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Text: The United States federal government should offer a guaranteed income for all persons living in the United States
  1. Solves the aff- Guaranteed income solves the economy and provides for the only form of sustainable growth
Legum, no date
(Margaret Legum, Legum is a South African/British anti-apartheid activist and social reformer, who specialized in economics. No Date__http://www.epri.org.za/ MargaretLegumFullPaper.pdf__ )
Clearly what is needed is a growth path that will get income into the hands of poor people – rather than one that, as now, sucks resources from the poor to the rich. That vortex effect on our economy – its tendency to suck wealth away from poor people - is what resulted in our government taking radical measures over the past five years – in terms of the huge programme of social grants. Make no mistake: those grants have kept millions alive and coping; without them, destitution would have taken an even worse toll. Research presented at the conference will demonstrate the wider benefits, world-wide, of getting cash into poor areas and communities – growing livelihoods in the absence of jobs, the effect of cash circulating locally so that local skills can be activated. It is hard for most people to grasp the effect of living in totally cashless communities. The grants have changed that. There is now cash in poor communities: the next stage is how to us it best. With luck they will also have put to rest the heartless theory that poor people will be made ‘dependent’ by being given ‘hand-outs’. (Unlike rich people who deserve every penny that comes to them!) Happily, there is a growing world-wide rejection of growth - as now conceived - as a way of reducing, let alone eliminating, poverty. The London-based New Economics Foundation (see www.neweconomics.org) has an excellent new publication, based on global research, called Growth is not the Answer. That is not only for the obvious reason that unlimited growth is inconsistent with a planet containing limited resources. It is because the current growth path creates, rather than solving, poverty. It is very clear that the larger the market in which goods and capital operate, the larger the successful enterprises become. Small enterprise does not survive; mergers and acquisitions are the rule rather than the exception. And all successful enterprise sheds labour. In the age of digital technology, you cannot afford anything but the least labour costs and the highest technology. So large-scale markets reduce the costs of labour and shed it routinely. Large markets are bad for employment. Large enterprises are also bad for competing local small enterprises. Large supermarkets create an enterprise desert around them; and they are the template for the phenomenon. They are not wicked or cruel; just unavoidable products of the system. Growth can, and must, be re-focused from the global to the local, from the world-scale to the human scale. Of course not everything should be localised: ship, planes and car building, as well as mining, are obvious examples. But nobody needs to choose between sugar and tea-shirts, tables and carpets from all over the world. When production and consumption are geographically closer, many benefits follow.

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b. Net benefit-
ELR ensures wage inflation while Guaranteed income avoids the link
Seccareccia Full Professor of Economics, 04
(Mario Seccareccia, January/February, 2004 Full Professor, Department of Economics, University of Ottawa Ottawa, Ontario __http:// redalyc/pdf/601/60124701.pdf__ )
Keynes's radical policy system would neither be favourably received by the economic establishment of his times nor of ours. As Hayek (1966: 243) put it so succinctly, Keynes was reviving the most naive "inflationist fallacies" that no scarcity exists in the labour market (except at full employment). Despite the strong neoclassical opposition, governments both during W.W.II and the early post-war period did come to subscribe to some aspects of Keynes's thinking, largely because of conjunctural factors pertaining to the balance of political forces at the time that gave rise to what some may describe as a Fordist social structure of accumulation (cf. Paquette 1999: 967-71). As a byproduct of the early post-war political commitments to full employment in Western Europe and North America, the international policy drift in favour of high employment by means of public investment and low interest rate policy did follow a general policy pattern quite compatible with Keynes's vision. However, already in the late 1950s, growing fears of a "creeping inflation" associated with high employment brought many policy makers (as noted by Lerner 1963: 229) to "retreat from Keynesianism". These fears, especially as it came to be crystallized in the Phillips curve trade-off menu and subsequently in the Friedmanite natural rate hypothesis, ultimately came to spell the end of activist state policy to achieve full employment. As has been witnessed over the last three decades, policy thinking moved full circle back to the neoclassical supply-side doctrines of the 1930s. Once again, the only appropriate role of government has now become that of ensuring its long-run monetary and budgetary neutrality and actively to remove all institutional obstacles in the labour market that prevent wages from falling in order to reduce the equilibrium level of unemployment. As understood within neoclassical theory, unemployment is the result of structural rigidities that do not allow the labour market to perform its functions in terms of allocation and clearance. Consequently, any macroeconomic policy that does not take heed of these underlying functions would generate inflationary pressures. Instead of seeking to boost progressively aggregate demand whose ultimate repercussion would supposedly be accelerating inflation, it is by dismantling various institutional obstacles in the labour market that would bring the equilibrium unemployment closer and closer to its full employment level (cf. Seccareccia 1991a, 1991b, and Bougrine and Seccareccia 1998, 1999). If problems of income distribution and poverty were to arise from the normal functioning of an unhindered and flexible labour market, the solution would be to set up a redistributive system that is presupposed to be least distortive in the sense of permitting wages to serve as the primary allocative and market-clearing device and, at the same time, not have the inherent inflationary features that were assumed to accompany Keynesian full employment policies. It is in this context that the various programmes of income supplementation such as Friedman's negative income tax and other notions of guaranteed income (GI) came to be seen as substitutes for an activist Keynesian policy of achieving full employment. As Friedman (1962: 191) pointed it out, unlike minimum wages and other similar income support systems such as unemployment insurance, a GI system would not much "distort the market or impede its functioning." This is because a GI policy would create incentives for individuals to offer their labour services while, at the same time, provide a basic income that would not hinder wage flexibility in the labour market. The idea of a GI system is quite simple. In an unfettered labour market tending towards full employment, all individuals ought still to be guaranteed a minimum basic income (MBI). However, instead of most current transfer systems which allow individuals to receive either welfare payments or work (but not both), thereby creating work disincentives, a GI system would supplement a low-wage job by taxing back only a fraction of the GI transfer. The idea is appealing since it does concern itself with some income security objectives not presently met by numerous current welfare systems, especially with regards to the working poor. However, as it has been argued elsewhere (see Iacobacci and Seccareccia, 1989, and Seccareccia 1991a), such as system would only be desirable in an ideal neoclassical world in which full employment is presupposed to have been reached. On the assumption that the minimum basic income would be set close to what are present welfare transfers to the poor and in the absence of a comprehensive minimum wage legislation and Keynesian fiscal and monetary policies to achieve full employment, the effect would be significant wage deflation with the accompanying
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proliferation of low wage jobs. This is because the GI policy would significantly increase the number of employable welfare recipients seeking work in labour markets already characterized by chronically high unemployment. Due to the increased propensity to accept lower-paying jobs that would be generated by what in Iacobacci and Seccareccia (1989) was described as the "compensation effect" of the income support provided by the GI programme, such a policy would only intensify the downward pressures on wages and activate forces pushing towards a low-wage/part-time economy. Of critical importance to us, at the macroeconomic level, the adoption of such GI programmes would have an important effect on the responsiveness of wages to the business cycle. As cyclical unemployment rises, the number of workers willing to accept lower-paying jobs or a cut in wages (if already employed) would also rise, due to the compensation effect. In the process, the neoclassical flexible wage system would be rehabilitated; but, as Keynes (1936) had argued, flexible labour costs do not move the economy closer to full employment. Because of the negative feedback effects on aggregate demand, just the reverse would be true, especially if the gap between wages and profits might be widening in the long run owing to the proliferation of low wage jobs. These wage deflating tendencies which would result from the above-mentioned compensation effect could exist regardless of the guaranteed minimum basic income (MBI) that would be set by the government. However, the higher the MBI, the lower would be the participation rate on the part of households, and thus the lower ought to be the underlying labour market pressures to bring down wage costs. As shown in Figure 1, where the MBI is measured on the vertical axis and the percentage employment (e) and participation (l) rates are measured on the horizontal axis, even if the employment rate remains insensitive to a small change in the MBI (because of the usual explicit assumption of "fiscal neutrality" of the GI programme [for a discussion, see Iacobacci and Seccareccia 1989: 162-63]), if the participation rate falls as the MBI rises, this would ultimately bring down the unemployment rate, reflected in the narrowing gap between e and l. In reality, however, labour demand (e) would probably not be inelastic to changes in the MBI. As the MBI moves upward, it would likely have a destabilizing effect on the wage structure as firms offering wages below the MBI would be under growing pressure to increase them, especially if labour becomes progressively scarce as the labour force participation rate (l) falls. To the extent that this positive effect on overall wages becomes significant (as the MBI rises), we could trace an upward-sloping adjusted e' curve reflecting the higher macroeconomic demand for labour arising from the increased consumption demand that ought to accompany the higher wages. It follows, therefore, that the choice of the minimum basic income is a critical factor in determining how significant would be the wage deflation bias in the operation of a GI programme. As the value of the MBI approaches MBI* (or MBI*') in Figure 1, it is likely that the wage deflating influence of the GI programme (due to the compensating effect) would be progressively outweighed by upward labour market pressures on wages as firms compete for qualified workers. However, as much as one may theorize about these latter effects, the dangers of inflation would be incredibly remote under current GI proposals. This is because all GI programmes are normally packaged so that the MBI is sufficiently low, usually below the poverty line and, indeed, even below existing social assistance levels (Iacobacci and Seccareccia 1989: 147-48). For this reason, not only do all proposed GI programmes meet the criterion of zero inflationary pressures that is of concern to neoclassical theorists but, as has been argued, the adoption of such programmes would have a clear deflationary bias in the labour market.

