AT Deficits DA - Michigan 7 2023 BFHGR

Aff Answers
Fiscal Crisis DA
2AC --- N/U --- Spending Inev.
Spending and deficit increases are inevitable --- makes the disad non-unique
Cassidy 6/5/23
(John, “What Does the Debt-Ceiling Agreement Say About the U.S. Political System?,” pg online @ https://www.newyorker.com/news/our-columnists/what-does-the-debt-ceiling-agreement-say-about-the-us-political-system //um-ef)
Last Thursday night, when the U.S. Senate passed, by a vote of sixty-three to thirty-six, the Fiscal Responsibility Act of 2023, raising the nation’s debt ceiling until January 1, 2025, and capping some federal spending for a couple of years, it effectively ruled out the possibility of a U.S. debt default, at least for now, and brought a long-running political saga to an end. President Biden, in his first televised address to the nation from the Oval Office, hailed the bipartisan agreement as a sign of our political system’s health, saying, “I was told the days of bipartisanship were over and that Democrats and Republicans could no longer work together.” He praised Kevin McCarthy, the Republican Speaker of the House, who led the negotiations with the White House. “We were straightforward with one another, completely honest with one another, and respectful with one another,” Biden said. “Both sides operated in good faith. Both sides kept their word.” If we judge by Wall Street’s reaction to the debt-ceiling crisis, most investors agree with Biden that, for all the noise and theatrics that emanate from Washington, the American political system is still capable of carrying out some basic tasks that require bipartisanship, such as resisting the urge to blow up its golden goose—the U.S. bond market. During the past few weeks, as the “X-Date” approached, the markets remained pretty calm, indicating faith that a debt default wasn’t a serious possibility. And, on Friday, following the vote in the Senate, the Dow climbed seven hundred points. (To be sure, a strong payrolls report for May also contributed to this.) Amid all this good cheer, the debt-ratings agency Fitch sounded a discordant note. A couple of weeks ago, when the Biden-McCarthy talks appeared to be stalling, Fitch put the U.S. government’s debt on negative watch for a possible credit downgrade. (Such a downgrade has occurred only once: after the 2011 debt-ceiling crisis, Fitch’s rival S. & P. lowered the country’s rating from AAA—the highest possible grade—to AA+.) On Friday, Fitch announced that it would not be reversing its decision to put U.S. debt on a negative watch. “Reaching an agreement despite heated political partisanship while reducing fiscal deficits modestly over the next two years are positive considerations,” the agency said. “However, Fitch believes that repeated political standoffs around the debt-limit and last-minute suspensions before the x-date (when the Treasury’s cash position and extraordinary measures are exhausted) lowers confidence in governance on fiscal and debt matters.” At Friday’s White House press briefing, Press Secretary Karine Jean-Pierre was asked about Fitch’s announcement. She pushed back on Fitch’s concerns, saying the debt-ceiling agreement insured that the U.S. government would continue to meet its financial commitments, and adding that the market for U.S. Treasury bonds “remains the safest, the deepest, and the most liquid market in the world.” This was clearly a prepared answer, and it suggested that the Biden Administration is irked that Fitch hasn’t reversed its decision. That’s an understandable reaction, especially given that, as Biden mentioned in his television address, he has managed to get other significant bipartisan legislation passed during his tenure, including a trillion-dollar infrastructure bill in 2021, and the two-hundred-and-eighty-billion-dollar chips and Science Act, in 2022. Biden’s world view, which he has stuck to doggedly since launching his Presidential candidacy, in 2019, is that, even as full-scale partisan warfare rages on social media and cable news, there are still enough reasonable people in Congress, and enough moderate voters in the country, who can be mobilized to keep the show on the road, and even get some constructive things done, such as subsidizing green energy and reducing the cost of insulin for seniors. (The debt-ceiling agreement preserved both of these policies.) Inside the 2020 Biden campaign, this argument got reduced to the mantra “Twitter isn’t real life.” But, to the President himself, fostering bipartisanship is a personal mission. “No matter how tough our politics gets, we need to see each other not as adversaries but as fellow-Americans,” he said in his television address. “Treat each other with dignity and respect. To join forces as Americans, to stop shouting, lower the temperature, and work together to pursue progress, secure prosperity, and keep the promise of America for everybody.” Admirable sentiments. But the fact remains that the House Republicans recklessly manufactured a crisis to pursue their political ends and ended up achieving some of them. After vowing for months not to negotiate about the debt ceiling, the White House was forced to reverse course and make a series