Obama's Thoughest Policy Challenges

1. Pakistan
Pakistan, is a country with an unstable government and nuclear weapons, in the middle of the struggle between Western radicals and Muslim radicals. The growing influence of radical groups in the north of Pakistan has lead the US to deploy military strikes across the Federally Administered Tribal Areas (FATA). Continued strikes by the US military will exacerbate and destabilise the Asif Ali Zardari government which seeks domestic support. Obama will demand more cooperation from Pakistan, however, support will continue to be ambivalent given Pakistan's desire to maintain a sphere of influence around Kashmir. While the US recent rapprochement with India helps to balance US interests in the region, the Zardari administration shows little promise of consistent military and political support.    

2. The Senate
What is worrying about the United States democratically elected Senate is that it is not very democratic. Each member of the House of Representatives represents roughly the same number of voters.  In the Senate, by contrast every state gets two seats., regardless of influence or population. So Wyoming with 500,000 citizens enjoys exactly the same clout as California. No wonder the Senate spends so much money on pointless projects. Furthermore, senators have the power to kill a bill - it takes 60 votes out of 100 to end a filibuster, so 41 senators can block anything. In fact, 11% of the population could theoretically thwart the will of the other 89%. This is the kind of in balance that kept legislation such as the Jim Crow laws alive. Obama's team will have to rely heavily on bi-partisan agreements to push his agenda forward; something that might prove difficult given the upcoming Senate elections in November 2010.  

3.  Medicare, Social Security and Medicaid
Medicare, Social Security and Medicaid- will drive deficits and so debt up sharply. Publicly held debt will climb from 41% of GDP last year to 54% last year next year. Obama's ability to invest in the programs he believes important for America will be limited by a raising deficit. In 2007, $432 billion was spent on Medicare accounting for more than 3 percent of the U.S. gross domestic product (GDP). 

The way to address Medicare's shortfall is to fix the private health-care system, as Barack Obama has pledged to do. If health-care costs are contained, so that they only grow due to the ageing of the population, and otherwise move in line with per capita income, then Medicare will be an affordable programme. The problem is not the ageing of the population, the problem is a broken health-care system.

Comments

[On the Money]

Certainly a forthright opinion piece. Spending on social projects creates opportunities for further money circulation and so enriches communities. Even capital recognises the need to "speculate to accumulate". Thanks for a very interesting post.