Thursday, March 31, 2011

Libya's Humanitarian Effort

On March 17th 2011, the United Nations Security Council passed Resolution 1973, which called for a no fly zone over the northern Africa country of Libya. But as the fighting continues, thousands of people will lack food and other necessities they need to live.

In a closed meeting to the General Assembly, Secretary-General Ban Ki-moon said “there is an urgent need for humanitarian access” in Libya. But as soon as the rebels started the fighting, Qadhafi’s forces have been on the eastern and western borders stopping humanitarian agencies from entering the country.

As the no fly zone has been enforced, fighting continued between the Libyan government and the rebels, an entire week passed until three UNHCR trucks were able to enter the country delivering 18.5 tons of pulses (seeds that contain a variety of nutrients), plus sleeping mats and blankets.

With 23 people on the ground, the World Food Program (WFP) has distributed almost 11 thousand metric tons of food within the country and the surrounding camps, but they have only been able to enter the eastern part of the country. Abeer Etefa, Senior Regional Public Information Officer for WFP, told me food has been brought to “7,000 internally displaced persons in Eastern Libya.” But with the ongoing conflict “we face challenges in access to some cities especially in the contested areas. We hope to be able to deploy more teams on the ground as soon as the security situation allows and a safe humanitarian corridor is established.”

As the fighting increased, replenishing the food in the country has been difficult. Abeer told me 95 percent of the shops have been closed, making it more difficult for people to meet their basic needs. As the conflict continues, more people will need to receive aid.

While the total operation is costing $39 million dollars, an additional $4 million is being used to build better communications systems for non-profits working in the country. For the next three months, WFP plans to feed 600,000 people in Libya, and an additional 280,000 and 180,000 to the people living in the camps.

Tuesday, March 22, 2011

No Traffic Light Ahead

President's have always justified using force in different ways, whether for humanitarian, economic, or to protect the country. But when the decision is made to use the military, there needs to be clear goals. If you are positive military action is necessary, it should be obvious what you want to get out of it. In Libya though, no one seems to know when the strikes will stop or what will be accomplished by them.

As a communist country, Libya has been a thorn in America's side for decades. The jabs have been over its nuclear weapons, and the times Qadhafi tried to take over other countries in Africa. But recently things were going well. Just a few years ago Qadhafi decided to let inspectors to look at his nuclear facilities and accepted responsibility for the
Lockerbie bombing. But then he started killing innocent protestors.

I can't help but remember what President Obama said during his speech when he accepted the Nobel Peace Prize. "To say that force may sometimes be necessary is not a call to cynicism -- it is a recognition of history; the imperfections of man and the limits of reason." With all the protests going on in the Middle East and North Africa, it was only a matter of time before it became violent, and in Libya's this case the military was needed.

While agreeing to use the military, what bothers me is that there does not seem to be an end in sight. General Ham, who is in charge of this operation, has said there are no plans to go after Qadhafi and its mission is to protect the civilians. But how do you protect civilians without attacking the person who is trying to kill them? At one of the daily briefings, the UN spokesman said they have not decided whether the rebels were going to be considered citizens or casualties of war, because, technically, this isn't a war.

One of the country's leading military experts, (and one of my former professors) Michael O' Hanlon, told me in an email that "I don't know where it ends but I don't favor a military operation to overthrow Qaddafi". He also pointed out that the mission has already gone beyond a no fly zone because Libya's tanks have been taken out. But even without tanks, the government forces are much better armed than the rebels fighting them.

It is also unclear how many people are actually fighting against the government. While next door in Egypt the military held a non-violent coup, there have only been a handful of military officers who sacrificed themselves and chose not to fight. But if Qaddafi is going to be forced from office, the majority of the Libyan people are going to have to sacrifice the most.

Qadhaffi has shown no signs of slowing down and has placed his troops on the country's borders where thousands of civilians are trying to escape. To make matters worse, UN workers are not able to get into the country where there are even more displaced people who need help.

There doesn't seem to be much middle ground anymore. At this moment, both sides seem to be waiting for the other to stop, and no one is putting on the breaks. That's why the coalition supporting this operation is going to have to decide whether or not to try and find Qadhaffi or pull out.

Tuesday, March 15, 2011

Add Value To Your Buck

It's almost that time of year again, tax season! OK, maybe I'm exaggerating on how exciting this is. The US tax code is longer than War and Peace, but just like the classic book, almost no one can understand it, and almost no one today has read it. But someone has to read the code in order to figure out how much money people owe their government. If only there was a simpler way…

Debating tax policy is almost as bad as actually paying them, but here I go. The last time any serious tax reform occurred was during the Reagan administration. The Tax Reform Act of 1986 reduced individual and corporate taxes almost by half, and indexed those standards for inflation. The number of tax brackets were also reduced. But the Act also included the Alternative Minimum Tax (AMT) which only complicated the code more. The more complicated the code became, the more loopholes were there for people to take advantage of. While less money was coming in, the government was spending more, which increased the national debt. The code has become so complicated, and hard to enforce, only 47% of American's who file for federal taxes actually pay them.

