Da Neg Spending 37

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Spending DA Neg Spending DA Neg.......................................................................................................................................................1

Spending DA Neg...........................................................................................................................1 1NC 1/2.......................................................................................................................................................................4

1NC 1/2............................................................................................................................................4 1NC 2/2.......................................................................................................................................................................5

1NC 2/2............................................................................................................................................5 Uniqueness – Yes Econ (General)...............................................................................................................................6

Uniqueness – Yes Econ (General).................................................................................................6 Uniqueness – Yes Econ (Prices)..................................................................................................................................7

Uniqueness – Yes Econ (Prices).....................................................................................................7 Uniqueness – Yes Econ (AT: Dollar)..........................................................................................................................8

Uniqueness – Yes Econ (AT: Dollar).............................................................................................8 Link – Policy-Decisions..............................................................................................................................................9

Link – Policy-Decisions..................................................................................................................9 Link – Clean Energy.................................................................................................................................................10

Link – Clean Energy....................................................................................................................10 Link – Regulations (Exports)....................................................................................................................................11

Link – Regulations (Exports)......................................................................................................11 Link – Oil..................................................................................................................................................................12

Link – Oil......................................................................................................................................12 Link – Energy Prices (Steel).....................................................................................................................................13

Link – Energy Prices (Steel)........................................................................................................13 Link – RPS................................................................................................................................................................14

Link – RPS....................................................................................................................................14 Link – Nuclear Power...............................................................................................................................................15

Link – Nuclear Power..................................................................................................................15 Link – Nuclear Power...............................................................................................................................................16

Link – Nuclear Power..................................................................................................................16 Link – Nuclear Power (AT: Yucca)...........................................................................................................................17

Link – Nuclear Power (AT: Yucca).............................................................................................17 Link – Renewables....................................................................................................................................................18

Link – Renewables.......................................................................................................................18 Link – Renewables....................................................................................................................................................19

Link – Renewables.......................................................................................................................19

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Link – Renewables (AT: New Market).....................................................................................................................20

Link – Renewables (AT: New Market).......................................................................................20 Link – Solar Power...................................................................................................................................................21

Link – Solar Power......................................................................................................................21 Link – CAFE.............................................................................................................................................................22

Link – CAFE................................................................................................................................22 Link – CAFE (Auto).................................................................................................................................................23

Link – CAFE (Auto)....................................................................................................................23 Link – Hybrids..........................................................................................................................................................24

Link – Hybrids.............................................................................................................................24 Link – Carbon Tax.....................................................................................................................................................25

Link – Carbon Tax.......................................................................................................................25 Link – Carbon Tax.....................................................................................................................................................26

Link – Carbon Tax.......................................................................................................................26 AT: Dollar Link Turn.................................................................................................................................................27

AT: Dollar Link Turn...................................................................................................................27 Internal Link – Exports (Agriculture).......................................................................................................................28

Internal Link – Exports (Agriculture).......................................................................................28 Internal Link – Energy Prices (Forests)....................................................................................................................29

Internal Link – Energy Prices (Forests)....................................................................................29 2NC Impact Module – China....................................................................................................................................30

2NC Impact Module – China......................................................................................................30 2NC Impact Module – China (Asia).........................................................................................................................31

2NC Impact Module – China (Asia)...........................................................................................31 2NC Impact Module – China (Competitiveness)......................................................................................................32

2NC Impact Module – China (Competitiveness)......................................................................32 2NC Impact Module – China (Terrorism).................................................................................................................33

2NC Impact Module – China (Terrorism).................................................................................33 Impact – General.......................................................................................................................................................34

Impact – General..........................................................................................................................34 Impact – R&D Warming...........................................................................................................................................35

Impact – R&D Warming.............................................................................................................35 Impact – Environment...............................................................................................................................................36

Impact – Environment.................................................................................................................36 Impact – AT: Economy Resilient..............................................................................................................................37

Impact – AT: Economy Resilient................................................................................................37

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Dollar Collapse Bad..................................................................................................................................................38

Dollar Collapse Bad.....................................................................................................................38 Dollar Collapse Good................................................................................................................................................39

Dollar Collapse Good...................................................................................................................39

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1NC 1/2 Ignore all market-based uniqueness claims – the economy is growing due to employment, confidence, trade figures and GDP – exports are key to future growth Anatole Kaletsky, The Times, July 14, 2008, We have financial, not economic, problems Sometimes the markets just get things wrong. It doesn't happen very often. Usually the market's collective wisdom is more perceptive than the individual opinions of the investors who comprise it. But every now and then - about twice every decade markets make spectacular blunders, completely losing touch with the real economy of consumption, investment, employment and world trade. The markets' behaviour last week suggested that such a time has arrived. On Friday, share prices around the world collapsed as Wall Street was gripped by rumours about the bankruptcy of the two largest financial institutions in the world: the US Government-backed mortgage insurers Fannie Mae and Freddie Mac, whose combined debts are almost $6 trillion, equivalent to roughly double Britain's entire GDP. Yet what has been happening in the world of real economic activity to explain such extreme market action? While Wall Street has gone into meltdown since the beginning of June, conditions in the real economy have been unambiguously improving. The latest employment figures, published two weeks ago, confirmed that economic conditions had stabilised after their sharp deterioration in the winter, while purchasing

managers' surveys, the most reliable indicator of very recent economic trends, suggested a continuation of the modest but clear improvement that began in April. Sales figures from leading retailers were much stronger than expected, showing that tax rebates designed to provide a shot of financial adrenaline to all but the richest US households were doing exactly what the doctor ordered - offsetting the depressing effect on consumption of the credit crunch and the housing slump. As a result, consumer confidence, although an unreliable and lagging indicator, showed its first improvement for six months. Even the figures on home sales have now been near-stable for four consecutive months, after almost a year of vertiginous falls. Most important of all, the monthly trade figures, published on Friday in the midst of the Wall Street meltdown, proved that the remarkably adaptable US economy was responding to the credit crunch exactly as the optimists had hoped - by undertaking an immense structural shift from consumer and housing-led growth to growth powered by exports. Related Links The narrowing of the US trade deficit, despite the biggest monthly increase on record in the cost of oil imports, almost guarantees that the second-quarter GDP figures, due to be published two weeks from now, will show the US economy accelerating from the stagnant conditions of the past two quarters to a near-normal rate of 2.5 or even 3 per cent growth. Why, then, are share prices collapsing and the dollar hitting new lows? There are three possible explanations. First, financial markets may “know something” dreadful about America's economic prospects that is not yet apparent in any statistics. Secondly, investors may be reacting to specifically financial problems that have relatively little impact on the non-financial economy outside Wall Street. Thirdly, the markets may simply be wrong about the economic outlook and about the value of financial assets, as they have been many times in the past. Hence the adage that “Wall Street is a great economic forecaster - it has predicted six of the last three recessions”. The first explanation - the skeleton in the cupboard - is the one naturally favoured on Wall Street itself. The financial community's self-regarding faith in the foresight of financial analysts and investors seems never to be shaken by the total lack of foresight revealed by these same analysts and investors in the past. For example, one of the “events” that triggered last week's collapse of confidence was a privately circulated paper from a leading hedge fund group, which estimated that total losses in the global credit crunch might be as high as $1.6 trillion, rather than the $400 billion recently suggested by the IMF, the Bank of England and other serious researchers. These new estimates contained no new “information”, apart from some simple extrapolations of the losses already suffered by the hardest-hit segments of the credit markets on to other parts of the economy that so far had shown few signs of trouble. This was, in other words, a perfect example of the self-justifying “reflexivity” identified by George Soros as the main cause of boombust cycles in financial markets. But how much impact on the real economy are these self-justifying expectations likely to have? Thus far, it seems that the answer is “mercifully little”, which raises the second possible reason for the divergence between financial and economic realities these days. It is perfectly possible for financial conditions to keep

deteriorating and for bank shareholders to keep losing money, while real economic activity stabilises and then improves. Even if institutions such as Fannie Mae are “technically insolvent”, as suggested last week by Bill Poole, a famously outspoken former governor of the Federal Reserve, this does not necessarily mean that the real economy will suffer or that these “insolvent” institutions either need to or ought to stop lending money, a point that Mr Poole himself made.

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1NC 2/2 Cleaner energy policies will derail the economy The Energy Journal, 1/1/04 The possibility that R & D aimed at increasing energy efficiency diverts funds from economic growth is consistent with the causal relations identified by the VECM. The elements of [alpha] indicate that the third cointegrating relation loads into the [DELTA]GDP equation (Table 7). This result indicates that energy prices "Granger cause" GDP (Granger, 1969). That is, higher energy prices slow GDP. This result is consistent with those generated by Hamilton (1983), who finds that sharp increases in real oil prices "Granger cause" recessions in the US economy during the post war period. A causal relation that

runs from energy prices to GDP implies that carbon taxes and/or tradable permits will slow economic activity. The negative macroeconomic effects of higher energy prices are reinforced by lower energy use. The elements of [alpha] indicate that the second cointegrating relation loads into the [DELTA]GDP equation (Table 6). This indicates that energy use "Granger causes" GDP. This result is consistent with analyses of the causal relation between US economic activity and energy use that account for energy quality (Stern, 2000). A causal relation that runs from energy use to GDP indicates that efforts to reduce carbon emissions by reducing energy use will slow economic activity.

A collapse in the US economy collapses the world economy. Walter Russell Mead, Kissinger Senior Fellow at the Council of Foreign Relations, Foreign Policy. 3/1/04 Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States--government and private bonds, direct and portfolio private investments--more and more of them have acquired an interest in maintaining the strength of the U.S.-led system. A collapse of the U.S. economy and the ruin of the dollar would do more than dent the prosperity of the United States. Without their best customer, countries including China and Japan would fall into depressions. The financial strength of every country would be severely shaken should the United States collapse. Under those circumstances, debt becomes a strength, not a weakness, and other countries fear to break with the United States because they need its market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a crippling liability, and the United States must continue to justify other countries' faith by maintaining its long-term record of meeting its financial obligations. But, like Samson in the temple of the Philistines, a collapsing U.S. economy would inflict enormous, unacceptable damage on the rest of the world. That is sticky power with a vengeance.

Global economic decline will bring Armageddon Lt. Col, Tom Bearden, PhD Nuclear Engineering, April 25, 2000, http://www.cheniere.org/correspondence/042500%20-%20modified.htm Just prior to the terrible collapse of the World economy, with the crumbling well underway and rising, it is inevitable that some of the weapons of mass destruction will be used by one or more nations on others. An interesting result then---as all the old strategic studies used to show---is that everyone will fire everything as fast as possible against their perceived enemies. The reason is simple: When the mass destruction weapons are unleashed at all, the only chance a nation has to survive is to desperately try to destroy its perceived enemies before they destroy it. So there will erupt a spasmodic unleashing of the long range missiles, nuclear arsenals, and biological warfare arsenals of the nations as they feel the economic collapse, poverty, death, misery, etc. a bit earlier. The ensuing holocaust is certain to immediately draw in the major nations also, and literally a hell on earth will result. In short, we will get the great Armageddon we have been fearing since the advent of the nuclear genie. Right now, my personal estimate is that we have about a 99% chance of that scenario or some modified version of it, resulting.