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That’s key to prevent a wage price spiral that kills the economy
Louis Uchitelle. The New York Times, August 1, 2008 (“Fed Fears Wage Spiral That Is Little In Evidence,” http://www.nytimes.com/ 2008/08/01/ business/economy/01fed.html?_ r=1&ref=business&pagewanted= print, accessed through LexisNexis)

The policy makers assume that rational human beings, faced with higher prices, eventually demand and get higher pay, despite their apparent lack of leverage. They have built that assumption into their economic models, but they differ sharply on how quickly the wage pressure could resurface, an issue they will once again debate at their next meeting, on Tuesday. ''The power to bargain for higher wages, a power that we assume was dismantled, may not be so feeble,'' said Richard W. Fisher, president of the Federal Reserve Bank of Dallas, who is the most certain of all that a wage-price spiral is imminent. If the Fed anticipates a reawakening, organized labor itself certainly does not. ''Real wages, adjusted for inflation, are falling, and there is no sign at all of any change in direction,'' said Ronald Blackwell, chief economist for the A.F.L.-C.I.O., offering a view shared by Nigel Gault, chief domestic economist for Global Insight, a Wall Street firm, who argues that if prices go up, people will expect not a raise, but ''their standard of living to go down.'' The issue to be debated by policy makers, who recently finished slashing interest rates in response to the credit crisis and the economic downturn, is how quickly wage pressures could resurface. In the Fed's playbook, employers would grant raises in response to the pressure and then seek to recover the costs of those raises by jacking up prices for a range of everyday items Their price increases would be followed, again according to the Fed’s playbook, with another round of wage increases, to be followed in turn by another round of price increases, setting off a wage-price spiral that would be difficult for the Fed to undo. Just such a spiral drove up the inflation rate in the 1970s, during the first great oil price surge, and it haunts the policy makers to this day. Paul Volcker, then the Fed chairman, finally broke the spiral by pushing interest rates ever higher, precipitating the harsh 1981-2 recession.Inflation and wage demands have remained relatively subdued ever since, but that cannot last in the teeth of another oil price shock, in the view of the current policy makers, who see themselves as Mr. Volcker's spiritual heirs. Some policy makers are much more convinced than others that a modern-day version of the 1970s experience is not only possible but imminent, and they insist that interest rates must go up now to snuff it out, even at the expense of further weakening an already damaged economy.

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Health care will pass now but Obama being able to reign in spending is key to its passage
Associated Press 8/4
(Associated Press, n American news agency. The AP is a cooperative owned by its contributing newspapers, radio and television stations in the United States, which both contribute stories to the AP and use material written by its staff journalist 8/4/09) http://www.google.com/ hostednews/ap/article/ ALeqM5hqsLQvKIDJyBRLnfbA0U0KgG fqrAD99S7H700

Senate Majority Leader Harry Reid says his party's caucus has "absolute unity" on the need to pass health care reform this year. The Nevadan, joined by other lawmakers, spoke to reporters Tuesday afternoon on a White House driveway after Senate Democrats met over lunch with President Barack Obama. Reid said Democrats wants to produce a bipartisan bill "if there's any way humanly possible." Senate Finance Chairman Max Baucus said, "The American people want us to work together." Reid and Baucus, a Montana Democrat, expressed confidence that health care legislation would get done by year's end. Extending health insurance to the uncovered and reining in costs are key Obama priorities.

Government providing full employment is controversial
Dooley, 03
(David Dooley, Staff Writer for American Journal of Community Psychology, 2003
http://www.questiaschool.com/ read/5002014183?title= Unemployment%2c% 20Underemployment%2c%20and% 20Mental%20Health%3a% 20Conceptualizing% 20Employment%20Status%20as% 20a%20Continuum)

A third reason is that the link between unemployment and well-being has serious political implications. The claim, for example, that a rise in unemployment produces a significant rise in such outcomes as suicides or mental hospitalizations quickly enters the political arena as an argument favoring full-employment economic policies. The late Senator Hubert Humphrey made this argument explicitly in supporting his Humphrey-Hawkins full employment legislative proposal (Brenner, 1976). But making the government the guarantor of full employment is controversial, and opponents of such policies naturally rise to challenge the social science underlying such claims. The vehemence of such counterattacks is illustrated by the one mounted in England in reaction to Brenner's analyses of British data showing a link between unemployment and health (Bartley, 1992). Why would anyone oppose efforts to do away with unemployment? One economic rationale for keeping unemployment from falling too low assumes that unemployment holds wage inflation in check, a relationship summarized in the Phillips curve (Phillips, 1958). If there is a reserve of unemployed workers ready to take jobs at the present wage level, workers in those jobs have less power to bargain for higher wages. This view implies some "natural" level of unemployment that will hold inflation steady or the "non-accelerating-inflation rate of unemployment" (NAIRU), variously estimated in the range of 4-6%. The validity of this NAIRU hypothesis is controversial among economists (Gordon, 1988), but it offers one rationale for resisting full employment policies and generating rival analyses of the unemployment-health link. All of these factors may have stimulated the growth of the literature. However, each applies equally to underemployment, but that literature has not grown like that of unemployment.

