Assume the Position

Saturday, May 31, 2003
Reasons. There is another quote from of the Vanity Fair interview with Wolfowitz (below) that also fans the flames about the reasons for the war, as seen in the way the Sydney Morning Herald spins it, "WMDs only 'bureaucratic reason' for war: Wolfowitz"

Wolfowitz said another reason for the invasion had been "almost unnoticed but huge" - namely that the ousting of Saddam would allow the United States to remove its troops from Saudi Arabia, where their presence had long been a major al-Qaeda grievance.

"Just lifting that burden from the Saudis is itself going to open the door" to a more peaceful Middle East, Wolfowitz was quoted as saying.

That's from the end of the interview. Here's the last question and answer from the Pentagon's transcript:

Q: And then the last question, you've been very patient and generous. That is what's next? Where do we stand now in the campaign that you talked about right after September 11th?

Wolfowitz: I think the two most important things next are the two most obvious. One is getting post-Saddam Iraq right. Getting it right may take years, but setting the conditions for getting it right in the next six months. The next six months are going to be very important.

The other thing is trying to get some progress on the Israeli-Palestinian issue. I do think we have a better atmosphere for working on it now than we did before in all kinds of ways. Whether that's enough to make a difference is not certain, but I will be happy to go back and dig up the things I said a long time ago which is, while it undoubtedly was true that if we could make progress on the Israeli-Palestinian issue we would provide a better set of circumstances to deal with Saddam Hussein, but that it was equally true the other way around that if we could deal with Saddam Hussein it would provide a better set of circumstances for dealing with the Arab-Israeli issue. That you had to move on both of them as best you could when you could, but --

There are a lot of things that are different now, and one that has gone by almost unnoticed--but it's huge--is that by complete mutual agreement between the U.S. and the Saudi government we can now remove almost all of our forces from Saudi Arabia. Their presence there over the last 12 years has been a source of enormous difficulty for a friendly government. It's been a huge recruiting device for al Qaeda. In fact if you look at bin Laden, one of his principle grievances was the presence of so-called crusader forces on the holy land, Mecca and Medina. I think just lifting that burden from the Saudis is itself going to open the door to other positive things.

I don't want to speak in messianic terms. It's not going to change things overnight, but it's a huge improvement.

Q: Was that one of the arguments that was raised early on by you and others that Iraq actually does connect, not to connect the dots too much, but the relationship between Saudi Arabia, our troops being there, and bin Laden's rage about that, which he's built on so many years, also connects the World Trade Center attacks, that there's a logic of motive or something like that? Or does that read too much into --

Wolfowitz: No, I think it happens to be correct. The truth is that for reasons that have a lot to do with the U.S. government bureaucracy we settled on the one issue that everyone could agree on which was weapons of mass destruction as the core reason, but -- hold on one second --


Kellems: Sam there may be some value in clarity on the point that it may take years to get post-Saddam Iraq right. It can be easily misconstrued, especially when it comes to --

Wolfowitz: -- there have always been three fundamental concerns. One is weapons of mass destruction, the second is support for terrorism, the third is the criminal treatment of the Iraqi people. Actually I guess you could say there's a fourth overriding one which is the connection between the first two. Sorry, hold on again.

Kellems: By the way, it's probably the longest uninterrupted phone conversation I've witnessed, so --

Q: This is extraordinary.

Kellems: You had good timing.

Q: I'm really grateful.

Wolfowitz: To wrap it up.

The third one by itself, as I think I said earlier, is a reason to help the Iraqis but it's not a reason to put American kids' lives at risk, certainly not on the scale we did it. That second issue about links to terrorism is the one about which there's the most disagreement within the bureaucracy, even though I think everyone agrees that we killed 100 or so of an al Qaeda group in northern Iraq in this recent go-around, that we've arrested that al Qaeda guy in Baghdad who was connected to this guy Zarqawi whom Powell spoke about in his UN presentation.

Q: So this notion then that the strategic question was really a part of the equation, that you were looking at Saudi Arabia --

Wolfowitz: I was. It's one of the reasons why I took a very different view of what the argument that removing Saddam Hussein would destabilize the Middle East. I said on the record, I don't understand how people can really believe that removing this huge source of instability is going to be a cause of instability in the Middle East.

I understand what they're thinking about. I'm not blind to the uncertainties of this situation, but they just seem to be blind to the instability that that son of a bitch was causing. It's as though the fact that he was paying $25,000 per terrorist family and issuing regular threats to most friendly governments in the region and the long list of things was of no account and the only thing to think about was that there might be some inter-communal violence if he were removed.

The implication of a lot of the argumentation against acting -- the implication was that the only way to have the stability that we need in Iraq is to have a tyrant like Saddam keeping everybody in check -- I know no one ever said it that way and if you pointed it out that way they'd say that's not what I mean. But I believe that really is where the logic was leading.

Q: Which also makes you wonder about how much faith there is in spreading democracy and all the rest among some of those who --

Wolfowitz: Probably not very much. There is no question that there's a lot of instability that comes with democracy and it's the nature of the beast that it's turbulent and uncertain.

The thing is, at a general level, I've encountered this argument from the defenders of Asian autocracies of various kinds. Look how much better off Singapore is than Indonesia, to pick a glaring contrast. And Indonesia's really struggling with democracy. It sort of inherited democracy under the worst possible conditions too, one might say. But the thing that -- I'd actually say that a large part of Indonesia's problems come from the fact that dictatorships are unstable in the one worst way which is with respect to choosing the next regime. Democracy, one could say, has solved, not solve perfectly, but they represent one of the best solutions to one of the most fundamental instabilities in politics and that's how to replace one regime with another. It's the only orderly way in the world for doing it other than hereditary monarchy which doesn't seem to have much of a future.

Q: Thanks so much.

Wolfowitz: You're very welcome.

Wolfowitz is saying what many of us said the whole time, no single reason standing by itself was worth going to war with Iraq, but Hussein's Iraq was the only place in the world where all of the many reasons put together justified military action. Getting rid of an unbelievably cruel despot and bringing some form of democracy wasn't a sufficient reason on its own. Ending Hussein's support of terrorists wasn't a sufficient reason on its own. Being able to end the No-Fly Zones wasn't a sufficient reason on its own. Being able to pull troops out of Saudi Arabia wasn't a sufficient reason on its own. Being able to approach the Israel-Palestine issue without the interference of Hussein wasn't a sufficient reason on its own. Being able to end the sanctions wasn't a sufficient reason on its own. Creating a new dynamic throughout the region wasn't a sufficient reason on its own. And Hussein's WMD threat wasn't a sufficient reason on its own, either. But when all of those reasons are put together, it tipped the balance; and the prohibited weapons programs provided the best (and probably, only) handle under international law because of the original Gulf War cease fire agreement:

The answer to "Why Iraq instead of …?" is because Iraq is like a slot machine that always comes up Triple-Bar in every category when you compare it to any other regime you might use to finish that question, and the handle on the side is inscribed "use all necessary means."