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Uniqueness – Yes Econ (General) The economy is recovering Sean O’Grady, July 4, 2008, Paulson predicts US economy will pick up by end of the year, The Independent The US Treasury Secretary, Henry Paulson, signalled yesterday that the worst may soon be over for the American economy. As the price of a barrel of oil tested fresh highs once again, and acknowledging the "headwinds" to growth coming from rapidly rising global energy and food inflation, Mr Paulson nonetheless said: "We have a resilient economy, we have good productivity, we have good efficiency. I think there's a very strong possibility that we will be growing at the end of the year, we will have stronger growth at the end of the year than we have right now." That, however, could still be relatively weak, and Mr Paulson continues to be more worried about growth than inflation. "Our biggest concern is the downturn. There's no doubt that high headline inflation numbers are a real concern to Americans, but core inflation is relatively contained and my biggest focus is on the downside risks, which are housing, oil prices and what is going on in the capital markets."

Recession fears are wrong – prefer predictive evidence London Stock Exchange, July 11, 2008, US economy 'to begin recovery mid-2009' The US economy is set to begin recovering from its slowdown next year, it has been predicted. Kenneth Lewis, chief executive of Bank of America, issued his projection for the economy in a speech before a nonprofit organisation in Los Angeles. He said: "I think we'll start a gradual recovery toward the middle of next year. "Until then, depending on what sector of the economy you're in, it will feel slow and may feel like a recession."

WNDI 2008

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Uniqueness – Yes Econ (Prices) The economy is growing stably, but higher energy prices would kill the economy Dr. M. Ray Perryman, president and chief executive officer of the perryman group, economic theory prof at the international institute for advanced studies, July 13, 2008, Midland Reporter-Telegram, Long-term economic outlook brighter than some forecasters suggest The headlines are full of bad economic news ranging from high gasoline and food prices to housing market woes. Pundits debate the best way to fix problems and deal with uncertainty. You might think we are in for a deep, dark recession. However, the U.S. economy is actually growing, albeit at a pace a bit anemic when compared to years past. The future is not nearly as bleak as some prognosticators suggest and, if you consider expectations for the long term, the picture is one of continued health with moderate prosperity. I have just finished my annual long-term economic outlook for the United States, Texas, and the state's major metropolitan areas and regions. It covers projections for the years from 2007 to 2030 with particular focus on vital economic generators as well as industrial sectors. By virtually every measure, the Lone Star State is forecast to achieve compound annual growth rates (CAGR) that exceed those of the U.S. With regard to real gross product (RGP), commonly referred to as output or the final value of all goods and services produced in an economy during a given period of time, the U.S. is likely to experience a per annum growth rate of 3.27 percent for the long term. Texas RGP is anticipated to expand at a 3.77 percent annual pace. This expectation follows the general historic pattern that has seen the Texas economy growing faster than the nation as a whole. More than half of the RGP growth projected for Texas will likely be generated by services -- 22.84 percent; finance, insurance, and real estate (FIRE) -- 16.53 percent; and trade -- 13.65 percent. These industrial sectors are predicted to contribute $674.51 billion of the expansion in the Texas economy through 2030. Other leading sectors anticipated to achieve significant expansion over the long term include durable manufacturing; transportation, warehousing, and utilities (TWU); information; and nondurable manufacturing. In 2030, the population of Texas is forecast to be approximately 36.3 million, an increase of nearly 13 million people from 2007 (a 1.82 percent yearly growth rate). During this same period, the U.S. will likely see an additional 68.5 million residents, which represents 0.89 percent annual expansion. The U.S. employment growth rate from 2007 to 2030 is expected to be 1.19 percent per annum. The Texas employment CAGR for these years is forecast to be 1.52 percent and will be noted by the 4.5 million new workers across the state, more than half of which will be in the services sector. The government and trade industries combined should account for an additional 1.2 million workers over the 23-year period. The industrial sector predicted to experience the fastest growth in wage and salary employment in Texas during the long term is services, with a 2.03 percent CAGR. The yearly growth rates for the other sectors are projected to range from 0.45 percent (mining) to 1.52 percent (achieved by both FIRE and TWU). Real personal income (RPI), which is the total income accruing to households, is expected to expand in Texas at 4.39 percent annually over the 2007-2030 horizon, while the U.S. should see 3.51 percent per year gains. The Texas RPI (in 2000$ and by place of residence) is anticipated to grow from $745.11 billion in 2007 to more than $2.00 trillion by 2030. The total volume of retail goods sold in Texas is anticipated to surpass $2.06 trillion in 2030, a significant increase from the $435.62 billion in 2007 and representative of a 7.00 percent per annum growth rate (which includes some component of inflation). Of course, in making long-term economic projections, it is recognized that numerous salient factors can affect the ultimate outcomes. Depending on patterns in these underlying forces, the forecast for the long term could undergo some changes. Included in these key issues are high energy costs, health care affordability concerns, and the ongoing housing market difficulties. We have no idea where technology will take us during this time, but we know it will be an interesting ride. Among the other matters in this mix are the demographic changes the nation will experience during the next 23 years. Of particular note are the significant expansion of the minority population and the upward trend in the median age of the overall U.S. population. In spite of the challenges our state and nation will certainly face through 2030, there are many reasons to believe that we will escape a major recession for the foreseeable future. Still, business cycles are inevitable and can undoubtedly interrupt forecasted patterns periodically. All-in-all, the U.S. capacity for global competitiveness remains alive and well.

WNDI 2008

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Uniqueness – Yes Econ (AT: Dollar) A dollar decline won’t hurt the economy. The Guardian, 11/11/04 But, for the time being, it seems that the Bush administration is quite happy to "let the dollar fall further", because a decline in its value, "if it is orderly, would not be at all bad", reckoned Jonathan Fuerbringer in the New York Times . Although a weak dollar will hurt Americans who travel abroad, and all those who buy imported goods, it helps US exporters "and it would help automakers and other companies compete domestically with imports from Europe and Asia".

The dollar is irrelevant – single-policies cant cause a collapse and there is no impact AP, July 8, 2008, Dollar woes cramp economy, US consumers, but the government’s options are limited And some of the decline in the dollar's global role "is due to the foreign policy failures of the Bush administration, not just to recent economic developments and policies," suggests Adam S. Posen, deputy director of the Peterson Institute for International Economics and a former economist at the Federal Reserve Bank of New York. In other words, some international investors unhappy with Bush's policy on Iraq or toward other parts of the world might not wish to invest in American companies or buy U.S. bonds. Still, he argues that the euro is unlikely to replace the dollar as the world's main reserve currency, and that the euro may be at "a temporary peak of influence." David Wyss, chief economist at Standard & Poor's in New York, says he envisions a day when the dollar and the euro will share billing as the world's reserve currencies.

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Link – Policy-Decisions The perception of your plan will kill consumer confidence, which is key to the economy Daniel Gross, Moneybox columnist for Slate and the business columnist for Newsweek, July 13, 2008, Neither Obama nor McCain can cure ailing economy When consumers, whose collective actions constitute more than two-thirds of U.S. economic activity, are in the dumps, they're less likely to spend, invest and take risks. But – and this is the second but – history has shown that presidents do have the ability to affect the short-term national mood about the economy, as long as the rhetoric is backed by action. "Whatever beneficial effects FDR or Reagan had on the economy had more to do with their policies than with their pleasant demeanors," says Richard Scylla, a historian at New York University. FDR's inspiring speeches and fireside chats in 1933 were accompanied by a profusion of policy experiments, many of which worked.

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Link – Clean Energy Energy use is key to an expanding economy Paul Roberts, energy expert and writer for Harpers, 2004, The End of Oil, pg. 154-5 Whatever their actual utility, SUVs and pickups are exceedingly popular among American drivers of all ages and incomes. In fact, the "light truck" category, which includes pickups and SUVs, is the largest-selling category in the United States, accounting for 48 percent of all new vehicle sales in 2003, and it may reach 60 percent by 2015. This, more than anything else, explains why the fuel economy of the average new vehicle sold in the States is now less than twenty-one miles per gallon'2 --- the lowest level since 1988, the peak year for fuel efficiency. To put it another way, of the nearly twenty million barrels of oil that America uses every day, more than a sixth represents a direct consequence of the decision by automakers to invest the efficiency dividend in power, not fuel economy. Or as the U.S. Environmental Protection Agency concluded recently, if the 2003 vehicle fleet had the same average performance and weight distribution as vehicles made in 1981, the average fuel economy would be a third higher. One consequence of these trends was that even as most of the rest of the U.S. economy was in the doldrums in 2003, oil demand was growing at nearly 3 percent, a reminder to the rest of world why America is the most important oil market. More generally, the trend toward larger cars and trucks, coupled with the expected growth in number of vehicles and in miles traveled, helps us understand how oil consumption has increased in the United States from seventeen million barrels per day in 1990 to twenty million today, and may rise as high as thirty-two million by 2020. Yet what is most disturbing about our desire for ever-larger cars and houses, more gadgets, and ever-greater demand is that it is difficult to see where it all ends. Where are the natural limits? Barring some massive disruption in energy supply, it is hard to see why consumers or companies would willingly use less energy --- or for that matter, why any political leader would suggest that they use less energy, or even that they slow the growth in their energy demand. For all our astonishing improvements in technology and energy efficiency, an expanding economy is still seen as inseparably linked to constant increases in energy use. And the rest of the world, especially the developing world, has noticed.

Energy efficiency crowds out investments and steals funds vital to economic growth. The Energy Journal, 1/1/04 If present, demand-pull innovations that reduce energy intensity may not be free. Developing energy efficient technologies consumes research and development funds, and using these funds to increase energy efficiency during periods of higher prices may crowd out investments that would otherwise speed economic growth. Goulder and Schneider (1999) evaluate these potential costs with a parameterized model. Their results indicate that using a limited supply of R&D funds to increase energy efficiency diverts funds from investments that spur economic growth and therefore, increases the gross costs of a carbon tax.

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Link – Regulations (Exports) Regulations lead to a rapid drop in exports. Adam B. Jaffe, Brandeis University and National Bureau of Economic Research, et al., March 1995, Journal of Economic Literature, “Environmental Regulation and the Competitiveness of US Manufacturing: What Does the Evidence Tell Us?”, pg. 142 Natural resource endowments have been a particularly important determinant of trading patterns (see. for example, Edward E. Leamer 1984). Having recognized this, we note that when a firm pollutes, it is essentially using a natural resource (a clean environment), and when a firm is compelled or otherwise induced to reduce its pollutant emissions, that firm has, in effect, seen its access to an important natural resource reduced. Industries that lose the right to pollute freely may thus lose their comparative advantage, just as the copper industry in developed countries lost its comparative advantage as copper resources dwindled in those regions. The result is a fall in exports.

This causes a free-fall for the dollar. Newsday (New York), 12/10/04 But there is more going on here and none of it is good. The drop in the dollar's value is caused at least in part by the large and dangerously growing budget deficit in the United States. If things don't change - that means if we keep increasing spending and cutting taxes - the deficit will rise to $825 billion, according to one recent report, which is 6.4 percent of gross domestic product. By any standard, that is alarming. The deficit has not been a major problem until now because foreign countries bought U.S. debt. But there will be fewer buyers if the dollar continues to fall, unless interest rates increase substantially. European nations have already been selling greenbacks. Unfortunately, a sudden increase in interest rates would adversely affect the average American. Mortgage rates, for instance, would significantly increase. Many Long Islanders have purchased homes at prices previously unimaginable because of low interest rates. But if those interest rates go up, especially for those with variable mortgages, the houses might become unaffordable. While other nations need to do more to improve their economic performance, most economists agree that it's essential for the United States to reduce its deficit. But the Bush administration's economic plan is to push for more and permanent tax cuts, even while the costs of the war in Iraq continue to mount. The Economist magazine recently pointed out that the dollar has been the world's reserve currency for longer than anybody can remember. It has been a significant benefit to the U.S. economy and its overall standing in the world. But that doesn't mean it can go on forever. It's time to pay attention.