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Pushing controversial legislation burns political capital
Mark Seidenfeld, Associate Professor, Florida State University College of Law, Iowa Law Review, October 1994
In addition, the propensity of congressional committees to engage in special-interest-oriented oversight might seriously undercut presidential efforts to implement regulatory reform through legislation. n198 On any proposed regulatory measure, the President could face opposition from powerful committee members whose ability to modify and kill legislation is well-documented. n199 This is not meant to deny that the President has significant power that he can use to bring aspects of his legislative agenda to fruition. The President's ability to focus media attention on an issue, his power to bestow benefits on the constituents of members of Congress who support his agenda, and his potential to deliver votes in congressional elections increase the likelihood of legislative success for particular programs. n200 Repeated use of such tactics, however, will impose economic costs on society and concomitantly consume the President's political capital. n201 At some point the price to the President for pushing legislation through Congress exceeds the benefit he derives from doing so. Thus, a President would be unwise to rely too heavily on legislative changes to implement his policy vision.
Political capital key to healthcare reform
Chiropractic Economics 7-7-2009
http://www.chiroeco.com/ chiropractic/news/7360/861/ Prioritizing-healthcare- reform-components/

INDIANAPOLIS – Faced with a barrage of pressing issues, the Obama administration has placed health-care reform high on its agenda. The timing bodes well for change, according to Aaron E. Carroll, M.D., director of the Indiana University Center for Health Policy and Professionalism, associate professor of pediatrics at the IU School of Medicine and a pediatrician at Riley Hospital for Children. "If the new administration wants to accomplish significant reform, they will need political capital, which they have now," says Dr. Carroll, who is a health services researcher and a Regenstrief Institute affiliated scientist. "We have a government elected with a mandate for change and health care is an area that requires reform. Moreover, with the economy in its current state, with unemployment on the rise, and with health care costs on the ascent, more and more people will not be able to afford insurance or health care. Therefore, more will be in need of reform." According to Dr. Carroll there are now more than 45 million people in America who have not had health insurance for the entire year; almost twice that number lack coverage for a portion of the year. Over the last few years, most of the newly uninsured are from the middle class. As unemployment rises, along with food, utilities and other prices, a growing number of people will be unable to afford health insurance, especially as it gets increasingly expensive.

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The impact is a new Great Depression. Reform is key to signal long term fiscal solvency and prevent spiraling sell-offs of US debt
Boston Globe, 2-23-09

Budget analysts are worried that a continuing economic crisis will make it impossible to raise sufficient funds from foreign markets to finance the nation's debt. In the last four years, about three-quarters of US debt was purchased by foreign interests, most prominently by China. If other nations lose confidence that the United States will pay its debts, however, some economists fear an international financial crisis could escalate and turn into a worldwide depression. In any case, it is widely expected that debt purchasers will soon demand higher interest rates, which would translate into higher costs for US taxpayers. Obama is being urged by some analysts to start moving toward a balanced budget as soon as possible to send a signal to the world that deficit spending will abate. Yet some analysts are offering Obama conflicting advice, warning him not to repeat what they regard as the mistake of President Franklin Roosevelt, who launched the New Deal but eventually heeded calls to curtail deficit spending, only to see a new recession batter his presidency. A key player in the summit will be Senator Judd Gregg, the New Hampshire Republican who backed out of his commitment to be Obama's commerce secretary and then voted against the stimulus bill. Despite the embarrassment caused by Gregg's about-face, the White House believes that he could be one of its most important allies in the overhaul of Social Security, Medicare, and tax policy. That is because Gregg is the co-sponsor of the measure that would create a bipartisan commission to put together far-reaching recommendations for an up-or-down vote by Congress. In an interview, Gregg said that under such a procedure, the measures could be passed within a year, as long as most of the benefit cuts and tax increases were not slated to take effect until well after the recession is over. "We need an up-or-down vote on a package that will be unquestionably bipartisan and fair," Gregg said, a reference to criticism that Obama's stimulus bill was too partisan. Asked about his hopes for the summit, he said, "It can either be very nice public relations or move the ball down the road on what is an impending fiscal tsunami." Some budget specialists are skeptical. Robert Reischauer, former head of the Congressional Budget Office, said Obama should have seized the opportunity to pair the stimulus bill with the overhaul of Social Security, Medicare, and the tax code. "When you are shoveling out the goodies, you have a greater probability of getting people to sign on to some fiscal diet," said Reischauer, who has been invited to the summit. He said he is worried that nothing will happen on the most difficult issues until political leaders "have a gun at our heads. The system tends to respond only in the face of unavoidable crisis." Analysts across the political spectrum agree that the current path is unsustainable. Unless there is a major budgetary change, federal spending will go from being about 20 percent of the nation's economy to 42 percent in 2050, according to the Concord Coalition. The major reason is that entitlement programs for older Americans are running short of funds. Social Security is slated to pay out more money than it receives by 2017. Obama suggested during his campaign that he might support changing the level of income at which Social Security taxes are calculated. Another frequently mentioned option is raising the retirement age. But any measure will be even more controversial than usual because so many Americans have seen their private retirement plans pummeled by the stock market collapse. Medicare, the government-run healthcare program for older Americans, is already running a deficit, which is expected to increase quickly as baby boomers retire. That is why many analysts are urging Obama to link changes in Medicare with an overhaul of the health system.

Global nuclear war
Mead, 2009
(Walter Russell, the Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations, “Only Makes You Stronger”, The New Republic, February 4, 2009)

History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight.

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Confidence high, but lack of discipline causes premature pullout
Cass, former editor-in-chief of Worth, a magazine devoted to wealth management and related issues for the affluent readers, 6-12-09[Dwight Cass, former editor-in-chief of Worth, a magazine devoted to wealth management and related issues for the affluent readers, June, 12th, 2009, “Bond bust fears overblown-for now”, http://money.cnn.com/2009/06/ 12/markets/bondcenter/bond_ bust_fears_overblown. breakingviews/index.htm? postversion=2009061211]

The U.S. Treasury bond market has been feeling distinctly unloved. A 10-year bond auction went badly on June 10 after Russia, Brazil and China said they were taking steps to diversify their foreign currency reserves. Worries that Thursday's $11 billion auction of 30-year bonds would follow suit rattled the market. But central banks flocked to buy the bonds, meaning dollar diversification fears were overblown -- at least for now. Treasury officials may be relieved, but they shouldn't relax. The factors that could push up the cost of issuing U.S. government debt continue to mount. The behavior of the inflation-linked bond market shows investors are beginning to worry more about inflation than deflation, as signs of an approaching economic recovery proliferate. And the sheer volume of debt the U.S. has to issue this fiscal year -- $3.25 trillion worth, or nearly four times as much as last year -- has unnerved investors. Nonetheless, the 30-year bond auction received a lot more interest than usual. The ratio of total bids to accepted bids, an indicator of demand, was 2.68, up from an average of 2.21 in recent auctions. Encouragingly, foreign investors, mainly central banks, purchased nearly half the bonds. They normally take only about a third. That's notable because big Treasury bond investors like China have been shifting their purchases toward shorter-term securities to reduce their risk of loss from interest rate rises. And that's a significant risk. The 4.72% yield at which the bonds were sold was admittedly the highest at auction in nearly two years. But assume inflation returns to a long-term average of about 3%, and the real return on the bonds starts to look parsimonious. Add the likelihood of long bond yields rising significantly at times over three decades, and the price of this bond could slide. While the willingness of foreign central banks to shoulder this risk is encouraging, Treasury officials shouldn't be high-fiving each other just yet. The long bond has plummeted 10% in price in the last month alone. The patience of many foreign investors is already strained. Some may soon reach their limit