The US did. It was the right choice. And whether we only find the two mobile BW labs, or tons of prohibited material turns up, it remains the right choice.

[For those just tuning in, I have steadily maintained that US military action against Iraq is best judged as an escalation of an ongoing war that merely entered a lull with the 1991 cease fire. Any violation of the 1991 cease fire agreement by Iraq at any time provided sufficient justification under international law to escalate the ongoing hostilities back to the level of full, out and out warfare.]

UPDATE: The Kellems in the above transcript is Kevin Kellems out of the OASD(PA)—Office of the Assistant Secretary of Defense (Public Affairs)—and he is, apparently, Wolfowitz's press advisor.

UPDATE 2 - June 1, 2003: Pejman Yousefzadeh was on to this "Much Ado About Nothing" on Friday (via Instapundit).

UPDATE 3 - June 1, 2003: UK Prime Minister Tony Blair says essentially same thing I wrote yesterday (emphasis added):

Downing Street has been hampered in its argument by repeated suggestions from the Bush administration that WMD may never be found. Paul Wolfowitz, deputy to the US Defence Secretary Donald Rumsfeld, suggested last week that WMD were a bureaucratic pretext to start a war.

Blair told Sky that WMD were the basis in law for taking military action - but 'that's not the same as saying it's a bureaucratic pretext'.

I'd like to find the acutal quote of what Blair said, since it's hard to trust the Guardian/Observer's paraphrase as they continue to push the distortions about what Wolfowitz said.

Spin Of Omission Or Fallibility? A widely reported quote of Paul Wolfowitz in the Vanity Fair interview by Sam Tanenhaus has stirred up another mess. CNN's Jamie McIntyre reports, "Pentagon challenges Vanity Fair report."

The article by Sam Tanenhaus quoted Wolfowitz as saying, "For bureaucratic reasons we settled on one issue, weapons of mass destruction, because it was the one reason everyone could agree on."

The Pentagon says a full reading of the transcript of the telephone interview Wolfowitz gave the reporter May 9 does not support that interpretation of the deputy secretary's comments.

"Vanity Fair only used a portion of the deputy secretary's quote," the source said. "Their omission completely misrepresents what he was saying. The complete quote makes clear that there were multiple reasons for the use of military forces against Iraq."

According to a tape recording made by the Pentagon, the actual quote is, "The truth is that for reasons that have a lot to do with the U.S. government bureaucracy we settled on the one issue that everyone could agree on, which was weapons of mass destruction, as the core reason."

After a brief pause to take another phone call, Wolfowitz continues, "There have always been three fundamental concerns. One is weapons of mass destruction, the second is support for terrorism, the third is the criminal treatment of the Iraqi people. Actually, I guess you could say there's a fourth overriding one, which is the connection between the first two."

The shortened quote was reported all over the place and I was ready to write about this as another spin of omission where a quote is trimmed to fit the writer's bias. But while I was building the list of news reports where the quote had been used, I ran across this AP report in USA Today, "Wolfowitz comments revive doubts over Iraq's WMD." First an idea of the outcry (and it was all over Australian and US news as well):

Neither Rumsfeld nor Wolfowitz suggested Washington fabricated weapons claims, and an aide to the defense secretary, speaking on condition of anonymity, insisted their remarks had been misinterpreted.

However, the remarks were widely published in Europe and were seen by skeptical Europeans as a tacit admission that the United States overstated Iraq's weapons threat.

The Daily Express of London ran a report Friday on the statements by the two U.S. officials with the headline "Just Complete and Utter Lies."

"Claims that the world was lied to about the reasons for going to war in Iraq gathered pace yesterday as fresh doubts were cast on Britain and America's account of Saddam Hussein's weapons of mass destruction," the newspaper said.

Now the specific part about the Wolfowitz quote by Tanenhaus (emphasis added):

Deputy Defense Secretary Paul Wolfowitz cited bureaucratic reasons for focusing on Saddam Hussein's weapons of mass destruction, and said a "huge" result of the war was to enable Washington to withdraw its troops from Saudi Arabia.

"The truth is that for reasons that have a lot to do with the U.S. government bureaucracy, we settled on the one issue that everyone could agree on which was weapons of mass destruction as the core reason," Wolfowitz was quoted as saying in a Pentagon transcript of an interview with Vanity Fair.

The magazine's reporter did not tape the telephone interview and provided a slightly different version of the quote in the article: "For bureaucratic reasons we settled on one issue, weapons of mass destruction, because it was the one reason everyone could agree on."

The Pentagon transcript supports the assertion that Tanenhaus didn't tape the interview, but shows something else, too. The interview took place over two telephone calls. Here is the beginning of the second call from the Pentagon's transcript [they put an extra 'n' in Tanenhaus in the transcript] (emphasis added):

[Session Two, Saturday, May 10, 2003]

Wolfowitz: Hello.

Q: How are you doing?

Wolfowitz: Pretty good. How are you?

Q: Okay. I will try to make this painless. It reminds me of an interview I read with Philip Ross once in the Times and he said what a day. First the dentist, now a journalist. [Laughter]

Wolfowitz: The dentist was easy, so I hope you can stay below his threshold. [Laughter]

You're kind of faint.

Q: I was telling Kevin, I have a headset and I type as we speak, which is one reason I'll want to see the transcript just so I don't make errors. I'm reliable, but I'm not a letter-perfect typist and I won't always be able to keep up with you.

Can you hear me okay now?

Wolfowitz: Pretty well. It's okay.

The question whether this is a case of spin of omission or just a mistake by Tanenhaus rests on whether he ever got a copy of the Pentagon transcript before finishing the article and having it published. I don't have any evidence (or even an opinion) that supports calling it one way or the other.

Bogons! I remarked in the last post that Gokhale and Smetters should have presented their number as 44.2 trillion bogons so that everybody would understand that it is only useful when compared with other bogons. To illustrate we'll look at the scare quotes from the Boston Globe editorial and the Financial Times article that were crafted to put people in a frenzy.

Boston Globe - "An economic 'menu of pain'" (emphasis added):

Would the present value (the value today) of the future revenues cover the present value of the future expenditures?

The answer is no, and the fiscal gap is the $44 trillion. Now, that is big bucks by anyone's definition. It's four times current GNP and 12 times official debt. Imagine everyone in the country working for four years and handing over every penny earned to pay this bill, and you'll grasp its size.

The Financial Times - "US 'faces future of chronic deficits' (emphasis added):

The study's analysis of future deficits dwarfs previous estimates of the financial challenge facing Washington. It is roughly equivalent to 10 times the publicly held national debt, four years of US economic output or more than 94 per cent of all US household assets.

It is meaningless to compare 44.2 trillion bogons to the GNP or GDP. To be a valid comparison it needs to be compared to the bogon version of the GDP. In other words, the present value (PV) of the US GDP calculated over forever and ever and ever. But we can do that, and the bogon GDP is about 560 trillion. So it is meaningless to say the $44.2 trillion is "four times current GNP" of ~$10 trillion, since it is really only about 8% of the present value of GDP computed over the same infinite horizon.