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Link – Oil Loss of oil power weakens US ability to force OPEC to trade in dollars. What The Papers Say (Russia), 3/10/03 Four out of five international currency transactions and half of export transactions are carried out in dollars; two thirds of the world's currency reserve are also in dollars. The foundations of this status is petro-dollar transactions - if it is broken, the whole structure may fall apart like a house of cards. Since euro and the EU zone have appeared, the situation has become even more abnormal, as it does not correspond to the real weight of the US economy in the world system. At present, the United Europe has already overweighed the US on the world market; hence, from the standpoint of investments, the European finance is much more attractive than the US.

That shift crushes the dollar. Sartre “The Petro-Dollar and the EURO: No more Dollars, we want the EURO”; Sober Thought Provoking Essays; April 4, 2003; http://pages.zdnet.com/sartre65/view/id20.html //nick OPEC always priced oil in US Dollars. In the perceptive essay, The Real Reasons for the Upcoming War With Iraq by W Clark, the thesis that a shift using the EURO as the settlement currency, drives the Bush/Cheney administration hydrocarbons geo-strategy. "The

Federal Reserve's greatest nightmare is that OPEC will switch its international transactions from a dollar standard to a euro standard. Iraq actually made this switch in Nov. 2000 (when the euro was worth around 82 cents), and has actually made off like a bandit considering the dollar's steady depreciation against the euro. (Note: the dollar declined 17% against the euro in 2002.) "The real reason the Bush administration wants a puppet government in Iraq -- or more importantly, the reason why the corporate-military-industrial network conglomerate wants a puppet government in Iraq -- is so that it will revert back to a dollar standard and stay that way." (While also hoping to veto any wider OPEC momentum towards the euro, especially from Iran -- the 2nd largest OPEC producer who is actively discussing a switch to euros for its oil exports)." The effect of an OPEC switch to the euro

would be that oil-consuming nations would have to flush dollars out of their (central bank) reserve funds and replace these with euros. The dollar would crash anywhere from 20-40% in value and the consequences would be those one could expect from any currency collapse and massive inflation (think Argentina currency crisis, for example).

You'd have foreign funds stream out of the U.S. stock markets and dollar denominated assets, there'd surely be a run on the banks much like the 1930s, the current account deficit would become unserviceable, the budget deficit would go into default, and so on. Your basic 3rd world economic crisis scenario.

A. Reducing fossil fuel use increases energy prices Lehr and Bast, 6/28/04 Chicago Sun-Times The bill would cap major sources of greenhouse gas emissions at 2000 levels beginning in 2010. The principal nonagricultural source of greenhouse gases is the burning of fossil fuels. For households and industries to reduce their consumption of fossil fuels, prices must rise. As energy prices rise, industries substitute less energy-intensive production methods or use more expensive non-fossil sources of energy. Both forms of substitution require more capital investment, which leads to a lower level of consumption in the nearterm and a reduced rate of return on investment, thereby reducing consumption in the future as well. Because industries no longer would be as productive, their revenues would fall, leading to lower wages. Because of lower wages, labor supply would be reduced, further trimming economic output and personal income. Individuals would face a reduced ability to consume as a result of this policy.

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Link – Energy Prices (Steel) High energy prices crush the steel industry. Heather Villanova, Villanova Environmental Law Review, 2000, 11 Vill. Envtl. L.J. 161 In addition to the effects the Protocol has on the coke process, the Protocol further impacts the steel process because it increases the cost of energy. Under the Protocol, energy prices could rise in two possible ways: (1) in an attempt to decrease the amount of fossil fuels used, the government could place mandatory caps on fossil fuel usage or (2) in order to limit consumption, the government could place a tax on fuels which would inevitably cause the price of fuels to rise. The rise in the cost of energy dramatically affects the steel industry because the steel industry is an "energy-intensive" industry. An "energyintensive" industry produces a low-cost product at a high-cost of energy. In the manufacturing of steel, the cost of energy comprises fifteen to twenty percent of the total cost of production. This is considered high because the average energy cost for manufacturing a product is three to five percent. Due to the high component of energy in the manufacturing of steel, the Protocol's effect on energy prices will substantially increase the total cost of producing steel in the United States. If energy prices were to double, the steel industry would suffer a five billion dollar increase in one year. This increase in the cost of production would shift thirty percent of the manufacturing of steel to developing countries - countries the Protocol leaves unscathed. This shift of production would result in the loss of 100,000 United States steelmaking jobs. The economic effect on the steel industry does not stop there. It also affects consumer products that rely on steel, such as automobiles and appliances. Because increased costs of production are normally allocated to the consumer, consumers would expect to pay more for products with steel components.

The steel industry is key to hegemony. Andrew Sharkey, III, President and CEO of the American Iron and Steel Institute, February 28, 2002, http://www.steel.org/news/innews/Andy2_28_02.htm, accessed 2/3/03 Third, it redefines, and brings into sharper focus, the issue of why a strong and vital domestic steel industry is critical to national security. It does this in two ways. It explains why domestic steel production is important to U.S. defense industries defined broadly, meaning both direct and indirect steel shipments to the military infrastructure needed to support a war effort overseas, plus Federal Government-U.S. steel industry R&D efforts in defense-related areas. And it explains why the domestic steel industry is important to U.S. economic and infrastructure security, including our homeland security, once again defined broadly, meaning steel shipments to U.S. energy security infrastructure, U.S. transportation security infrastructure, U.S. health and public safety infrastructure and U.S. commercial, industrial and institutional buildings.

Heg solves nuclear war Zalmay Khalilzad, RAND, The Washington Quarterly, Spring, 1999 Under the third option, the United States would seek to retain global leadership and to preclude the rise of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the United States exercises leadership would have tremendous advantages. First, the global environment would be more open and more receptive to American values -- democracy, free markets, and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability than a bipolar or a multipolar balance of power system.

WNDI 2008

14 Spending DA Neg

Link – RPS RPS will increase utility bills $3.1 billion Competitive Enterprise Institute, September 23, 2002, http://www.cei.org/gencon/019,03215.cfm, Accessed: September 1, 2004 According to a July 2000 study by the National Renewable Energy Laboratory, more than one-third of U.S. consumers now have the option to purchase "green power" (electricity made wholly or partly from renewables) if they are willing to pay premiums ranging from 0.4 cents to 20 cents per kilowatt-hour. However, the study notes, less than one percent of utility customers choose "green power" when given the chance. Presumably, "green power" premiums would be higher - and customer participation even more dismal - if taxpayers and ratepayers were not already subsidizing renewable-based power. Should the U.S. Government force companies to sell what consumers do not want to buy? Citing a recent EIA study, proponents claim a 10-percent RPS will add "only" $3.1 billion to the nation's electricity bill in 2020. By this pork-barrel logic, one can justify any consumer or taxpayer rip-off. That is the nature of corporate welfare entitlements - they filch relatively small sums from millions of households to enrich a greedy few. But EIA's estimate is really beside the point, because the Senate bill's RPS is the camel's nose under the tent a floor, not a ceiling. Once enacted, the RPS will strengthen the renewable lobby and grow like other entitlements.

WNDI 2008

15 Spending DA Neg

Link – Nuclear Power Nuclear power costs billions Harry Braun, Editor in Chief, The Bush Hydrogen Initiative:THE GOOD, THE BAD & THE UGLY, Phoenix Project, 2003 http://www.phoenixproject.net/releases/bushh2init.htm accessed 12/26/2004 Billions of dollars have been spent on trying to solve the nuclear waste problem over the past 50 years, and yet no acceptable solution has been identified. The waste disposal issue is already reaching a critical stage as existing nuclear plants are all becoming long-term waste storage facilities by default. But to embark on a program that will exponentially increase the nuclear waste problem is more than irresponsible. It represents a crime against humanity that makes the atrocities committed against the Jewish people in World War II pale by comparison. While Hitler's despicable acts were committed against one generation, the nuclear wastes we are creating will leak and spread for literally thousands of centuries into the future. It is hard to imagine a more insidious poison to inflict on our descendents over such incomprehensible amounts of time. Given such considerations, allowing the existing nuclear plants to continue their daily operation of radioactive waste production, is far more unethical than the Germans who tolerated the daily operation of the death camps.

New nuclear facilities would cost taxpayers and the government. Reno Gazette-Journal, 5/21/03 Perhaps the most appalling aspects of the Senate bill to Nevadans are federal subsidies for the nuclear power industry and the repealing of consumer protection laws. The federal subsidies and loan guarantees that are slated for the nuclear power industry are to build new reactors. Generating power with nuclear energy is unsafe, inefficient and expensive to produce, and the reality is that federal subsides mean taxpayer subsidies. So while Nevada's schools are in dire need of funding, we Nevadans will be paying to build new nuclear reactors. New nuclear reactors could cost taxpayers as much as $30 billion. The federal government is already anticipating that even with federal subsidies and loans the new nuclear reactors won't be economically viable. Therefore the government has agreed to buy the power from these reactors. If private investors are not willing to endure the financial burden and risks of building new reactors, then neither should the federal government. In summary, Nevada taxpayers will pay to build nuclear power plants, buy the electricity these plants produce and then have to bury the nuclear waste at Yucca Mountain.

New nuclear plants would be incredibly costly, requiring government expenditures in the form of loans The Record (Bergen County, NJ), August 4, 2003 However, according to the non-partisan Congressional Budget Office, the prospects for a second generation of nuclear reactors are equally abysmal. The CBO says the Department of Energy could provide loan guarantees for up to 50 percent of the construction costs for seven new nuclear power plants, but it also considers the risk of default on these loans to be very high - well above 50 percent. It is little wonder that the three nuclear corporations that are attempting to site new nuclear reactors - Dominion Resources, Entergy, and Exelon - have stated that the numbers for new nuclear construction just don't add up.

Nuclear power plants are expensive to build. Springfield News-Leader (Springfield, MO) August 5, 2004 Nuclear energy would be cheaper to generate than coal power except for the fact that a nuclear power generator would be more expensive to build and waste disposal presents a major problem. Few nuclear power plants have been built in the United States since the 1980s.

WNDI 2008

16 Spending DA Neg

Link – Nuclear Power Nuclear power represents the biggest economic disaster in history. Plan is a terrible idea. The Record (Bergen County, NJ), August 4, 2003 The Department of Energy compared nuclear construction cost estimates to the actual final costs for 75 of these reactors. The original cost estimate was $45 billion. The actual cost was $145 billion! Forbes magazine recognized that this "failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster of monumental scale." According to Forbes, "only the blind, or the biased, can now think the money has been well spent." Despite the $100 billion cost overrun, Sen. Domenici wants again to give the nuclear industry billions in taxpayer dollars and guaranteed loans.

The nuclear industry has a history of leaving economic disaster in its wake. Bulletin of the Atomic Scientists, September 1, 2003 Others are less than pleased with the notion. Keith Ashdown of Taxpayers for Common Sense points out that nuclear power is still much more expensive than coal- or gas-fired power. The seven reactors at Kashiwazaki cost more than $ 21 billion, according to Tepco records. Using that number, meeting the 230,000-metric-ton estimate of daily U.S. hydrogen needs would require more than 50 such plants, at a cost of more than $ 1 trillion. Oregon Sen. Ron Wyden, a Democrat, believes that the loan guarantees proposed to the nuclear industry in the new Energy bill could risk as much as $ 30 billion of public money. He reminded his colleagues that when the Washington Public Power Supply System pulled the plug on its ambitious, over-budget nuclear program in 1983, it mothballed several unfinished nuclear plants and defaulted on $ 2.25 billion in bonds--at the time, the worst bond default in history, but positively Yugosized compared to the potential fallout from a subsidized nuclear renaissance built around hydrogen-powered cars.

