that those tradeoffs
exist but, sometimes, numbers bring home the meaning of this equation in stunning fashion. What made
me think of this is a set of revealing numbers that jumped out at me the other day — numbers that
underscore why there is, in my opinion, something lacking in the message of most of the Democratic
presidential candidates and our party’s leadership. The numbers come from an article in the June 30th
edition of the well-known left-wing magazine, The Economist entitled “The Hobbled Hegemon.” The
theme of the article is that, surprise, the Iraq war and occupation have weakened the U.S. militarily but,
The Economist reassures its readers, “America is likely to remain the dominant superpower.” What struck
me in the lengthy piece were three pie charts. The first chart details what major countries spent on
defense in 2006, as a percentage of the total worldwide defense expenditures of $1.2 trillion (which, on
its own, is a staggering figure): U.S.: 45.7 percent China: 4.3 percent Japan: 3.8 percent India: 2.1 percent
Rest of the world: 28.3 percent The second chart measures world gross domestic product (GDP), as a
percentage of the total of $48.2 trillion in 2006: U.S.: 27.5 percent China: 5.5 percent Japan: 9.1 percent
India: 1.8 percent Rest of the world: 38.6 percent Finally, the third chart lays out world population shares,
of the total of 6.5 billion people: U.S. 4.6 percent China: 20.2 percent Japan: 2 percent India: 17.4 percent
Rest of the world: 50.5 percent So, what are some of the lessons from those numbers? If you want some
solid explanation to explain why our country is in trouble in foreign policy, why 47 million Americans lack
health care and why we don’t have money to do basic infrastructure upkeep on road, bridges, water
mains and our energy system, these numbers tell a lot.

Trumps Military Spending has a direct trade off with the education budget.
Brendix 3/16/17, Aria Bendix is a frequent contributor to The Atlantic, and a former editorial fellow at CityLab. Her work
has appeared on Bustle and The Harvard Crimson., Trump's Education Budget Revealed,
https://www.theatlantic.com/education/archive/2017/03/trumps-education-budget-revealed/519837/

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.”
 2nc – military spending good

US military spending is good--- key to maintain affective global alliance, prevent catastrophic
warfare, prevent Chinse expansionism, and maintain US hegemony.
Salam 2015, Reihan Salam is a columnist for Slate., NOV. 12 2015, The United States Doesn’t
Spend Enough on Its Military,
http://www.slate.com/articles/news_and_politics/politics/2015/11/military_spending_the_cas
e_for_spending_more_not_less.html
The reason command of the commons is so important is that the U.S. is and has long been a trading
nation, and if rival states could deny the U.S. access to the commons, the U.S. would always be at
the mercy of these rival states. The U.S. managed to get by when the British Empire had command of the commons in an earlier era, but we have little
experience of a world in which access to the commons was controlled by an unfriendly power. One of the chief arguments for the U.S.

involvement in the First and Second World Wars was that if some other power grew dominant
on the Eurasian landmass, it might then achieve command of the global commons and tie an
economic noose around America’s neck. Command of the commons is extremely valuable, yet America has had it for so
long that we tend to take it for granted. That is a mistake. And command of the commons is
getting more expensive to maintain. The other thing we expect of our military is that it be able
to protect not just the U.S. homeland, but also our allies around the world. The United States is
pledged to defend every other NATO member state if they’re ever under attack. To be sure, every other NATO
member state has also pledged to defend the U.S. But let’s just say that in practice, the U.S. is not banking on the Estonians to ride to the rescue in case of an invasion while the Estonians are
certainly banking on the U.S. having their back if the Russians come knocking. And NATO is just the tip of the iceberg. Michael Beckley, a political scientist at Tufts, has observed that since

, the United States has signed defense pacts with more than 60 countries. This U.S.-led
World War II

global alliance contains 25 percent of the world’s population and generates 75 percent of global
GDP. America’s allies have primary responsibility for their own defense, to be sure. Yet they really do count on the U.S.
to step up when the going gets tough. Why does the U.S. extend security guarantees to so many different countries, including rich ones? One way to think about it is that U.S. allies are by
definition countries that the U.S. will never have to fight against. Instead of building up their militaries in ways that might threaten the U.S. or their neighbors, former rivals like Germany and
Japan have militaries that are almost exclusively devoted to territorial defense. Whereas both Germany and Japan once had imperial designs, neither country could conquer a faraway land if

The U.S.-
they tried. What they can do is meaningfully contribute to U.S.-led efforts to defend not only their own homelands but also other democracies in their respective regions.

led global alliance has created a vast zone in which interstate conflict is largely unknown, and
commerce can flow freely. American leadership allows and encourages our allies to cooperate,
and it makes it effectively impossible for them to wage war on each other. This is a far cry from the years before
1945, when the world’s richest and most powerful countries were at each other’s throats. Could it be that the remilitarization of Germany and Japan outside of the American security umbrella
would be welcomed by their neighbors? Might the Middle East be safer if Saudi Arabia had to fend for itself, and it devoted its oil wealth to, say, building its own nuclear arsenal? I’m skeptical,
and frankly I think it would be unwise for us to roll the dice to find out. For decades, mainstream Democrats and Republicans have agreed that bearing the costs of U.S. global leadership is
preferable to the uncertainty that would arise if the U.S. were to pull back, and so the U.S.-led global alliance has persisted. From Bill Clinton to Barack Obama, every president since the end of
the Cold War has actually favored expanding this alliance. The problem we face now is that both Democrats and Republicans don’t seem to appreciate that the costs of U.S. global leadership
are rising, whether they like it or not. Consider the case of China. In recent years, China has devoted a growing share of its military resources to so-called anti-access and area denial weapon
systems. First, they want to ensure that they can prevent the United States from having free rein throughout the Western Pacific, their backyard, and so they are pouring money into things like

If China fires off hundreds or thousands of

cheap missiles that can overwhelm America’s big, slow-moving naval vessels and overseas bases.

missiles, they only need a handful to reach their targets to deal a devastating psychological
blow to the U.S. and its allies. This is very smart strategy, and U.S. defense planners are thinking hard about
how to counter it. But the Chinese benefit enormously from the fact that they really just want
to dominate their backyard and to ensure that they’re eventually strong enough to keep the
U.S. out of it. If the Chinese could do that, they could then dominate their neighbors, including
U.S. allies like Japan and South Korea. The U.S. would lose command of the commons in the world’s most economically dynamic region. Chinese
domination of the Western Pacific is far from inevitable. To successfully contest it, however, the U.S. will have to spend money.

Military Spending is necessary to prevent war

Cotton and Rubio 20 15 ,, Marco Rubio US Senator for Florida, U.S. Senator serving the state of Arkansas., Rubio,
Cotton: Why defense budget must grow, March 26, 2015, http://www.cnn.com/2015/03/26/opinions/rubio-cotton-defense-
cuts/index.html

(CNN)With majorities in both chambers of Congress, it

is time for Republicans to begin rolling back six years of failed
Obama administration policies. Our highest priority during the ongoing budget debate should be undoing the damage
caused by defense sequestration and the hundreds of billions of dollars of defense cuts made by the
Obama administration. Regrettably, military strength is seen in many quarters as the cause of military adventurism.
A strong, robust defense is seen not to deter aggression, but to provoke it. For years, we have systematically
underfunded our military, marrying a philosophy of retreat with a misplaced understanding of our larger
budgetary burdens and the real drivers of the debt: our entitlement programs. As expected, almost four years after the
passage of the Budget Control Act, virtually nothing has been done to address the unsustainable growth of our entitlement programs, while essential defense
programs have been sacrificed. Political leaders
in Washington need to be reminded that our defense is the single most
important responsibility of the federal government. Instead of starting the process by setting arbitrary defense spending levels and
then forcing our military to cut vital programs in order to meet these levels, the budgeting process should start by taking into account all the threats against us,
listing the programs and capabilities we'll need to protect our people and interests around the world, and then funding those efforts. Even though we've been able
From the rise of the Islamic State
to keep the homeland safe for more than a decade, the threats to Americans at home and abroad are growing.

and the spread of Islamic terrorism, to Russia's aggression in Europe, to Chinese expansionism in the
South China Sea, the threats to American security are growing. Yet, even as the world outside our borders is filled with more
doubt and uncertainty, the United States has been steadily reducing our spending on defense. Even before sequestration, President Obama made defense cuts of
$487 billion over 10 years and redirected the savings to already bloated domestic programs. This was followed by tens of billions more in defense cuts each year
because of sequestration, which, when combined with Obama's prior cuts, will total $1 trillion over the coming decade. All of these reductions were enacted despite
the warnings of four secretaries of defense and our entire military leadership. The
results of these cuts have been disastrous for our
military and for our ability to project power and deter our enemies. The slight increase in President Obama's proposed 2016
budget won't significantly change that. At the end of this process, our military will be significantly smaller, dramatically less capable and dangerously unready to
deploy if these budget cuts remain in place. The Army is on the path to be reduced to pre-World War II levels. The Navy is at pre-WWI levels. And our Air Force has
the smallest and oldest combat force in its history. Our force reductions have been felt throughout the world -- by our
friends and our enemies. They have presented not just a crisis of readiness for America, but also a
perilous strategic weakness. Our adversaries have been emboldened by what they perceive as our
diminished military presence. History has shown that every time we have unreasonably cut resources from our military in anticipation of a peace
dividend, it has only cost us more to make up for the deficit we create in military readiness and capability, and the expected era of perpetual

peace fails to materialize. We think we are saving money, but in the long run, we end up paying more and
creating more risk and uncertainty. We can afford the military we need, but we must make it a priority. For this reason, we introduced an
amendment to the Senate budget resolution this week to address the dangerous funding gap our military currently faces. We believe we must increase

the resources available to our military to the levels proposed by (former) Defense Secretary Robert Gates in his FY12 budget, the last defense
budget based solely on an assessment of the threats we face and the requisite military needs to deal with those threats. It is the budget that the bipartisan,
congressionally-mandated National Defense Panel stated was "the minimum required to reverse course and set the military on a more stable footing." Now that
Republicans control both house of Congress, it is time to support a defense budget that actually reflects the world in which we live, not the world the way we wish it
was. Until now, our approach as a country and a party since the Budget Control Act has not been one of American strength. Continuing on the current path will only
invite war and conflict through weakness. We need to heed the bipartisan warnings of our nation's military leaders and get back on track toward a defense budget
that reflects the realities of the challenges we face and is worthy of our brave men and women in uniform. In the end, it is they who will suffer the most if
sequestration is not reversed and our readiness and equipment continues to degrade. As members of Congress, we have a sacred obligation to ensure that they
have the best possible training and equipment so they can successfully complete their missions. Despite the fiscal constraints imposed on our military, they are
doing their part and are holding up their end of the bargain. It's time that we hold up ours.
 2nc – trump budget good
Trumps Military Budget is key to National Security
Flournoy 3/1/17, Michèle Flournoy, chief executive of the Center for a New American Security, was
undersecretary of defense for policy from 2009 to 2012., Opinions Trump is right to spend more on
defense. Here’s how to do so wisely., March 1st 2017
https://www.washingtonpost.com/opinions/trump-is-right-to-spend-more-on-defense-heres-how-to-
do-so-wisely/2017/03/01/ca776f74-fe8e-11e6-8f41-
ea6ed597e4ca_story.html?utm_term=.04e96389576d