For those interested in how I came up with $558,921,789,473,678.00 as the GDP PV, here are the figures I used: 2002 GDP of $10.422 trillion from the budget (3.2 MB PDF), growth rate of 1.7% used in Gokhale and Smetters' study (858kB PDF), and the discount rate of 3.6% used by the study. Compound forever. Acutally, the numbers converge to +/- $1 trillion after ~450 years, +/- $1 billion after ~750 years, +/- $1 million after ~1200 years, +/- $1,000 after ~1500 years, and +/- $1 after ~1750 years. Of course, those levels do not reflect precision, just where the calculations converged—the level of accuracy would be somewhere between the trillions and tens of billions.

Noting the convergence point is something else Gokhale and Smetters could have presented to put their numbers in perspective. (I assume their calculations converge about the same places mine did.) If the President's budget says the Social Security and Medicare deficit is $16 trillion over 75 years (which it does, $3 SS and $13 Medicare) and then somebody comes along and says the SS/Medicare deficit is $41.6 trillion over 500 years ($7 SS and $36.6 Medicare), then reasonable people are going to say, "Ok, I can see that," rather than getting all wound up over it.

I don't have a problem with generational or infinite horizon accounting—you just have to remember to only compare the output bogons with other bogons. Kotlikoff and Sachs know that since the former is Chairman of the Economics Department at Boston University and the latter is an economics professor at Columbia University according to the Boston Globe editorial they wrote. And Despeignes of the FT probably knows it, too. But that didn't stop any of them from making the scary, but meaningless, comparison to the current, single-year GDP.

Also, thanks to Instapundit, CalPundit, and Right Wing News for linking to the prior post. Check out what they have to say about the study and editorials as well as the posts by Donald Luskin, Two--Four and Powerline who all take a swing at Andrew Sullivan and others for falling for the bogon and the distortions associated with it.

Friday, May 30, 2003
The Latest Big Lie is brought to you via Agence France Presse via the Financial Times's Peronet Despeignes via the Boston Globe editorial by Laurence J. Kotlikoff and Jeffrey Sachs. The source is Jagdessh Gokhale, who is either incredibly naive or lying.

Boston Globe - "An economic 'menu of pain'" (emphasis added):

OUR GOVERNMENT is going broke. The feds face bills that are far beyond our capacity to pay -- by $44 trillion to be precise. The longer we ignore them, the bigger they get. Yet President Bush is working overtime to deepen our fiscal trap. This $44 trillion figure is not ours. Nor is it some other academics' calculation. It was produced last fall by economists and budget analysts at the US Treasury, the Federal Reserve, the Office of Management and Budget, and the Congressional Budget Office. The study was ordered by then Treasury Secretary Paul O'Neil and was slated to appear in the president's budget, released in February.

O'Neil instructed his team, led by Jagadeesh Gokhale, Federal Reserve senior economist, and Kent Smetters, then deputy assistant secretary for economic policy at the Treasury, to answer the following question: Suppose the government could, today, get its hands on all the revenue it can expect to collect in the future, but had to use it, today, to pay off all its future expenditure commitments, including debt service net of any asset income. Would the present value (the value today) of the future revenues cover the present value of the future expenditures?

The answer is no, and the fiscal gap is the $44 trillion…

If the fiscal gap and its associated menu of pain are unfamiliar, there's a reason. You can scour the thousands of pages of the president's FY 04 budget, and you won't find the analysis. It never made it in. When Secretary O'Neill was replaced last December, the analysis was yanked from the budget.


Agence France Presse - "Washington shelved report of 44-trillion-dollar deficit" (emphasis added):

LONDON (AFP) - In the midst of negotiating a steep tax cuts package, the US government shelved a report that showed the United States faces future federal budget deficits of more than 44.2 trillion dollars.

President George W. Bush's administration chose to keep the findings -- commissioned by then-Treasury secretary Paul O'Neill -- out of the 2004 annual budget report, published in February, London's Financial Times reported.

Wrong. Keep in mind how the AFP credited the FT.

The Financial Times - "US 'faces future of chronic deficits' (emphasis added):

The Bush administration has shelved a report commissioned by the Treasury that shows the US currently faces a future of chronic federal budget deficits totalling at least $44,200bn in current US dollars.

The study, the most comprehensive assessment of how the US government is at risk of being overwhelmed by the "baby boom" generation's future healthcare and retirement costs, was commissioned by then-Treasury secretary Paul O'Neill.

But the Bush administration chose to keep the findings out of the annual budget report for fiscal year 2004, published in February, as the White House campaigned for a tax-cut package that critics claim will expand future deficits.

Wrong. Now here are the last two grafs in the FT piece:

Laurence Kotlikoff, an expert on long-term budget accounting, alleged in a recent Boston Globe editorial that the Bush administration suppressed the research to ease passage of the tax-cut plan.

An administration official said the study was designed as a thought-piece for internal discussion - one among many left every year on the cutting-room floor - and noted the budget's extensive discussion of projected, 75-year Social Security and Medicare shortfalls.

What we have here is another attempt to bash the administration by people who are either clueless or willfully ignoring the budget submission timelines, just like the did with the issue of funds for Afghanistan. And the FT knows it because Despeignes did separate interviews with Jagdessh Gokhale and Kent Smetters. (The FT deserves credit for making the interviews available; it's too bad they didn't really use them.)

The reality. Long term budget projections are always questionable because they are based upon estimating trends. That's why there is always argument among the Office of Management and Budget (OMB), the Congressional Budget Office (CBO), the Government Accounting Office (GAO) and others about about how large or small a surplus or deficit is over the long term and what effect any specific policy change would have over time.

One thing that has become standard for budget submissions is that they contain five and ten projections for most things, and use the actuarial projections from the Social Security (SS) and Medicare Trustees over 75 years for Social Security and Medicare liability calculations. You can download the administrations' budget submissions from FY 1996 through FY 2004 here. The long term projections are in the "Analytical Perspectives" section of each budget. They always use the latest SS and Medicare Trustees' reports that have been published. Because of the budget submission timeframe, that means using the report published for the prior year: e.g.; the FY 2004 budget was submitted to Congress on February 3, 2003 and contained the SS and Medicare actuarial projections published by the Trustees March 26, 2002. [Here are the locations to download the Social Security Trustees' reports and Medicare Trustees' reports. The latest reports were submitted to Congress and published March 17, 2003—too late to be in the President's budget submitted a month and half earlier.]

Gokhale and Smetters propose a new method to estimate the present value (PV) surplus or deficit far beyond the 75-year window that they call the "FI and GI Composite" for the two estimates of "Fiscal Imbalance" and "Generational Imbalance." How far beyond? Try eternity. It is an infinite horizon projection until the numbers converge (get too small to produce further changes in the output). So, according to the FI-GI Composite, the PV of current fiscal policy extended to the heat death of the universe shows a $44.2 trillion deficit.

