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Volume 7, Issue 6: February 7, 2005

  1. Bush's Economic Proposals Won't Reduce Size of Government, Powell Argues
  2. Decentralization Would Help Stabilize Iraq, Eland Argues
  3. Former CIA Analyst Michael Scheuer to Address Independent Policy Forum (3/1/05)

1) Bush's Economic Proposals Won't Reduce Size of Government, Powell Argues

Although President Bush called for restraint in government spending in last week's State of the Union address, a closer examination reveals that his proposals "will not reduce the role of government in our economy," according to economist Benjamin Powell, director of the Independent Institute's Center on Entrepreneurial Innovation. In his latest op-ed, Powell states that Bush's proposals would "simply change the way government intervenes" in the economy.

"The centerpiece of Bush's Social Security reform," writes Powell, "is 'voluntary personal retirement accounts.' Yet what Bush means by 'voluntary' is that young workers can stay in the current system, or go to his system where eventually up to four percentage points of workers' payroll taxes will go to a personal investment account. If these accounts were really 'voluntary,' workers would not be forced by a tax to contribute at all. They could either save in a manner they choose, or not at all.... Only in politics can 'voluntary' mean 'not voluntary' and can 'your money' not be yours."

Bush said that under his plan "the money in the account is yours and the government can never take it away." But as Powell points out, government policies could still reduce the value of individuals' personal retirement accounts -- especially through future changes in the tax laws and through inflation. In addition, under the Bush proposal individuals could invest only in the types of assets allowed by the plan and would have limited ability to withdraw funds from their account, Powell explains.

"Is the money in this type of account really 'yours' if you cannot decide what should be done with it?" asks Powell. "The Social Security reform Bush outlined in his State of the Union address is not voluntary and it doesn't create purely private accounts. It just creates a new version of government-mandated and -regulated retirement savings.

"A prosperous economy and secure retirement can be achieved in a voluntary society, but Bush's State of the Union address should not be interpreted as a significant move in that direction."

See "State of the Union Double Speak" by Benjamin Powell (2/3/05)
"El Doble Discurso sobre el Estado de la Unión," by Benjamin Powell (2/3/05)

Also see "A Primer on the Social Security Crisis," by Alexander Tabarrok (10/25/99)

For more on Social Security, see


2) Decentralization Would Help Stabilize Iraq, Eland Argues

Although reportedly 83 percent of South Vietnam's potential voters went to the polls in that country's 1967 elections, peace and stability were anything but imminent. Those euphoric over the relatively large turnout (except in the Sunni triangle) for Iraq's national elections last week should keep that simple fact in mind, argues Ivan Eland, senior fellow and director of the Independent Institute's Center on Peace & Liberty, in his latest op-ed.

Cobbled together by the British after World War I brought Ottoman rule to an end, Iraq is an artificial country with fractious religious and ethnic divisions. Therefore, for the region to become peaceful and prosperous, it is imperative that Iraq's Sunni Arabs, and other minorities, do not feel threatened by the rule of their rivals, Eland explains.

The most promising approach for reducing the prospect of civil unrest, Eland argues, is to give these groups an opportunity for self-rule, such as in a decentralized confederation.

"If given a real choice -- instead of the constrained option offered by a heavily armed occupying power to elect the leaders of a unified U.S.-like federation -- Iraqis might want a looser confederation, with increased autonomy for various ethnic/religious groups, or even a partition of the country into separate states," Eland writes.

Coupled with the withdrawal of U.S. troops, decentralized governance would likely quell the insurgency, according to Eland.

"The foreign occupier would be gone and no strong central government would exist to threaten to oppress groups that didn't control it. Security could be provided locally, rather than nationally, using existing Kurdish and Shiite militias and insurgents converted to security forces in Sunni areas."

See "Iraq: Purple or Still Black and Blue?" by Ivan Eland (2/7/2005)

Also see:

"Are Iraqi Elections a Panacea?" by Ivan Eland (1/31/05)

"The Way Out of Iraq: Decentralizing the Iraqi Government," by Ivan Eland

To purchase THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland, see

Center on Peace & Liberty


3) Former CIA Analyst Michael Scheuer to Address Independent Policy Forum (3/1/05)

Despite the absence of a terrorist attack on American soil since 9/11, the threat al Qaeda poses to the American homeland is real and significant, according to former Central Intelligence Agency Senior Counterterrorist Analyst Michael Scheuer, the "anonymous" author of the acclaimed bestseller, IMPERIAL HUBRIS: Why the West Is Losing the War on Terror. In fact, U.S. policies and actions have helped Osama bin Laden win greater sympathy from within the broader Muslim community, putting all Americans at greater peril, according to Scheuer, whose CIA work focused exclusively on terrorism, militant Islam, Afghanistan, and Pakistan until he resigned from the CIA last fall to speak out publicly on the failures of U.S. foreign policy. What is the U.S. government doing wrong in its fight against terrorism? What policies should it pursue? And how should the intelligence community be reformed? Please join us as CIA insider Michael Scheuer shares his informed and unique insights on these pressing issues.

MICHAEL SCHEUER is a 22-year veteran of the Central Intelligence Agency. From 1996 to 1999, he directed the CIA's Osama bin Laden desk, although his efforts fell on deaf ears. The "anonymous" author of the acclaimed bestseller, IMPERIAL HUBRIS: Why the West Is Losing the War on Terror (2004), and THROUGH OUR ENEMIES' EYES: Osama bin Laden, Radical Islam, and the Future of America (2002), Mr. Scheuer has appeared on CBS's "60 Minutes," NBC's "Meet the Press," PBS's "Frontline: Al Qaeda's New Front," and other news programs.

Tuesday, March 1, 2005
Reception and book signing: 6:30 p.m.
Program: 7:00 - 8:30 p.m.

The Independent Institute Conference Center
100 Swan Way
Oakland, CA 94621-1428
For a map and directions, see

TICKETS: $20 per person ($15 for Independent Institute Members). Special Offer: Admission with a copy of IMPERIAL HUBRIS is $40 ($35 for members) -- a 25% savings on the book. Reserve tickets by calling (510) 632-1366 or ordering online at

Praise for IMPERIAL HUBRIS: Why the West Is Losing the War on Terror:

"A powerful, persuasive analysis of the terrorist threat and the Bush Administration's failed efforts to fight it . . . [Michael Scheuer's] criticism is damning."
-- RICHARD A. CLARKE, Former National Coordinator for Security and Counter-terrorism; author, AGAINST ALL ENEMIES

"Pulls few punches . . . and gives us a fascinating window on America's war with al Qaeda."
-- MICHIKO KAKUTANI, The New York Times

"This book is so valuable, it hardly seems that any review could do it justice. . . . All those concerned with our national security would do well to take up this book.
-- RALPH PETERS, retired Army intelligence officer; author, BEYOND BAGHDAD

"No serious observer of the war on terrorism can ignore this scathing critique of the Bush administration's policies."
-- PETER BERGEN, CNN Terrorism Analyst; author, HOLY WAR, INC.

For more information about this event, see


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