In his address Tuesday to Congress, PresidentTrump promised to make sure that the U.S. military gets what it
needs to carry out its mission by securing “one of the largest increases in national defense spending in

American history.” More funding would surely be a good thing, although the issues of how much and what for are
complicated. No one should be under any illusions that a higher Defense Department top line guarantees a more capable armed force. Trump is reportedly seeking
$54 billion over the sequester caps imposed by the 2011 Budget Control Act, which would bring 2018 defense spending to $603 billion. While Trump may view this
proposal as historic, it’s only 3 percent more than President Barack Obama’s final budget request. Meanwhile, the chairman of the Senate Armed Services
Committee has called for a much larger increase — to nearly $640 billion. And as the post-9/11 defense buildup taught us, throwing more money at the Pentagon is
not a panacea. What matters is how the money is spent. So what should we look for in the president’s budget request? There is broad consensus in the Pentagon
and Congress that the most urgent priority is addressing readiness shortfalls that affect the military’s ability to respond quickly to crises and other near-term
demands. Every member of the Joint Chiefs of Staff has highlighted readiness problems — such as inadequate training time and maintenance and replacement of
equipment — as a source of accumulating risk. While Congress’s willingness to provide war funding — “overseas contingency operations” funds — above baseline
defense spending has helped, it has not solved the problem. The larger challenge will be striking the right balance between building a bigger force and building a

a “larger, more capable, and more lethal

better one. Defense Secretary Jim Mattis has rightly defined his priority as building

joint force” to contend with a more challenging international security environment and
increasingly capable adversaries. But there are tradeoffs between paying for additional personnel and force structure vs. investing in the
technology and capabilities necessary to prevail in more contested air, land, maritime, cyber and space domains. Although some increases in force size may be
warranted, such as a larger Navy fleet and modest increases elsewhere, the dramatic across-the-board hikes in force structure that Trump proposed during his

The bulk of any additional defense investment must focus on

campaign are both unaffordable and unwise.

maintaining and extending our technological and warfighting edge, including in cyber,
electronic and anti-submarine arenas, unmanned systems, automation, long-range
striking and protected communications. U.S. military leaders should moderate their
appetite for a bigger force today to protect critical investments in cutting-edge
capabilities that will determine whether we succeed on the battlefield tomorrow. Second, are
deterrence and alliance capabilities being strengthened? Critical to the United States’ ability to deter aggression and prevent conflict in regions where we have vital
interests is deploying U.S. military forces forward and helping allies and partners build their own defense capacity. Some of these costs, such as those associated
with routinely deploying naval forces around the world, reside in the base defense budget. Others, such as the European Reassurance Initiative, will be covered by
annual overseas contingency funding. Still others, such as helping Israel field more robust missile defense systems, are enabled by the State Department’s foreign

These investments, although relatively small in dollars, are disproportionately important to reducing
military financing.

the risk of more costly U.S. military engagements

 at: allies fill in
US key, Other countries can’t fill in--- The US needs to protect National Security Interest along
with domestic interest. US spending is necessary to develop hard power other countries focus
is Soft power relations and post-conflict stabilization
Salam 2015, Reihan Salam is a columnist for Slate., NOV. 12 2015, The United States Doesn’t
Spend Enough on Its Military,
http://www.slate.com/articles/news_and_politics/politics/2015/11/military_spending_the_cas
e_for_spending_more_not_less.html

Why can’t Japan, or other affluent allies, pick up the slack? To be sure, our allies have a
role to play. The U.S. military and its partners are involved in a big, complex, cooperative
enterprise, in which the U.S. takes on some roles while partner countries take on others .
During the Cold War, the U.S. expected its NATO allies to be prepared for ground combat in Europe and its Asian allies to focus on anti-
submarine warfare. The U.S. was concerned primarily with maintaining its large nuclear weapons arsenal and maintaining command of the
commons. Since the Cold War, Tufts’ Beckley has identified a broadly similar division of labor. As before, the U.S. focuses on commanding the
Now, however, America’s European allies are more
commons and maintaining high-end offensive capabilities.

likely to engage in peacekeeping and post-conflict stabilization while our Asian allies are
devoting resources to countering China’s new anti-access and area denial weapons. With
the notable exception of Iraq, a war that many U.S. allies wanted no part of, it is not at all

uncommon for U.S. allies to take more casualties as a share of their ground forces than
the U.S. in post-conflict missions. To put it crudely, the U.S. military is built to focus on the high-intensity phase
of a conflict in which the goal is to overwhelm the enemy with superior firepower. U.S. allies are

more suited to doing the often equally important work of post-conflict stabilization. None
of this is to suggest that America’s European allies shouldn’t spend more on their militaries. They should. NATO has set a 2 percent target for
But even if Britain, France, and Japan
defense spending, and only five NATO members clear that very modest threshold.

doubled or tripled their military budgets, they still couldn’t afford to command the
global commons or successfully defeat enemy forces in serious ground combat. Like it or
not, the U.S. really is the indispensable nation.
 at: budget won’t pass
A form of trumps budget will pass now --- We’ve inserted a graph to explain.
Timmons 3/3/17, Heather Timmons is QZ's first White House correspondent. he spent 10 years with The New York Times
in London and New Delhi, covering business and finance. Before the Times, Heather was the banking editor at BusinessWeek in
New York, where she covered risky lending, corruption on Wall Street, and a post-9/11 city. She began writing about banking
and finance as a reporter with the Daily Deal and American Banker., Charted: Trump’s “America First” budget looks nothing like
what the government will do in 2017, https://qz.com/974098/charted-the-spending-bill-congress-is-expected-to-pass-this-
week-looks-nothing-like-the-america-first-budget-trump-wants/

US budget director Mick Mulvaney took to the podium at the White House press room on Tuesday (May 2)
with one message: President Donald Trump, and not the Democratic party, is the clear winner of the
federal spending bill Congress crafted over the weekend—even though it bears little resemblance to
Trump’s proposed “America First” budget. Mulvaney said the president was “frustrated,” by news coverage and Democratic celebration over the bill, which
has been described as a defeat for Trump. Congress eschewed the president’s drastic proposed cuts to health and other

social services, the State Department, and the Environmental Protection Agency, among other agencies.
The spending bill also doesn’t include funding for Trump’s border wall—although it does include funding to fix and replace existing border structures, which Mulvaney highlighted by showing

. “We are building this now,” he said. Democrats are trying to “cover up the
photographs of steel walls in the press briefing room

fact that they cut a deal with president Trump,” he said, and wanted a government shutdown, but didn’t get it. “They were desperate to make this
administration look like it couldn’t function.” The House will vote on the bill today May 3 and it is expected to pass there and the

Senate before being signed by the president this week. To be clear, the spending bill and the Trump
budget are two different things. The first dictates funding for the federal government for the rest of 2017, while the second is Trump’s “America First” wish list for

the 2018 budget.

****aff****
2ac
 2ac – no trump budget
Trump’s budget won’t pass- criticism from GOP, no bipartisan effort
Carney 5/24 Jordain Carney is a reporter at The Hill covering the Senate. “Lindsey Graham: Trump's
budget 'doesn't have a snowball's chance in hell'”, The Hill, 05/24/17. Ghs-cw
http://thehill.com/policy/finance/334959-lindsey-graham-trumps-budget-doesnt-have-a-snowballs-
chance-in-hell

Republican Sen. Lindsey Graham (S.C.) on Wednesday threw cold water on President Trump's budget,
saying there's no chance it will pass Congress. "The budget proposed by the president doesn't have a
snowball's chance in hell of passing," Graham said during an Appropriations subcommittee hearing.
Graham pressed military officials at a hearing on the Navy and Marine Corps 2018 fiscal year budget if
they thought the president's budget had a "pathway forward." When the officials hesitated, Graham
added: "I don't, so that's probably a question for me." Trump released a budget on Tuesday that would
make deep cuts in nondefense spending while increasing military spending. But GOP lawmakers have
knocked the proposal, arguing that it both doesn't increase defense spending enough while also
proposing unrealistic cuts for some domestic programs. Lawmakers are expected to set aside the White
House's budget proposal and instead craft their own legislation later this year. Graham, who backs more
defense money, has also grilled the administration over a nearly 30 percent cut to the State
Department's budget that some GOP senators have warned can't pass the upper chamber. Lawmakers
will need to reach a deal on spending by October if they want to avoid mandatory across-the-board
spending cuts scheduled to go back into effect. Graham, acknowledging that he was getting "a little
preachy here" during Wednesday's hearing, threw his support behind forming a "super committee two,"
referring to a 2011 group that failed to reach a debt reduction deal. "Right now in May there is no plan
to fix sequestration. There's not a bipartisan effort, there's not a sole party effort to relieve the suffering
that we have created ... from insane budget cuts," Graham said. Presidents' budget proposals frequently
gain little traction in Congress. Republicans forced multiple votes on the Obama administration's
proposals, including a 98-1 vote against the measure in 2015.

Both Democrats and Republicans acknowledge that the budget won’t pass
Kaplan 5/23 Thomas Kaplan is a reporter for the New York Times covering Congress. “Divided
Republicans May Find It Hard to Pass Any Budget”, NY Times, 5/23/17. Ghs-cw
https://www.nytimes.com/2017/05/23/us/politics/congress-budget-republicans.html

— Congressional Republicans greeted President Trump’s first full budget on Tuesday with open
WASHINGTON

hesitation or outright hostility. But it was not clear that they could come up with an alternative that
could win over conservatives and moderates while clearing a path for the tax cuts and policies they have
promised for years. The budget battle ahead mirrors the continuing health care fight, in which concessions to Republican moderates alienate conservatives, while overtures to
conservatives lose moderate votes. But with Republicans in full charge of the government, the onus is on their leaders to reach a budget agreement in a matter of weeks that would ease

“It is now up to the Congress

passage of the president’s promised tax cuts as well as a new spending plan that would reshape the government in a Republican mold.

