Has Washington gone mad? Sadly, no. What's more, America's Congress and its members - craven, but sane enough - show no sign of going anywhere.
Last week, the US President Barack Obama unveiled his budget for fiscal year 2011. It weighed in at US$3.8 trillion (Dh13.95tn), slightly smaller than China's annual economic output, and includes a $1.6tn shortfall, followed by deficits of $1.3tn in 2012 and a total of $8.5tn over the next 10 years.
By the end of the decade, America's public debt, at 77 per cent of GDP, would be at its highest level in six decades.
Mr Obama frequently and justifiably points out that debt financing on such a vast scale was necessary to repair the damage done to the US economy by his predecessor. According to The New York Times, roughly half of this year's shortfall is due to the initiatives of the former president George W Bush; in particular his tax cuts, his wars in Iraq and Afghanistan, and his unfunded mandate to enlarge a national drug programme for the elderly.
The Times attributed only 10 per cent of the deficit to Mr Obama's nearly $800 billion stimulus measure passed a year ago to keep the economy afloat, in addition to other incumbent programmes.
Nevertheless, the Obama budget, and Congress's response to it, is less a spending plan than a portent of national bankruptcy. Last Tuesday, Moody's Investors Service warned that America's "Triple A" sovereign credit rating was in jeopardy. Either engineer a robust economic recovery, Steven Hess, the Moody's senior credit officer, told Washington, or demonstrate to the world you are serious about fiscal consolidation.
To the surprise of no one, Mr Hess's remarks failed to register with America's politicians, who would surely indulge in partisan bickering even as they steered the ship of state towards insolvency.
Consider: by the end of last week, it was clear that Mr Obama's efforts to form a bipartisan commission that would hammer out ways to reduce the deficit was going nowhere after Congressional Republicans - the party of fiscal restraint, mind you - declined to participate.
The reason? Republicans fear such a commission would give the president and his Democratic party political cover during this year's midterm elections.
The defence secretary Robert Gates has warned the elected politicians against restoring funds to weapons programmes he wants cut.
They include a $2.5bn programme to build 10 C-17 cargo planes the air force says it does not need, but production of which generates some 30,000 jobs. Last week, the Republican senator Kit Bond, whose home state of Missouri produces C-17 cargo doors, warned that ceasing production of the aircraft would leave the US at the mercy of "Russia or other foreign countries" for its airlift needs.
The proposed US defence budget - at $712bn, including war spending - is equal to half of what the rest of the world spends on national security and represents a slightly smaller outlay than the GDP of Turkey, the world's 17th-largest economy.
The Obama budget calls for an end to a programme that would restore lands at abandoned mines that have already been cleaned up.
This is the president's second attempt to cut the initiative. Last year, senators from both parties whose states are on the receiving end of the programme managed to keep it running.
The veteran reporter for The Wall Street Journal Gerald Seib devoted his column last week to the national security implications of Washington's reliance on foreign lending, particularly from China, whose interests diverge from those of the US as much as they converge with them.
A day later, a senior official from China warned Mr Obama against meeting the Dalai Lama, the Tibetan spiritual leader whom Beijing regards as a subversive, lest it would "damage trust and co-operation between our two countries, and how would that help the United States surmount the economic crisis?"
One would think that a veiled threat of economic sabotage, that Beijing would begin dumping its vast holdings of US securities if the meeting goes ahead, would compel legislators to set aside their partisan rancour and craft a thoughtful approach to fiscal recovery. Apparently, one would be wrong.
The budget debate that will consume Congress for the next several months will be remembered for its futility.
By precluding any chance of comprehensive tax increases, as Republican leaders have pledged to do by filibuster, they have torpedoed any chance for the kind of entitlement reform that will be needed to contend with the next crescendo of debt, the one that will come with the baby-boomer retirement wave and the enormous stress it will place on the country's federal health and insurance schemes.
Economists estimate the costs of such a burden in the tens of trillions of dollars.
The US has reached an inflection point. Chronic deficits, the wages of political gridlock, are now an all but permanent vital sign of the US economy.
The rest of the world will take note and adjust accordingly.
@Email:business@thenational.ae
Paris%20Agreement
%3Cp%3EArticle%2014%3C%2Fp%3E%0A%3Cp%3E1.%20%5BThe%20Cop%5D%20shall%20periodically%20take%20stock%20of%20the%20implementation%20of%20this%20Agreement%20to%20assess%20the%20collective%20progress%20towards%20achieving%20the%20purpose%20of%20this%20Agreement%20and%20its%20long-term%20goals%20(referred%20to%20as%20the%20%22global%20stocktake%22)%3C%2Fp%3E%0A%3Cp%3E2.%20%5BThe%20Cop%5D%20shall%20undertake%20its%20first%20global%20stocktake%20in%202023%20and%20every%20five%20years%20thereafter%C2%A0%3C%2Fp%3E%0A
AIDA%20RETURNS
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ECarol%20Mansour%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3EAida%20Abboud%2C%20Carol%20Mansour%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203.5.%2F5%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
AS%20WE%20EXIST
%3Cp%3EAuthor%3A%20Kaoutar%20Harchi%C2%A0%3C%2Fp%3E%0A%3Cp%3EPublisher%3A%20Other%20Press%3C%2Fp%3E%0A%3Cp%3EPages%3A%20176%3C%2Fp%3E%0A%3Cp%3EAvailable%3A%20Now%3C%2Fp%3E%0A
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
The specs
Engine: 5.0-litre V8
Power: 480hp at 7,250rpm
Torque: 566Nm at 4,600rpm
Transmission: 10-speed auto
Fuel consumption: L/100km
Price: Dh306,495
On sale: now
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
THE SPECS
Engine: 1.5-litre turbocharged four-cylinder
Transmission: Constant Variable (CVT)
Power: 141bhp
Torque: 250Nm
Price: Dh64,500
On sale: Now