To see how massively Despeignes twists things in the FT story, I'm going to intertwine some of the separate interviews of Jagdessh Gokhale (JG) and Kent Smetters (KS). (I've dropped the original boldface from the FT questions, the answers were originally in plain type, so all emphasis past the colon is mine.)

FT-JG: How was this study initiated?

JG: Treasury last year wanted to carry on a discussion on Social Security and the government's fiscal position. And they wanted me to do some work on this.

FT-JG: Kent Smetters approached you?

JG: Right

FT-JG: Do you know if Paul O'Neill who was the person who put in the request for this study?

JG: It was initiated during his tenure for sure.

FT-JG: And he took a strong interest in this, didn't he?

JG: I believe he was very interested in this issue. I've heard that he had frequent discussions with his staff about this. My belief is, yes, he was very interested, and that's presumably why it was carried forward during his tenure.

FT-JG: And it was initiated in early 2002?

JG: Well, I went to Treasury as a consultant in July 2002.

FT-JG: And it was completed when?

JG-JG: It was completed earlier this year - around January or February.

There is no way anyone with a shred of sense would believe that figures from a wholly new approach to producing these kinds of estimates would be included in Bush's budget submission that went to Congress on the 3rd of February, 2003. It's just ridiculous. Gokhale doesn't even know if he and Smetters had completed the study by the time the budget was submitted.

But that is what Gokhale maintains.

FT: Weren't numbers and discussions from this study supposed to appear in the 2004 Budget?

JG: It did appear, but my numbers did not. They published 75-year projections of Social Security and Medicare.

FT: And your study discusses the shortcomings of those measures?

JG: Yes, it does.

FT: Your study was meant to be a comprehensive measure?

JG: The complete, full representation of the future imbalance.

FT: When were you told that it was going to appear in the budget?

JG: Well, when we were conducting the study, my impression was that it was slated to appear, but I guess they hold those decisions until the last minute.

FT: When were you told it was going to appear?

JG: I was always under the impression while I was doing it that it would appear, or that it was being seriously considered. They never gave me a final decision about whether it would, but they kept saying everything looked good, everything looked good was basically my information.

FT: You were never told otherwise, and you were never given the impression that it wouldn't appear in the budget?

JG: Yeah, but they never said it would or wouldn't. Just that everything looked good, and we made presentations to various members and got a positive, very encouraging reaction.

FT: So you were surprised?

JG: Well, yeah, at some point, the momentum builds and you think everything is a go, and then the decision came down that we weren't part of the prospective budget. It was disappointing, but I guess this is how things work. My guess is that they investigated this, they wanted an ongoing discussion and at some point, especially after the secretary changed, there wasn't enough time to look at it in depth and didn't feel comfortable with the numbers. A million reasons are quite believable.

FT-KS: When was this study initiated and at who's request?

KS: The work was never meant to be a Treasury study. It was meant to be some internal thinking, something for O'Neill. It was meant to be an internal part of thought process on how to reform the budget - in particular, budget accounting.

FT-KS: What was the idea here?

KS: I've gotten a lot of calls about this.

FT-KS: From who?

KS: Lots of media organisations, and I've just refused to talk to people in the past. I'm not sure how you got my cell phone number.

FT-KS: You haven't talked to anyone about this?

KS-KS: No, I just refuse to return calls. But this Boston Globe editorial kind of let the cat out of the bag. So maybe this is a good opportunity to set the record straight.

O'Neill is a very engaging and smart guy. He hired me in June 2001 as his deputy assistant secretary - six months before he even hired an assistant secretary - in order to get a jump-start on working on Social Security reform. Especially before September 11, 2001, I was meeting with him two or three times a week, primary to talk about social security reform. It became very clear very early that a big part of the problem is the whole language we're using in this debate, which is being driven by the current budget accounting framework. The current budget accounting has all these biases against trying to reform Social Security in a way that increases the amount of funding in the system. It doesn't track the Social Security liabilities at all. So that a lot of potential reforms appear to be bad since they would increase the debt held by the public ?

FT-KS: They don't account for the reduced drain from future unfunded liabilities.

KS: Exactly.

FT-KS: The cost, but not the benefits in the form of future unfunded liabilities avoided

KS: That's exactly right. So what happens is that you have a bias against pre-funding because you see only the increase in debt held by the public but not any of the reductions in the present value of future Social Security obligations since they are not being tracked. O'Neill understood this instantly. It took him 30 seconds to understand this. He was very engaged. He pretty much let me do my own thing, but he was very engaged on this.

FT-KS: He was engaged in having this process develop and produce some very significant results?

KS: Absolutely, but the outlet for this was never to be a Treasury study, but to create internal discussion and hopefully reform the president's budget framework - to slowly start to change how people think about the budget framework to track these hidden obligations.

So, no matter how much Gokhale was "under the impression" the study was supposed to be part of the budget submission, Smetters (who brought Gokhale on-board) says that was never the case. It was "to slowly start to change how people think about the budget framework," to push the envelope into generational or infinite horizon accounting to be able "to track these hidden obligations."

Remember, Gokhale says the discussion of the study (completed or not) appeared, just not the raw numbers: "It did appear, but my numbers did not."

The general discussion of shortcomings of the 75-year actuarials is discussed in the budget. Here is part of what the "Analytical Perspectives" (3.2 MB PDF) to the FY 2004 Budget says on page 47 regarding Social Security:

Limiting the calculations to 75 years understates the deficiencies, because the actuarial calculations omit the large deficits that continue to accrue beyond the 75th year. The understatement is significant, even though values beyond the 75th year are discounted by a large amount...For Social Security, the present value of benefits less taxes in the 76th year alone is nearly $0.1 trillion, so the omission of these distant benefits amounts to several trillion dollars of present value.

And on page 48 regarding Medicare:

Extending the calculation beyond the 75th year would add many trillions of dollars in present value to Medicare's actuarial deficiency, just as it would for Social Security.

IOW, the concepts of the study made it into the budget request, to begin to make that change in how the numbers are looked at. But the raw numbers from the study really aren't trustworthy, though it would be too much to expect the authors to admit it.

FT-JG: But the question in that case would be, why did they feel uncomfortable with these numbers and not uncomfortable with any of a number of the other numbers that did appear in the budget?

JG: I would only be speculating about that. I don't know the answer to that.

FT-JG: What do you suspect? What's your hypothesis?

JG: One hypothesis is that there's a lot of other policy initiatives that the administration wants to undertake this year, and maybe they thought putting out these numbers would not help that discussion, would not help for pushing those policy initiatives further.

FT-JG: If that were true, why would they include the Medicare and Social Security 75-year projections which are pretty awful?

JG: They're pretty bad, as well.

FT-JG: Because they're bigger, simpler to understand, stronger, more transparent, more comprehensive?

JG: I don't know the answer to that. I still feel that, had they included our numbers - which are obviously better - they would have gotten a lot of credit for it. The 75-year numbers are misleading because they don't take into account that from year 76 onward, there are still huge deficits. As the SS Trustees report shows that if you do the full perpetuity measure, the imbalance increase by three-fold. I don't know who made this decision.