Multiple scenarios why the plan reverses this trend
  1. Employment initiatives destabilize the economy and destroy confidence.
Askari and Krichene 7-26
(09, “It’s Time to Revamp the Federal Reserve”, Hossein Askari and Nourreddine Krichene, Asia Times Online, http://www.atimes.com/atimes/ Global_Economy/KG26Dj02.html)

In pursuit of its full-employment mandate, using aggressive monetary policy since 2001, the Fed has driven nominal interest rates to record low levels, making real interest rates largely negative. Low interest rates

, in turn have fueled speculation by reducing its cost, resulting in a number of assets bubbles, the most prominent in housing. This policy, in turn, has compromised the creditworthiness and soundness of the entire US banking and financial system. The Feds reckless monetary policy has cost the US government trillions of dollars in bailouts for banks, the automobile industry, and homeowners. More precisely, on July 21, Neil Barofsky, the overseer of the Troubled Asset Relief Program (TARP), estimated in a prepared statement to a committee of the US House of Representatives that the total exposure of the US government to the financial crisis at US$23 trillion to $27 trillion. Fed policies set off commodity price inflation, most notably in oil prices, and exchange rates instability; it aggravated external current account deficits; and it has already pushed unemployment to 9.5% in June 2009, with the expectation that it may reach around 11% before it is all done. In the process, the Fed has created considerable distortions in the economy and has heightened economic uncertainty. The full extent of the damage and how long recession will last cannot be predicted today. There are in fact clear dangers that this unparalleled monetary expansion could be paving the ground for even bigger bubbles, more intense financial instability and larger bankruptcies in the future

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New social service spending freaks out investors deficit issues
Irwin, Staff writer for the Washington Post covering the economy, 6-4-9 [Neil Irwin, Staff writer for the Washington Post covering the economy, June, 4th, 2009, Bernanke Presses for Fiscal Restraint, http://www.washingtonpost.com/ wp-dyn/content/article/2009/ 06/03/AR2009060301367.html]

The nation needs to begin planning now to eventually bring taxes and spending in line, Federal Reserve Chairman Ben S. Bernanke said yesterday, arguing that large budget deficits, if sustained, could deepen the financial crisis and choke off the economy. Bernanke's testimony to Congress reflected growing concern among economists and investors that the nation's long-term fiscal imbalances could stand in the way of economic recovery by driving up the interest rates that the government, businesses and consumers pay to borrow money. The rate the government pays has already risen in recent weeks. The Fed chairman argued that even as the government spends massive amounts of money to contain the financial crisis, it must be prepared to move toward fiscal balance. "Congress and the administration face formidable near-term challenges that must be addressed," Bernanke told the House Budget Committee. But "unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth." The financial crisis is driving the country deeply into the red, with the national debt projected to double from about 41 percent of the economy last year to more than 82 percent by the end of the next decade. Thereafter, things will only get worse, budget analysts say, as the baby boom generation lays claim to benefits from Social Security and costly federal health programs. So far, President Obama has offered no plan to rein in those costs, though he has stressed the importance of reducing the deficit generally. Bernanke frequently delivers messages on the need for fiscal responsibility to congressional budget committees. But his comments yesterday carried more weight given recent swings in the market for Treasury bonds. In particular, the global investors who finance the nation's large budget deficits have grown more antsy. The U.S. Treasury must now pay 3.5 percent to borrow money for 10 years -- low by historical standards, but up from about 3.1 percent a month ago and 2.9 percent three months ago. The increase has come even as the Fed has launched a program to buy up to $300 billion in Treasury bonds -- purchases designed to push down rates and did, when the program was rolled out in March. The higher rates for government borrowing have many likely causes, and some of those reflect improvement in financial markets. For example, as investors have become more comfortable investing in risky assets such as stocks, they have been willing to move money out of safe U.S. Treasury bonds and into other investments. But other reasons for the shift are less positive. Investors are also worried that Congress and the Obama administration will continue to rely heavily on borrowed money to fund the government and thus are demanding a higher premium to lend it money. "These increases appear to reflect concerns about large federal deficits," Bernanke said in his testimony, before naming other causes that are also playing a role. Some analysts worry that the Fed will succumb to political pressure in the future to effectively print money to fund government borrowing -- a process known as monetizing the debt. Two congressmen raised that possibility explicitly in yesterday's hearing. "This can be a dangerous policy mix. The Treasury is issuing debt. And the central bank is buying it," said Rep. Paul D. Ryan (R-Wis.). "It gives the alarming impression that the U.S. one day might begin to meet its financial obligations by simply printing money. And we all know what happens to a country that chooses to monetize its debt. It gets runaway inflation, a gradual erosion of workers' paychecks and family savings." Bernanke said that the Fed takes its political independence seriously, and while it is now focused on using all the tools at its disposal to ease the pain of the recession, it will respond aggressively if inflation becomes a problem. The Fed has given no strong indication of whether it will expand its purchases of Treasury bonds. Without doing so, though, the Fed would have less flexibility to stimulate the economy. It has already cut a key interest rate it controls to nearly zero. "They definitely have less leeway" to buy more Treasury bonds, said Michael Feroli, an economist at J.P. Morgan Chase. "The Fed hasn't done a stellar job of communicating its strategy" with the bond purchases, which, he argued, has allowed the discussion to be dominated by people who argue that the Fed's actions are effectively monetizing the debt. Doing so would increase the money supply, thereby weakening the dollar and leading to high inflation. One thing that would help assuage those fears would be for government leaders to signal that they will manage the nation's finances well in the long run. That would tend to keep long-term interest rates low, which in turn would help encourage an economic recovery. Bernanke, as is his habit, did not recommend specific ways that Congress should aim to reduce long-term budget deficits; he views tax and spending decisions as the domain of elected officials. "In the end, the fundamental decision that the Congress, the administration and the American people must confront is how large a share of the nation's economic resources to devote to federal government programs, including entitlement programs," Bernanke said. "Crucially, whatever size of government is chosen, tax rates must ultimately be set at a level sufficient to achieve an appropriate balance of spending and revenues in the long run."

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Investor confidence decline collapses the economy
The Economist 6/11/2009 (http://www.economist.com/ opinion/displaystory.cfm? story_id=13829461)

