William Galston devotes his Wall Street Journal column to arguing that there is an urgent need for the federal government to avoid a “debt spiral”:

When Bill Clinton took office in January 1993, government debt held by individuals and private institutions, foreign and domestic, amounted to 46.8% of U.S. gross domestic product. After four consecutive budget surpluses in his second term, it had fallen to 32.7% by the end of 2000, and it remained at roughly this level for the next seven years, until the onset of the Great Recession.

By the time the recession ended in the third quarter of 2009, a combination of higher spending and lower revenues had raised the debt-to-GDP ratio by nearly 20 percentage points, to 52.3%. During the next decade, it continued to rise under presidents of both parties, reaching 79.2% by the fourth quarter of 2019.

Then came the second giant fiscal shock—the Covid-19 pandemic—to which the federal government under both Presidents Trump and Biden responded with record levels of spending on individuals, families, businesses, public institutions, hospitals and state governments. As these policies wound down at the end of 2022, debt held by the public had surged to 97%.

Enter the Congressional Budget Office. In its latest 10-year budget analysis released last week, CBO projected large and rising budget deficits as far as the eye can see. Debt held by the public will increase by an eye-popping $22 trillion, from $24.3 trillion in 2022 to $46.4 trillion in 2033, and the debt-to-GDP ratio will rise by more than 20 points, to 118%.

Some believe this increase doesn’t matter much for the economy or average families, but the evidence suggests otherwise. For one thing, this increase will trigger a debt spiral in which the U.S. must borrow more and more simply to pay the interest on its debt. Between 2022 and 2033, annual interest payments on the public debt will triple, from $475 billion to $1.4 trillion, and double as a share of GDP. Because a substantial portion of this debt is held by foreign entities, including the Chinese government, the U.S. will be transferring more of its income and wealth overseas.

For another, increases in the national debt tend over time to increase long-term interest rates, which slows economic growth. A recent analysis by Lukasz Rachel and Larry Summers found that each percentage-point increase in the debt-to-GDP ratio raises interest rates by 3.5 basis points, or 0.035 percentage point. If that’s correct, the 20-point increase in store for us over the next decade will raise rates by 0.7 percentage point, which will have a significant negative effect on investment and output.

Unless something dramatic happens it looks very much as though we have a protract period of inflation higher than we’ve become accustomed to conjoined with growth too slow to do much about it. What does Mr. Galston propose?

Here’s what I’d do to prevent the debt spiral. First, stop the bleeding by agreeing to prevent the debt-to-GDP ratio from increasing over the next decade. This would mean reducing the projected $22 trillion debt accumulation by about $7.5 trillion during this period.

Second, put everything on the table. If Republicans continue to insist that tax increases are off the table while Democrats proclaim that Social Security and Medicare are untouchable, negotiations won’t go anywhere.

Third, establish some guiding principles. Mine are simple: Do no harm to low-income and working-class families; do not allow the burdens on upper-income households to be lighter than for those further down; and, within these constraints, orient the federal budget to maximize the rate of economic growth that can be sustained over time.

To my mind eliminating FICA max is a no-brainer. At the very least it should be raised to cover nearly all wage income—to $538,000 indexed. I don’t believe that increasing it to cover all income is either achievable or desirable. That alone won’t solve Social Security’s problems: you need to change the benefit formula at the same time.

Although I believe in Medicare I’ve said in the past that as implemented it was a terrible policy error, one, unfortunately, that’s impossible to undo at this point. The best we can do is hold the line on reimbursement rates. Let’s not kid ourselves. That will have implications, too.

What we can’t do is keep things the way they are right now on both sides of the ledger without impelling serious problems.

There are two drastically different accounts of the war in Ukraine, one epitomized by President Biden’s speech in Kyiv and the other by Russian President Putin’s speech. The Ukrainians’ and our account of the war is a year ago Russia made an unprovoked attach on Ukraine and have piled atrocity on atrocity in their prosecution of the aggressive war. Russia’s account is that it was a spoiling attack which disrupted an assault by Ukraine on the Russia-aligned people of the Donetsk and Luhansk provinces. While I suspect that there’s more truth in the Ukrainian account, neither their nor the Russian account is the whole truth. Like so much in this war its obscured by, to use Carl von Clausewitz’s felicitous description, the fog of war.