to act,” Mr. Trump said in his Budget Message. “I pledge my full cooperation in ending the economic malaise that has, for too long, crippled the dreams of our people. The time for small
thinking is over.” Mr. Trump’s $4.1 trillion budget, with its deep cuts to poverty programs, biomedical research,

student loans and foreign aid, will not pass, as Republicans on Capitol Hill have freely acknowledged and
even the White House is aware. Republicans on Capitol Hill parted ways with the president not only on
many of his deepest cuts but also on some of his smaller proposals, like resurrecting a national nuclear waste repository in Nevada and
ending the Great Lakes cleanup program. Representative Harold Rogers, Republican of Kentucky and a former chairman of

the House Appropriations Committee, called the cuts “very harmful.” Senator Dean Heller of Nevada, perhaps the most endangered
Senate Republican up for re-election next year, labeled the budget “anti-Nevada.” But the drastic reordering of government that Mr. Trump has embraced includes many measures long sought
by conservatives on Capitol Hill, including adding work requirements for food-stamp eligibility and opening the Arctic National Wildlife Refuge to oil drilling. It would also eliminate whole
programs, including AmeriCorps, the Corporation for Public Broadcasting, the National Endowment for the Arts and the Low Income Home Energy Assistance Program. The budget would
increase military spending by 10 percent and calls for spending $2.6 billion on border security, including $1.6 billion to begin funding a wall on the border with Mexico. Some of the president’s
proposals are likely to survive. For Republicans, the stakes of the coming budget season go beyond the intricacies of budgetary minutiae: Republicans want to use their budget to pave the way

Mr. Trump’s promised “biggest tax cut” in history

for an overhaul of the tax code that could skirt a Senate filibuster. If they cannot agree on a budget,

will be doomed. A protracted fight over the budget would also further delay the orderly appropriations process that Republicans have promised to follow after years of neglect. If
congressional Republicans fail to pass spending bills this summer, they again run the risk of funding the government through stopgap resolutions that keep programs on autopilot — and in the

shape that President Barack Obama left them in . “It’ll be very difficult in both bodies to pass a budget proposal,” Mr. Rogers said. The next
step for Republicans in Congress is to agree on a budget blueprint, which sets spending levels and provides a road map for spending and revenue in the coming years. But first, they must find a
way to overcome their diverse views on fiscal policy. Mr. Trump’s budget, drafted by a budget director, Mick Mulvaney, who came from the most conservative corners of the House, starts the
conversation on friendly House Republican turf. Representative Mark Meadows, Republican of North Carolina and the chairman of the conservative House Freedom Caucus, said that was the
right starting point. The budget negotiation “goes from conservative to moderate, and that’s the way that it should go,” Mr. Meadows said. “If you start in the middle, you make everybody

There’s
mad when you move one way or another.” Senator Chris Van Hollen of Maryland, who was the lead Democrat on the House Budget Committee for years, was not so sanguine. “

always been a divide between the House and Senate Republicans on a lot of these issues, but this looks
like it was written by House Republicans on steroids, and I think it will be difficult for them to get it
through the Senate,” he said. Republican lawmakers already face a time crunch, given that Mr. Trump offered his budget three months past the statutory deadline in February.
While new presidents routinely take more time to submit their inaugural budgets, Mr. Trump unveiled his unusually late, and in an uncommonly low-key fashion, dispatching his budget
director to unveil the plan while he was overseas. That raised questions about whether he would take a leadership role in the coming spending debates. The House and Senate budget
committees both expect to introduce their proposals in June, according to congressional aides. The House plan is expected to incorporate the significant changes that Speaker Paul D. Ryan, a
former budget committee chairman, has long championed for Medicare, a major break with Mr. Trump, who has promised to leave Medicare alone. For years, Mr. Ryan has tried to shift
Medicare away from its open-ended commitment to pay for medical services and toward a fixed government contribution for each beneficiary — a change he has said would inject market
forces and competition into the program. Mr. Ryan told reporters on Tuesday that Congress would take the president’s budget “and then work on our own budget, which is the case every
single year.” The Senate majority leader, Mitch McConnell of Kentucky, was equally noncommittal. “Every president since I’ve been here, and that covers a good period of time, has made a

recommendation, and then we decide what we’re going to do with those recommendations,” Mr. McConnell said. Mr. Mulvaney conceded that the plan would not be
embraced in its entirety, but said it was a signal from the president to Congress about his priorities and goals. “If Congress has a different way to get to that endpoint, God bless them
— that’s great,” Mr. Mulvaney said Monday as he previewed the plan. “Do I expect them to adopt this 100 percent, wholeheartedly, without any change? Absolutely not. Do I expect them to

.” Democrats came out strongly against the

work with the administration on trying to figure out places where we’re on the same page? Absolutely

budget, saying it would hurt the poor and the working class. They are hoping that Republicans will brush off the White House’s requests,
much as they did when Mr. Trump sought funding for his border wall as well as billions of dollars in cuts to domestic programs as lawmakers hammered out an agreement to fund the

The Senate minority leader, Chuck Schumer of New York, said Republicans “dislike this
government through September.

budget almost as much as we do.” “And so the likelihood is what happened with the 2017 budget will happen here,” Mr. Schumer said. “Democrats and Republicans
will tell President Trump and his minions to stay at the other end of Pennsylvania Avenue. Let us work out a budget together that will make America a better place.”

Trump’s budget is politically toxic- no chance it’ll pass Congress

Coy 5/25 Peter Coy is a Bloomberg Businessweek Economics Editor. “Trump’s Budget Is Designed to
Impress, Not to Pass”, Bloomberg, 5/25/17. Ghs-cw ttps://www.bloomberg.com/news/articles/2017-05-
25/trump-s-toxic-budget-is-a-cheap-win-with-the-right-people

The most common reaction to the austere budget released by the Trump administration is that it on May 23

can’t possibly get past Congress his budget looks more like a sop to the far-
. President Donald Trump himself may be fine with that. In its current form,

right wing of the Republican Party —cheap currency to buy the goodwill of a crucial part of his base. Trump has already scored a meaningful political victory—meaningful to him, at least—by eliciting the right responses from the

right people. Americans for Limited Government praised the plan as “sober,” while former Treasury Secretary Larry Summers, a Democrat, called it “simply ludicrous.” Budget Director Mick Mulvaney, a founding member of the House’s conservative Freedom Caucus, brags the plan would
wipe out the entire budget deficit and produce a small surplus by 2027, even while spending more on the military and border control and protecting Medicare and the retirement portion of Social Security. That requires leaps of faith both economic and political. Economically, the proposal
assumes 3 percent average annual growth beginning in 2020—way above the 1.8 percent average predicted by the nonpartisan Congressional Budget Office—partly fueled by tax cuts. Until now, the administration had been saying extra growth would simply offset revenue losses from

Politically, the plan whacks a hornet’s nest by

lower tax rates. Now it’s claiming the tax plan itself will be revenue-neutral and the growth it stimulates will produce more tax revenue to close deficits.

cutting Medicaid, food stamps, Social Security disability payments, student loans, farm subsidies, and
federal employee benefits. It also includes a “two-penny plan” that cuts an additional 2¢ each year from
every $1 of nondefense discretionary spending , i.e., everything from federal courts to the Department of State to the Environmental Protection Agency. “Meals on Wheels, even for some of us who are

Among those most harmed by the budget cuts would be a lot of people who voted
considered to be fiscal hawks, may be a bridge too far”

for Trump. “If the Trump budget were to be implemented as he’s proposed it, there would be a sense of
betrayal in Trumpland that would be extraordinary,” says Stan Collender, executive vice president of Qorvis MSLGroup, a Washington-based communications firm. Fortunately for Trump, his budget doesn’t stand a chance on Capitol Hill. And not just
because of Democrats. “ We know the president’s budget isn’t going to be passed as it is ,” John Cornyn of Texas, the No. 2 Senate Republican, told reporters. North Carolina
Representative Mark Meadows, chairman of the Freedom Caucus, which favors deep spending cuts, told the New York Times, “Meals on Wheels, even for some of us who are considered to be fiscal hawks, may be a bridge too far.” The big picture is this: Tru mp can afford to use his first
budget as a purely political document, because Congress, not the White House, is in charge of taxing and spending. That’s always been true, but it matters even more today, because Trump’s ability to lead has been diminished by his own erratic personality, a handful of unforced errors,

plus multiple investigations into possible Russian meddling in the presidential election . Never has the old saw, “the president proposes, Congress disposes,”
been more accurate . GOP congressional leaders know they’ll be judged harshly by history—and midterm election voters—if they fail to pass important legislation while their party controls both the White House and Congress. Republicans’ majority in

the House is just off the high the party reached in the 2014 election, which was the most since 1947. But the time for action is running out, with breaks for Memorial Day, Independence Day, and the month-long August recess looming, a new fiscal year beginning on Oct. 1, and the debt
ceiling expected to be hit sometime in the fall. The GOP faces a tricky legislative schedule: To pass a tax cut in the Senate without Democratic votes, Republicans need to use a budget procedure known as reconciliation. To do that, they first need both chambers to pass a 2018 budget
resolution. And before doing that, they must wrap up the American Health Care Act, which is being negotiated under terms of t he 2017 budget resolution. Moderate Republicans in the Senate, such as Bill Cassidy of Louisiana, are balking at the House version of the AHCA. Senate Majority
Leader Mitch McConnell is meeting with his colleagues about health care behind closed doors, knowing that a public hearing would throw a spotlight on opponents’ objections and hoping, perhaps, that the pressure to act will spur most Republicans to fall in line. “The logic of Republicans’
feeling like they need to get this done is probably enough to get it over the finish line,” says Jon Lieber of the consulting firm Eurasia Group Ltd. (On May 24 the CBO said the House-passed bill would cut deficits by $119 billion over 10 years, $32 billion less than the defeated version.) A tax

cut would be comparatively easy. Trump’s one-page tax plan is skewed toward the wealthy, which chafes Democrats . A compromise that shifts
cuts toward the middle class could probably get through both chambers of Congress. The casualty would likely be the federal budget deficit. Speaker Paul Ryan has insisted that any tax package must keep deficits from growing, but he acknowledged on May 24 t hat his favored way to
raise revenue, a border-adjusted tax, is being resisted by the White House. A tax compromise that Trump could claim credit for isn’t hard to imagine. Business would be pleased. “A quarter of a loaf is better than none,” says Tom Giovanetti, president of the center-right Institute for Policy
Innovation in Irving, Texas. In short, we aren’t living in a world where Trump’s budget is setting the agenda for change. And that’s why the Democrats’ brave talk about the budget being “dead on arrival” is empty. It’s like declaring a piñata dead on arrival: The thing is designed to be
smashed apart. For Trump, appearances matter, and the appearance he’s trying to convey is that he can out-Reagan Reagan. Says Stephen Myrow, managing partner of Beacon Policy Advisors LLC: “He isn’t trying to make a difference with the budget; he’s trying to make a point.” The

bottom line: Trump’s budget is so politically toxic that Congress won’t come close to passing it , which is exactly what the president wants.