This alarming trajectory puts policymakers in an increasingly tricky bind. In the short term government borrowing is an essential antidote to the slump. Without bank bail-outs the financial crash would have been even more of a catastrophe. Without stimulus the global recession would be deeper and longerand it is a prolonged downturn that does the greatest damage to public finances. But in the long run todays fiscal laxity is unsustainable. Governments thirst for funds will eventually crowd out private investment and reduce economic growth. More alarming, the scale of the coming indebtedness might ultimately induce governments to default or to cut the real cost of their debt through high inflation. Investors have been fretting on both counts. Worries about default have been focused on weaker countries in the euro area, particularly Greece, Ireland, Italy, Portugal and Spain, where the single currency removes the option of unilateral inflation (see our special report). Irelands debt was downgraded for a second time on June 8th. Fears of inflation have concentrated on America, where yields on ten-year Treasuries reached nearly 4% on June 10th; in December the figure was not much above 2%. Much of this rise stems from confidence about economic recovery rather than fiscal alarm. Yet eye-popping deficits and the uncharted nature of todays monetary policy, with the Federal Reserve (like the Bank of England) printing money to buy government bonds, are prompting concerns that Americas debt might eventually be inflated away. Justified or not, such worries will themselves wreak damage. The economic recovery could be stillborn if interest rates rise too far too fast. And todays policy remedies could become increasingly ineffective. Printing more money to buy government debt, for instance, might send long-term bond yields higher rather than lower. What should policymakers do? A sudden fit of fiscal austerity would be a mistake. Even when economies stop shrinking, they will stay weak. Japans experience in 1997, when a rise in consumption taxes pushed the economy back into recession, is a reminder that a rush to fiscal tightening is counterproductive, especially after a banking bust. Instead of slashing their deficits now, the rich worlds governments need to promise, credibly, that they will do so once their economies are stronger. Lord, make me prudentbut not yet But how? Politicians promises are not worth much by themselves. Any commitment to prudence must include clear principles on how deficits will be shrunk; new rules to stiffen politicians spines; and quick action on politically difficult measures that would yield future savings without denting demand much today, such as raising the retirement age. Broadly, governments should pledge to clean up their public finances by cutting future spending rather than raising taxes. Most European countries have scant room for higher taxes. In several, the government already hoovers up well over 40% of GDP. Tax reform will be necessaryparticularly in places, such as Britain and Ireland, which relied far too much on revenues from frothy financial markets and housing bubbles. Even in the United States, where tax revenues add up to less than 30% of GDP, simply raising tax rates is not the best answer. There too, spending control should take priority, though there is certainly room for efficiency-enhancing tax reforms, such as eliminating the preferential tax treatment of housing and the deductibility of employer-provided health insurance.

Full Employment 1NC

  1. Inflation
ELR causes high levels of inflation
Sawyer, 03
(Malcom, Sawyer,The author is Professor of Economics in Leeds University Business School, December 2003 MalcolmSawyer/elrjie.pdf)
Any proposals to secure high levels of employment run into the charge that they would be inflationary, and the ELR proposals are no exception. There are two types of reason why the ELR proposals may be seen as inflationary. First, the creation of ELR jobs involves deficit spending and the creation of HPM, which can be seen as generating inflation.14 The arguments concerning money and deficits have been examined above and are not further discussed here. Second, the level of unemployment achieved could be below a supply-sidedeter- mined inflation barrier: for example, the NAIRU. In this discussion we will use the term NAIRU, though it should be interpreted as the general notion that there may be sup- ply-side constraints on the achievement of full employment. Thus, it could be argued that the ELR would lead to accelerating inflation, since unemployment would fall well below the NAIRU level. The main response from the advocates of ELR has been to compare those employed on the ELR to a buffer stock from which employers can draw when labor is required (as further discussed in the next section). Thus the stock of unemployed under present policies and the stock of ELR employees are viewed as analogous. In both cases they form an available pool of labor, and in both cases employers would have to pay more than those in the pool receive (more than unemployment benefits in the case of unemployed, base wage in case of ELR employees). The ELR scheme is viewed as pref-erable to unemployed on benefits in that the ELR scheme involves people being in work, retaining attachment to the work force, and so on. The analysis of how the introduction of an ELR scheme could impact the level of employment in the private sector can depend on how inflation barriers to full employ- ment are conceptualized. The NAIRU is the best known expression of an inflation bar-rier, but there are different conceptualizations of the NAIRU, three of which are mentioned here. The first is that the level of the NAIRU reflects various imperfections in the labor market, and the second is that the NAIRU is the level of unemployment which disciplines workers sufficiently to hold real wages in check. A third is that the NAIRU corresponds to a lack of productive capacity to provide non-inflationary full employment. Considering the first-mentioned conceptualization of the NAIRU, it could be argued that the institutional arrangements, laws governing the labor market, and imper-fections of the labor market would be unaffected by the introduction of an ELR scheme. But the argument is made that the ELR workers are a more effective supply of labor to the private sector than unemployed workers are. The buffer stock employees are more attractive [to potential employers] than when they were unemployed, not least because they will have basic work skills, like punctuality, intact (Mitchell 1998, 551). The second conceptualization of the NAIRU can be examined through figure 1, in which the p-curve reflects the price, wage, and employment decisions of firms and the w-curve the wage determination process (drawn from Sawyer 1999, figure 1). When the w-curve is based on efficiency wage considerations (and the drive by firms to extract effort from workers), then the position of the w-curve depends on the level of unemploy-ment benefits. Workers effort is viewed as depending on actual real wages relative to an alternative income which is based on the unemployment rate and unemployment bene- fits. With the introduction of an ELR scheme, the alternative income would be based n the wages paid to ELR workers and the proportion of workers in ELR employment. Under the assumption that a job with an ELR wage is perceived as better than unem- ployment on benefits, then the alternative income is higher, and in effect the w-curve shifts upward following the introduction of an ELR/JG scheme. In general this would be seen to lead to a lower level of private sector employment.15 A similar conclusion was reached by P. Kriesler and J. Halevi (2001) when they stated the following: In the advent of inflation, without the [ELR] scheme, people dropping from employment to unemployment reduce inflationary pressure both by reducing demand and by reducing the militancy of the labor force (like the reserve army). With a buffer scheme, people will drop from employment to buffer employ- ment. Since the loss in wages and status, etc. is much reduced, this means that more people will have to change state in such a scheme. NAIBER (the Non-accelerating inflation buffer employment share, (which) is the ratio of suffer stock employment to total employment that is required to stabilize infla- tion (Mitchell 1998 547n)) must be higher than NAIRU. This means that there is a clear opportunity cost of the scheme. Namely, that x percent of the labor force, where x percent = NAIBER NAIRU, will now be in buffer employment whereas previously they were fully employed. (778)

Full Employment 1NC

High inflation causes financial disasters and economic collapse
Boyd, Levine, and Smith, 2k
(John H. Boyd, Carlson School of Management, University of Minnesota, Ross Levine, Carlson School of Management, University of Minnesota, Bruce D. Smith, Department of Economics, University of Texas-Austin, The Impact of Inflation on Financial Sector Performance

Recent theoretical work stresses that predictable increases in inflation can intensify informational asymmetries, leading to less intermediary or equity market activity. Recent empirical work shows that a deterioration in financial sector performance has large, negative implications for economic growth. Theory further predicts that the inflation-finance relationship may exhibit strong non-linearities. For example, informational frictions may become binding only when inflation exceeds certain thresholds. When inflation passes these thresholds, some theories suggest that we will observe a corresponding collapse in financial system performance with adverse effects on resource allocation and economic activity. Since previous empirical work highlights the impact of financial sector development on economic growth, this paper focuses on empirically assessing these theoretical predictions regarding the impact of sustained inflation rates on financial sector performance. The evidence indicates that there is a significant, and economically important, negative relationship between inflation and financial development. This correlation emerges essentially independently of the time period considered, the empirical procedure employed, or the set of variables that appear in the conditioning information set. It is also not sensitive to inclusion or exclusion of countries that have experienced extraordinarily high rates of inflation. Finally, the negative relationship between inflation and financial sector performance emerges even after controlling for simultaneity and omitted variable biases. Thus, a preponderance of evidence indicates that sustained inflation and financial sector performance display a strongly negative association.