I’ve read many opinions of the two speeches over the last several days. Here’s the opinion of the editors of the Wall Street Journal:

Mr. Putin’s goal is unchanged: Control most or all of Ukraine, and incorporate it into his greater Russian empire. He still thinks he can outlast the Ukrainian government and its Western supporters. Many in the U.S. and Europe are ready to head to a negotiating table, but Mr. Putin is not. The only settlement he has in mind is Ukraine’s surrender.

The fastest route to peace then is defeating Mr. Putin, which the Biden Administration still seems reluctant to admit. Mr. Biden hasn’t wavered in his rhetorical support for Ukraine, and his Tuesday Speech in Poland struck the right note that autocrats “cannot be appeased” but “must be opposed.”

Yet his air of triumphalism is premature—Ukraine could still lose—and it is backed by ambivalent action. In the latest example, Mr. Biden is still holding back the Army tactical missile system, long-range weapons that the Ukrainians desperately want so they can strike deeper into Russian positions. The Administration is leaking that the U.S. military doesn’t have any to spare, but allied inventory estimates run in the thousands.

This has been the pattern for a year. The Biden team throws up reasons why a certain weapon—tanks, Patriot missile defenses, Himars—can’t be provided to Ukraine. The system is too complex. The training will take too long. Then these objections suddenly vanish after criticism in public and from Congress, and Ukraine gets the goods. Can we skip ahead and provide F-16 fighter jets now?

Getting Ukraine the weapons they need is increasingly urgent. If Russia receives arms from China, the war will descend into an even bloodier stalemate or a Ukrainian defeat. Political support could fray in European capitals and in Washington, even as Beijing’s involvement raised the global risks of defeat.

I don’t view these things through a prism of right and wrong. That is not to say that I don’t think there is a right and wrong but that I think it’s unproductive to couch matters in those terms. I tend to look at things in terms of interest and distinguish among the achievable, the hard to achieve, and the impossible or nearly impossible to achieve.

Claiming that we’re supporting Ukraine in defense of a rules-based order is sophistry. If we believe in a rules-based order, why do we have troops in Syria? Why do we have troops in Niger? I think we have made it abundantly clear that we consider hurting Russia in our national interest.

Viewed through that prism, what is achievable? I would say that preventing Russia from occupying all of Ukraine is achievable as is admitting Ukraine to NATO and the European Union. Returning to the pre-2022 borders would be hard to achieve; returning to the pre-2014 borders would be impossible or nearly impossible to achieve.

At this point to me is what can be accomplished without a direct involvement of NATO troops, assuming, of course, that NATO regulars are not already fighting in Ukraine, something asserted by the Russians. IMO achieving the hard to achieve or nearly impossible goals would require such involvement.

Blithely asserting the choice is the Ukrainians’ to make is facile. Our supplies and support change the Ukrainians’ calculus. I would not doubt that they will continue to fight even should we reduce or eliminate our support. The question is to what end? I strongly suspect their goals would change.

It’s been a busy day. Between work and walking dogs in the Freezing rain this is the first chance I’ve had to post today.

Last night I made Shrimp Étouffée. With some rice and a glass of dry red wine, that was our dinner. Possibly the only thing I enjoy more than making cajun food is eating cajun food. Do you know the difference between cajun cooking and creole cooking? You eat creole cooking in the dining room; you eat cajun cooking in the kitchen.

At RealClearPolicy Lars Carlstrom has an upbeat post about the burgeoning domestic lithium industry:

t’s no secret that the Inflation Reduction Act has been a game-changer for the U.S. energy transition value chain. Indeed, the legislation was a key driver for launching Statevolt when we did, and subsequently our partnership with Controlled Thermal Resources on our Hell’s Kitchen Lithium and Power plant. Despite its name, the Hell’s Kitchen Lithium and Power facility has no affiliation with Gordon Ramsey’s hit US reality TV show. Instead of terrorising aspiring chefs, the 54GWh Gigafactory will produce lithium and geothermal power right here in California.