Trump’s proposal is just that- it’ll get tossed out when Congress starts to craft spending plans
Jackson 5/22 Herb Jackson is the Washington correspondent for The Record (Bergen County) at
NorthJersey and part of the USA Today Network. “Don't expect Congress to pass Trump's controversial
budget plan”, USA Today, 5/22/17. Ghs-cw
https://www.usatoday.com/story/news/politics/2017/05/22/dont-expect-congress-pass-trump-
controversial-budget-plan/102009962/

the Republican-controlled Congress will start to craft federal spending plans for
After taking a break next week for Memorial Day,

next year — but they will not be starting with the budget blueprint President Trump is sending over
Tuesday. Trump's budget plan sets out dramatic spending cuts and a bold plan to squeeze savings out of entitlement programs such as Medicaid, but it is a long way from
being enacted. "The president's budget has never been the starting point for anything as long as I've been here," said
Rep. John Yarmuth of Kentucky, the top-ranking Democrat on the House Budget Committee now in his 11th year in Congress. "I don't think there's much
chance of this budget going anywhere based on how Republicans talked about the skinny budget," he added,
referring to a slimmed-down outline of the plan that Trump released in March. Congress usually starts its drafting process each year with the existing budget and makes additions or subtractions from that. If it keeps to that
practice, it will be starting with a plan that passed with bipartisan support earlier this month, one Democrats believe many Republicans would not mind sticking to for another year. But the dynamics of the Republican majority, with
the staunchest conservatives often uniting to insist on shrinking the government, probably will lead to some of Trump's proposals "bleeding into the budget we're going to deal with in a few weeks," Yarmuth said. For example, he
said he does not expect the House to draft a plan with a $200 billion cut to the Supplemental Nutritional Assistance Program, or food stamps, but he does expect there to be some money cut from SNAP. This budget will be dead on
arrival with Democrats — if early reports on its contents are any indication — and should be with the bipartisan majority that approved the package of spending bills three weeks ago, said Roy Loewenstein, a spokesman for Rep.
Nita Lowey of New York. Lowey, the top Democrat on the House Appropriations Committee, would work with committee Republicans to improve afterschool education programs, invest in medical research and maintain national

But Democrats won’t accept any spending proposals or appropriations bills with poison pill
security, he said. “

policy riders or that slash critical programs that support working American families,” Loewenstein said.
And it is not just Democrats who are skeptical of Trump's broad strokes. Interest groups began organizing after the preliminary version of
Tuesday's budget released in March proposed eliminating dozens of programs. Members of Congress in both parties — who jealously guard their

constitutional power to allocate funding — quickly said the president was free to propose what he
wanted, but they would decide what gets funded and what does not. "Some of the large cuts, I don’t think will be sustained by the majorities in the
House," House Appropriations Chairman Rodney Frelinghuysen, R-N.J., told a telephone town hall with constituents on March 20. He specifically rejected Trump's call to cut public broadcasting, the National Endowment for the Arts
and the National Institutes of Health. And he took a swipe at former congressman Mick Mulvaney, now Trump's budget director. "I think Mulvaney, quite honestly, and he's not one of my favorite people, I never worked with him
when he was in Congress, he has no idea of the facts," Frelinghuysen said. The Library of Congress is filled with budget proposals that presidents sent to Capitol Hill and never saw again in the form of legislation. Even with a House
and Senate controlled by fellow Republicans, Trump’s plans could face the same fate. “It’s true of any president’s budget that somebody on the Hill is going to say, 'It’s dead on arrival,' ” said Steve Ellis, vice president of Taxpayers
for Common Sense. “And with the cuts envisioned and changes to entitlement programs, this one may be deader than most.” Mulvaney will go before the House and Senate Budget committees this week, and members of Trump's

All will likely be pressed to defend the cuts under questioning

Cabinet will testify before other committees that set policies for their departments.

from some of the lawmakers who wrote the laws creating programs slated for elimination. Ellis said his group for years
has supported some of the cuts Trump is proposing, such as the elimination of the Appalachian Regional Commission and similar regional economic development organizations that survive because of their popularity with local
members of Congress. "It all depends how hard the president and his allies going to push," Ellis said. "It's easy to make cuts on paper, what really is the measure of the administration is what they will fight for on the Hill." Trump
was already rebuffed in his first budget battle, when Congress largely ignored his call to cut $18 billion from domestic spending in the budget for the remainder of this fiscal year, which runs through Sept. 30. That battle pushed up
against the deadline to pass a spending bill earlier this month to avoid a partial shutdown of the government, and Trump lashed out on Twitter after seeing news coverage saying Democrats had won, saying "Our country needs a
good 'shutdown' in September." Under what is almost reverentially referred to as "regular order" on Capitol Hill, the budget process is supposed to work this way: The president sends a budget to the Hill, the Budget committees
draft a resolution setting top spending levels for various departments, and then the 12 appropriations subcommittees write detailed spending bills on how much each department and agency gets for programs. But that process
calls for the Budget committees to pass their resolution by April 15, so the appropriators can write and pass their bills before the fiscal year ends Sept. 30. Yarmuth said he could not see the House passing a budget resolution

Stan Collender, a former staffer on both the House and Senate Budget
before the end of June, meaning appropriators would only get started in July, and Congress is due to be in recess for all of August.

does not expect spending bills to be passed until December

committees who is now a vice president at the communications firm MLSGroup Qorvis, said he

at the earliest. "The president's budget is just a proposal," Collender said. "Congress can ignore it, adopt
it, change it, do whatever they want to. It does not have any more meaning any other piece of proposed
legislation."
Trumps budget will never pass--- 5 reasons.
Barrett and Walsh 3/27/17, Ted Barrett is a senior congressional producer for CNN Politics, Deirdre Walsh is a Senior Congressional Producer for
CNN. Over the last 14 years at CNN, Walsh has covered major news stories including: four presidential campaigns, several midterm elections, Congress' handling of
the 2008 financial crisis, lengthy negotiations over health care reform, the battle over fiscal policy and the nation's debt limit, the Sept 11, 2001 attacks, and the
Shuttle Columbia disaster. Why Trump's budget can't pass Congress, http://www.cnn.com/2017/05/23/politics/why-trumps-budget-cant-pass-congress/index.html

Washington (CNN)President Donald Trump's first full budget request was formally delivered Tuesday to Congress. There were photo-ops and a public push from the
administration to tout its plan as evidence it is doing what the billionaire businessman turned reality star said he would do during the 2016 campaign: Slash federal
programs and balance the budget. Trumps budget, with substantial and symbolic cuts, could be politically tricky for Republicans Republicans have argued a GOP
president would help them implement policies they have pushed for years, but Trump's budget blueprint will largely be ignored by the GOP-controlled Congress.
"Almost every president's budget proposal that I know of is basically dead on arrival," Sen. John Cornyn, R-Texas, said bluntly
Monday, just hours before the budget release. Here's five reasons why: 1. Budgets don't get signed into law Annual budget

requests are political wishlists that set out a leader or party's policy priorities. They are not bills that are sent to the President to be signed into law.
Both the House and Senate vote on budget proposals but they often vote on several versions -- one crafted by
leaders, potentially others drafted by conservative Republicans, one written by Democrats. These are messaging votes and are used by both parties to zero in on key
contrasts -- on health care, tax reform, on funding for education, environmental and medical research programs. Budgets include topline numbers and instructions
to other committees to use to write annual spending bills, or craft legislation that actually carry out the budget's directives. The roll out of the budget is a photo-op
that allows the President (or his surrogates) to point to a glossy-bound book that shows how he is following through on key campaign promises. "Based on what we
know about this
budget, the good news -- the only good news -- is that it's likely to be roundly rejected by members of both
parties here in the Senate -- just as the last budget was," said Sen. Chuck Schumer, D-New York, the minority leader. Budgets sent to the Hill from
President Barack Obama were also mostly ignored by Democrats in the House and Senate, and often got fewer votes when Republicans brought them up on the
floor than the proposals drafted by the top Democrats on the budget committees. 2.
Republicans in Congress are working on their
own plan Congress' key constitutional role is its power of the purse. "We haven't paid a whole lot of attention to any
president's budget since I've been here," Senate Majority Leader Mitch McConnell said in an interview with Bloomberg News last week. The GOP on the Hill and the
White House will coordinate on the topline numbers, but budget committee chairs are working with top leaders on their own budget proposal, which is expected to
be rolled out sometime in mid-June. The nitty gritty of how much each agency will get for various federal programs will be decided by members of the House and
Senate appropriations committees. Those panels will begin writing roughly a dozen spending bills, which need to pass both chamber and be signed into law by the
President before the end of September to avoid a government shutdown. Trump admin backtracks on plan to nearly eliminate office fighting opioid abuse Trump
admin backtracks on plan to nearly eliminate office fighting opioid abuse This year, the GOP will use the budget process to smooth passage of one if its top policy
goals -- restructuring the tax code. Republicans plan to use procedural tool knows as budget reconciliation which allows them to pass major legislation in the Senate
with a simple majority. They used the same tool in last year's budget resolution to address their first priority with unified Republican government -- repealing and
replacing Obamacare. Many of the policy proposals in the Trump administration's budget are cribbed from earlier proposals crafted by Hill Republicans, including
the Medicaid cuts that were part of the House GOP health care overhaul. 3. Some
programs are tough to slash Congress may not go
along with Trump's proposed cuts to some programs they consider critical and popular, like Medicaid and the National
Institutes of Health. Speaker Paul Ryan urged House GOP members to hold their fire on specific elements of the President's budget in a closed door
meeting on Tuesday morning, noting they should review all the details and emphasizing it brings the budget into balance -- a feature they all want, according to a
Republican who attended the meeting. But not all House Republicans heeded that call. "If taken as is the President's budget, it would be very harmful," Kentucky
GOP Rep. Hal Rogers told reporters Tuesday. "I've said before these cuts that are being proposed are draconian. They are not mere shavings. They are really deep,
deep cuts." Trump's budget by the numbers: What gets cut and why The budget contains hundreds of billions in cuts to federal-state health insurance program for
low-income Americans, something the House called for in its Obamacare repeal and replacement bill that it recently passed. But that proposal is the subject of
intense negotiations in the Senate, where some nervous Republicans are unwilling to accept that 10 million people could lose coverage under that budget. Trump's
last effort to cut NIH funding was blocked by both Democrats and Republicans who stood up for the scientists there who are working on medical breakthroughs.
"The President's proposed budget has never been followed in the Senate or the House so the idea that this somehow is imposing cuts is just not true," Cornyn said
about the President's budget proposal at the end of March. "It's going to be up to us to work through that and I dare say just after voting to plus up NIH funding in in
the 21st Century Cures bill, it would be difficult to get the votes to then cut it." 4. Republicans largely oppose some of the things
Trump wants to add Ivanka Trump is pushing a $25 billion family leave and child care assistance program that might be more in line with Democratic
orthodoxy than Republican. Not many GOP lawmakers came to Washington campaigning to add entitlements. But what do about the first daughter's pet project
could be a touchy subject for congressional Republicans who want to keep good relations with the President. "I would certainly be happy to talk to her," Cornyn said
Monday. "I'm sure all of us would be. But, obviously, when it comes to spending it's a matter of priorities, where that would fall in the list of priorities, I can't tell you
right now." Look for Democrats to highlight this split by pushing Republicans to vote up or down on the overall budget plan and separately on Ivanka's proposal.
Republicans did the same to Democrats throughout the Obama years, repeatedly forcing Democrats --
especially moderates -- to embrace parts of Obama's budget Republicans considered out of step with their

voters. The President's budget largely leaves massive entitlement programs alone. Republicans on the Hill do support the move to boost spending on the
military, but they warn that without the willingness to reform or trim large cost drivers like Social Security and Medicare it forces larger cuts in other programs.
Rogers said without addressing those programs, OMB "pretty well boxed themselves in on what to cut." He noted that "the mandatory part of the budget, of
spending, is rapidly growing while the discretionary appropriated accounts are dwindling. There's not much money left to whittle." 5. Hill Republicans in
competitive races want to keep their distance from anything that has Trump's name on it The
President's approval ratings in many key swing districts across the country are low. The latest string of
controversies swirling around the President and his administration with the multiple Russia
investigations may make some in the GOP opt to steer clear of proposals that are pushed personally by
Trump. Instead, they will emphasize areas where they split with the President, such as protecting programs that boost cancer research.
 2ac – trump’s budget fails
The CBO criticized Trump’s budget for being overly optimistic and using minimal detail
Rappeport 7/13 Alan Rappeport is an Economic Policy reporter at The New York Times. “Congressional
Budget Office Casts Doubt on Trump Spending Plan”, The New York Times, 7/13/17. Ghs-cw
https://www.nytimes.com/2017/07/13/us/politics/cbo-trump-budget.html

