The No. 1 priority facing President-elect Barack Obama is the economic crisis, which, so far, is focused on the financial sector. But there are other serious issues deserving attention from the president-elect.
Related to, but distinct from, the economic crisis is the fiscal, budgetary crisis facing the federal government.
Even before the onset of the economic crisis, Medicare was on course to create financial obligations for the federal government that will be unsustainable.
AIG, it turns out, needs almost twice as much money as was envisioned in its original bailout plan. The auto industry needs yet another very large infusion of cash. Having bailed out Wall Street, the federal government now faces calls from many quarters to bail out Main Street. And the president is pledged to make investments in health care, alternative fuels, and education, just to name a few.
At some point, the federal government will have created so many financial obligations that the confidence in and value of the dollar will be irretrievably undermined. To prevent that from happening, the government needs to prove that it can eliminate, as well as create, hundreds of billions of dollars in spending programs.
By some calculations, the U.S. spends as much on national defense as the rest of the world combined.
Many of these expenditures have little or nothing to do with the struggle against trans-national terrorism. Many military bases overseas and in the United States could be closed. Congress has subsidized weapons systems that not even the Pentagon wants. Farm subsidies could be slashed. Perhaps the new president could rely on his tremendous popularity in Europe to persuade the European Union to engage in a joint effort to reduce subsidies to agriculture.
It was impolitic of him to say so, but Joe Biden was right when he said that a new president, especially one with military forces so obviously tied down in Iraq and Afghanistan, is likely to be tested by antagonists abroad. And this military issue will undoubtedly also be tied to the economic situation in the U.S. and around the world.
The United States is committed, at least by statements made by the previous administration, to expand NATO to include Georgia and possibly Ukraine.
One apparent impact of Russia’s recent military confrontation with Georgia was that its stock market crashed and foreign investors withdrew billions of dollars.
It is reasonable to hope that as a result, the Russian government will think twice before engaging in future military adventures. However, with Russia’s economy heading toward dire straits partly due to sinking oil prices, the Russian government may feel a need to boost its legitimacy by settling some accounts in its "near abroad."
Is expanding NATO a good idea under these circumstances? Modern communications and transportation reduce the importance of ambassadorial appointments.
But there is arguably a pressing need to appoint top-notch people as ambassadors to Estonia, Latvia, and Lithuania, which are former Soviet Socialist Republics that are now members of NATO. Of course, the most important thing is for the new Obama administration to establish a few simple priorities and stick to them!
James L. Ray is a professor of political science. This column was originally published Nov. 16 in The Tennessean.
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