Wednesday, November 28, 2012

Comprehensive Immigration Reform: A Model of Forgiveness

Let’s be honest.  Everyone knows that comprehensive immigration reform entails amnesty, and ultimately citizenship, for more than 10 million Latino/a illegal immigrants residing in the U.S.  Amnesty means that these individuals would be pardoned of the crime of entering the U.S. illegally.

In the holiday spirit, amnesty (temporary or complete forgiveness of a lawful obligation) could usefully be applied in some or all of the following ways:

Forgiveness of sufficient principal on outstanding home mortgages to lift all homeowners above water, i.e., their homes would be worth at least as much or slightly more than their mortgages.

One year moratorium (or forgiveness), renewable if poor economic conditions persist, on payments of principal and interest on student loan debt.

Ditto on credit card debt.

Ditto on back federal taxes.

[Fill in other debts.]

Why single out only one group of people for amnesty?  Fair is fair.  Let’s give others the same break.  Reducing debt obligations on millions of Americans would put more money in the pockets of individuals and households with which to buy goods and services.  The increase in aggregate demand would boost the economy.  Why force foreclosures and debt collectors on debt-lade  households when moratoria and debt forgiveness are both more humane and economically beneficial?



Tuesday, November 27, 2012

Who Should Pay To Maintain The Flow Of Oil Through The Strait Of Hormuz?

For all intents and purposes, U.S. military forces provide the security that insures the uninterrupted flow of oil through the Strait of Hormuz.

An important new development in oil and gas production, hydraulic fracking, will soon put the U.S. on the cusp of energy independence.

Near-term U.S. energy independence makes this the perfect time to transfer the burden of keeping the Strait of Hormuz open.  Let that fall upon the chief consumers of Middle East oil.

Japan imports about 4.4 million barrels of oil a day (mb/d), 89% from the Middle East
China 5.3 mb/day, 40% ME
India 3.1 mb/day, 63% ME
South Korea 2.5 mb/d, largely from the ME.

The U.S. should transfer the protection of the Strait of Hormuz to these countries.  Let them assemble a joint naval force and pay for it themselves.

The benefits are numerous.  The U.S. Navy will have more resources to facilitate President Obama’s pivot to Asia, especially if Congress reduces overall defense spending.  U.S. taxpayers will stop subsidizing a portion of the total cost of oil consumption by Asian countries.  The U.S. will not be caught between rival Arab factions and countries.  In the absence of large forces stationed in the region, the U.S. is less likely to be drawn into another Middle East conflict.