President Obama has said he wants to reform the tax code to make it easier for Americans. But what's the best way to do this? There are a lot of ideas out there. Some say there should be a flat tax where everyone pays the same amount. But that's not progressive. It can also hurt those who do not have a lot of money, while people who earn more won't be paying their fair share. Another idea is to eliminate loopholes and certain credits. This could work, but doesn't go at the heart of the problem, which seems to be the way we calculate how much American's need to pay.

One idea that works for forty other countries (mostly in Europe) is the Value Added Tax (VAT). Instead of pushing a sales tax onto the consumer, items are taxed at a percentage as the product is put together. So if the VAT was 10% it would work like this:

- The manufacturer pays $1.00 for the raw materials, certifying it is not a final consumer.

- The manufacturer charges the retailer $1.20, checking that the retailer is not a consumer, leaving the same gross margin of $0.20.

- The retailer charges the consumer $1.50 + ($1.50 x 10%) = $1.65 and pays the government $0.15, leaving the gross margin of $0.30.

The government gets paid each step of the way, and it is clear how much everyone owes so it is easy to enforce. Overall this reduces the costs to the consumer because they don't have to pay so much at the end. The French implemented a VAT in 1954 and today it counts for half of the government's income.


But there are opponents. People argue implementing a VAT can cause large amounts of fraud such as false claims. There have been instances where the individual or business argues that they did not know they had to pay a tax on a certain item. Then of course there is the old fashion "hidden sale" where the consumer is charged something that is completely made up.


Despite those concerns, studies show that if a 5% VAT was implemented, and covered 80% of goods people consume, it could generate roughly $260 billion. The Virginia Tax Review estimates that a VAT of 25% could pay for health care reform, exempt millions of American families from income taxes and still raise the revenues necessary to cut into the budget deficit.


One of the reasons American's are less inclined to pay taxes now is because we became a individualistic society. When FDR was President, there was a "we are in this together" philosophy. But that has gone away. The book Bowling Alone explains it pretty well. But when you are paying taxes, you are paying for the freedoms that people in the Middle East and North Africa are fighting for. Whether you are rich or poor, everyone benefits one way or another, and those who don't pay their taxes are cheating their fellow citizens.

Just because something is European doesn't make it scary. Paying taxes is important. It goes to Veteran Hospitals, public parks, schools, and keeps our food and water clean. But paying for these services doesn't have to be a burden. Instituting a VAT could bring in more money for areas that all Americans use, and everyone could get a bigger bang for their buck.



Thursday, March 10, 2011

Union Politics

Should it be surprising that 62% of American's oppose the elimination of collective bargaining for unions? Without this tool, young children would still be working in factories, people in factories would not be paid as well, and today's health care costs would be much much higher on families. While most American's don't seem to be lost in the madness, I haven't seen one article or report trying to explain what the problem is.

Two weeks ago, Governor Scott Walker said on Meet The Press: "For us to balance the $3.6 billion deficit we have -- but not only now, but to ensure we can continue to do that in the future so our kids don't inherit these same dire consequences -- we've got to have assurances. And over the past two weeks, even after they made those promises, we've seen local union after local union rush to their school boards, their city councils, their technical school boards and rush through contracts in the past two weeks that had no contributions to the pension and no contribution to health care."

Besides the fact Wisconsin's budget office said the state would be fine, Walker is playing politics (and losing), while he tries to make it sound like unions have been the problem. But really, no one has been responsible. Unions will always ask for more money because it's their job. And it's the Governors job to negotiate those costs down. But I don't believe the system is the problem. As Walker points out: "Under Barack Obama, he presides over a federal government where most federal employees do not have collective bargaining for, for benefits, nor for pay." But federal workers have some of the best benefits and get paid more than private employees. Plus, if public unions are the only problem, why have private sector health costs almost doubled in the past ten years?

States are facing fiscal problems mainly because of pensions and benefits which can't be paid for. It is a problem that was seen coming (whether the financial crisis occurred or not) and no one did anything about it. The stimulus package allocated money for companies like IBM to develop programs that would allow doctors to share information on patients. This would allow them to compare and figure out which treatments work best, thus reducing costs. Plus, it saves money on paper work, trees, and you won't have to worry about not being able to read your doctors handwriting anymore. Obviously, this hasn't been implemented yet, but experts agree it would be a step in the right direction.

The vote taken by Wisconsin's legislature last night was a bad political and policy move. It won't solve the problem of rising costs, and it pins one person, one party, against another, which voters never like to see. Walker may think he's winning, but instead he's acting like a putz.

So now that you have my opinion, what's yours? How would you lower health care costs? Or do you think collective bargaining is a problem?