Investment in nuclear power wastes money, taxes consumers, and prevents development of profitable technologies. The Sentinel (Stoke), 4/13/03 The North West MEP is a regular campaigner for environmental issues and welcomed last month's shutting down of Calder Hall, at the plant in Cumbria. Liberal Democrat, Mr Davies, said it marked the beginning of the end for an industry that had been "massively over-hyped and over-subsidised." He said: "When Calder Hall opened in 1956, we were promised it would herald a new era of virtually free electricity. In practice nuclear power has been hugely expensive, surviving because of enormous subsidies from the taxpayer and extra charges on electricity bills." "The advocates of nuclear power have led us up a blind alley and left us with a legacy of dangerous radioactive waste." He added: "If a fraction of the money spent on developing nuclear power over the past fifty years had been devoted to alternative sources of energy, Britain would now be leading the way with this technology." The MEP claimed that if 20 per cent of Britain's arable land was devoted to energy crops the electricity produced could replace the nuclear contribution entirely.

Japan proves that nuclear power is more expensive because of excessive maintenance and security requirements. The Japan Times, June 15, 2003 Nuclear advocates always say that Japan needs nuclear power so that it isn't dependent on foreign oil, an argument that supposedly addresses both environmental and economic concerns. But last year's scandal showed that, whatever dangers lie in foreign oil dependence, there are more immediate dangers inherent in nuclear power. Economically, nukes are insupportable. It is extremely expensive to shut them down and then start them up again, and if the scandal has taught us anything it's that nuclear reactors need to be shut down someday.

WNDI 2008

17 Spending DA Neg

Link – Nuclear Power (AT: Yucca) Yucca Mountain Nuclear Waste site would not benefit the economy Campbell, Duncan, The Guardian (London), May 19, 2001 L/N Ed Goedhart is sceptical about a jobs windfall, saying that the project work so far and the adjoining military base has put little into the local economy. "All that money has gone somewhere else. It's lined the pockets of lobbyists and highly paid consultants who live in Denver, Colorado or some other yuppie place and the workers are flown in or shuttled in." In Shoshone lore, the Yucca mountain is a snake. If the government and the nuclear industry do press ahead with the waste dump scheme, as now seems inevitable, they could find that the mountain and its diverse supporters still carry a potent bite.

WNDI 2008

18 Spending DA Neg

Link – Renewables Renewables raise the cost of energy. Robert Bradley, president of the Institute for Energy Research, adjunct scholar of the Cato Institute, Renewable Energy: Not Cheap, Not “Green,” Cato Policy Analysis No. 280, August 27, 1997, http://www.cato.org/pubs/pas/pa-280.html A multi-billion-dollar government crusade to promote renewable energy for electricity generation, now in its third decade, has resulted in major economic costs and unintended environmental consequences. Even improved new generation renewable capacity is, on average, twice as expensive as new capacity from the most economical fossil-fuel alternative and triple the cost of surplus electricity. Solar power for bulk generation is substantially more uneconomic than the average; biomass, hydroelectric power, and geothermal projects are less uneconomic. Wind power is the closest to the double-triple rule. The uncompetitiveness of renewable generation explains the emphasis pro-renewable energy lobbyists on both the state and federal levels put on quota requirements, as well as continued or expanded subsidies. Yet every major renewable energy source has drawn criticism from leading environmental groups: hydro for river habitat destruction, wind for avian mortality, solar for desert overdevelopment, biomass for air emissions, and geothermal for depletion and toxic discharges. Current state and federal efforts to restructure the electricity industry are being politicized to foist a new round of involuntary commitments on ratepayers and taxpayers for politically favored renewables, particularly wind and solar. Yet new government subsidies for favored renewable technologies are likely to create few environmental benefits; increase electricity-generation overcapacity in most regions of the United States; raise electricity rates; and create new "environmental pressures," given the extra land and materials (compared with those needed for traditional technologies) it would take to significantly increase the capacity of wind and solar generation.

Renewables would require trillions of dollars of spending. Frank Murkowski, US Senator, Harvard Journal on Legislation, Summer, 2000, 37 Harv. J. on Legis. 345 Third, we

must recognize the limitations of our economy and infrastructure to respond to significant policy shifts. The demand for energy facing the world of the twenty-first century will be enormous if we wish to sustain the current standard of living in industrialized nations and extend it to developing countries. We will not be able to meet these energy demands without some use of fossil fuels, and emerging renewable energy technology will continue to require significant market subsidies to be cost competitive. Moreover, nations have invested trillions of dollars in power generation and transmission infrastructure that would need to be retired early if current energy sources are replaced. There are also issues of reliability and availability of energy sources: the wind does not always blow, and the sun is not there to provide solar energy at night when heating is needed. Further, large production capacity for

non-hydro renewable energy is not yet available.

Regulations cause a ripple effect of high prices throughout the economy. Sheldon Pollack, Professor @ the University of Delaware. The Tax Lawyer. Fall 1998. Businesses in the United States incur significant economic costs when complying with the vast array of governmental regulations enacted since the 1960s and 1970s. n1 Among the most expensive of the new "social regulations" are those implementing federal and state environmental policy. n2 Pervasive environmental regulation is now a recognized, although not necessarily welcome, fact of doing business in the United States. For many sectors of the economy -- particularly, the chemical and petroleum industries -- state and federal environmental regulation reaches virtually every level of business activity. While not all businesses so directly confront the plethora of rules and regulations enacted to protect the environment, for those that do, the cost

of compliance can be staggering. Even for those industries not directly subject to the environmental statutes, this form of regulation imposes "hidden" or indirect outlays as the cost of compliance is built into the price of chemical and petroleum products used generally by American industry. In this way, the costs of environmental compliance and remedial programs constitute a significant financial cost for virtually every sector of domestic industry.

WNDI 2008

19 Spending DA Neg

Link – Renewables A. Renewable transitions crush multiple sectors of the economy including the auto industry. Paul Roberts, energy expert and writer for Harpers, 2004, The End of Oil, pg. 270 To divest in any real way from fossil fuels, or at least to change how we use them, will entail enormous changes for companies that produce hydrocarbons, those which consume large quantities of hydrocarbons (such as utilities), and those whose products now burn hydrocarbons (such as auto-makers). True, some players will make the transition profitably — oil companies, for example, are already investing in gas and alternative-energy technologies — but many more will not. In some cases, the failure will stem from a simple lack of capacity to change: the factors that gave a company an advantage in the old energy economy — its technology, its business relationships, the expertise and experience of its work force — may simply not apply in the new energy economy. In many cases, however, companies contemplating a move to the new economy must cope not only with their own weaknesses but with the realization that the new energy economy may not be a very profitable place.

B. Auto industry key to the economy. PR Newswire, September 24, 2003. While the automobile industry continues to be America's largest manufacturing industry, the majority of those jobs are in supplier and related industries, with total auto industry and related employment numbering 13.3 million, a new Center for Automotive Research study shows. About 6.6 million jobs are connected to automotive manufacturing and new vehicle sales, generating more than $240 billion in annual private sector compensation. "When you look under the hood of today's automobile, you'll see goods from America's greatest industries across the country," said Alliance President & CEO Josephine S. Cooper. "These include textiles from the Southeast, computer chips from California, aluminum manufactured in Iowa, and air bags produced in Arizona." Cooper continued: "No other single industry is more linked to U.S.

manufacturing or generates more retail business and employment. New vehicle production, sales and other jobs related to the use of automobiles are responsible for one out of every 10 jobs in the U.S. economy."

The expense of transitions to renewables will bury the economy. Paul Roberts, energy expert and writer for Harpers, 2004, The End of Oil, pg. 287-8 Lacking true economic power, advocates rely instead on persuasion and coercion and often browbeat other energy players into taking action. This has been critical in getting some producers, like BP, to change their policies and practices, but it has led to excesses. Too many advocacy groups, in choosing issues for their publicity potential, exaggerate various energy and environmental calamities and ignore the economic realities of the new energy economy. In the climate debate, for example, environmental groups are among the strongest advocates for making ultradeep cuts in CO2

emissions quickly — even though this approach may be so costly that it ultimately defeats longer-term efforts to reduce emissions. Villains are also often an essential element in most advocates’ rhetoric. Some U.S. and European advocates, for example, say the only reason we don’t have a hydrogen economy now is that automakers and oil companies are wicked and greedy — but these claims conveniently omit any mention of the huge financial risks and engineering uncertainties inherent in shifting to a hydrogen economy. In the same way, some NGOs, in criticizing developing countries for using fossil fuels instead of renewables, ignore the expense of renewables and fail to acknowledge that often the quickest way to alleviate energy poverty is not with a solar panel but with a truckload of stove oil. Notes one expert on world poverty, “Most of the NGOs come from the north — Europe and the U.S. — where energy issues look a lot different, and a lot simpler.”

WNDI 2008

20 Spending DA Neg

Link – Renewables (AT: New Market) Losing the renewables market doesn’t matter – Denmark proves Graeme Haycroft, founder and General Secretary of the Small Business Union, The Courier, July 22, 2002 The Small Business Union, which now competes directly with Commerce Queensland to provide services to other small business employer associations and professional groups, is all about protecting Queensland small business from adverse influences, wherever they may be. Andrew Craig bleats: "Our environmental and renewable energy industries clearly will suffer if excluded from the international scene." Compared to Queensland's mighty coal industry, solar energy is a toy, and, moreover a very expensive toy. Even in draughty Denmark, much-touted wind energy is still unprofitable, according to Herbert Inhabler (TechCentralStation of 11 July 2002), who points out that Denmark remains heavily dependent on coal.

Renewables will never be efficient or a useful market Jack Kemp, Distinguished Fellow at the Competitive Enterprise Institute, FNS, July 15, 1999 To make that case we have to strike boldly. To leapfrog over the green-eyeshade issue of what the administration is spending "on Kyoto" versus "on idiotic energy policies" we should decisively go after the latter. Over two decades after the Carter administration's costly and failed policies to promote energy sources that have no prospect of market viability (solar, wind, synfuels, biomass, ethanol, etc.), why do we still have programs on the books to subsidize what we know doesn't work? Our policy as a nation should be to encourage technological innovation in the broadest and most sweeping sense, whether in the field of energy or beyond. We don't need corporate welfare programs, public-private partnerships, specialinterest tax breaks, or propaganda campaigns to fight what the market tells us: the people want clean, efficient, reliable sources of energy at a reasonable cost. The free market has given them that, and will continue to do so with minimum, prudent regulation. Our energy future is freedom--it's as simple as that. Furthermore, we must pursue a pro-growth, pro-innovation, pro- entrepreneur tax policy that will liberate the imagination of our people to find ways to create jobs, improve productivity, and generate wealth in ways that are even greener, cleaner, and more energy- efficient. That means lower tax rates, reducing the cost of capital, and removing tax considerations wherever possible from the economic decision-making equation, whether it be investment in new equipment, raising venture capital, or a personal decision to invest in stocks as a step towards retirement security. That kind of tax policy has everything to do with Kyoto, because it enthusiastically embraces America's overwhelming competitive advantage: the ingenuity of our people and our business leaders in bringing economic abundance, lower- cost energy, and more efficient energy to the world. Compared with that, the Clinton administration's elitist policy of offering miniscule tax breaks to politically-favored energy producers (like the so-called renewables) looks primitive indeed, whether motivated by Kyoto or not.