  1. Deficit Spending
Government job creation requires massive deficit spending
Lingle, 08
Research Scholar at the Centre for Civil Society in New Delhi and Visiting Professor of Economics at Universidad Francisco Marroquin in Guatemala (“The Expensive Fallacy of Government Job Creation”, Christopher Lingle, Jakarta Post, December 16th, http://www.thejakartapost.com/ news/2008/12/16/the-expensive- fallacy-government-job- quotcreationquot.html)

Despite having a stake driven through its heart after being identified as the primary cause of the Stagflation of the 1970s, a failed economic policy has arisen from the dead. Yet the consensus evident at the recent G-20 Meeting is that governments can create jobs and end recessions simply by spending more money. The myth that higher public spending is good economic policy is so resilient that its supporters are unperturbed by all the evidence that contradicts it. Consider that Japan 's policy makers began throwing massive amounts of money at the local economy in the late 1980s to re-ignite it. This constant flow of deficits brought only a growing mountain of public-sector debt with the economy regaining its long-term growth trajectory. Nor did it deter Japan from officially ushering in yet another recession. More recently, the Economic Stimulus Act of 2008 gave so-called tax rebates worth US$100 billion to U.S. households in May, June, and July. But the rise in spending was very small since most went into savings, including paying down debt. Despite this recent failure, President-Elect Barack Obama promises he will direct government spending to create jobs. But numerous studies show that one-time tax rebates cannot bring higher economic activity. This is because temporary increases in disposable income do not create incentives to increase consumption over time. The only certain thing is that stimulus packages based on increased public-sector deficits will add to the national debt. Belief in the efficacy of deficit spending is based on a naive notion that consumption is the important driver of economic growth. It is as though consumer goods and services are merely gifts of nature. Such nonsense has been appropriated by profligate politicians and bureaucrats to promote inappropriate overreach of public-sector spending. But reality demands that the path for sustainable economic growth is for there to be more saving so that there can be more capital goods. As it is, capital goods are the basis of higher output and increased wages by boosting productivity. And the provision of capital goods requires that consumption be deferred. It seems that saving is not only a natural instinct, but it is also promoted by many fables, Biblical and otherwise, that show the merits of thrift. In recent years, central bankers removed the incentives to save by driving interest rates to unsustainable and artificially-low levels while inducing more consumption.

Full Employment 1NC

This leads to a "paradox of spending" whereby consumers, deterred from saving by low deposit rates, are lured into low-interest borrowing to boost their current living standards. This distortion in credit markets induces individuals to make decision that lead to greater misery in the future for themselves and for others. Indeed, increased spending may cause incomes to fall by a greater amount since the attempt to buy more today backfires in that there are fewer jobs and less to consume later. Buying more now can leave everyone worse off in the future in the same way that a community suffers from eating its seed-corn. Therefore, policies that aim to raise consumption now lead to less capital being available for future production so there will be less future consumption. An enduring fable has it that governments can "create" jobs either through public-spending to employ people in the public-sector or to increase overall demand. During his campaign, Barack Obama promised to use $150 billion to promote windmills, solar panels and 'energy efficiency' that would supposedly create 5 million "green" jobs. In the first instance, government spending to "create" jobs costs more than jobs created in the private sector since public-sector recruitment involves massive bureaucracies. And since adding workers to the public payroll creates a new burden on taxpayers that have less to spend or invest, this means that there can be no net gain to the economy. In all events, government-funding to "create" Green jobs may be the worst of both worlds. Much of the support for Green projects is that they create more jobs because they involve more labor-intensive production. For example, supporters of initiatives for alternative fuels insist that they would boost employment than would the building of conventional power stations. But conventional power stations operate with enormous economies of scale that bring lower unit costs so that more jobs can be created throughout the economy. Job creation based on real economic merit does not require government involvement. But providing subsidies to support inefficient technology raises the labor-to-capital ratio so that the demand for labor will be lower and real wages would fall. It would be bad enough that deficit spending on job creation was simply ineffective. What is worse is that government spending schemes that expand public-sector debt imposes several burdens on future generations. Most obvious is their additional tax burden they must pay for debts incurred in the present. By spending beyond their means to conjure up jobs, governments undermine or eliminate employment that would have been created in the private sector in the future. If increasing the share of GDP claimed by government leads to lower long-term economic growth, "creating" jobs today will mean fewer jobs in the future.

3. Business confidence

Low unemployment rates kill business confidence
Lewis, No Date Given
(Megan Lewis, Education and Training Advisor ,No date given http://www.cciq.com.au/docs/ fs2-skills-shortages.pdf

Strong growth in the Australian economy has seen unemployment rates drop dramatically over the last decade. This decline in unemployment rates has seen the pool of surplus labour disappear with the economy in a position of near full employment. Contemporary surveys of business confidence report that ‘the availability of suitably qualified employees has remained the number one constraint on business expansion.

Full Employment 1NC

Buisness confidence is key to the economy
Salmond, 08
(Rob Salmond, April 2008. Assistant professor in the Department of Political Science at the University of Michigan. "Partisan Cycles in Business Confidence Indicators," Paper presented at the annual meeting of the MPSA Annual National Conference, Palmer House Hotel, Chicago, http://www.allacademic.com// meta/p_mla_apa_research_ citation/2/6/6/9/5/ pages266955/p266955-1.php.)

The performance of business confidence can be broken in to two constituent parts: its predictive performance; and its causal impact. The most wide-ranging study on the predictive performance of business confidence was conducted by Santero and Westerlund (1996) under the auspices of the OECD. They examined patterns of business confidence, consumer confidence, and economic output across eleven advanced economies, finding that business confidence is a good predictor of output whereas consumer confidence is not. The best correlations between business confidence and output were found when the output measure (in this case year-on-year GDP growth) is lagged by either two or three financial quarters, which they say provides a clue that the business confidence indicator is indeed prescient of future events, rather than simply reflective of current ones. In terms of the causal impact of business confidence on the economy, Santero and Westerlunds empirical analysis also found that business confidence measures Granger caused changes in economic output. Granger causation is a measure of correlation rather than causation â testing whether variable A (in this case business confidence) provides additional information about the future value of variable B (here GDP growth) beyond the information contained in variable BâTMs own history. While this empirical result is interesting, it does not provide any theory under which business confidence has an independent impact on output. Such an independent impact is of critical importance to business leaders because its existence is ultimately what makes politicians and citizens alike wary of actions that would lower business confidence. A causal impact does, however, exist in economic theory. Ng (1992) showed that, in broadly defined conditions of imperfect competition, self-fulfilling drops in business confidence (which Ng defines as the expected value of aggregate demand) are possible. That is, an exogenously caused drop in business confidence can plausibly cause a recession entirely on its own. Business confidence causal impact on political phenomena such as incumbent approval, partisan public opinion, and election results are substantially unexplored in the academic literature, despite the assumption of such effects found in much business and political journalism.

All these scenarios lead to nuclear war
Mead, 9 – Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations
(Walter Russell, Only Makes You Stronger, The New Republic, 2/4/09,
http://www.tnr.com/politics/ story.html?id=571cbbb9-2887- 4d81-8542-92e83915f5f8&p=2)

History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight.