of concessions to reach a deal. As I argued last week, the agreement could have been a lot worse, but the process by which it was reached—extortion, basically—supported Fitch’s argument for staying on high alert, namely that “there has been a steady deterioration in governance over the last 15 years.” Fitch is essentially arguing that the U.S. political system is suffering from slow rot. As well as pointing to the repeated episodes of brinkmanship over the debt ceiling, the ratings agency cited “increased political polarization and partisanship as witnessed by the contested 2020 election,” and how a “failure to tackle fiscal challenges from growing mandatory spending has led to rising fiscal deficits and debt burden.” There can be no wholly reassuring response to these statements. Last week, as federal judges continued to sentence to prison participants in the January 6th riot on Capitol Hill, the man who instigated the violent attack was flying to Iowa and leading the 2024 G.O.P. Presidential primary polls by about thirty points. And, although the debt-ceiling agreement imposed tight caps on non-defense discretionary spending until fiscal 2025, it didn’t really affect the biggest drivers of higher deficits and debts, which include higher spending on contributory entitlement programs, the vast Pentagon budget, and a long-running failure to raise taxes to match rising spending, by, for example, taxing wealth or eliminating the upper income limit on Social Security contributions. Last month, the Congressional Budget Office predicted that the budget deficit would rise from 5.8 per cent of G.D.P. this year to 6.9 per cent in 2033, despite assuming that the economy will grow steadily during that period. Such a trajectory would be unprecedented outside national emergencies (such as wars and pandemics) and economic slumps, and the budget-ceiling deal seems unlikely to alter it much. If the Republicans return to power, they are likely to make the fiscal outlook considerably worse by cutting taxes again, especially taxes on the rich, which is what they did during the Reagan, George W. Bush, and Trump administrations. When Republicans are out of office, they talk about reducing the deficit; when they have power, they introduce policies that increase it. This is a long-standing pattern, and there’s no compelling reason to assume that it will change soon. Fitch failed to mention this ongoing threat to fiscal stability, but it’s a key feature of the deterioration in U.S.-government finances over the past forty years, and the ratings agencies should be willing to point this out. Financial irresponsibility in Washington isn’t a symmetrical phenomenon.
2AC --- No Spending Limits Now
The debt deal didn’t do anything --- no unique limitations on spending
Sutton 5/30/23
(Sam, “How spending cuts will hit the U.S. economy,” pg online @ https://www.politico.com/newsletters/morning-money/2023/05/30/how-spending-cuts-will-hit-the-u-s-economy-00099190 //um-ef)
But there was no appetite from either party to address big ticket items like Social Security, Medicare or defense spending. And once it became clear that the White House would largely block any raid on funds appropriated through Biden’s landmark legislative accomplishments — the Inflation Reduction Act and CHIPS — it assured that the macroeconomic impact of any deal would be negligible. Brian Riedl, a senior fellow at the Manhattan Institute and former chief economist to retired Ohio Republican Sen. Rob Portman, on Sunday said the headline caps on regular, non-emergency discretionary spending have so many “caveats and asterisks [that] may render these figures mostly meaningless.” (That underscores why the deal has raised the hackles of many policymakers on the GOP’s right flank — including Florida Gov. Ron DeSantis.) The cuts amount to “a rounding error” of GDP, Riedl told MM.
2AC --- No Link Threshold
No threshold for the link --- no one knows when borrowing is TOO MUCH --- U.S. can continue to borrow and increase spending
Wessel ‘20
(David, “How worried should you be about the federal deficit and debt?,” pg online @ https://www.brookings.edu/articles/how-worried-should-you-be-about-the-federal-deficit-and-debt/ //um-ef)
Is debt at that level a problem? For now, it isn’t. The U.S. government borrows trillions of dollars a year at very low interest rates on global financial markets, and there doesn’t appear to be much private sector borrowing that is crowded out by U.S. Treasury borrowing right now. Indeed, the fact that global interest rates remain very low while governments around the world are borrowing heavily to fight the COVID-19 recession suggests that there is still a lot of savings around the world, more than is needed to finance private investment. No one really knows at what level a government’s debt begins to hurt an economy; there’s a heated debate among economists on that question. If interest rates remain low, as currently anticipated, the government can handle a much heavier debt load than was once thought possible. And the recent increase in borrowing—while enormous—is a temporary increase intended to combat an emergency; it changes the level of the debt, but not its long-run trajectory.