As the demand for EVs and renewable energy grows, so too does the demand for lithium, which is needed to produce the batteries that store the energy generated by renewable sources. The need for domestic lithium supply chains is at an all-time high, with U.S. lithium demand for EVs and storage forecast to reach 383 kilotons by 2030 (Source: IEA).

Read the whole thing. Recently, I’ve read a number of articles about the headwinds the Chips and Science Act is encountering. As it turns out building an entire supply chain is harder than adding chip fabricating plants and that’s hard enough. We have a long way to go recover the ground we’ve lost over the last 30 years. Let’s hope we see a lot more posts like Mr. Carlstrom’s.

It’s going to be darned hard not to mention expensive to promote the adoption of electric vehicles when their prices rise as fast as they have recently and, since a considerable portion of their cost is in the batteries, producing more lithium is a necessary step.

The editors of Bloomberg prescribe a does of fiscal responsibility for the federal government:

President Joe Biden and Congress should take a break from their ritualized wrangling over the debt ceiling and look closely at last week’s projections from the Congressional Budget Office. These show that an already bad fiscal outlook is rapidly getting worse. The new forecast makes the standard assumption that the policies in place won’t change — thus proving beyond a doubt that they’ll have to.

Last May the CBO projected a budget deficit of just under $1 trillion for 2023. It now expects a deficit of $1.4 trillion, or 5.3% of gross domestic product. Deficits continue to trend higher, not just in dollar terms but as a proportion of national income. The cumulative deficit over the next 10 years is estimated at $19 trillion, $3 trillion more than before. The ratio of public debt to GDP rises to 98% this year, and to 118% by 2033. After that, the debt burden just carries on growing, year in year out.

There’s a word for all this: unsustainable.

They’re dreaming. Neither Democrats nor Republicans feel any need to exercise any fiscal responsibility and, indeed, doing so would discourage the very bases they’re trying to attract.

Democrats have tied themselves to an agenda of boundless public spending while promising to shield the vast majority of households from higher taxes. Republicans want spending cuts — but not to reduce deficits. Their goal is to shrink the government, and they’re perfectly happy with ever-increasing deficits and public debt so long as tax cuts are part of the mix. Meanwhile, they think, threatening to destroy the US government’s standing with creditors is permissible.

They do make one significant observation—that higher inflation is increasing the costs of many federal programs fast than it’s increasing revenues. Meanwhile, I suspect the overwhelming likelihood is that the debt overhang will reduce GDP growth while our elected leaders hope that inflation reduces the significance of that debt overhang. That strategy hurts the very people they purport to care about most.

At War on the Rocks Mike Pietrucha makes a pretty good case that sending F-16s to Ukraine is at best a distraction:

The foundation of an airpower capability is fundamentally people, not hardware. An aircraft, of whatever type, does not grant a capability unless it is flown by capable and trained individuals, competently maintained, and adequately supported. Ukraine’s air force is not a fledgling air force; it operates fixed and rotary wing aircraft that perform airlift, counterair, and ground attack missions. It has a 30-year history of using and modifying legacy Soviet aircraft, and Ukraine has its own aviation industry. Ukraine has managed to maintain a force despite horrific losses in the early days, and has even managed to add new defense-suppression capabilities, enabled by MiG-29 Fulcrum carrying American-supplied AGM-88 High Speed Antiradiation Missiles. But it does not operate Western aircraft and it never has. By necessity, its training programs, tools, support equipment, and experience base are entirely based on three decades of independent operations with Soviet legacy aircraft, which were designed to support a Soviet style of airpower employment, not a Western one. The Soviets operated their airpower under centralized control, primarily in support of the ground component, while Western airpower embraces aviator initiative and utilizes airpower for a wide range of missions beyond just flying artillery.