FT-JG: Are you saying that they are avoiding them?

JG: I'm not saying that, because they report 75-year numbers which are also very large.

FT: But they're understating them?

JG: They're understating them. Yes.

FT: There was a deliberate effort to understate this?

JG: You're putting words in my mouth. Someone felt uncomfortable with how big the numbers were, so they maybe this is a case of let's put out these 75-year numbers which are traditional, and it's enough to prepare the public for the fact that these numbers are big. Maybe they're easier to digest. I don't know. Who knows. But the decision was it would be better not to publish our numbers.

FT-KS: So there wasn't any high-level conspiracy?

KS: No, there wasn't. This point has to be really emphasised. In fact, if you look at this framework, the tax plan looks great. You see 99 per cent of all the liabilities are Social Security and Medicare. That's even after including the president's original $750 tax-cut plan proposal. The estimates correspond directly with the OMB budget so it includes all the policy proposals he originally wanted. It included the full elimination of the dividend tax. Only a very small part of the imbalance actually comes from the rest of the government - only $600bn of the $44,000bn. Almost all of it is Social Security and Medicare. This is hardly stuff the Administration would kill because they're afraid of the tax plan looking bad.

FT-KS: Indeed, they did include the 75-year projections for Social Security and Medicare?

KS: Yes, but those estimates are problematic for a number of reasons. They underestimate the problem by two-thirds when you do it correctly into perpetuity, which is really the way economists think about this. The 75-year projections represent only one-third of the problem. Also, there was sort of a rush job on those numbers, so they actually didn't calculate them under OMB assumptions. They just got the Social Security and Medicare actuaries to give them the numbers under Trustees assumptions which are much more conservative.

FT-KS: Mr Gokhale has a somewhat harsher interpretation of all this than you do Sure, they see a set of numbers and they want to digest them first, but the question is: There were all these other numbers in there...why did a lot of other numbers that were presented to them at the last minute make it in, and why did this number not? The whole point of this number is to provide a simple, easily understood, transparent, comprehensive measure of the government's full long-term imbalance

KS: My reading of what happened is simply this: If, in fact, these perpetuity numbers where calculated by the actuaries themselves then they would have found their way into the budget. The old guys did not need to have the numbers calculated by the actuaries because they had followed the project and understood them. But the new guys did not have the time to study them in much detail before the budget was going to press. And so if the actuaries had calculated them and, therefore, provided some distance, they might have gone to press.

Nobody can get it through Despeignes' head that any actual numbers dealing with Social Security and Medicare to appear in the budget come from the Trustees' published reports. The 75-year actuarial projections in the report were not among "other numbers that were presented to them at the last minute" and made it in to the report—those numbers came from the Trustees' reports of March 2002. Smetters tries, but either he just isn't blunt enough or Despeignes to fixated on his conspiracy theory.

FT-KS: But we understand that the Fed, the OMB, some other Treasury officials and the Social Security Administration had personnel involved in putting this together.

KS: No, Jagdeesh is with the Cleveland Fed and he's on leave with them when we hired him as a consultant to help crunch out the numbers, but it's not like the Federal Reserve was officially involved. But I am thrilled that Jagdeesh gave us his time because the numbers could not have been calculated without him.

FT-KS: Again, I talked to Mr. Gokhale about this at length, and he said he was under the impression from the very beginning that everyone was very happy with the study and that it would appear in the 2004 budget

KS: Yeah, but then people got fired. [That would be O'Neil and company in December 2002. --lp]

FT: And, yet, most of the work that those people spearheaded appeared in the budget, and yet this number, this study, didn't?

KS: My own reading is that I think the numbers would have been shown in the budget if the new guys had time to digest them or if the numbers were calculated by the government's own actuaries. I think that the old guys were willing to go with our numbers because they had the time to digest them in much more detail. They knew how they were calculated. But the new guys just needed to be more cautious. Suppose - and this is hypothetical - that we made a big mistake in the estimates. Then, that doesn't give the new guys much to fall back on, whereas if the actuaries did them, it definitely gives them more distance.

But one big success we had was the re-writing of the Trustees' report, and in fact you do find the perpetuity number inside the Social Security Trustees report, the last one released in March. The problem is that the Trustees still don't have the right measure - the perpetuity measure - for Medicare. They really do need to do this measure for Medicare.

The $44 trillion magic number is the product of two guys—Gokhale and Smetters—and Gokhale is upset that his number did not appear in Bush's official budget submission to Congress. That is really all there is to the story. Notice, that if the Trustees had submitted their report in January, then the Social Security perpetuity number most likely would have been included in the President's budget. Instead, the best they got was the discussion of the shortcomings of using 75-year projections.

Also, there are other reasons for the "new guys" to be "uncomfortable" with the numbers while being completely comfortable with the concept. The raw number, $44 trillion, is incredibly meaningless and misleading. A raw FI-GI Composite number is useless unless it is used to compare with another FI-GI Composite reflecting different policy choices. But it wouldn't wind up being compared with other policy choices, it would get compared to previous deficit estimates calculated over the 75-year window. If Gokhale and Smetters had taken their number and doubled or halved it and expressed it in bogons there would be no problem. 'The FI-GI Composite projection shows a deficit of 88.4 (or 22.1) trillion bogons.' People would automatically know that the number was produced by a method far different than normally used for Social Security and Medicare deficit calculations.

Additionally, the raw number itself is not to be trusted since the results are very sensitive to the underlying assumptions because they compound to an infinite horizon.

[Gokhale presented the FI-GI Composite and the $44 trillion figure at the American Enterprise Institute (AEI) "Time Bombs in the Federal Budget" seminar. From AEI you can download the 12th draft (April 26, 2003 - 858kB PDF) of Gokhale and Smetters paper at the prior link, or the 4th draft (April 7, 2003 - 334kB PDF) from the FT. I will be quoting from the 12th draft, without the authors approval, and all emphasis will be as close to the original as I can get it.]

Calculations under alternative growth and discount rate assumptions suggest a low-side estimate of federal FI of about $29 trillion and, under very conservative assumptions, a high-side estimate of about $64 trillion.

That's a swing of $35 trillion dollars based on varying the assumptions.