No Financial Crisis
No financial crisis
McGagh 17 — (Michelle McGagh, 7-18-2017, "Now is a ‘Golden Era’ of Economic Stability," Citywire Money, http://citywire.co.uk/money/now-is-a-golden-era-of-economic-stability/a1034341)
Investors may be wary about the elevated state of the stock market but M&G Investments manager Eric Lonergan said they will look back at this time as a ‘golden era of stability’. Citywire A-rated Lonergan, who is head of multi asset research at M&G, said ‘behavioural bias’ has kept investors trapped in a pessimistic mindset where they expect another recession, despite facts to the contrary. He believes the current economic backdrop in the UK, US, Japan and Germany is ‘near perfection’ with ‘stable and persistent growth, close to full employment and low inflation’, which would not have been dreamed of 20 years’ ago. ‘That is economic perfection,’ he said. ‘But you have this narrative of secular stagnation and that we will all be replaced by robots.' He added: '2% US GDP growth is not stagnation.’ Lonergan also believes investors are too pessimistic about technological advances that are being made, with the rhetoric geared towards job losses. ‘People see the jobs that may be lost but not those that may be created. If you look at economies with the greatest technological diffusion, they are close to full employment.’ Lack of growth and robots causing widespread unemployment are ‘two hypotheses that are false’, said Lonergan. ‘We have secular stability, where you have stable and consistent growth.’ This distortion in investors’ outlook is due to the residual memories of the 2008 financial crisis, which has left them ‘mentally scarred’, believes Lonergan. ‘Since the financial crisis, the system has been reacting like an organism that has been attacked, and it is trying to heal itself and prevent a reoccurred,’ he said. ‘The mental scars associated with 2008 will last a long time, which suggests when people look back [on today] it will be seen as a golden era of stability. But people are not thinking about that, people are thinking about 2008.’ Exploiting behavioural bias is the way which Citywire A-rated Lonergan aims to deliver returns through the three multi-asset funds he manages, M&G Episode Defensive + , and co-manages; Episode Growth + , and Episode Macro + . He argued that multi-asset manager cannot claim to have a ‘research edge’ as they ‘operate in the most information efficient part of the market’ and so he has turned to human psychology, which he described as ‘the least objective and analysed part of the financial market’. ‘We do not believe in forecasts and put a lot of emphasis on human psychology: how people think and feel and the errors they make, and on their perception of risk,’ he said. This has led to a contrarian investment approach where the areas that are seen as most at risk are the most attractive. ‘Everyone talks about the financial crisis, which means the probability of its happening again is very low, and that is a huge opportunity for investors,’ he said. Lonergan said he benefited from holding US banks post-crisis when people were concerned that they were too risky. Following the crisis, they were forced to increase their capital ratios and more conservative management teams were brought in, de-risking the banks and the investment. ‘You end up with a banking system that is de-risked and regulation that is on the side of the investor,’ he said. ‘People do not want a recession to happen again and when people are most afraid of a recession, the probability of it happening is at its lowest – that is the psychology of probability.’
AT: NATO Impact
NATO strong now, invasion of Ukraine united members
Nigel Gould-Davies, 23 (3/8/2023; Senior Fellow for Russia and Eurasia at the International Institute for Strategic Studies; “The Astonishing Endurance of Unity on Ukraine”; Foreign Affairs; https://www.foreignaffairs.com/ukraine/astonishing-endurance-unity-ukraine) //LVL
Ever since Russia launched its invasion of Ukraine, many analysts have worried about the durability of Western support for Kyiv. Not a week goes by without new reports of weakening resolve, war fatigue, or cracks in the coalition. Yet a year into the conflict, the West’s commitment to Ukraine is undiminished—and, measured by aid delivered, stronger than ever.