Switching over to Western aircraft is possible, of course, and Ukraine is an excellent candidate for doing so. But the provision of Western fighters like the F-16 is not an evolutionary step; it is a revolutionary step that will require the Ukrainian air force to start from scratch. Ukraine has experience operating single-mission aircraft — their interceptors like the MiG-29 Fulcrum have only a rudimentary ground attack capability, and their Su-24 Fencer and Su-25 Frogfoot ground attack aircraft have no air to air capability at all. The F-16 has evolved into a capable multirole fighter that has no parallel in the ex-Soviet aviation enterprise.

All it would take is time and the people to train to fly and maintain the craft. Sounds to me like procuring old Soviet aircraft would actually be a better choice.

Not everyone sees President Biden’s visit to Kyiv as a triumphant affirmation of Ukraine’s heroic defense. Here are Harry Kazanias’s remarks at 1945:

The problem for Joe Biden is people are now actually going to start asking real questions about U.S. policy when it comes to the Ukraine war. You don’t need a Ph.D. from Princeton to dream them up: what are our goals in Ukraine, how do we plan to achieve them, and what we are willing to risk to reach them?

And believe me, those are never questions any president wants to answer when it comes to matters abroad.

and

There is no end game, just to make sure there is no media outrage that we aren’t helping Ukraine. You know, Biden has to worry about 2024 and keeping his poll numbers from not slipping any more than they have.

In all honesty I think it’s probably both. I think he was right to provide support for Kyiv. I think we should be more hesitant about supporting Kyiv’s full war goals. Neither I nor anyone who actually knows anything about Russia thinks that Moscow is bluffing when it holds us Russian control of Crimea as a non-negotiable national interest. I’m not as confident about Russia’s view of Ukraine exiting the Russian sphere of influence. Some knowledgeable people seem to think that would be an acceptable outcome for Russia. I think it’s an inevitable one.

If it’s not an acceptable outcome, the Ukrainians, Russians, and we are in for a very bad time of it.

You might find this post by Blake Stilwell at Military.com entertaining. As it turns out the Air Force combined the power of more than a thousand Playstations to create one of the fastest supercomputers in the world:

When the PlayStation 2 was first released to the public, it was said the computer inside was so powerful, it could be used to launch nuclear weapons. It was a stunning comparison. In response, Iraqi dictator Saddam Hussein opted to try and buy up thousands of the gaming consoles, so many that the U.S. government had to impose export restrictions.

But it seems Saddam gave the Air Force an idea: building a supercomputer from many PlayStations.

Just 10 years after Saddam tried to take over the world using thousands of gaming consoles, the United States Air Force took over the role of mad computer scientist and created the world’s 33rd-fastest computer inside its own Air Force Research Laboratory.

Only instead of PlayStation 2, the Air Force used 1,760 Sony PlayStation 3 consoles. They called it the “Condor Cluster,” and it was the Department of Defense’s fastest computer.

Read the whole thing. The experiment, although successful, did not end happily. Sony shut them down.

I also wanted to bring George Friedman’s observations on what happens if Ukraine falls to your attention. He notes:

If the Ukrainians can no longer resist effectively, and if the flanks represented by Belarus and Moldova are opening a path to Poland and Romania, what will the United States do? Europe will follow Washington’s lead, for better or worse. The worst-case scenario, of course, would be the war that was avoided during the Cold War. That war never happened because Russia did not have the power to engage and defeat NATO and its U.S. benefactors. The Russians were not prepared to attack given the risk of failure and the riskier, albeit unlikely, possibility of a nuclear exchange.

Still, the U.S. must consider the risks of intervention. If Russia occupies Ukraine, it would effectively border Poland, Slovakia, Hungary and Romania.

The big question is whether Russia would then invade any of those countries. I don’t think so but I’ve been wrong before. It’s certainly a risk.

Aiding the Ukrainians in recovering all of there erstwhile territory including Crimea is also a risk. Weighing the relative risks is something I’m glad I don’t have to do. I wish no one had to do it.