WASHINGTON — President Trump had promised that his mix of tax cuts, deregulation and reductions in wasteful
spending would spur economic growth and cure America’s ailing fiscal health. On Thursday, an
independent government analysis of those proposals effectively said, “Not so much.” The Congressional
Budget Office cast Mr. Trump’s inaugural budget as overly optimistic, expressing doubt about his
promises to balance the federal budget. The budget projected that by 2027, the economy would achieve a small budget surplus. But according to the
budget office, the deficit would remain at $720 billion, or 2.6 percent of gross domestic product. The
assessment comes after the Trump administration was criticized in May for releasing a budget that
economists said relied on overly rosy growth estimates. It was also panned for using questionable math
and offering minimal detail about the president’s tax plan, a central component in Mr. Trump’s plans for
improving the economy. One of the biggest reasons the Trump budget fell short is that the budget office did not agree that its proposals would generate as much economic growth as the White House
has suggested. It said that the average gross domestic product growth over 10 years is currently 1.8, and that under Mr. Trump’s plan it would be 1.9 percent — far lower than the 3 percent the administration assumes. The

lack of specifics in Mr. Trump’s plans was also a problem for the Congressional Budget Office. It said that
in many cases where Mr. Trump’s policy initiatives lacked details, its analysts had to use place-holder
figures. The $4.1 trillion budget for 2018 that the White House proposed recommended a large increase in spending on the military and on border security. By assuming rapidly
accelerating economic growth, Mr. Trump’s economic team was able to make the budget balance
without making changes to Social Security’s retirement program or Medicare, the two biggest drivers of America’s federal government
debt. Tepid economic growth and an aging population have raised concerns about the future of those

programs. The Trump administration said Thursday that the financial outlook for Medicare’s Hospital Insurance Trust Fund had slightly improved in the last year but that Social Security still faced serious long-term
financial problems. The Medicare trust fund will be depleted in 2029, the administration said. Last year the government said that the trust fund would be exhausted in 2028. In a companion report, federal officials said the Social
Security Trust Funds for old-age benefits and disability insurance could be depleted in 2034. Last year’s report also said that the combined trust funds would be depleted in 2034, but that tax collections would still be sufficient to

.
pay about three-quarters of promised benefits for a half-century more. More than 60 million people get money from Social Security, Medicare or both. The two programs account for about 40 percent of all federal spending

The Congressional Budget Office has been under fire from Republicans who claim it has provided faulty
number crunching for the party’s proposed health legislation. Mick Mulvaney, the White House budget director, has called for the office’s influence to be
diminished and said recently that its time had come and gone. This week, the White House even released a video on its official Twitter account that assailed the credibility of the office. “The Congressional Budget Office’s numbers
don’t add up,” it claimed. On Thursday, the White House’s Office of Management and Budget found parts of the budget office’s work worthy of praise. “We are thrilled that C.B.O. confirms that the president’s proposed budget
resulted in the largest deficit reduction they have ever scored,” said Meghan Burris, a spokeswoman for the White House budget office. “C.B.O. agrees that this is the largest deficit reduction package in American history.” Over a

decade, the Congressional Budget Office said, Mr. Trump’s budget proposals would reduce the projected $10.1 trillion deficit by $3.3 trillion, not the $5.6 trillion that the White House has projected. It remains
unclear what impact Mr. Trump’s proposals will have on the deficit if they are adopted. A Tax Policy Center report released
on Wednesday based on what is known about his tax plan said that it could reduce federal tax revenue as much as $7.8 trillion over a decade. Some fiscal hawks have not been impressed. After the budget

office released its report on Thursday, they said Mr. Trump would have to address Social Security and
Medicare spending and rely on more realistic economic projections to fulfill his campaign pledge to
restore fiscal sanity. “C.B.O.’s analysis shows the president’s claim of a balanced budget is built on a house of cards, reinforced by economic growth rates that are far outside of the mainstream consensus and
would be unprecedented given today’s demographic realities,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan advocacy organization.
 1ar – trump budget fails
Trump’s new budget is purely wishful thinking- ignores empirics and economics
Appelbaum and Rappeport 17 Binyamin Appelbaum is a writer for The New York Times. Alan Rappeport is an
Economic Policy reporter at The New York Times. “Trump’s First Budget Works Only if Wishes Come
True”, The New York Times, 5/22/17. Ghs-cw
https://www.nytimes.com/2017/05/22/us/politics/budget-spending-federal-
deficit.html?mtrref=undefined

WASHINGTON — In its inaugural budget, the Trump administration projected that booming economic growth would allow the
president to keep a wide range of expensive campaign promises while eliminating federal deficits in 10
years. It is wishful thinking. The budget promises a deep tax cut for businesses and consumers that would not reduce federal revenue. An increase in military
spending would be offset by trillions of dollars of unspecified or loosely sketched reductions in federal
spending. And it all works because the budget assumes an acceleration of economic growth to an annual
pace of 3 percent a year, much higher than the post-recession average of 2 percent. “I see no way that’s going to remotely
happen,” said David A. Stockman, the budget director under President Ronald Reagan. He noted that the White House is depending on the continuation of an

economic expansion that is already among the longest in American history. “It assumes you’re going to
go 206 months without a recession, which has never happened,” he said. Not in the United States, at least. Presidential budgets are political statements
— wish lists that Congress never grants in full, and sometimes rejects completely. A preliminary version of President Trump’s plan already got a frosty

reception on Capitol Hill even though Republicans control both houses of Congress. Many Republicans
share the Democrats’ wariness about large-scale cuts to the social safety net. And increased military spending would require Democratic
support to lift the caps imposed by the Budget Control Act of 2011, giving the minority party valuable leverage. Strikingly, Mr. Trump’s budget would increase the share of the nation’s economic output the federal government
collects each year. The Congressional Budget Office projected in January that under current law the government would collect 18.37 percent of gross domestic product in 2027. Mr. Trump’s budget projects that the government
would collect 18.43 percent — even after a proposed tax cut. Because the White House also projects faster economic growth, the combined effect would increase federal revenues over the 10-year period by an estimated $2.7

trillion. The White House expects the government to claim a smaller share of a much larger pie . By 2027, the Trump administration estimates, higher growth
would yield an additional $344 billion in individual income taxes even after the proposed reductions in
individual tax rates. Mr. Trump wants to combine that stream of revenue with sharp spending cuts to reduce annual federal deficits. The White House projects the budget would swing from a deficit of $440
billion in 2018 to a surplus of $16 billion in 2027, which would be the first since 2001. Some proposed reductions in federal spending are clearly specified. The budget assumes, for example,

that the government can save $48.8 billion in disability payments by returning to work men and women
who the government has previously concluded are unable to work. Other proposed reductions are unspecified, like a “two-penny plan” to reduce
discretionary spending by 2 percent a year. That wide-ranging category of spending includes everything except the defense budget, interest payments and obligations like Social Security. But the administration provided no details
about the particulars of the plan, just an estimate that the cuts would save $1.4 trillion, or about 40 percent of the total reduction in federal spending. A combination of fiscal restraint and faster growth could quickly render the

. Under Mr. Trump’s budget, the debt would

federal debt much more manageable. The standard measure of government debt is in comparison to a nation’s economic output

decline from 76.7 percent of annual economic output in 2018 to 59.8 percent of annual economic
output in 2027. By contrast, the Congressional Budget Office estimated in January that under current
law the debt would reach about 88.9 percent of annual economic output over the same period. “The C.B.O.
assumes that we’ll never grow at more than 1.9 percent again,” said Mick Mulvaney, director of the Office of Management and Budget. “That assumes a pessimism about America, about the economy, about its people, about its
culture that we refuse to accept.” But economists generally regard the projection of 3 percent annual economic growth as highly optimistic. The Federal Reserve estimated in March that the maximum sustainable pace of economic
growth is around 1.8 percent. The Congressional Budget Office puts the ceiling at 1.9 percent. Those are low numbers by historical standards, but growth is determined by the expansion of the work force and the improvement in

Without violating some of the most basic

the amount that workers can produce. The growth of both the working-age population and productivity have slowed in recent years. “

laws of economics and history, we are not going to get the kind of growth that will yield a balanced
budget in 10 years,” said Steve Bell, a former staff director at the Senate Budget Committee who is now at the Bipartisan Policy Center. That would leave two possible outcomes: deeper spending cuts or larger
deficits. Mr. Trump has some big spending plans. His budget would provide an additional $469 billion for defense discretionary spending over 10 years. It also calls for $2.6 billion in 2018 to bolster border security and begin work
on a wall along the border with Mexico. And he has called for a family-leave program that would allow new mothers and fathers to take six weeks off work while receiving their full salaries. The idea, the brainchild of Mr. Trump’s
daughter Ivanka Trump, would cost $19 billion over a decade. Mr. Trump’s budget sheds little new light on the main planks of his legislative agenda. The budget allocates $200 billion over 10 years to “support” $1 trillion in
infrastructure investment. This would entail using federal money to attract investment from the private sector to help rebuild roads and bridges. A summary of the budget proposal also describes the Keystone XL pipeline as an