Full Employment 1NC


Full employment doesn’t solve poverty
Widerquist and Lewis, 97
(Karl Widerquist, Research Associate, The Jerome Levy Economics Institute of Bard College
and Michael A. Lewis, Assistant Professor, SUNY School of Social Welfare at Stony Brook November 1997 http://www.levy.org/pubs/ wp212.pdf)

A similar belief is that the government can use fiscal and monetary policy to maintain the full employment level of output. We believe that, like economic growth, full employment is desirable but full employment alone is not enough to eliminate poverty. The U.S. governments experiments at maintaining full employment have been mixed and some economists believe that the closest attainable approximation of it is a 5 percent unemployment rate (Munday, 1996). Others contend that it is possible to bring the unemployment rate down as low as 3 or 4 percent as it has been at times in post-war U.S. history. However, in 1966, during the Vietnam War, the unemployment rate was only 3.8 percent but the poverty rate was 14.7 percent (Census Bureau, 1975). In 1953, during the Korean War, the unemployment rate was only 2.9 percent, the lowest rate between the end of the Second World War and the present, yet the poverty rate was 26.2 percent (Murray, 1984). Explanation for this includes: even at full employment there are millions not working and there can be millions more working at low wages. Clearly full employment alone will not eliminate poverty.

No solvency- aff ignores people’s inability to work
Widerquist and Lewis, 97
(Karl Widerquist, Research Associate, The Jerome Levy Economics Institute of Bard College
and Michael A. Lewis, Assistant Professor, SUNY School of Social Welfare at Stony Brook November 1997 http://www.levy.org/pubs/ wp212.pdf)

There are many differing views on the cause or causes of poverty, including the physical inability to work, inadequate demand for labor, inadequate human capital, lack of work ethic, and single parenthood. There is no clear consensus about the relative importance of each of these possible causes. We discuss all of them and then discuss our own view. A. Physical lnabilitv to Work Some people are physically incapable of holding a job and, hence, providing for their own subsistence because of old age or disability. Disabilities can be the result of a birth defect or an injury. They can be either physical or mental, including retardation or mental illness. Although this is in some ways the most straight forward and widely accepted cause of poverty, there is considerable gray area as to how disabled one must be to be incapable of working (Dolgoff, Feldstein, and Skolnik, 1993). According to the House Committee on Ways and Means (1992), the official definition of disability is, Those unable to engage in any substantial gainful activity by reason of medically determined physical or mental impairment expected to result in death or that has lasted or can be expected to last for a continuous period of at least 12 months. Problems with this definition include, at what age is a person too old to work? At what I.Q. is a person considered mentally retarded? B. Sinale-Parenthood A single parent, especially of an infant, is faced with the problem of having full time demands on them outside of work. One cause of poverty could be that single parents cannot afford the time away from their children to work (Ellwood, 1988). Diane Pearce (1978) found that female headed families have become a disproportionate share of the impoverished population. William Kelso (1994) tells us that, between 1960 and 1991, the percentage of poor families headed by single women increased from 18.3% to 38.7%. There is disagreement, however, as to whether this should be viewed as a root cause of poverty or not (Mishel and Bernstein, 1994 and Garfinkel and McLanahan, 1986). If single parenthood does cause poverty, the root cause is whatever makes people become single parents. Are they people in unfortunate circumstances or people who have deliberately chosen their position? Some authors (Magnet, 1993, Murray, 1984, and Tanner 1996) argue that Welfare itself causes single parenthood by encouraging women who would not otherwise become single parents to do so. According to Marlene Kim (1997) while most single-parents with children under age six did not work, 46% of those who did work had incomes below the poverty line. We could conclude from this that the reason that so many single-parents do not work is because if they do they have a high probability of still being in poverty.

Full Employment 1NC

Capitalism makes poverty inevitable- it subordinates the poor to where they are caught in a cycle of poverty
Leonard, prof @ McGill University, 04
Peter Leonard, professor in the School of Social Work @ McGill University, 2004 Chapter 1; in Social Work in a Coporate Era: Practices of Power and Resistance edited by Linda Davies and Peter Leonard, Pg 12 par 1 par 3

The Welfare Recipient as a Class Subject From the abstraction of the global economy and the dynamic of class exploitation we can turn now to a more concrete example of how class subjects are constructed. The subject position of what might be called the welfare dependent, dependent, that is, on state resources, is of course problematic for the subject - it invariably involves many kinds of deprivations and abuses, material, social and psychological. The welfare dependent is the object of state monitoring, surveillance and control. But welfare dependency is also a problem for capital. The welfare recipient is dependent on the state and not on the labour market, directly. Being outside the process of exchanging labour for wages - the fundamental dynamic of capitalist appropriation - weakens (it is feared) the subject's allegiance to the moral necessity, and not just the material necessity, of paid work, and allows the subject to escape from the social discipline involved in daily paid labour. For most workers in capitalist societies, paid work is, in other words, experienced as a moral obligation, although this dependency on the labour market is re-defined by capital as independence. Through identification with the dominant discourse on work, the subject tends to believe that the ethical imperative to engage in paid labour is autonomously and freely chosen, a belief which we might call a primary ideological effect. One way of managing people's dependence on state welfare payments and legitimating increases in poverty as the price to be paid for increases in the rate of exploitation is to develop an appropriate subordinate social category to which subjects can be consigned, subjects who comprise the segment of the population most likely to be the clients of social workers. This category, variously called the underclass or the culture of poverty, classifies and contextualizes subjects described as welfare dependents, the chronic poor, or often 'bad mothers'. These categories may be seen as a discursive weapon of class struggle; like the nineteenth century categoies of the Residium, the pauper, and the deserving/undeserving, they serve the same or similar purposes. These purposes include directing attention away from the structural forces which determine the distribution of economic and social advantages, avoiding the contemplation of how the State reproduces these distributive mechanisms (by supporting capital's exploitative dynamic), and pathologizing those most injured by shits in the balance of class forces.

No spillover- The aff attempts to solve poverty at a domestic level and ignores poverty worldwide which trigger their impacts

Full Employment 1NC

No scenario- U.S. India Relations are inevitable
(SAPRA, SAPRA is Security and Political Risk Analysis, 1/17/05 http://www.usindiafriendship. net/viewpoints1/ram2.htm)