This unity is unprecedented and underappreciated, and it far surpasses the strongest periods of transatlantic cohesion during the Cold War. It runs across states, societies, and companies. Every EU and NATO member state except Hungary has rallied behind Ukraine, despite deep divisions that preceded the war—over Poland’s authoritarian drift, for instance, and the United Kingdom’s ill-tempered exit from the European Union. Troubled economies roiled by war-fueled inflation have not led any major political party to argue that the costs of backing Ukraine are too high or that it is time to accommodate Russia’s demands. Pro-Ukraine policies have passed electoral tests in Italy and Sweden, where governments have turned over but support for Kyiv has endured. French President Emmanuel Macron beat off a challenge from far-right opposition leader Marine Le Pen, who came to see her long-standing ties to the Kremlin as a liability and destroyed thousands of leaflets picturing her with Russian President Vladimir Putin.
This overwhelming official support for Ukraine reflects widespread popular sympathy across Western society, visible in the Ukrainian flags, stickers, and badges displayed in homes and businesses. Many retail outlets now invite customers to donate in support of Ukraine. Thousands of families have taken in refugees. The war has produced almost none of the polarization, conspiracies, or willful disregard for evidence that have beset other major events, such as the outbreak of COVID-19 or the 2020 U.S. presidential election. Russia’s narratives about the war have gained no real purchase. Among the wider public, empirical truth and moral clarity have returned to political discourse.
Most remarkable of all, Western support for Ukraine has spread across the private sector. Companies from industries as varied as oil and tech began to withdraw from Russia within days of its invasion. In the past, the private sector complied with sanctions regimes but privately argued for their easing. Now they voluntarily reinforce such restrictions. Those companies that remain in Russia face growing pressure to follow suit.
The extraordinary breadth and depth of Western unity is a product of a rare alignment of threats: Russia’s invasion of Ukraine challenges the West’s security and sense of morality in equal measure, something that no conflict has done since World War II. This alignment has enabled Western countries to act faster and take greater risks in defense of Ukraine—and offers hints about how such cohesion and resolve can be maintained.
COLD WAR, LUKEWARM ALLIANCE
Throughout the Cold War, divisions within and between NATO countries strained the alliance. At no point did Western states, societies, and companies share a common view of the Soviet threat or the appropriate response to it. This was true even in the Cold War’s most dangerous phase in the early 1980s. Initiatives such as the Reagan administration’s antimissile defense program openly alarmed Western Europe. Even Washington’s closest ally, the United Kingdom, resisted U.S. extraterritorial sanctions to prevent the building of the Siberian gas pipeline to Europe. Millions of Europeans marched against the deployment of U.S. intermediate-range nuclear weapons in their backyard. Major European political parties adopted antinuclear policies. And many observers worried that these divisions could decouple Western Europe from the United States, splitting the Atlantic alliance.
Intra-Western divisions since February 2022 pale by comparison. They are spats, not splits—mostly disagreements over tactics, timing, and rhetoric—that are amplified by social media but quickly resolved. The controversy over whether to send tanks to Ukraine is a good example. In January 2023 Germany refused to provide Leopard 2s but changed its mind within days. Several other states have committed heavy materiel to Kyiv. In a pattern repeated since the start of the war, the unthinkable became doable.
The West has stayed unified even as it has radically hardened its position. It has escalated military support to Ukraine and economic coercion of Russia and has devised new policy instruments, such as a price cap on Russian oil, to do so. The EU is weaning itself off Russian energy. In December 2022, Germany announced that it would stop buying oil from Russia in 2023—an astonishing about-face for a country that had made gas imports from Russia a central part of its economic strategy.
The West is also locking in its hardened position by permanently changing its institutions. Finland and Sweden are set to join NATO, which has adopted a new Strategic Concept that will increase the alliance’s rapid-reaction force from 40,000 to 300,000 troops. The EU has accepted Ukraine’s candidacy for membership and is arming Ukrainian troops through the European Peace Facility fund. In addition, Western countries are preparing major new demands on Russia, including accountability for war crimes, reparations for Ukraine’s reconstruction, and the return of millions of abducted Ukrainians. Any postwar settlement will have to go far beyond answering the question of how lines are drawn on the map.
AT: DOD Impact
DoD modernizing with current budget
DoD 2

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