. Even less specificity was offered

example of an infrastructure project that might not happen without the Trump administration’s involvement, though it would not receive federal funding

on the tax plan, which Mr. Trump’s economic team has promised will become law by the end of this year. Mr. Mulvaney said Monday that the budget projected that the proposed tax cuts would not increase the
federal debt because they would produce offsetting economic growth. That assertion is disputed by a wide range of economists, both liberal and conservative. The Committee for a Responsible Federal Budget estimated last month
that the ideas presented by Mr. Trump, including cutting the corporate tax rate to 15 percent from 35 percent and doubling the standard deduction for individual taxpayers, could reduce tax revenues by $7 trillion over 10 years.
The budget contained no new information on the plan. Materials released by the White House showed tax projections that appeared unrelated, and the White House did not respond to a request for comment. “The tax plan as you
know is in its very early stages,” Mr. Mulvaney said.
 2ac – no tradeoff
Trump’s budget would allow adequate funding for schools no trade-off
Brendix 3/16/17, Aria Bendix is a frequent contributor to The Atlantic, and a former editorial fellow at CityLab. Her work
has appeared on Bustle and The Harvard Crimson., Trump's Education Budget Revealed,
https://www.theatlantic.com/education/archive/2017/03/trumps-education-budget-revealed/519837/

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.”
 2ac – trump budget bad
Trumps budget actually hurts U.S. national security---budget cuts will affect domestic
agencies that are key to security interest.
Korb 3/5/17, Lawrence J. Korb is a senior fellow at the Center for American Progress. He served as assistant
secretary of defense during the Reagan administration., Trump’s Defense Spending Increase Could Actually Make
the U.S. Less Safe, march 3rd 2017, http://fortune.com/2017/03/05/donald-trump-defense-spending-military-
increase-national-security/

President Dwight Eisenhower said in 1960 that the U.S. should spend as much as necessary on defense, but not
one penny more. Before Congress approves the massive 10% increase in defense spending proposed by President
Donald Trump—which will be offset by slashing the budgets of the State Department and Environmental

Protection Agency, as well as killing several domestic programs—the legislative body must be able to explain
why current spending levels are insufficient. Even a cursory look at our national security spending will show that they are not. The U.S. by
itself spends more on defense than the next seven highest-spending nations in the world combined. Regardless, no matter how much the U.S. or

any nation spends on defense, it cannot buy perfect security. Whatever level of funding we provide for national security is not as
important as having the appropriate strategy to deal with the current challenges facing the nation . Spending large sums of money to deal

with threats from a bygone era like the Cold War, for instance, will not enhance national security. While Russia has
rebuilt its military somewhat, it is nowhere near as capable as that of the former Soviet Union. In fact, Russia’s total defense budget is less than $50 billion. Just as
the sequester is a non-strategic and unwise way to limit a budget, increased funding that is not connected to a sound defensive strategy for the demands we face
today will be non-strategic, wasteful, and do more harm than good.
Proponents of increased Pentagon spending argue that our
military is not prepared to deal with current threats and that the defense budget is not receiving a large enough share
of the nation’s gross domestic product. While it is true that defense spending compared to GDP dropped over the

Obama presidency, the economy has grown—a lot. A lower ratio of spending to GDP is not an accurate
representation of the readiness of our military to respond to threats posed by terrorist groups like ISIS, as well as states like
Russia, China, North Korea, and Iran. In a recent article in Foreign Affairs, Gen. David Petraeus and the Brookings Institution’s Michael O’Hanlon make clear that the
current state of U.S. armed forces is “awesome,” they are not facing a readiness crisis, and the current
level of defense spending on the readiness portions of the defense budget and procurement is more
than adequate. Even with the limits placed upon the Pentagon under the 2011 Budget Control Act (BCA), the amount of funding for defense in the National
Defense Authorization Act (NDAA) recently signed by Obama amounts to more in real terms than the U.S. spent on average in the Cold War and also more than was
spent at the height of the Reagan defense buildup. This amount is three times more than our nearest competitor, the Chinese, will spend this year, and accounts for
more than one-third of the world’s total military expenditures. Even the BCA hasn’t hamstrung defense spending, as large amounts of the war budget, which is
exempt from BCA rules, have been used for enduring programs not associated with any war. While
the defense budget is the most
conspicuous dollar amount associated with national security, it is in no way the only federal agency
working to keep America safe. The State Department and the U.S. Agency for International Development
(USAID), for example, both play vital roles in protecting the country. State Department diplomats forge relationships and bonds of
trust with U.S. allies and potential adversaries, while USAID provides humanitarian and development assistance that saves and improves the lives of millions of
people around the globe. As Defense Secretary James Mattis has noted, not fully funding these areas makes new wars and conflicts more likely. Each
of
these face steep cuts in order to increase the defense budget. If the government provides so much of its limited resources to the
Pentagon that it cannot fund these agencies adequately, U.S. national security will suffer. Nor does America have to use military power as a first
resort. Whether it is dealing with Russia, China, North Korea, Iran, or ISIS, the U.S. can and should work effectively with allies and partners. The U.S.-led 60-nation
coalition fighting ISIS, the buildup of military forces by NATO allies to combat aggressive moves by Russia, and the economic sanctions the U.S. and European Union
placed on Russia after its annexation of Ukraine are examples of leveraging all the instruments of American power and the contributions of allies to protect national
security. It is true that despite the many contributions of U.S. allies, both Republican and Democrat secretaries of defense like Robert Gates, Leon Panetta, and
Chuck Hagel have all expressed dismay about inadequate defense spending by our partners. But that kind of behavior is enabled by profligate U.S. defense
spending. America needs to spend wisely as it calls on friends to honor their side of the common security
bargain. Finally, the U.S. cannot be strong abroad if it is not strong at home. As Eisenhower realized, a strong
domestic economy is the basis for military might abroad. Therefore, running up large deficits or not providing
adequate funds for education, health, or infrastructure—as a result of providing too much of America’s limited resources for defense—will

have a negative impact on national security.

 1ar – trump budget bad
Trump’s military focused budget sacrifices diplomacy- undermines national security
Salhani 17 Justin Salhani is a Journalist/writer in Milan, author for Latterly, and founder of Guerilla FC.
“Trump’s ‘public safety and national security’ budget damages public safety and national security”, Think
Progress, 2/27/17. Ghs-cw https://thinkprogress.org/trumps-budget-would-slash-diplomacy-and-boost-
militarism-3f774418c13f

The White House is pushing a budget that sacrifices global diplomacy for American militarism and may
actually undermine national security, according to experts. The budget proposal will reportedly include a $54 billion
increase in defense spending while simultaneously cutting important funding from other agencies, including the
Environmental Protection Agency and the State Department. The singular approach is a focus on “public safety and national security,”

according to President Donald Trump. But the cuts from agencies that handle important diplomatic procedures do not help

national security — they undermine it. “The Department of Defense is not the only federal agency
responsible for protecting our national security,” Larry Korb, a senior fellow at the Center for American Progress and assistant secretary of defense from
1981 through 1985, said in a testimony to the Senate Armed Services Committee last month. “The State Department, the Agency for International Development, and the Department of

If we provide so much of our limited resources to the Pentagon that

Homeland Security all play a vital role in protecting this country.

we cannot fund these agencies adequately, our national security will suffer.” (ThinkProgress is an editorially independent news
site housed at the Center for American Progress.) The Office of Budget and Management typically tries to balance domestic and

national security spending. But the latest White House budget would deviate from past norms, particularly
considering Trump has yet to give any indication what his plan will be on infrastructure and a host of other crucial issues. And Congress could ensure that Trump’s current plan is “short-lived”,
according to Rudy deLeon, Senior Fellow with the National Security and International Policy team at the Center for American Progress. The White House is expected to announce “dollar for dollar
cuts,” according to a senior administration official interviewed by Politico. While campaigning, President Donald Trump spoke regularly about the financial burden international agencies like the

This budget expects the rest of the world to step up in some of the programs this
UN and NATO place on the United States. “

country has been so generous in funding in the past,” the OMB official told reporters Monday morning. The plan seems to fall in
line with comments by Trump and his chief strategist Steve Bannon at CPAC, said deLeon. Bannon has been a big proponent of
‘‘economic nationalism” and American “sovereignty,” terms that underline his protectionist ideology. Trump
has meanwhile spoken regularly about his perception that the American military has deteriorated under the Obama administration, even though top experts have described the power of the
armed forces as “awesome.”

New budget would deck US diplomacy

Lockie and Szoldra 17 Alex Lockie is a News Editor and a military and foreign policy blogger at Business Insider. Paul Szoldra is the editor of Business Insider's Military and
Defense section, and was formerly a Marine Corps seargant. “Trump's plan to spend more on the military may actually put US national security at greater risk”, Business Insider, 3/1/17. Ghs-cw
http://www.businessinsider.com/trump-cut-state-fund-military-2017-3

President Trump's proposed $54 billion bump to defense spending may be a good idea, but cutting
foreign aid and funding for the State Department to pay for it may actually undermine US national-
security interests. In 2013, current Secretary of Defense Jim Mattis put the need for diplomacy over strict
military power succinctly: "If you don't fund the State Department fully, then I need to buy more
ammunition ultimately." As Mattis' point makes clear, the military is great at fighting, but diplomacy is
how many problems are ultimately solved. In the past, he's described the military as "buying time" for US
diplomats to solve issues the military cannot. But Trump's proposed budget flips that view on its head.
The $54 billion represents an increase of about 10% and would bring total funding to about $603 billion.
Coupled with additional Overseas Contingency Operations funding, defense spending would total some
$640 billion — more than the next 12 countries spend on their militaries combined, according to figures
provided by IHS Jane's Guy Eastman. To be fair, the bump in spending is unprecedented, but so was the
condition that preceded it — sequestration. Sequestration, a provision of the 2011 Budget Control Act
froze military spending while intragovernmental gridlock prevented the president and Congress from
agreeing on other cuts that would reduce the national deficit. Since 2011, defense spending as a share of
overall GDP has taken a nosedive, and its deleterious effects have been felt throughout all branches of
the military. In 2016, chiefs of staff from the Army, Navy, Air Force, and Marine Corps joined together to
tell Congress that sequestration alone represented the single biggest threat to the readiness of the US
military. Meanwhile, the US has remained at war for over 15 years. Today, threats from ISIS in the Middle
East and North Africa continue to pose real threats to the US and its allies. Military experts predict that
Russia could take capitals of NATO states in the Baltics in as little as two days. China continues to menace
its neighbors with the militarization of artificial islands in the South China Sea. In short, demands on the
US military have only grown, while funding has remained frozen — and in fact shrunk because of inflation
over time. In constant 2014 dollars, US military spending peaked in 2010, at just under $758 billion
dollars. While military officials support sizable increases in military spending with near unanimity, more
than 120 retired US generals and admirals urged Congress on Monday to fully fund US diplomacy and
foreign aid — the very programs Trump threatened to cut to fund the defense spending. "We know from
our service in uniform that many of the crises our nation faces do not have military solutions alone," they
wrote. "The State Department, USAID, Millennium Challenge Corporation, Peace Corps and other
development agencies are critical to preventing conflict and reducing the need to put our men and
women in uniform in harm's way." As those top military officers, intelligence officials, and the current
defense secretary know, you can't kill your way out of war. Let's hope congressional leaders, and the
president, come to understand that too.

