Tag: wasteful

Can America Still Lead?

LONDON—The first week of August 2011 will be remembered as a singularly irrational, wasteful and shameful moment in the political and economic history of the United States. It reflected much of what is wrong with the priorities of our political elites and the obsessions of those who now hold effective veto power over our government.

It began with the world hanging on to every development in the debt-ceiling negotiations as it fretted over whether Washington’s dysfunction would lead to American default and global calamity. Even robustly pro-American commentators and politicians wondered aloud if the United States could still govern itself.

Yet by Thursday, even though default was averted through a deal that largely capitulated to Republican demands, calamity arrived anyway. Around the world, markets imploded. The debt-ceiling crisis artificially created by right-wing American politicians didn’t matter nearly as much as the dangerous fragility of the global economy and Europe’s far more profound debt crisis.

And to complete this portrait of fecklessness, Standard & Poor’s, which once happily and profitably stamped triple-A ratings on rip-off mortgage-backed securities, ended the week by downgrading the federal government’s creditworthiness. S&P once caved to pressure from Goldman Sachs in its rating of private securities, yet it refused even to pause in its dissing of American creditworthiness despite the Obama administration’s successful challenge to some of its numbers. We need to learn far more about what forces pushed S&P to this outlandish and highly politicized decision.

In our fixation with a deeply ideological debate over government spending, we have lost track of what really matters. Washington, acting in concert with other nations, should be focused on creating jobs and restoring growth. It needs to deal with a housing mess and personal debts that have destroyed the balance sheets of millions of households. It needs to increase consumer purchasing power. And it should be expanding public investments in the nation’s future, not cutting them.

Yet the world is looking to the United States to help power a recovery and provide leadership at a time when we are suffocatingly inward-looking—and when ultraconservatives are so dogmatic about slashing government that they are prepared to boot away our nation’s influence. Default? No problem.

“We weren’t kidding around, either,” Rep. Jason Chaffetz, R-Utah, told The Washington Post. “We would have taken it down.” He said it with pride, yet the “it” involved the American economy and America’s standing around the globe. This is patriotism?

Watching the week that was from abroad has been sobering, and you wonder if President Obama fully grasps how much disappointment there is among the tens of millions around the world once so hopeful that he would restore the United States to a position of responsible global leadership.

America’s friends overseas know that the debt crisis was instigated by Obama’s opponents. Yet they worry now about how strong Obama is, whether he will draw lines and if he can seize back the initiative.

On Friday, I met with a leading British Conservative, a rising member of Prime Minister David Cameron’s cabinet who spoke of his liking for Obama. His take on the politics of the debt fight perfectly captured the ambivalence of those who genuinely wish Obama well.

“As a political strategist, he is often underestimated,” this shrewd politician said of Obama. “He’s playing a longer game.” While “the Republicans have allowed the Tea Party tail to wag the dog … Obama will be able to say, ‘I believe in spending cuts, but I also believe that the richest in the country should pay a little more.’” Republicans will counter by arguing for steep cuts in Medicare and other popular programs, but he noted that where public opinion is concerned, this will give Obama the high ground.

Then came the downside: that Obama “seems to be a passive figure at a time when the world needs a leader.” Obama and his advisers should pay heed to this quietly devastating observation. Even if they’re right about where Obama is positioned politically, they have to worry whether all the concessions and maneuvering undercut a president’s most important asset: an earned image of strength rooted in principle.

The central question is whether the United States is still capable of leading the world out of economic turmoil. Obama’s response to this challenge will have far more impact on both the country’s future and his own re-election than all the sloganeering, polling and positioning put together.

E.J. Dionne’s e-mail address is ejdionne(at)washpost.com.

U.S. Money Improperly Used in Afghanistan

While debt-ceiling debates rage on in Washington, the Government Acountability Office (GAO) may have found a genuine source of government waste — aid to Afghanistan by the Department of Defense (DOD). Reports indicate that the distribution of direct aid by the United States government in Afghanistan might be profoundly wasteful and that, in some cases, the Department of Defense violated protocol in how it awarded funds.

Apparently U.S. contributions to Afghan organizations increased from more than $665 million in fiscal year 2009 to around $2 billion in fiscal 2010; as the GAO put it, “The United States more than tripled its awards and contributions of USAID and DOD direct assistance funds to the Afghan government.”

The trends go beyond increases in expenditures. The GAO also pointed out some large inefficiencies in the distribution of money to organizations in Afghanistan. USAID and DOD — the two major direct contributors to Afghan reconstruction examined by the report — are usually regulated by the World Bank and the United Nations Development Program. The GAO report, however, indicates that these and similar distributors of direct assistance have “not consistently complied with its multilateral trust fund risk assessment policies in awarding funds.”

The violations seem to be related to risk assessments of recipient organizations. The report states that in the case of one violation in March 2010, “USAID did not conduct a risk assessment before awarding an additional $1.3 billion to the World Bank” for Afghan organizations. It seems that distributors of U.S. money in Afghanistan broke protocol by failing to adequately assess the risk of giving money to some organizations.

This report comes on the same day the Wall Street Journalreported that U.S. financial auditors were dissatisfied with the level of cooperation by the Afghan government in multiple investigations. U.S. agencies are concerned by the lack of aggressive prosecution of suspected Afghan money launderers who may have allowed “billions of dollars to slip out of sight.

As Congress nitpicks for specific spending cuts, they might want to make sure that U.S. funds are being distributed abroad with at least a whiff of accountability.