This section reports the sensitivity of the FI estimates to variations in three key underlying assumptions: the government's long-term annual discount rate, r; the annual growth rate of GDP per capita, g;20 and, the differential, h, between the annual growth rate of outlays on Medicare and Medicaid per capita and g. This differential, however, only exists until 2080. Between 2080 and 2100, the annual growth rate of outlays on Medicare and Medicaid per capita is gradually reduced to g so that the differential, h, becomes zero where it remains after 2100. Under the baseline set of assumptions corresponding to results presented earlier, r = 3.6, g = 1.7, h = 1.0 percent. We now consider two alternative values – a "low" value and a "high" value -- for each parameter. The low and high values for r are 3.3 and 3.9 percent, respectively; those for g are 1.2 and 2.2 percent, respectively; and those for h are 0.5 and 1.5 percent, respectively.21

Table 5 shows the variation in end-year 2002 FI estimates for the alternative values of r, g, and h. The FI estimate is quite sensitive to the discount rate assumption: FI is estimated to be $34.6 trillion under the high discount rate assumption (r = 3.9 percent) whereas it is $58.6 trillion when the assumed discount rate is low (r = 3.3 percent). The high sensitivity of the estimates to the different values of r is not surprising. Notice, for example, that the baseline total FI estimate is almost 3 times larger than the truncated 75-year estimate (see Tables 2 and 3), suggesting that annual imbalances are projected to grow considerably beyond the 75th year. This high projected growth in the distant future means that FI estimate is quite sensitive to the discount rate.

20Hence, the effective discount rate equals r - g. However, an increase in g does not necessarily have the same impact as an equal decline in r, because higher growth does not necessarily imply higher outlays in every category. For example, higher growth is likely to result in lower social welfare outlays. Hence, we show below the sensitivity of FI estimates to variations in r and g separately.

21We consider the sensitivity of each parameter relative to the baseline set of parameters. Future work could extend this analysis by considering different parameter combinations along combined with the probability of each combination in order to create a distribution of possible outcomes.

There is a $24 trillion swing from just a 600 basis points change in discount rate when used as a constant projected through eternity. Using a low g of 1.2% to a high g of 2.2% has a $19 trillion swing in the FI figure. Likewise, there is a $34.4 trillion difference in FI between a low h of 0.5% and a high h of 1.5%. But neither demographic trends, nor the discount rate, nor the economic growth rate are going to remain constant over even the 75-year outlook, let alone over an infinite horizon.

This does not mean the FI-GI Composite calculations are useless or meaningless, because the same infinite horizon magnification applies to compounding small policy changes over eternity:

Although FI is fairly sensitive to these economic assumptions, we argue below that this sensitivity only strengthens the need to focus on FI rather than on traditional shorter-term fiscal measures. Furthermore, the ratios of FI to the present value of GDP and future payrolls—and, hence, estimates of tax hikes or spending cuts required to restore fiscal sustainability—are not as sensitive to alternative economic assumptions because GDP and the payroll base are similarly sensitive to the underlying assumptions.

The reason:

The ratio of FI to the present values of payroll and GDP, however, exhibits greater stability than the present value constant 2002 dollar amounts in response to changes in r because the denominator—the present value of future payrolls or GDP—changes in the same direction as total FI. In other words, while the dollar-value of the Fiscal Imbalance is sensitive to the underlying assumptions, the size of the tax rate increase or percent decrease in spending required to achieve sustainability is much less sensitive. Table 6 shows that under baseline assumptions, this ratio is estimated at 16.6 percent as of fiscal year-end 2002. Under high and low productivity growth assumptions respectively, it is estimated to be 14.8 and 18.0 percent respectively.

The FI-GI Composite addresses a major shortcomings of the 75-year horizon—earners under 65 by 2080 only count as revenue pluses because there is no accounting for when they start to draw benefits from the programs after 2080. The use of infinite horizon estimates is necessary, but their introduction needs to be accompanied with a lot of explanation and it would be just as meaningful if the figures were expressed as 44.2 trillion bogons instead of dollars.

Here is one of Richard Jackson's(Senior Advisor, Concord Coalition) concerns about the FI concept from his remarks at the same AEI seminar.

Let me turn to a final reservation—namely, that the FI concept is much more robust when applied to some individual federal programs than to the budget as a whole. For Social Security, projections in perpetuity make sense because the program is based on promises spanning generations. True, Social Security is a legislated entitlement, not a contract. But its contributory nature, its permanent appropriation, and its immense popularity have always given it a special protected status. No one seriously doubts that Social Security's unfunded benefit promises constitute some sort of government obligation.

Medicare's fiscal imbalance may be several times larger than Social Security's, but the obligation is considerably less certain. For one thing, Medicare is more politically vulnerable to benefit cuts, in part because the program depends on large general revenue subsidies. For another, even assuming that current law remains unchanged, projecting Medicare costs is much more difficult. While Social Security benefits are determined by formula, Medicare constitutes a largely open-ended promise to pay for a constantly evolving package of health-care services. And as Jagadeesh and Kent point out, the program's long-term cost is very sensitive to even modest changes in assumptions about the growth in real per capita spending.

The $44.2 trillion is almost completely SS and Medicare. From the Gokhale/Smetters paper:

Of the total federal FI of $44.2 trillion, Social Security's FI is about $7.0 trillion in present value. Medicare's FI is $36.6 trillion (for both Parts A and B). Medicare Part A (Hospital Insurance) contributes $20.5 trillion and Part B (Supplementary Medical Insurance) contributes $16.1 trillion.3 By contrast, the rest of federal government's FI amounts to only $0.5 trillion, which is comprised of a surplus of prospective revenues over outlays of $4.6 trillion as well as liabilities to Social Security, Medicare, and the debt held by the public of $5.1 trillion.

3As we explain later, consistent with the Social Security and Medicare Trustees, we assume that health care per capita grows a rate of one percentage point faster than GDP per capita until 2080 -- a very conservative assumption relative to the past two decades. Between 2080 and 2100, the one percentage point differential is gradually reduced to zero, thereby assuming that health care spending grows no faster than GDP. Even with these very cautious assumptions, very large Medicare Fiscal Imbalances exist.

Which takes us back to the very beginning and disposes of another lie, the one in the second sentence of Kotlikoff and Sachs's Boston Globe piece: "The feds face bills that are far beyond our capacity to pay -- by $44 trillion to be precise." Unless it is precisely $29 trillion, or precisely $64 trillion, or any other number inside or outside those ranges.

It also should dispose of the idea that there is any connection to the tax cut. Almost the whole FI deficit is from Social Security and Medicare, only $0.5 trillion (that's $500 billion) comes from the entire rest of the government, and the tax cut didn't change payroll taxes (individual and employer SS and Medicare taxes).

Generational, infinite horizon projections are a fine idea, but people (especially in OMB and the Trustees) need to be comfortable with the process and understand the limitations of the numbers before they start showing up in the budget submissions.

Tuesday, May 27, 2003
The Sin Of Omission. Charles Murtaugh points to editor Peter Beinart's latest weekly "TRB" column at the The New Republic. Because Charles' post is short, I'm going to quote it completely with the original formatting:

Liar, liar part deux

If you only read one TNR article this week -- hell, it's almost the only one you can read online without a subscription -- read Peter Beinart's "Character Witness":

To conservatives, the Bush administration is everything its predecessor was not: decent, ethical, honest. It doesn't abuse government power or the public trust. As Wall Street Journal columnist and presidential hagiographer Peggy Noonan [1] has put it, "Bush brings character to the table."