Trumps budget actually hurts U.S. national security---budget cuts will affect domestic
agencies that are key to security interest.
Korb 3/5/17, Lawrence J. Korb is a senior fellow at the Center for American Progress. He served as assistant
secretary of defense during the Reagan administration., Trump’s Proposed Defense Budget Will Not Support U.S.
National Security, march 3rd 2017, http://fortune.com/2017/03/05/donald-trump-defense-spending-military-
increase-national-security/

Released in May, President Donald Trump’s fiscal year 2018

defense budget increases funding for the U.S. Department of Defense
while cutting funding for other critical programs in the discretionary budget. In analyzing whether the proposed budget
truly enhances national security, however, it is important to keep the following three ideas in mind. First, while the defense budget
is the largest dollar amount associated with protecting U.S. national security, the Pentagon is not the
only federal agency working to keep America safe, as the Center for American Progress pointed out in its report, “Integrated Power: A
National Strategy for the 21st Century.” The State Department and the U.S. Agency for International Development

(USAID), for example, both play vital roles in protecting the country. State Department diplomats forge relationships and bonds of
trust with U.S. allies and potential adversaries, while USAID provides humanitarian and development assistance that saves and improves the lives of millions of
people around the globe. As U.S. Defense Secretary James Mattis has noted, not fully funding these areas makes new wars and
conflicts more likely. And as former Secretary of State and Chairman of the Joint Chiefs of Staff Colin Powell has said, the country is
“strongest when the face of America isn’t only a soldier carrying a gun but also a diplomat negotiating
peace, a Peace Corp volunteer bringing clean water to a village or a relief worker stepping off a cargo plane as flood waters rise.” Second, several other
federal agencies—even those with a primarily domestic focus, such as the National Science Foundation, the National Institutes of Health, the U.S.
Environmental Protection Agency, and the Public Broadcasting Service (PBS)—also play important roles in enhancing national

security and keeping the economy strong. This is an important component of national security. Third, providing the Pentagon
with increased funding could lessen the incentives for its civilian and military leaders to manage the
armed forces more effectively and efficiently. Unfortunately, President Trump’s FY 2018 budget undermines all these principles. This
column looks at why the proposed budget falls short of truly enhancing the nation’s national security.

The trump budget does not adequately address national security instead makes it worse--- It
spends incorrectly and increases probability of a nuclear conflict
Korb 3/5/17, Lawrence J. Korb is a senior fellow at the Center for American Progress. He served as assistant
secretary of defense during the Reagan administration., Trump’s Proposed Defense Budget Will Not Support U.S.
National Security, march 3rd 2017, http://fortune.com/2017/03/05/donald-trump-defense-spending-military-
increase-national-security/

The Trump defense budget does not comprehensively address national security The budget proposes to increase the
Department of Defense base budget by $54 billion above the Budget Control Act (BCA) to $575 billion and adds another $65 billion to the Overseas Contingency Operations (OCO) budget. This
brings the total defense budget for FY 2018 to $640 billion. Adding in the $28 billion in funds that other federal agencies, especially the U.S. Department of Energy, will spend on national

defense in FY 2018, the total proposed defense budget will be $668 billion. This total does not include the approximately $85 billion in
amortization payments for the military retirement and military retirees’ health care trust funds, which used to be part of the defense budget but are now paid for by the U.S. Treasury

Department. Finally, the Trump budget does not provide the projections for defense spending over the next five
years, which normally come with each year’s budget. The Trump administration contends that this
increase is necessary for two reasons. First, the administration argues that the BCA caps have resulted in
$200 billion in defense cuts since 2013. However, this argument ignores the fact that about $180 billion—
or half the OCO funding, which since FY 2013 has amounted to $372 billion—has been spent on base budget items, something the

Pentagon controller has admitted. It also does not acknowledge that in FY 2016 and FY 2017, the Pentagon was granted
another $50 billion in relief from the caps, bringing the total relief from the BCA caps to more than $200 billion. Second, the Trump
administration claims in its budget documents that the U.S. military is in terrible shape because its war
fighting and readiness have been degraded. Therefore, the Defense Department needs this increase to reverse the degradation and restore readiness.
This claim ignores the fact that—as Michael O’Hanlon and General David Petraeus pointed out in The Wall Street Journal—the United States
already presently accounts for more than one-third of the world’s total military expenditures and
currently spend three times as much on defense as China and 10 times more than Russia, its two main geopolitical
rivals. And as O’Hanlon and Petraeus stated, the U.S. military does not have any readiness problems; in fact, it is “awesome.” A massive increase in defense

spending is not necessary. Moreover, the president’s budget proposes to spend some of the increased funds on items that will
not increase national security. For example, President Trump plans to triple spending on the nuclear capable Long Range
Standoff Weapon and to increase spending on the B-61 tactical nuclear weapon by 30 percent. As the CAP report, “Setting Priorities for Nuclear Modernization,” made clear, these

two programs will together cost about $15 billion and are not only unnecessary but also increase the probability of a nuclear

conflict. The budget also increases the size of the active duty ground forces by approximately 30,000 men and women, at a cost of more than $6 billion in FY 2018 alone. The
administration is proposing this increase even though it is opposed to sending large numbers of ground troops into other countries, preferring instead to rely primarily on air power and special
forces. And the administration continues to buy F-35 Joint Strike Fighters for the U.S. Navy even though the service would prefer to buy more FA-18/E/F’s, which it can get for half the price.
The administration also proposes spending more than $1 billion on another Littoral Combat Ship despite the fact that policymakers such as Sen. John McCain (R-AZ) have called it one of the
most egregious examples of waste at the Pentagon.

Trumps Budget actually fails National security--- reduces budget for agencies based on
diplomacy and international stability that are key to prevent increase probability of failed
states, terrorism, effective response to disease outbreaks, and Mitigation of climate change
implications.
Korb 3/5/17, Lawrence J. Korb is a senior fellow at the Center for American Progress. He served as assistant
secretary of defense during the Reagan administration., Trump’s Proposed Defense Budget Will Not Support U.S.
National Security, march 3rd 2017, http://fortune.com/2017/03/05/donald-trump-defense-spending-military-
increase-national-security/

The budget sacrifices diplomacy efforts and international stability The administration compounds the
budget’s problems by paying for its unnecessary increase in defense spending through significant cuts in
many areas of the nondefense portion of the discretionary budget. For example, the Trump budget reduces
the international affairs budget by $19 billion, or 32 percent, to $40.1 billion; the National Science
Foundation budget by 11 percent, or $766 million; and the National Institutes of Health budget by $5.8
billion, or 22 percent. It also eliminates two export promotion agencies—the Overseas Private Investment
Corporation and the U.S. Trade and Development Agency—eliminates funding for PBS, and cuts the
Defense Nonproliferation Account by $147 million, or 7.4 percent. These reductions will make it more
difficult for the United States to conduct the diplomacy necessary to prevent having to use military force
to deal with security threats; to fund international groups like the International Atomic Energy Agency, which inspects
nuclear weapons around the globe; and to conduct scientific research that will enable the military to maintain its technological
edge over its competitors. These reductions will cut the number of countries receiving U.S. economic
development assistance by 37, thus increasing the probability that these nations will become failed
states and havens for terrorists. The reductions also weaken the United States’ ability to respond to
disease outbreaks around the globe. This will contribute to global instability and undermine the health
of many Americans, thus limiting the pool of those qualified to meet the high standards necessary to join
the armed forces. These reductions will also threaten U.S. national security by cutting research and
programming related to climate change, which U.S. military leaders believe is a threat to national
security. The reductions will also eliminate funding for PBS—which General Stanley McChrystal claims will make the nation
less safe, smart, and strong—and harm thousands of workers in the United States who make a living by exporting goods to
other nations

Trumps budget also fails pentagon efficiency

Korb 3/5/17, Lawrence J. Korb is a senior fellow at the Center for American Progress. He served as assistant
secretary of defense during the Reagan administration., Trump’s Proposed Defense Budget Will Not Support U.S.
National Security, march 3rd 2017, http://fortune.com/2017/03/05/donald-trump-defense-spending-military-
increase-national-security/

The defense budget does not support efficiency at the Pentagon In addition to being unnecessary, the extra
money the budget provides to the Department of Defense will undermine the people trying to get the
Pentagon to operate more efficiently. In late 2013, for example, then-Defense Secretary Chuck Hagel recognized that
the Pentagon budget could not continue to grow at the same rate that it had before the Budget Control Act was passed, as it
had between 2001 and 2012. He asked the Defense Business Board to analyze administrative costs. Finished in late 2015, the
board’s study showed that the Pentagon could save $125 billion over five years by trimming its back-office personnel, which
currently exceeds one million people supporting an active duty force of 1.3 million. Rather that dealing with the problem,
however, Hagel’s successor fired the board’s head and tried to bury the report, most likely fearing it would undermine the case
for increasing defense spending. The Pentagon is also not dealing effectively with cost overruns and delays on
its major weapons programs. In 2015, a report by Deloitte found that the combined cost overruns for
major acquisition programs totaled $468 billion. For example, the aircraft carrier USS Gerald R. Ford, from which
Trump laid out his case for increasing spending on defense, came in two years late and 50 percent over budget. Finally, the
Pentagon is still the only federal agency that has not yet passed the federally mandated audit. As Congress
debates the defense and nondefense portions of the discretionary federal budget, it should keep all of these facts in mind.
Doing so will help improve U.S. national security.

Trump budget doesn’t make the U.S. safer--- Scarifies critical agencies and creates inefficiency
CAP National Security and International Policy Team 3/1/17, The National Security and International
Policy team seeks to advance a strong progressive vision for U.S. foreign policy. The team works on a wide array of
issues, ranging from defense and national security policy to foreign affairs and international development, and has
a broad geographic scope, from China and Southeast Asia to the Middle East and Turkey to Mexico and the
Americas. Major ongoing projects include a robust Middle East program; innovative work on U.S. foreign policy
toward China and in Asia; articulating a strong progressive vision on national defense; the cross-linkages of climate,
migration, and security; and building sustainable security through greater global prosperity and effective
international development.,President Trump’s Proposed Budget Is Bad for U.S. National Security, march 1st 2017,
https://www.americanprogress.org/issues/security/news/2017/03/01/427139/president-trumps-proposed-
budget-is-bad-for-u-s-national-security/

Speaking to the National Governors Association at the White House on Monday morning, President Trumpclaimed that his budget proposal
“puts America first by keeping tax dollars in America” and follows through on his “promise to focus on
keeping Americans safe.” However, by unwisely equating spending on the military with overall national
security and by reducing critical investments in U.S. leadership abroad, Trump will actually make
Americans less safe. More than 100 retired generals and admirals made this clear in a recent letter to leaders in the administration and Congress.
Current defense spending There are several issues surrounding President Trump’s proposed defense budget

increase, starting with the fact that U.S. defense spending is already incredibly high: It currently
accounts for more than one-third of the world’s total military expenditures. According to the latest numbers from the
International Institute for Strategic Studies, the United States spent $604.5 billion on defense in 2016, more than four times the next-biggest spender, China, which
spent $145 billion, and more than 10 times the third-biggest spender, Russia, which spent $58.9 billion. Further, the U.S. armed forces are already strong. According
to Michael O’Hanlon and retired Gen. David Petraeus, “the
United States has the best military in the world today, by far. U.S.
forces have few, if any, weaknesses”—a situation that is not “likely to change anytime soon.” Instead of focusing on
arbitrary increases in the defense budget that are not tied to specific military requirements and that
come at the expense of critical domestic and international programs vital to national security, the Trump
administration, Congress, and the Pentagon should focus on how to make current defense expenditures more

cost effective and efficient. A 2015 internal report from the Defense Business Board found $125 billion in administrative waste and offered a five-
year path to save this money by streamlining bureaucratic processes. Even if this assessment was “vastly overstated,” as Pentagon leaders asserted, even half of
those savings would be more than the increase that President Trump is proposing. While
defense spending is critical, throwing lots of
additional money at the U.S. Department of Defense at the expense of other critical programs will not
resolve inefficiencies in current spending. It also will not protect U.S. military forces or make the country
safer.