WNDI 2008

21 Spending DA Neg

Link – Solar Power Solar power is expensive and inefficient Jerry Taylor, director of natural resource studies at the Cato Institute and adjunct scholar at the Institute for Energy Research, and Peter VanDoren, editor of Regulation magazine, Journal of International Affairs, Fall 1999, p. 228-229 In 1987 Scott Skiar, executive director of the Solar Industries Association and the United States’ leading proponent of solar power, told a congressional subcommittee that the “consensus” among energy analysts was that solar power would provide between 10 and 20 percent of America’s energy needs by the year 2000 “quite easily”. As we approach that date, solar provides but one-twentieth of 1 percent of America’s energy needs, but Sklar and his colleagues continue to peddle the same “solar’s around the corner” message to congressional appropriators and the public. The main problem for all solar technologies is cost. Generating electricity via solar power from thermal or photovoltaic (PV) sources, or from microapplications, costs between 11 and 12 cents per kilowatt hour, at least quadruple the cost of its main competitor today—combined-cycle natural gas—and quadruple the cost of surplus gas-fired electricity in the marketplace. Even those cost figures, however, are understated. According to Solarex, a subsidiary of a partnership between Amoco and Enron and the largest U.S. manufacturer and marketer of PV systems, “using typical borrowing costs and equipment life, the life-cycle cost of PV generated energy generally ranges from 30 cents to $1 per kilowatt hour.” Those high solar costs, according to the California Energy Commission, are related to “problems such as high materials costs, fabrication cost, corrosion, erosion, fatigue, and thermal stress.” Perhaps the greatest economic obstacle to solar power is the problem referred to in the industry as “intermittency”—the fact that the sun doesn’t always shine and thus solar plants are not reliable sources of electricity In fact, a typical plant only operates at 13 percent of its theoretical capacity over a given year.

Solar power is expensive Robert L. Bradley Jr., president of the Institute for Energy Research, August 27, 1997, http://www.cato.org/pubs/pas/pa-280.html Weighing in at 358 MW nationally, bulk or central-station solar power (power generated at a large-scale centralized location and then transmitted on the power grid to multiple users) represents .05 percent--1/20 of 1 percent--of total U.S. generation capacity. Solar generation of 824 million kWh in 1995 was under 3/100 of 1 percent of national electricity production, one-fourth the size of the tiny wind-power industry (see Appendix, Tables A.2 and A.3). Like wind power's, solar's long-promised commercial viability has not occurred, [161] and potential market share has been grossly overestimated. [162] Solar power is substantially less economic than wind as a central-station power source, although its cost fell from around 25 cents per kWh in the early 1980s to a claimed 8 cents per kWh a decade later. [163] Unlike windpower capacity, new solar-power capacity is triple the cost of new gas-generated electricity and quadruple the cost of surplus power. Solar power, like most other renewables, is geographically limited for the foreseeable future. In the United States, central-station solar power is limited to the desert Southwest and other selected locales and often involves transmission investments that custom-sited gas-fired plants can avoid. States such as California and Nevada are swimming in economy energy at 2 cents per kWh, [164] an insurmountable barrier for cost-effective central-station solar under any conditions. Greater potential may exist abroad where power needs are greater (one-third of the world's population remains without electricity), desert areas are more common, electricity is more scarce, and natural gas is not indigenous. Even then, solar power is only a daytime electricity source, and intermittent at that, unless fossil-fuel generation, pumped storage (very expensive), battery storage, or nuclear power provides back-up reliability.

WNDI 2008

22 Spending DA Neg

Link – CAFE CAFÉ standards hurt competitiveness. Andrew Kleit, Professor of Energy and Environmental Economics @ Penn State. CATO. “CAFÉ Changes by the Numbers” January 10, 2003. Regulations Magazine. http://www.cato.org/pubs/regulation/regv25n3/v25n3-8.pdf Foreign automakers view the fine as a tax. Thus, BMW and Mercedes-Benz, for example, have routinely paid cafe fines. In contrast, American firms view the standards as binding because their lawyers have advised them that, if they violate cafe, they would be liable for civil damages in stockholder suits. The fear of civil suit is so strong that even Chrysler, which is owned by the German firm Daimler-Benz, will not violate the limits. Because the “shadow tax” of the cafe constraint (the cost of complying with the standards rather than paying the fine) can be much more than $55 per car/mpg, the effects of cafe standards are much larger on U.S. automakers than foreign firms.

Making CAFÉ changes too big, too fast hurts industry Barry Felrice, Senior Manager of Regulatory Affairs for Chrysler, March 8, 2002, http://www.heritage.org/Research/EnergyandEnvironment/WM85.cfm Industry needs sufficient lead time if CAFE standards are to change to get a return on our investment in technology. We spent $3 billion on the new 2002 Dodge Rams which included a new assembly plant, a new engine, and a new drive train. We probably will need six to eight years of production to make that money back and get some decent return on it. If CAFE standards change too quickly and are too high, we will have to scrap that investment where we'll lose more money, which is hard to imagine for some of us these days. We can't get to these new levels through technology. When that happens we start cutting back on the least fuel-efficient vehicles which lessens our revenue flow so then we have less revenue to invest in new technology. It's a vicious cycle.

CAFÉ interferes in the economy David Montgomery, Vice President of Charles River Associates, March 8, 2002, http://www.heritage.org/Research/EnergyandEnvironment/WM85.cfm The economy is an engine for producing goods and services that consumers want. And what you've heard about so far today is exactly how CAFE standards fundamentally interfere with efficiently allocating the resources we have in order to produce the goods and services that people want. And that means they're going to be a bad idea in terms of how well the economy operates. We need to work through where those inefficiencies in the resource allocation process come from and how large they are. We should also consider other ways we could go about remedying whatever defect in the economy CAFE standards are supposed to remedy but without so much interference the economy.

WNDI 2008

23 Spending DA Neg

Link – CAFE (Auto) CAFÉ standards would kill the auto-industry. Andrew Kleit, Professor of Energy and Environmental Economics @ Penn State. CATO. “CAFÉ Changes by the Numbers” January 10, 2003. Regulations Magazine. http://www.cato.org/pubs/regulation/regv25n3/v25n3-8.pdf I found that increasing the cafe standards by 3 mpg would reduce annual profits at General Motors by $433 million, at Ford by $455 million, and at Chrysler by $236 million. Total losses to U.S. automakers would amount to $1.124 billion. In contrast, foreign manufacturers would see an increase in profits of $260 million.

Auto industry key to the economy. PR Newswire, September 24, 2003. While the automobile industry continues to be America's largest manufacturing industry, the majority of those jobs are in supplier and related industries, with total auto industry and related employment numbering 13.3 million, a new Center for Automotive Research study shows. About 6.6 million jobs are connected to automotive manufacturing and new vehicle sales, generating more than $240 billion in annual private sector compensation. "When you look under the hood of today's automobile, you'll see goods from America's greatest industries across the country," said Alliance President & CEO Josephine S. Cooper. "These include textiles from the Southeast, computer chips from California, aluminum manufactured in Iowa, and air bags produced in Arizona." Cooper continued: "No other single industry is more linked to U.S. manufacturing or generates more retail business and employment. New vehicle production, sales and other jobs related to the use of automobiles are responsible for one out of every 10 jobs in the U.S. economy." CAFÉ standards would cost the US auto industry over a billion dollars annually. Andrew Kleit, Professor of Energy and Environmental Economics @ Penn State. CATO. “CAFÉ Changes by the Numbers” January 10, 2003. Regulations Magazine. http://www.cato.org/pubs/regulation/regv25n3/v25n3-8.pdf I found that increasing the cafe standards by 3 mpg would reduce annual profits at General Motors by $433 million, at Ford by $455 million, and at Chrysler by $236 million. Total losses to U.S. automakers would amount to $1.124 billion. In contrast, foreign manufacturers would see an increase in profits of $260 million.

CAFÉ standards would hurt the auto industry by limiting production and eliminating jobs. The Times (Shreveport, LA) October 5, 2003 Barthmuss said GM does not want to see federal regulations on fuel economy. GM and United Auto Workers officials have said higher CAFE standards could eliminate jobs in the auto industry because that would raise the cost of building vehicles and production could be cut. "We don't believe a mandated approach to fuel consumption is the right approach," Barthmuss said. "It fails to take in factors like safety equipment (which adds weight to the vehicle) and it takes away from consumer choice."

Increased CAFÉ standards hurt automotive companies David Montgomery, Vice President of Charles River Associates, March 8, 2002, http://www.heritage.org/Research/EnergyandEnvironment/WM85.cfm a proposal for something like the 28-mile-per- gallon SUV standard that if it was implemented over a 12year period with a careful phase-in to match the cycle of rebuild, would increase the cost of a new SUV by about 10 percent. Anything above 35 miles per gallon for new cars is hard to even conceive of over the period that we're looking at but it would add more than 20 percent to the cost of a new car. That includes both the We (Charles River Associates) put together some estimates of the cost of technology fixes. What we came up with was that

technology fixes and the downgrading of the quality of the vehicle in the consumer's preference. It's not the hardware. It's the combination of everything that either increases the cost or increases the value of the vehicle. So what we're talking about

there is probably something like a reduction in new car sales of about 15 percent when a standard like this comes in and starts to bite. The larger economic modeling we've done suggests that that would produce about a 10-percent drop in employment in the auto industry during the shock period. There is clearly a shock effect in the short run.

WNDI 2008

24 Spending DA Neg

Link – Hybrids Hybrids kills the auto sector and the economy University of Michigan News Service, January 31, 2005, Increase in Hybrid Cars Possibly Threatens US Jobs. Vehicles with gas-electric hybrid and advanced diesel powertrains could capture nearly 11 percent the U.S. light vehicle market by 2009, but because most of these new drive trains are being built overseas, a consumer shift to hybrids could cost Michigan, Indiana and Ohio more auto manufacturing jobs. "Japan has a substantial lead in hybrid technology and production and Europe leads in advanced diesels, so most of the supplier and assembly work for these new vehicles will probably take place outside the United States, and that could cost over 200,000 U.S. jobs," said Patrick Hammett of the U-M Transportation Research Institute's Office for the Study of Automotive Transportation (OSAT). "Fortunately, there are ways to limit these losses, if not entirely avoid them." A new report issued by OSAT and the Michigan Manufacturing Technology Center and funded by the National Commission on Energy Policy and the Michigan Environmental Council outlines possible scenarios for U.S. sales of vehicles with these two alternative powertrains, models their costs of production and forecasts the likely job consequences of their increasing market share. The study projects that hybrids and advanced diesels may account for as many as 1.8 million sales in reasonably robust market of 16.6 million light vehicles in 2009. The study, "Fuel Saving Technologies and Facility Conversion: Costs, Benefits and Incentives," also examines the impact of a tax credit to encourage powertrain component and vehicle producers to locate some production and assembly work in the United States. "These scenarios are just that—pictures of what might happen," says Hammett, who directed the study. "But the farther out you go, say to 2012 or beyond, the more likely they become. So the real question is probably less whether they will happen than it is when they will happen." The report considers three different market-growth scenarios in 2009 for vehicles with gaselectric hybrid and advanced diesel powertrains. A normal growth scenario of about 3 percent would result in job losses of 38,000; a growth rate of roughly 7 percent (requiring some shift in consumer preferences) would mean a loss of 131,000 jobs; and growth of nearly 11 percent (requiring a strong shift in consumer sentiment) would result in 207,000 job losses. "These losses include current jobs making vehicles with traditional powertrains that would be displaced by these new vehicles, as well as the failure to secure new jobs making those new vehicles with these alternative powertrains," Hammett said. One way to limit job losses is to provide an incentive to component and vehicle manufacturers to invest in U.S. production. A tooling and equipment investment tax credit for suppliers that convert capacity to components for these new powertrains , and for manufacturers that convert capacity to assemble these vehicles, could indeed yield powerful results, Hammett says. If even partially effective, a tax credit can lower job losses substantially in each market scenario, he says. Moreover, depending on the scenario, additional government revenues associated with U.S. production over a 10-year period will reach five-to-eight times the cost of the credit. "This tax credit is not only revenue-neutral or even better, but it could save one of every four U.S. jobs put at risk from imports of these newer powertrains and vehicles," said Daniel Luria of the MMTC. According to Hammett, gas electric hybrid and advanced diesel powertrains present a bit of an "ecology vs. economy" dilemma. "Their enhanced fuel economy and reduced emissions are important positives, but absent any effort, they will probably have adverse economic consequences on the United States," he said. Luria adds there would be particularly adverse economic consequences for Michigan, Indiana and Ohio, which together account for a substantial share of relevant automotive activity, including 45 percent of vehicle assemblies and 88 percent of transmissions and diesel engines. SOURCE: U of M News Services