Indias importance lies in the fact that it brings to the partnership table exactly the attributes the US lacks, and desperately needs, in this competition with China. Look at the list: Indias demographics are even more favorable than Chinas. For starters as then Prime Minister Atal Bihari Vajpayee pointed out in his August 15, 2003 address from the Red Fort, India boasts over 600 million people in the working age group. This working force will overtake China's by 2025, and decisively so by 2050. Perhaps even more significantly, India edges China handily when it comes to intellectual capital. Its ability to produce first rate scientific, technological and managerial manpower equals, even exceeds, that of China, with the added plus of being able to "think" in English! To sum up India has exactly what the US lacks. And most importantly, from the US point of view, India can never be, will never be, an aggressive competitor the way China is. China has, for well over a decade now, bent its collective will to one single strategic objective, which it chases with trademark ruthlessness namely, to dethrone the US from its current position as the worlds sole acknowledged economic, technological and military superpower. One fact is obvious given the demographic disadvantage the US suffers, it can never win this competition; not if it tries to fly solo. From that fact, emerges another the only way the US can in fact win, is by teaming up with India. IT HAS NO OTHER OPTION. A US-India partnership, by whatever name it's called, is a winner; it is, in fact, the only possible partnership with the ability to offset the surge in China's geopolitical and economic powers. In a sense, mine is not an original thought a potential US-India alliance against China has been mooted before, by some scholars. But and this is a very, very important but most such scholars have, I submit, gotten hold of the wrong end of the stick. When they talk of such an alliance, it is normally couched in terms of military strategy; the general thesis invariably is that India will form a buffer between the US and Chinas emerging military might. That thinking is wrong -- absolutely wrong! Let me repeat -- there is no logical possibility of war between India and China, or the US and China. Or, more accurately, there is no possibility of military engagement. War there is, and war there will be but it is, and will be, a war fought on the battlefields of the economy, and of technology. And it is here that the US and India stand out as natural, logical even inevitable partners. Standing alone, each nation has its own limitations but together, they quite simply can NOT be beaten. Let us get one other fact clear a US-India partnership of the kind I outline will NOT be directed AGAINST China repeat, will NOT be directed AGAINST China -- or, in fact, any other country or group. It is only the naïve who will talk in terms of the US and India forming an anti-China alliance. Why? Simple! For both nations, there is too much to lose. The United States has very substantial interests in China. The volume of US-China trade, and of US investments is enormous and growing more so with each passing year. Simultaneously, the magnitude of Chinese support in financing US deficits completely rules out any inimical posture on the part of the US. Likewise, India-China trade is on an upward trajectory, and poised to grow further. In other words, it is in the economic self-interest of both these countries to refrain from inimical moves. So, if a US-India partnership is not against China, then what is it for? Simple: Self interest, self-preservation no doubt. But, more importantly, the partnership will seek to advance joint interests in value in a stable, democratic and prosperous world free from terrorism and the threats of weapons of mass destruction, drug and human trafficking. Such a partnership will, put simply, enable both the US and India to move forward in calibrated fashion, leveraging each others' complementarities in resource endowments and carrying them to their logical end.

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Obama checks- he is committed to an agenda of expanding relations
Sen, 08
(Ashish Kumar Sen, He is a journalist based in Washington D.C. He writes on international relations and foreign policy matters. 7/21/08, http://www.usindiafriendship. net/viewpoints1/obama-7-21-08. htm

In what areas would you like to see US-India relations grow? A. Across-the-board would be the short answer. But let me elaborate with a few examples. I believe that the US and India must work together to combat the common threats of the 21st century. We are both victims of terrorist attacks on our soil, and our counter-terrorism partnership is based on a shared interest in defeating the forces of extremism. Our common strategic interests call for strengthening US-India military cooperation. We share an interest in democracy and the rule of law, and can work to promote democracy and strengthen legal institutions in South Asia and beyond. We share an interest in combating global climate change, and the US and India can both do more to lead the world in securing a cleaner and more sustainable energy future. I intend to increase energy cooperation with India so we can together address the climate crisis that threatens our planet. We share an interest in combating the spread of disease, including HIV/AIDS. And we share an interest in combating global poverty, which is why I will seek the UN's goal of halving extreme poverty by 2015. We cannot allow the world's neediest to be left behind. India has enormous potential to contribute to a shared, sustained global economic growth. Our agenda should also include strengthening our economic relationship on a mutually beneficial basis. I would also like to see agriculture given a higher priority in our relations, as India pursues its goal of a 'Second Green Revolution'. I would like to see a ramp-up in higher education collaboration in fields like science, public health and information technology.

Non unique- India has already undergone economic liberalization
Phanikiran, No date
(Phanikiran, Writer for Chillibreze a content and design service provider catering to the needs of a global clientele No date http://www.chillibreeze.com/ articles/India-liberalization. asp#a

The Government of India started the economic liberalization policy in 1991. Even though the power at the center has changed hands, the pace of the reforms has never slackened till date. Before 1991, changes within the industrial sector in the country were modest to say the least. The sector accounted for just one-fifth of the total economic activity within the country. The sectoral structure of the industry has changed, albeit gradually. Most of the industrial sector was dominated by a select band of family-based conglomerates that had been dominant historically. Post 1991, a major restructuring has taken place with the emergence of more technologically advanced segments among industrial companies. Nowadays, more small and medium scale enterprises contribute significantly to the economy.

By the mid-90s, the private capital had surpassed the public capital. The management system had shifted from the traditional family based system to a system of qualified and professional managers. One of the most significant effects of the liberalization era has been the emergence of a strong, affluent and buoyant middle class with significant purchasing powers and this has been the engine that has driven the economy since. Another major benefit of the liberalization era has been the shift in the pattern of exports from traditional items like clothes, tea and spices to automobiles, steel, IT etc. The made in India brand, which did not evoke any sort of loyalty has now become a brand name by itself and is now known all over the world for its quality. Also, the reforms have transformed the education sector with a huge talent pool of qualified professionals now available, waiting to conquer the world with their domain knowledge

Full Employment 1NC


The threat is hugely exaggerated- there is almost no impact to terrorism
John Mueller, Professor of Political Science at Ohio State, May 2005,International Studies Perspectives, Volume 6 Issue 2 Page 208-234, Simplicity and Spook: Terrorism and the Dynamics of Threat Exaggeration

The capacity for small bands of terrorists to do harm is far less than was the case for the great countries behind international Communism who possessed a very impressive military (and nuclear) capacity and had, in addition, shown great skill at political subversion. By contrast, for all the attention it evokes, terrorism, in reasonable context, actually causes rather little damage and the likelihood that any individual will become a victim in most places is microscopic. Those adept at hyperbole like to proclaim that we live in "the age of terror" (Hoagland, 2004). However, the number of people worldwide who die as a result of international terrorism is generally only a few hundred a year, tiny compared with the numbers who die in most civil wars or from automobile accidents. In fact, until 2001 far fewer Americans were killed in any grouping of years by all forms of international terrorism than were killed by lightning. And except for 2001, virtually none of these terrorist deaths occurred within the United States itself. Indeed, outside of 2001, fewer people have died in America from international terrorism than have drowned in toilets.24 Even with the September 11 attacks included in the count, however, the number of Americans killed by international terrorism since the late 1960s (which is when the State Department began its accounting) is about the same as the number killed over the same period by lightningor by accident-causing deer or by severe allergic reaction to peanuts. In almost all years, the total number of people worldwide who die at the hands of international terrorists is not much more than the number who drown in bathtubs in the United States.

2. Their internal link is middle east employment not u.s. employment- Their Burrows in 09 evidence indicates unemployment in the middle east helps recruit terrorist

3. Nuclear terrorism is improbable
Chapman, 08
(Steve Chapman, Steve Chapman is a columnist and editorial writer for the Chicago Tribune. http://www.creators.com/ opinion/steve-chapman/the- implausibility-of-nuclear- terrorism.html)

Stealing some 100 pounds of bomb fuel would require help from rogue individuals inside some government who are prepared to jeopardize their own lives. The terrorists, notes Mueller, would then have to spirit it "hundreds of miles out of the country over unfamiliar terrain, and probably while being pursued by security forces." Then comes the task of building a bomb. It's not something you can gin up with spare parts and power tools in your garage. It requires millions of dollars, a safe haven and advanced equipment plus people with specialized skills, lots of time and a willingness to die for the cause. And if al-Qaida could make a prototype, another obstacle would emerge: There is no guarantee it would work, and there is no way to test it. Assuming the jihadists vault over those Himalayas, they would have to deliver the weapon onto American soil. Sure, drug smugglers bring in contraband all the time but seeking their help would confront the plotters with possible exposure or extortion. This, like every other step in the entire process, means expanding the circle of people who know what's going on, multiplying the chance someone will blab, back out or screw up.