Trump budget fails to protect national security--- specifically increases probability of climate
change dilemmas and security crisis.
CAP National Security and International Policy Team 3/1/17, The National Security and International
Policy team seeks to advance a strong progressive vision for U.S. foreign policy. The team works on a wide array of
issues, ranging from defense and national security policy to foreign affairs and international development, and has
a broad geographic scope, from China and Southeast Asia to the Middle East and Turkey to Mexico and the
Americas. Major ongoing projects include a robust Middle East program; innovative work on U.S. foreign policy
toward China and in Asia; articulating a strong progressive vision on national defense; the cross-linkages of climate,
migration, and security; and building sustainable security through greater global prosperity and effective
international development.,President Trump’s Proposed Budget Is Bad for U.S. National Security, march 1 st 2017,
https://www.americanprogress.org/issues/security/news/2017/03/01/427139/president-trumps-proposed-
budget-is-bad-for-u-s-national-security/

Climate change and environmental degradation As mentioned above, President Trump’s proposed budget will reportedly include
massive cuts to the EPA, with some sources saying that the EPA’s budget could be cut by 25 percent and that one in five of the
agency’s workers would eventually be eliminated. Such cuts would deal another blow to U.S. national security, in
addition to Americans’ health and safety. If the Trump administration funds a Department of Defense
hardware-buying spree by cutting the EPA’s ability to reduce pollution and ignoring climate change, it
will be neglecting what the Defense Department has called a “threat multiplier.” Climate change is not only
threatening American coastlines; it has also played a role in triggering security crises around the world that can cost
American lives. For example, climate change appears to have played a role in igniting the current crisis in
Syria, which has led to an estimated 400,000 casualties and caused at least 4.9 million Syrians to flee
their homes. The Pentagon understands the security risks of climate change. As of 2015, the Department of Defense had integrated
anticipated climate change impacts and associated risk management and preparedness strategies into all combatant commands. There is broad
agreement within the defense community that climate change poses a direct national security risk to the United
States. If the Trump administration takes funding away from U.S. efforts to combat global climate
change—efforts that the State Department and the EPA were leading under the Obama administration—and uses that funding to buy more
military hardware for the Department of Defense, it will increase the likelihood that American men and women will be
sent into future conflict zones, putting an untold number of lives at risk. The United States faces two choices on the
climate security front: work collaboratively with other nations to reduce rising national security risks or ignore those risks today and face a
more dangerous future. The proposed budget suggests that the Trump administration is making no effort to move the nation toward the
former scenario and is instead doing everything it can to ensure the latter. This poses a grave concern for all Americans, particularly those
whose sons or daughters could one day be sent to fight on the front lines of a conflict that could have been prevented with smart climate
diplomacy.

Trump budget is problematic by trying to “protect” the U.S. it will only amplify insecurity.---
Decreases diplomacy which increases likelihood of war, along with increases changes od
infectious disease breakout.
CAP National Security and International Policy Team 3/1/17, The National Security and International
Policy team seeks to advance a strong progressive vision for U.S. foreign policy. The team works on a wide array of
issues, ranging from defense and national security policy to foreign affairs and international development, and has
a broad geographic scope, from China and Southeast Asia to the Middle East and Turkey to Mexico and the
Americas. Major ongoing projects include a robust Middle East program; innovative work on U.S. foreign policy
toward China and in Asia; articulating a strong progressive vision on national defense; the cross-linkages of climate,
migration, and security; and building sustainable security through greater global prosperity and effective
international development.,President Trump’s Proposed Budget Is Bad for U.S. National Security, march 1 st 2017,
https://www.americanprogress.org/issues/security/news/2017/03/01/427139/president-trumps-proposed-
budget-is-bad-for-u-s-national-security/

the proposed budget could slash spending on diplomacy and international

Diplomacy and foreign assistance According to officials,

development by 37 percent each. Once again, President Trump is acting impulsively without considering the
impact of his acts on the national interest. Diplomacy and development get the biggest bang for American taxpayers’ buck: They
are a tiny fraction of the budget, but they are crucial for national security, long-term economic
prospects, and addressing threats that know no border. American diplomats also defend U.S. trade
interests and offer crucial support for Americans living, working, and traveling abroad in times of crisis.
Even Trump’s own secretary of defense, James Mattis, has said that cutting State Department funding makes new wars and conflicts more likely, not less: “If you don’t fully fund the State

Department, then I need to buy more ammunition.” President Trump is dismissive of foreign assistance programs, which only
account for about 1 percent of the budget. Neglected by Trump and his staff, however, are the facts that 7 of America’s 10 largest export markets are
former aid recipients and that such assistance is grooming the fastest-growing markets for future U.S. trade in places such as Africa and South Asia. Foreign assistance

programs combat infectious diseases, help save the lives of millions of women and children, combat
hunger, and respond to devastating natural disasters such as earthquakes and floods. Both diplomacy
and development are extremely cost-effective investments in a more prosperous and secure world;
investing in them now means that fewer American lives will be lost in the future. Trump’s proposed cuts again demonstrate
the danger of governing by temper tantrum and myth.

Increasing defense spending wisely is beneficial for a more capable force

Flournoy 17 Michele Flournoy is the former Under Secretary of Defense for Policy. “Trump is right to
spend more on defense. Here’s how to do so wisely.”, Washington Post, 3/1/17. Ghs-cw
https://www.washingtonpost.com/opinions/trump-is-right-to-spend-more-on-defense-heres-how-to-do-
so-wisely/2017/03/01/ca776f74-fe8e-11e6-8f41-ea6ed597e4ca_story.html?utm_term=.18679accb521

In his address Tuesday to Congress, President Trump promised to make sure that the U.S. military gets
what it needs to carry out its mission by securing “one of the largest increases in national defense
spending in American history.” More funding would surely be a good thing, although the issues of how much and what for are complicated. No
one should be under any illusions that a higher Defense Department top line guarantees a more capable armed forces. Trump is reportedly seeking $54 billion over the

sequester caps imposed by the 2011 Budget Control Act, which would bring 2018 defense spending to $603 billion. While Trump may view this
proposal as historic, it’s only 3 percent more than President Barack Obama’s final budget request. Meanwhile, the chairman of the Senate Armed Services Committee has called for a much larger increase — to nearly $640 billion. And

as the post-9/11 defense buildup taught us, throwing more money at the Pentagon is not a panacea. What matters is how the money is spent. So what should we
look for in the president’s budget request? First, how is spending allocated across readiness, force structure and
modernization? There is broad consensus in the Pentagon and Congress that the most urgent priority is addressing readiness shortfalls that
affect the military’s ability to respond quickly to crises and other near-term demands. Every member of the Joint Chiefs of
Staff has highlighted readiness problems — such as inadequate training time and maintenance and replacement of equipment — as a source of
accumulating risk. While Congress’s willingness to provide war funding — “overseas contingency operations” funds — above baseline defense spending has helped, it has not solved the problem. The larger
challenge will be striking the right balance between building a bigger force and building a better one. Defense Secretary Jim Mattis has rightly defined his priority as building

a “larger, more capable, and more lethal joint force” to contend with a more challenging international security environment and increasingly capable adversaries. But
there are tradeoffs between paying for additional personnel and force structure vs. investing in the technology and capabilities necessary to prevail in more contested air, land, maritime, cyber and space domains. Although some
increases in force size may be warranted, such as a larger Navy fleet and modest increases elsewhere, the dramatic across-the-board hikes in force structure that Trump proposed during his campaign are both unaffordable and

additional defense investment must focus on maintaining and extending our technological and
unwise. The bulk of any

warfighting edge, including in cyber, electronic and anti-submarine arenas, unmanned systems, automation, long-range striking and protected communications. U.S. military leaders should moderate their
appetite for a bigger force today to protect critical investments in cutting-edge capabilities that will determine whether we succeed on the battlefield tomorrow. Second, are deterrence and alliance capabilities being strengthened?
Critical to the United States’ ability to deter aggression and prevent conflict in regions where we have vital interests is deploying U.S. military forces forward and helping allies and partners build their own defense capacity. Some of
these costs, such as those associated with routinely deploying naval forces around the world, reside in the base defense budget. Others, such as the European Reassurance Initiative, will be covered by annual overseas contingency
funding. Still others, such as helping Israel field more robust missile defense systems, are enabled by the State Department’s foreign military financing. These investments, although relatively small in dollars, are disproportionately

important to reducing the risk of more costly U.S. military engagements. Third, does the budget keep faith with the men and women who serve? Any budget that claims to strengthen
the U.S. military must put people first. Doing so requires reform. For example, does the budget adopt sensible reforms to military health care to improve
quality while reining in costs? Does it improve education and professional development? Does it enable more flexible career paths to retain the best and brightest? Does it include a round of Base Realignment and Closure to shed the
30 percent of infrastructure the service chiefs say they no longer need, enabling savings to be reinvested in better training and equipment for those we send into harm’s way? Fourth, how will we pay for the increased defense

spending? The Trump administration has promised dollar-for-dollar cuts in non-defense programs, reportedly targeting the
State Department and USAID for cuts of 30percent or more. This would create an even more imbalanced national security toolkit, limiting our ability to prevent crises through diplomacy and development and result in an overreliance
on the military. As Mattis said while head of the U.S. Central Command, “If you don’t fully fund the State Department, then I need to buy more ammunition.” This approach also is unlikely to fly in Congress. Absent a larger budget deal
that includes tax reform and reins in non-discretionary spending on Social Security and Medicare, the most likely result is a larger deficit. Finally, if this defense spending increase isn’t part of a larger budget deal providing predictable
spending levels for the next several years, it won’t have the desired impact. If the Pentagon is forced to operate under the threat of sequestration, it will not have the predictability necessary to make smart multiyear investments in

Trump is right to raise the need for more defense dollars, but Congress should scrub his request carefully to
the capabilities on which our security will hinge.

ensure that the money is spent wisely and not at the expense of non-defense programs that are critical to U.S. national security.