Auto industry key to the economy. PR Newswire, September 24, 2003. While the automobile industry continues to be America's largest manufacturing industry, the majority of those jobs are in supplier and related industries, with total auto industry and related employment numbering 13.3 million, a new Center for Automotive Research study shows. About 6.6 million jobs are connected to automotive manufacturing and new vehicle sales, generating more than $240 billion in annual private sector compensation. "When you look under the hood of today's automobile, you'll see goods from America's greatest industries across the country," said Alliance President & CEO Josephine S. Cooper. "These include textiles from the Southeast, computer chips from California, aluminum manufactured in Iowa, and air bags produced in Arizona." Cooper continued: "No other single industry is more linked to U.S. manufacturing or generates more retail business and employment. New vehicle production, sales and other jobs related to the use of automobiles are responsible for one out of every 10 jobs in the U.S. economy."

WNDI 2008

25 Spending DA Neg

Link – Carbon Tax A carbon tax would tank the global economy. The National Interest, Fall 1999 The Energy Modeling Forum at Stanford University (EMF) recently compared estimates of the costs of meeting the Kyoto targets made by ten modeling teams from around the world. They show that with no international trading of emission rights, the United States would need to levy a tax on carbon emissions of between $90 and $400 per ton of emissions in 2010 to accomplish its Kyoto objectives; this is equivalent to a tax on coal of $70-$320 per ton (versus its current price of about $25 per ton!). Most of the teams estimate that such a tax would cost the U.S. economy between $45 and $200 billion a year (about 0.5 to 2.0 percent of 2010's GDP). They show similar, or even larger, costs for Europe and Japan.

Carbon taxes send ripple effects throughout the economy by hurting labor supply. Ian W. H. Perry, October 2003, Oxford Review of Economic Policy 19, 2003, http://216.239.57.104/search?q=cache:LjghhWTgEgsJ:www.rff.org/Documents/RFF-DP-0346.pdf+carbon+tax&hl=en By increasing energy prices, carbon taxes drive up product prices throughout the economy, since energy is an input in most production sectors; this leads to a slight reduction in real household wages and labor supply. In general, the efficiency loss from this reduction in labor supply, or “tax-interaction effect,” exceeds the benefits from the revenue-recycling effect, implying that carbon tax swaps increase rather than decrease the costs of labor taxes. This finding is not surprising because, as explained below, it is entirely consistent with the familiar result in public finance that the efficiency costs of narrow taxes (ignoring externalities) tend to exceed those of broad taxes on labor income.

Carbon tax increases the price of products Ian W. H. Perry, October 2003, Oxford Review of Economic Policy 19, 2003, http://216.239.57.104/search?q=cache:LjghhWTgEgsJ:www.rff.org/Documents/RFF-DP-0346.pdf+carbon+tax&hl=en A second wave of papers revealed another linkage with the labor market that undermines the double-dividend argument (e.g., Bovenberg and de Mooij 1994; Bovenberg and van der Ploeg 1994b; Bovenberg and Goulder 2002; Parry 1995, 1997). A carbon tax increases the price of electricity, gasoline, and other energy goods; in turn, this drives up the prices of products in general, since they require energy inputs in production. The general increase in the price level reduces real household wages, which should slightly reduce employment given econometric evidence that lower real household wages lead to lower labor force participation and work effort. This leads to an efficiency loss of t , where is the (small) reduction in labor supply (this is the addition to the deadweight loss triangle in Figure 2 from a slight shift in of the labor supply curve). And labor tax revenues fall by t ; to maintain revenues, labor taxes must be increased slightly, resulting in an efficiency cost of . The combined loss from these two effects, is referred to as the tax-interaction effect.

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Link – Carbon Tax With high energy prices a carbon tax would increase inflation and crush business confidence. Emmet Oliver, August 23, 2004, The Irish Times Escalating oil prices have made the introduction of a carbon tax unnecessary, the employers' body IBEC said yesterday. Mr Brendan Butler, director of enterprise at IBEC, said the Government's carbon tax proposals should be "shelved". The Government has promised to introduce a new carbon tax in January, but has not outlined how it will be levied. IBEC said the steep rises in energy prices and the fall in Ireland's greenhouse gas emissions for a second successive year make the introduction of a carbon tax "unnecessary". The organisation said the "very reasons" for introducing such a tax no longer existed. Mr Butler said the original objective of a carbon/energy tax was to increase the cost of fuel so energy usage would drop. "Clearly the trend in rising energy costs over the last number of years and in particular over the last three months, coupled with increased investment, efficiency and innovation by industry, has already achieved this desired result". He said the Republic, in particular, was greatly exposed to rising fuel prices. "Ireland is 90 per cent dependent on foreign fuel sources compared to an EU average of 45 per cent and approximately 30 per cent in countries such as Norway and France". Figures published by the Environmental Protection Agency last week showed that greenhouse gas emissions have fallen in the last two years, said Mr Butler. Emissions from the business community fell by 14 per cent over this two year period, he added. "The introduction of a carbon tax will expose the Government proposal as a revenue generating mechanism rather than an environmental measure. "The introduction of a carbon tax at the top rate could yield an additional EUR 600 million per annum for the State. Already the Government takes over EUR 2 billion in taxes on motor fuel," he said. "Government exchequer figures published a few days ago suggest the public finances are in a strong position and Government policy in the forthcoming budget should be to support business rather than imposing unnecessary additional costs," he said. Mr Butler warned that a carbon tax could have implications for inflation too. "The impact would not be confined to energy users, as a tax would have an impact on inflation, possibly raising it by as much as 0.7 per cent. "At a time when oil prices

are historically high the Government should be assisting business and not proposing further unnecessary taxes," concluded Mr Butler. In July the Economic and Social Research Institute (ESRI) claimed the average tax bill on households from the proposed carbon tax could be around EUR 250 per annum.

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AT: Dollar Link Turn The weak dollar helps the economy – it is key to manufacturing and exports AP, July 8, 2008, Dollar woes cramp economy, US consumers, but the government’s options are limited The limp greenback has had one big benefit to the U.S. economy: Since it makes American goods cheaper overseas, it has helped manufacturers who export and other U.S. based companies with international reach. Exports have been one of the few bright spots in an otherwise darkening U.S. economy. Franklin Vargo, vice president of international economic affairs at the National Association of Manufacturers, welcomes the dollar slide, as do members of his organization. "We can see that, when the dollar's not overpriced, that people around the world want American goods and our exports are going gangbusters now," he said.

Unless we stop spending, foreign countries will abandon the dollar. Newsday (New York), 12/10/04 But there is more going on here and none of it is good. The drop in the dollar's value is caused at least in part by the large and dangerously growing budget deficit in the United States. If things don't change - that means if we keep increasing spending and cutting taxes - the deficit will rise to $825 billion, according to one recent report, which is 6.4 percent of gross domestic product. By any standard, that is alarming. The deficit has not been a major problem until now because foreign countries bought U.S. debt. But there will be fewer buyers if the dollar continues to fall, unless interest rates increase substantially. European nations have already been selling greenbacks. Unfortunately, a sudden increase in interest rates would adversely affect the average American. Mortgage rates, for instance, would significantly increase. Many Long Islanders have purchased homes at prices previously unimaginable because of low interest rates. But if those interest rates go up, especially for those with variable mortgages, the houses might become unaffordable. While other nations need to do more to improve their economic performance, most economists agree that it's essential for the United States to reduce its deficit. But the Bush administration's economic plan is to push for more and permanent tax cuts, even while the costs of the war in Iraq continue to mount. The Economist magazine recently pointed out that the dollar has been the world's reserve currency for longer than anybody can remember. It has been a significant benefit to the U.S. economy and its overall standing in the world. But that doesn't mean it can go on forever. It's time to pay attention.

Higher prices for consumers will weaken the dollar University Wire, 12/7/04 The U.S. dollar is steadily losing value in global markets. The greenback hit a record low this past week against the euro and has lost 15 percent against a diverse basket of other currencies.Our money's value is declining, and that trend is likely to continue as the trade imbalance, fiscal irresponsibility in the public sector and excessive household consumption all increase.What difference does this make to you? A weak dollar could hit your wallet in a big way.

Fiscal discipline is key to a strong dollar. The Baltimore Sun, 12/20/04 Of course, no change in dollar rhetoric will generate an orderly decline of the dollar if the fundamental policies that have an impact on the U.S. current-account position are not improved. Paramount here is agreement in the administration and Congress on a credible medium-term plan for fiscal consolidation in the United States.

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Internal Link – Exports (Agriculture) Exports are key to the Agriculture Industry. Star Tribune, May 18, 1999 Former Vice President Walter Mondale told agribusiness leaders Monday that their success and the fate of American farmers hinges on open international markets but the general public doesn't have a broad understanding of that economic reality. Mondale, a former U.S. ambassador to Japan, said the public's support for free trade could wane. "Right now, with the economy doing well, those who are arguing for protectionism are not getting much attention," Mondale said. "But when our economy slows, as it inevitably will, watch out. The voices of retreat will have an audience again." Mondale spoke to about 400 people attending the Pfizer Research Conference at the Minneapolis Convention Center. It was held in conjunction with the American Feed Industry Association convention, and the two events attract scientists, nutritionists and business people from the feed and livestock industries. Americans comprise only 4 percent of the world's consumers. "While our market is big and affluent, the prosperity of American agriculture absolutely depends on open international markets," Mondale said. "This is even more true since the adoption of the last farm bill, which assumes that world markets will underpin farm prosperity. With American farmers under severe economic stress, the cruelest possibility would be the loss of American support for open markets. "

The Agriculture industry is key to the economy. Rock Products, 8/1/04 Agriculture is the backbone of the economy. Brian Lego, an economist at Economy.com says if crops such as sorghum and corn fall victim to the drought, the cost of animal feed will rise and so will the cost of beef. People will have less money to spend, and the housing market will suffer, Lego says.