That's the claim. Here's the record over the last eight month:

[read this part for yourself -- it's damning stuff]

These stories of Bush administration dishonesty and abuse have not been denied in the conservative press as much as they have been ignored. . . For conservatives, it seems, this administration's decency and honesty are ideological axioms that require no empirical defense. President Bush is not President Clinton. That's all they need to know.

[1] The fact that Mickey Kaus continues to treat Peggy Noonan as a writer worth taking seriously makes it hard for me to treat him the same way.
Unlike Murtaugh suggests, it's not really "damning stuff," at least as far as Bush is concerned. However, there is at least one paragraph that should be considered "damning" to whatever credibility Beinart supposedly has for honesty and knowledge:

Once upon a time, conservatives thought presidential duplicity was a grave offense. Not anymore. On October 7, 2002, President Bush declared in a nationally televised speech that "Iraq is exploring ways of using these UAVs [unmanned aerial vehicles] for missions targeting the United States." That was a functional lie. Iraq's drones, the Bush administration later admitted, had a maximum range of several hundred miles. They could reach the United States only if flown from a warship stationed off America's coast (a virtually impossible scenario given Iraq's almost nonexistent navy).

The first thing that stands out is the 'quote.' Just like the modified quote of Gen. Wallace mentioned in the previous post, Beinart omits words from what the President said. The actual quote with the omitted opening words of the sentence underlined:

Iraq possesses ballistic missiles with a likely range of hundreds of miles -- far enough to strike Saudi Arabia, Israel, Turkey, and other nations -- in a region where more than 135,000 American civilians and service members live and work. We've also discovered through intelligence that Iraq has a growing fleet of manned and unmanned aerial vehicles that could be used to disperse chemical or biological weapons across broad areas. We're concerned that Iraq is exploring ways of using these UAVS for missions targeting the United States. And, of course, sophisticated delivery systems aren't required for a chemical or biological attack; all that might be required are a small container and one terrorist or Iraqi intelligence operative to deliver it.

So who is being "dishonest?" Beinart trims the quote to make it a flat assertion by Bush that Iraq was doing something, but the "concerned that" construction is often used to express worry about possibilities: I'm concerned that Beinart is dishonest and clueless. Maybe he is, maybe he isn't; and maybe this post will help you decide.

Beinart could have left the quote alone and still tried to push his following point, though he'd need to indicate that the "functional lie" was from exaggerating the US concern:

That was a functional lie. Iraq's drones, the Bush administration later admitted, had a maximum range of several hundred miles. They could reach the United States only if flown from a warship stationed off America's coast (a virtually impossible scenario given Iraq's almost nonexistent navy).

But does even that point have any basis in reality? Was the concern exaggerated or feigned, or was it legitimate? This is where Beinart displays his lack of knowledge.

ABC New's Martha Raddatz did the same thing the day after the Bush's speech, but she used the full quote:

Fact Check on Iraq
Bush Makes His Case for Action Against Iraq, But Are All His Concerns Valid?"

Another Threat — UAVs

The president expressed concern about unmanned aerial vehicles, or UAVs, which he says Iraq could use to disperse chemical and biological weapons.

"We're concerned that Iraq is exploring ways of using these UAVs for missions targeting the United States," Bush said.

"Iraq's Weapons of Mass Destruction Programs," an intelligence assessment released last week by the CIA, expressed the same concern.

"Baghdad's UAVs — especially if used for delivery of chemical and biological warfare agents — could threaten Iraq's neighbors, U.S. forces in the Persian Gulf, and the United Sates if brought close to, or into, the U.S. homeland," it said.

Like the president, however, the report presented no evidence that Iraq is planning such an attack. There was also no explanation given as to how Iraq would get the UAVs into the United States, or even close to it.

UAVs would not be capable of flying anywhere near the distance from Iraq to the United States, although they could threaten U.S. troops in Kuwait.

[You can download the mentioned CIA assessment, "Iraq's Weapons Of Mass Destruction Programs," as a 2.2MB PDF.]

Disregarding the idea that an attack on US embassies or forces might generally be considered "missions targeting the United States," Raddatz and Beinart seem to be in tune about the conceivable threat to North America from Iraqi UAVs. But is Beinart really correct in his flat assertion, "They could reach the United States only if flown from a warship stationed off America's coast (a virtually impossible scenario given Iraq's almost nonexistent navy)," or does he just not know what his is talking about?

I won't keep you in suspense—Beinart doesn't know what he is talking about.

First, small UAVs could be launched from any tanker, container ship or even smaller cargo vessels, you don't need a "warship" or "navy." (The one UAV used as an example in the CIA assessment, a converted L-29 jet trainer, is too big for that; but the report goes on to state "Baghdad has a history of experimenting with a variety of unmanned platforms. Iraq's use of newer, more capable airframes would increase range and payload, while smaller platforms might be harder to detect and therefore more survivable. This capability represents a serious threat to Iraq's neighbors and to international military forces in the region.")

Second, they don't have to be launched from coastal areas to begin with.

In March, Walter Pincus reported in The Washington Post:

Iraq tried to dismantle an undeclared new drone aircraft last week after it was discovered by inspectors from the United Nations, according to U.N. and U.S. officials.

Inspectors from the U.N. Monitoring, Verification and Inspection Commission (UNMOVIC) first discovered the remote piloted vehicle, or RPV, at the Samarra East flight-test facility north of Baghdad in mid-February, officials said. With a wingspan of almost 25 feet, the RPV could have a range far in excess of the 150 kilometers (93 miles) allowed by U.N. regulations.

The inspectors raised questions about the drone last Tuesday when they visited the Ibn Fernas Center in northern Baghdad, where RPVs and other unmanned aerial vehicles (UAVs) are developed and produced. When they returned to the flight-test site the next day for another look at the large drone, they found two such RPVs — and found the Iraqis dismantling one of them, as well as two smaller RPVs, according to a senior administration official. "They apparently did not expect the inspectors," the official said.

Under November's U.N. resolution, Iraq was required to declare UAV and RPV aircraft because Baghdad had experimented with them in the 1980s and 1990s as delivery vehicles for chemical or biological agents. The RPV being dismantled had been fabricated from the fuel tank of one of those vehicles, an L-29 Czech-made small airplane. Hans Blix, UNMOVIC's executive director, reported Friday to the Security Council that his inspectors had raised questions with Iraq about its unmanned aircraft. But U.S. officials Monday took public issue with his failure to disclose the problem encountered last week, calling it an example of Iraq's refusal to cooperate and disarm.

In a closed Security Council meeting Monday, Blix defended his handling of the issue, saying he does not report on all new findings by inspectors. Although the newly designed RPV should have been declared, he said, it was not certain it would be proscribed since it still may be just a "prototype."

The first public indication of the new RPV came Monday when UNMOVIC put on its Web site the 173-page document Blix gave privately to Security Council members last Friday, which was entitled "Unresolved Disarmament Issues, Iraq's Proscribed Weapons Programs."

[You can download the UNMOVIC report as a 1.42MB PDF.]