Agriculture is key to the economy Journal of Commerce, December 31, 1998 U.S. agriculture prices have reached lows not seen in 10, 20 or even 30 years, while the costs of living, labor and machinery are at record highs. The only thing missing that was present 70 years ago is a stock-market plunge and massive unemployment. If this country

continues to allow its agriculture to sink to Depression-era levels, how can it keep the stock market from tumbling, too? Think about the stock market's falling to levels of 30 years ago, say around 700, instead of flirting with 9,000. Impossible? In just over two years, cash grain prices have dropped over 70 percent from the high posted in July 1996. Hog prices also reflect a near-70 percent decline since 1990. Many things have contributed to this dramatic decline of commodity prices. Some have directly benefited the consumer, like lower petroleum prices that were passed on at the gas pump. However, this has not been the case with meats and other commodities in 1997 and 1998. Processors and retailers decided they could increase their margins rather than passing on the savings to the consumer (which would have cleaned up the oversupply). Supplies continue to build, benefiting only processors and retailers, not consumers. Free markets have been stymied. I am not trying to tell you we are heading for a sequel of the Great Depression. But why is the greatest production machine in the world, American agriculture, going through such difficult times? Why should a minority, those who produce the majority of our food, be subjected to cost inflation and price deflation at the same time? U. S. taxpayers coughed up $6 billion dollars this year to help the farmer. Along with next year's Freedom to Farm payments, the extra cash is helping us through the crisis. Thank you, it is just what we needed: another Band-Aid. Government policy for the past 60 years has been to intravenously feed farmers the ""antibiotic'' of farm subsidies and price supports. But the wound has never healed. The Freedom to Farm Act attempts to wean agriculture from subsidies and supports by initiating a ""withdrawal'' process. The problem is, other grainproducing countries around the world don't see it that way. They continue to subsidize their producers. The livestock producer gets no help from taxpayers. But if these prices continue, it is a pretty sure bet the banks holding his notes will get bailed out. We can make our products much more affordable to foreign buyers by devaluing the dollar. But, you say, that will cause inflation. Maybe investors should rethink inflation. Maybe a little inflation is much better than another Depression. If you look at government money-supply figures, it would appear that Washington may have started to print money (which, in hindsight, could have prevented the Great Depression). I hope this is the case. The enormous power of the hedge funds that continuously short commodity futures - the pricing mechanism of the world these days - is staggering. If agriculture dies an economic death, the rest of the economy is sure to follow. It is not too late, but we must act now. Please, help America's farmers sell our products outside our borders. We are dying out here.

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Internal Link – Energy Prices (Forests) Energy prices are key to the forest industry which is key to the nations economy. FDCH Congressional Testimony of James Rubright, Chairman and CEO of Rock-Tenn Company. 2/12/04 The U.S. forest products industry is vital to the nation's economy. We employ approximately 1.3 million people and rank among the top ten manufacturing employers in 42 states with an estimated payroll of $50 billion. Sales of the paper and forest products industry top $230 billion annually in the U.S. and export markets. We are the world's largest producer of forest products. Energy is the third largest operating cost for the forest products industry1, making up more than 8 percent of total operating costs. Since 1972, this industry has reduced its average total energy usage by 17 percent through increased efficiencies in the manufacturing and production process. In addition, it has reduced its fossil fuel and purchased energy consumption by 38 percent, and increased its energy self- sufficiency by 46 percent. Although the industry is nearly 60 percent self-sufficient (using biomass), we also use natural gas, coal, fuel oil, and purchased electricity to meet the balance of our energy needs.

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2NC Impact Module – China The US is on the brink of losing economic leadership in Asia to China – economic downturn causes a Chinese takeover AFP, July 8, 2008, Protectionist US risks losing economic leadership in Asia: official WASHINGTON (AFP) — The

United States is becoming increasingly protectionist and risks losing its economic leadership position in Asia to China, an official of President George W. Bush's administration warned on Monday.

"It is ironic that in the 21st century, America is turning inward, uncertain whether economic engagement with Asia is in the national interest -even as Asian nations rush to conclude trade and investment agreements with one another," said Commerce under secretary Christopher Padilla. "Perhaps this seems alarmist. But look at the facts," he told a Washington forum, saying many US lawmakers "are deeply suspicious" of expanded trade with allies such as South Korea and "downright hostile" toward trade with China. The Democratic partycontrolled US Congress has refused to ratify a free trade agreement with South Korea, the biggest trade deal in 15 years, citing barriers restricting US auto imports among the key reasons. Lawmakers are also considering plans to impose sanctions on China over currency concerns, amid recent turmoil in the American economy following a housing market crisis, falling US dollar and record oil prices. Padilla said he wondered whether America would remain committed to economic openness. If Washington drifted toward trade protectionism and restrictive investment and immigration policies, then Asia was likely to proceed on its own with regional integration, leaving the United States behind, he said. This would leave leadership on the Asian economic playing field largely to China, the fastest-growing Asian economy, he said. "A hesitant, timid, and inwardly focused America could give rise to an economic 'Pax Sinica,' in which China has the opportunity to shape Asia's economic architecture as it would prefer, rather than as we might like," he said. "Others in Asia might have little choice but to accommodate themselves to this economic reality," he said. Pax Sinica, Latin for 'Chinese Peace,' is a euphemism for periods of peace in East Asia during times of a strong Chinese empire between the 1680s to 1790s, characterized by the dominance of the Chinese civilization. China is again gaining influence in the region, striking trade and investment deals with countries amid rapid economic growth and on the back of a defense buildup and foreign exchange holdings. The Bush administration has been striving to create what it calls building blocks of an Asian economic architecture that includes the United States. It has signed free trade agreements with Singapore, Australia and South Korea, and launched negotiations for similar pacts with Thailand and Malaysia. It recently announced that it would begin work on services and investment with a budding Asia-Pacific grouping called the Trans-Pacific Strategic Economic Partnership Agreement, or "P4," involving Singapore, Chile, New Zealand and Brunei. The United States also launched talks last month to frame bilateral investment treaties with China and Vietnam. Padilla said that the hesitancy of Congress to ratify the free trade agreement with South Korea had created uncertainty among Asian partners about America's economic commitment to its closest regional allies. "Meanwhile, China's economic footprint continues to grow, and its economic diplomacy grows more assertive. The window for US economic leadership in the Pacific is closing," he said. If the Korean deal fails to pass Congress, Padilla said, the cost to US economy would go far beyond lost trade opportunities in that Asian nation. "America would be ceding economic leadership in Asia, increasing the likelihood that a future Asian economic architecture will leave out the United States," he warned.

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2NC Impact Module – China (Asia) China’s economic rise causes world war David M. Lampton Hyman Professor and Director of China Studies Johns Hopkins. “The United States and China: Competitors, Partners, or Both?” June 4, 2004. Delivered at U.S. Foreign Policy Colloquium George Washington University. http://www.nixoncenter.org/publications/ElliotSchoolspeech.pdf The final challenge facing the United States and China is managing what my colleague at SAIS, Professor Charles Doran, calls the power cycle problem.6 Simply put, the idea of power cycle theory is that as states, in this case say China, increase their relative share of global power, the rising state’s expectations to affect outcomes increase, while the previously dominant state is slower to adjust its behavior to the reality of diminished power. Moreover, the previously dominant power fears its declining status. As Franz Kohout put it, “When a state’s relative power increases, its interests and role aspiration increase as well, but other members of the international system are frequently unwilling to accept this new role…”7 In short, war results from changing power relationships among states, lags in adjusting to these changes, differential expectations, and efforts to resist or promote those alterations. There also is the ever-present danger that the rising state’s rapidly accelerating capabilities and/or ambitions create a coalition of others seeking to cut the upstart down to size, or the rising state builds a coalition to constrain the hegemon.

Any Chinese rise will ensure major US-China conflict and East Asian instability. Zbigniew Brzezinski, counselor at the Center for Strategic and International Studies. AND John J. Mearsheimer is the distinguished service professor of political science at the University of Chicago. Policy Foreign Policy, January/February 2005. http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=16538 China cannot rise peacefully, and if it continues its dramatic economic growth over the next few decades, the United States and China are likely to engage in an intense security competition with considerable potential for war. Most of China’s neighbors, including India, Japan, Singapore, South Korea, Russia, and Vietnam, will likely join with the United States to contain China’s power.

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2NC Impact Module – China (Competitiveness) Losing economic competitiveness to China kills heg Khalilzad - of the Rand Corporation - Spring 1995 (Zalmay, The Washington Quarterly, "Losing the Moment? The United States and the World After the Cold War," vol. 18, no. 2, p.84) The United States is unlikely to preserve its military and technological dominance if the U.S. economy declines seriously. In such an environment, the domestic economic and political base for global leadership would diminish and the United States would probably incrementally withdraw from the world, become inward-looking, and abandon more and more of its external interests. As the United States weakened, others would try to fill the vacuum. To sustain and improve its economic strength, the United States must maintain its technological lead in the economic realm. Its success will depend on the choices it makes. In the past, developments such as the agricultural and industrial revolutions produced fundamental changes positively affecting the relative position of those who were able to take advantage of them and negatively affecting those who did not. Some argue that the world may be at the beginning of another such transformation, which will shift the sources of wealth and the relative position of classes and nations. If the United States fails to recognize the change and adapt its institutions, its relative position will necessarily worsen.

US hegemony is essential to prevent global nuclear exchange. Zalmay Khalilzad, RAND, The Washington Quarterly, Spring, 1999 Under the third option, the United States would seek to retain global leadership and to preclude the rise of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the U nited States exercises leadership would have tremendous advantages. First, the global environment would be more open and more receptive to American values -- democracy, free markets, and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability than a bipolar or a multipolar balance of power system.

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2NC Impact Module – China (Terrorism) US economic growth is key to Chinese market liberalization Jason Dean, The Wall Street Journal Asia, July 14, 2008, Agencies' problems could deepen impact of credit woes in Asia But the indirect impact

on the Asian-Pacific region could be much worse. Already, turmoil in U.S. credit markets has led to massive losses in global stock prices. Bond issuers as far away as Australia have seen their sources of international financing dry up as debt investors in the U.S. and Europe shun risk, pushing some companies to the brink of bankruptcy. Problems at Fannie Mae and Freddie Mac could deepen the crisis. "This is the most dangerous moment," says Andy Xie, an independent economist based in Hong Kong, who believes a U.S. government bailout would likely lead to a further decline in the dollar. That hits directly at the value of massive dollar-based securities held by Asian central banks and institutions. The most serious damage to Asia would likely come if the Fannie and Freddie crisis exacerbates the U.S. housing downturn and triggers a full-blown recession in one of the region's biggest export markets. China is already starting to feel the impact of a weaker U.S. economy. So far, China's overall exports have held up reasonably well this year, growing 21.9% in the first half, but exports to the U.S. grew just 8.9% in the six-month period from a year earlier. Many low-

cost exporters in China are feeling a serious pinch from weak U.S. demand, the slumping U.S. dollar and rising labor and input costs. India could take a hit if a U.S. recession dries up overseas investment into its developing economy. The worsening financial crisis is fueling growing skepticism in China of American-style financial-system liberalization. Chinese officials have been unusually vocal this year in expressing concern about America's financial woes and the weak U.S. currency. Premier Wen Jiabao told visiting U.S. Secretary of State Condoleezza Rice last month that China hopes to see the U.S. quickly exit the credit crisis and steady the value of the dollar. At a bilateral economic summit earlier in June, Zhou Xiaochuan, governor of the People's Bank of China, the central bank, said China, which in the past had looked to learn from the U.S.'s management of its economy, is also looking to learn from America's mistakes.

That is key to US-China relations. BBC, December 6, 2003, accessed 10/10/2005, pg. ln He also pointed out that when developing Sino-US economic and trade cooperation, it is necessary to view and deal objectively with certain problems that have arisen in their economic and trade relations, and in particular, to avoid politicizing economic and trade issues. China is ready to resolve the relevant issues through dialogue on an equal footing and with consultation. The fact is that the reduction in US employment is not caused by Chinese imports, and China does not pursue a long-term and excessive trade surplus. China has recently adopted a whole series of measures in order to develop Sino-US economic and trade relations and to resolve problems of concern to the USA such as trade imbalance, thus fully expressing the importance that China attaches to US concerns and its sincerity for resolving the problems. We

hope that the US side will proceed from the overall situation of preserving Sino-US relations and economic and trade cooperation, attach importance to China's concerns and resolve them in a similar spirit, and take positive action in relaxing restrictions on Chinese exports and recognizing China's market economy status, so as to help Sino-US economic and trade relations to develop healthily along the orientation of mutual profit and benefit.

That’s key to solve terrorism. Bonnie S. Glaser, consultant on Asian affairs for the Department of Defense. 2002. “Fleshing out the Candid, Cooperative, and Constructive Relationship.” http://www.csis.org/pacfor/cc/0202Qus_china.html By contrast, China was included in the State Department's annual report to Congress "Patterns of Global Terrorism 2001," issued on May 21 by the Office of the Coordinator for Counterterrorism. The report lauded Beijing's vote for UN Resolution 1368

authorizing the use of international force against al-Qaeda, along with its "constructive approach to terrorism problems in South and Central Asia." Chinese financial and material support for the Afghan Interim Authority was also welcomed. China's bilateral cooperation with Washington was described as producing "encouraging and concrete" results, notably the approval by the Chinese government to establish an FBI Legal Attaché office in Beijing and set up U.S.-China counterterrorism working groups on financing and law enforcement. "Beijing has agreed to all our requests for assistance," the report noted. The report went farther than previous U.S. government statements in acknowledging "credible" accounts that some Uighurs who were trained by al-Qaeda have returned to China, but fell short of Chinese demands that the U.S. recognize as terrorist groups the East Turkestan Islamic Party and the East Turkestan Liberation Organization operating in and around the Xinjiang Uighur Autonomous Region. Moreover, the report reiterated previous warnings by Bush administration officials that a counterterrorism campaign cannot serve as a substitute for addressing legitimate social and economic aspirations.

Extinction. John Steinbruner, senior fellow at the Brookings Institution, chair of the committee on international security and arms control of the National Academy of Sciences, Foreign Policy, December 22, 1997 That deceptively simple observation has immense implications. The use of a manufactured weapon is a singular event. Most of the damage occurs immediately. The aftereffects, whatever they may be, decay rapidly over time and distance in a reasonably predictable manner. Even before a nuclear warhead is detonated, for instance, it is possible to estimate the extent of the subsequent damage and the likely level of radioactive fallout. Such predictability is an essential component for tactical military planning. The use of a pathogen, by contrast, is an extended process whose scope and timing cannot be precisely controlled. For most potential biological agents, the predominant drawback is that they would not act swiftly or decisively enough to be

for a few pathogens - ones most likely to have a decisive effect and therefore the ones most likely to be contemplated for deliberately hostile use - the risk runs in the other direction. A lethal pathogen that could efficiently spread from one victim to another would be capable of initiating an intensifying cascade of disease that might ultimately threaten the entire world population. The 1918 influenza epidemic demonstrated the potential for a an effective weapon. But

global contagion of this sort but not necessarily its outer limit.

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Impact – General Recession would cause wars worldwide Bernardo V. Lopez, BusinessWorld, September 10, 1998 What would it be like if global recession becomes full bloom? The results will be catastrophic. Certainly, global recession will spawn wars of all kinds. Ethnic wars can easily escalate in the grapple for dwindling food stocks as in India-Pakistan-Afghanistan, Yugoslavia, Ethiopia-Eritrea, Indonesia. Regional conflicts in key flashpoints can easily erupt such as in the Middle East, Korea, and Taiwan. In the Philippines, as in some Latin American countries, splintered insurgency forces may take advantage of the economic drought to regroup and reemerge in the countryside. Unemployment worldwide will be in the billions. Famine can be triggered in key Third World nations with India, North Korea, Ethiopia and other African countries as first candidates. Food riots and the breakdown of law and order are possibilities.

Lopez continues Unemployment in the US will be the hardest to cope with since it may have very little capability for subsistence economy and its agrarian base is automated and controlled by a few. The riots and looting of stores in New York City in the late '70s because of a state-wide brownout hint of the type of anarchy in the cities. Such looting in this most affluent nation is not impossible. The weapons industry may also grow rapidly because of the ensuing wars. Arms escalation will have primacy over food production if wars escalate. The US will depend increasingly on weapons exports to nurse its economy back to health. This will further induce wars and conflicts which will aggravate US recession rather than solve it. The US may depend more and more on the use of force and its superiority to get its ways internationally. The public will rebel against local monopolies. Anarchy and boycotts will be their primary weapons against cartels especially on agricultural products such as rice and vegetables, which are presently in the hands of a few in most Third World nations. Global recession will test the limits of human cooperation and sharing in the name of survival. Grants and aids will decrease. Rescues and international funding for advocacy NGOs will disappear rapidly. Coupled with disasters such as earthquakes, volcanic eruptions, climatic aberrations like the El Nino, global recession will degrade a step further.

Economic collapse leads to war (this evidence is gender paraphrased) Norman Bailey, Senior director of International Economic Affairs, The World and I, 1990, p. 33-34 The thirties, after all, began three months after the inception of the Great Depression arid ended four months after the start of World War II. This was not a coincidence. Tens of millions were killed and maimed in the Second World War. If another historical credit liquidation cycle is allowed to take place in the usual chaotic fashion the chances of another global armed conflict will be greatly increased—this time not only would hundreds of millions (rather than tens of millions) be killed or wounded, but the very hopes and the future of [hu]mankind.

Recession causes war Walter Russel Mead, Senior Counselor at the World Policy Institute, New Perspectives Quarterly, 1992, p. 301 Hundreds of millions—billions—of people around the world have pinned their hopes on the international market economy. They and their leaders have embraced market principles—and drawn closer to the West— because they believe our system can work for them. But what if it can’t? What if the global economy stagnates—or even shrinks? In that case, we will face a new period of international conflict: South against North, rich against poor, Russia, China, India—these countries with their billions of people and nuclear weapons will pose a much greater danger to world order than Germany and Japan did in the ‘30s.

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Impact – R&D Warming Revenue is key to R&D and tech development. Frederick H. Rueter. “Framing A Coherent Climate Change Policy,” Study of American Business Policy Study Number 141 1997 Although the proposed economic incentive mechanisms would encourage firms to undertake pertinent technological research and development, they also would reduce firms’ net revenues. The decline in net revenues would diminish firms’ ability to fund research, development, and implemen- tation of new technologies. Thus, on balance, the economic incentive mechanisms may impede crucial technological advancement instead of stimulating it.

R&D on new tech is crucial to solving warming Lee Lane, Executive Director Americans for Equitable Climate Solutions. “Allowance allocation under a carbon cap-and-trade policy,” The Climate Policy Center 2003. www.cpc-inc.org/library/files/19_lanesept03.pdf Recent studies have pointed out that existing energy technologies are unable to stabilize greenhouse gas emissions at affordable costs and have recommended research and development on a diversified portfolio of emission-free energy technologies (Hoffert et al p. 981 and MIT p.1). A recent assessment of the U.S. Department of Energy (DOE)’s R&D in energy efficiency and fossil fuel found that benefits in these two areas exceeded costs (NRC 2001 p. 6). More ambiguously, a recent analysis of government R&D for renewables found that costs fell as a result of the technological advance but not by enough to offset the cost advantage of fossil fuel-based technologies, which also improved.

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Impact – Environment Economic collapse would cause environmental destruction. Martin Lewis professor in the School of the Environment and the Center for International Studies at Duke University. Green Delusions, 1992 p106 While most radical environmentalists claim that they would welcome the resulting global economic chaos, its consequences would both impoverish the surviving communities and wreak ecological devastation. The local autarky envisaged by the greens would force us back to something very similar to the early medieval economy, one in which the vast majority of people lived in dire poverty. In fact, even in early medieval times, more long-distance trade was conducted than eco-radicals would care to allow. As Fernand Braudel (1990:121) writes in regard to Carolingian France: “It must be understood once and for all that no economy of any size could have survived under the mortal regime of autarky.”

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Impact – AT: Economy Resilient The economy is fragile – small dips snowball Lloyd V. Stover, Environmental Scienctist, July 12, 2008, A New Kind of Recession, Waldo County Opinions In theory, savings can be used to buy other goods and services at lower costs than they could produce themselves. But specialization depends on one essential factor: The reliability of supply. If any supplier in the chain fails to deliver a widget of adequate quality on time, the whole process is at risk. This makes the global industrial system vulnerable to conditions such as the collapsing housing market, astronomical oil prices and scarcities of food. The global economy has turned out to be more fragile than we imagined. Investment bankers created sophisticated debts with little concern about the creditworthiness of borrowers. The consequence of loose money policy in America and climbing oil prices has been inflation everywhere. We are beginning to understand that the greater interdependence within the system, the wider the effects of disruption in one part of it. The sub-prime loan crisis in America and record oil prices have created adverse impacts all over the world.

WNDI 2008

38 Spending DA Neg

Dollar Collapse Bad A collapse in the dollar would be catastrophic. The Irish Times, 10/7/04 Rather, the main risk lies in a panic-style rapid decline in the willingness of investors to finance the US external imbalance. In this scenario, the dollar would undergo a steep fall, US interest rates would rise sharply and the US would suffer a serious recession. Such a disorderly adjustment would also disrupt the international financial system, possibly inducing negative contagion especially among the emerging market debtor nations, and threatening those financial institutions that have developed highly leveraged strategies that rely on the continuation of a low interest rate environment. This crisis scenario is also of most concern to European policymakers, with the European Central Bank poised to cut interest rates if a sharp dollar depreciation takes place over a concentrated time period.

WNDI 2008

39 Spending DA Neg

Dollar Collapse Good A decline in the dollar saves the economy, reigns in the deficit, and boosts investment. The Irish Times, 10/7/04 Indeed, a gradual decline in the dollar is mostly good news for the US. By stimulating exports, it reinforces the recovery in the US economy and, over time, will rein in the US external deficit. In the short term, depreciation also generates a net capital gain for US investors: the dollar value of its substantial foreign-currency assets improves.

A declining dollar provides a boost to many sectors of the economy. AP, 12/11/04 Believe it or not, that's good news for many U.S. stocks. While a sharp drop in currency valuations could jeopardize the financial markets by pushing interest rates higher and stock prices lower, the dollar's gradual decline has had mostly positive effects, said Lynn Reaser, chief economist with Banc of America Capital Management. It's made U.S. exports more competitive on the global market and slowed domestic demand for imports. That, combined with a slow rise in interest rates, should help level off the nation's current account deficits, she said. "At this point, the decline in the dollar is actually, overall, relatively beneficial to the U.S. economy and many of our companies," Reaser said. "In terms of equity investors, they are finding that some of their companies are going to see a significant benefit." Stocks that stand to make the most gains from a feeble dollar include the major exporters, such as manufacturers and agricultural producers, as well as U.S.-based companies with sizable overseas operations. As their foreign earnings are translated back into dollars, they are likely to enjoy a large currency gain. This is particularly true for the tech sector and consumer staples, such as household products companies, many of which have close to 50 percent of their revenues coming from abroad. U.S. companies competing on price in foreign markets including those in the materials sector, such as steel producers - are also well-positioned. For example, a U.S. company selling a product in Asia may be able to capture market share from European makers. And, as a cheaper dollar lures vacationing foreigners to America, domestic lodging providers stand to benefit. This also bodes well for high-end luxury retailers: European and Japanese tourists are likely to splurge on pricey watches, jewelry, handbags and clothes while they're here because in terms of their own currency, these items are less expensive. In addition, U.S. residents who choose to vacation closer to home provide another boost to the domestic economy.