As The Washington Post piece indicates, the report mentions the February discovery of the one RPV type, but doesn't mention the incident with the inspectors which apparently happened to close to the time the report was completed (the report is dated March 6, the "last Tuesday" in the Washington Post article would be March 4 and day following would have been March 5), but Blix didn't mention it to the Security Council on March 7 (the "last Friday") when he presented the report, either. The report divides the class into RPVs and UAVs (emphasis added):

Unmanned Aerial Vehicles (UAVs) that fly autonomously to pre-programmed targets, and Remotely Piloted Vehicles (RPVs), that are controlled from the ground or another aircraft, are of particular interest to UNMOVIC because of their potential to deliver a weapon to a remote target. Even though some UAVs are small and can only carry a few tens of kilogrammes as payload, this could be significant if that payload is a BW agent such as anthrax. Indeed, Iraq has declared that in 1988 it considered RPVs as a delivery vehicle to spray BW agents, but said that it rejected the idea as the aircraft possessed at that time were too small. Subsequently in 1990, Iraq developed a remotely piloted MIG possibly to be equipped with a spray tank for the delivery of a BW agent, (see the clustered issue on Spray devices and Remotely Piloted Vehicles). UAVs/RPVs with a BW or CW payload are, of course, proscribed, as is any UAV/RPV with a range greater than 150 kilometres.

UNMOVIC has received intelligence reports of the development, during the past four years, of UAVs and RPVs that exceed the 150 kilometres limit. In fact, one report describes a UAV with a range of 500 kilometres.

Iraq has not declared the development of any UAV. However, it has declared that it developed during the past few years, two new RPVs with a range of 100 kilometres (see below). The stated design goal for one of the RPV's, designated by Iraq as "RPV-20", was to create a drone with an endurance of one hour that had an autonomous system for guidance and control with GPS navigation. Recent inspections have also revealed the existence of a drone with a wingspan of 7.45 metres that has not been declared by Iraq. Officials at the inspection site stated that the drone had been test flown. Further investigation is required to establish the actual specifications and capabilities of these RPV's and whether Iraq has UAV/RPVs that exceed the 150 kilometers limit.

Stack this [1] up against Beinart's notion that UAVs "could reach the United States only if flown from a warship stationed off America's coast:"

In the spring of 1999, eight surviving Hunters, redesignated "RQ-5A", were sent to Albania to support OPERATION ALLIED FORCE, the NATO air campaign against Serbia over Kosovo. The Hunters were flown out of Macedonia, and were able to provide real-time video to senior officers directing ALLIED FORCE, with the video relayed through a ground station, then through a satellite to the US, and finally distributed to end users.

The Hunter has a wingspan of 8.9 meters (29 feet 2 inches) — 1.45 meters (4 feet 9 inches) longer than the discovered drone's 7.45 meters (24 feet 5 inches). The Hunters did not fly across the Atlantic under their own power, nor were they launched on their missions from a "warship," they were crated and shipped to Albania.

In fact, Fox News looked at the UAV issue in February 2003, "Iraqi Drones May Target U.S. Cities," before the UNMOVIC discoveries were reported:

Iraq could be planning a chemical or biological attack on American cities through the use of remote-controlled "drone" planes equipped with GPS tracking maps, according to U.S. intelligence.

The information about Iraq's unmanned aerial vehicle (UAV) program has caused a "real concern" among defense personnel, senior U.S. officials tell Fox News.

They're worried that these vehicles have already been, or could be, transported inside the United States to be used in an attack, although there is no proof that this has happened.

Secretary of State Colin Powell showed a picture of a small drone plane during his presentation to the U.N. Security Council earlier this month. "UAVs outfitted with spray tanks constitute an ideal method for launching a terrorist attack using biological weapons," Powell said during his speech. "Iraq could use these small UAVs, which have a wingspan of only a few meters, to deliver biological agents to its neighbors or, if transported, to other countries, including the United States."

Even though it has been mentioned a few times by administration officials, the issue of UAVs and their capabilities has been largely overlooked.

But some experts say that even if the UAVs do get assembled for use in the United States, the chances that they could cause widespread damage are low.

"These technologies are not terribly well proven," F. Whitten Peters, a former Air Force Secretary, told Fox News, referring to vehicles that can be used to disperse harmful agents.

Peters said in order to go undetected in the air, the UAVs would have to be small — and therefore would not be able to carry too much of a harmful substance, and they would have to fly over densely populated areas if they want to achieve maximum casualties.

But because many large metropolitan areas such as Washington have air traffic watchers keeping an eye out for any nearby planes that have not filed a flight plan, the UAVs likely would not succeed in a large-city attack.

It's the smaller cities and towns that would be more vulnerable.

"It's not clear air traffic would actually see this aircraft," Peters said, adding that if the vehicles flew low enough to evade radar detection, "they would be basically invisible."

As to what the government could do to protect Americans from any threat UAVs may pose, Peters said: "I don't think there's much to be done besides the steps we're already taking to deal with chemical and biological threats."

But some experts say the threat is very real and should be taken seriously.

"This isn't brain surgery," Air National Guard Chief [Maj. Gen.] Paul Weaver told Fox News in reference to how easy it would be to assemble a UAV. "The key is getting it into the country."

Not too long after Sept. 11, there was a report made public about Usama bin Laden's Al Qaeda network being trained to conduct air raids through air vehicles outfitted with spray tanks. Some terror network members had looked into the possibility of training on the aerial UAVs. This was the catalyst for investigations into U.S. flight schools. [Here, Fox is distorting - it was training on cropdusters, not "aerial UAVs" (a redundant phrase) --lp]

"If they could organize something like Sept. 11," Weaver said, "this would be very doable."

Essentially, the idea that somebody could smuggle in a small UAV rigged to dispense a pound of powdered anthrax over a crowded sports stadium is no more far-fetched than the idea that somebody might hijack an airliner and crash it into a building. But according to Beinart, it was a "functional lie" for Bush to express any concern that Iraq was working on UAVs that could be put to such uses—even though that is exactly what Iraq was doing.

Beinart ends his piece with a paragraph that begins:

These stories of Bush administration dishonesty and abuse have not been denied in the conservative press as much as they have been ignored. In researching this column, I could not find a single substantive defense of Bush's UAV claim, or his filibuster plan, or his uranium allegation, in any elite conservative publication.

Maybe it's because the UAV claim needs no defense, "substantive" or otherwise, except to people who think "[t]hey could reach the United States only if flown from a warship stationed off America's coast." And, while Beinart probably considers FOX to be a conservative mouthpiece, it doesn't qualify as an "elite conservative publication," so maybe he is right. I'm not an "elite conservative publication" either, but I suspect this was more than "substantive" enough to to address two questions. The first is whether "Bush's UAV claim" was a "fundamental lie" or not? The second:

Is The New Republic's editor, Peter Beinart, lying or clueless, or both?

[1] Greg Goebel's site, "In The Public Domain," has some of the best UAV pages on the web.

Original content copyright © 2002-2005 Lynxx Pherrett. All rights reserved.