Rich Pay More --- Poor Pay Less Proportionally !

Rich Man's Burden

By INVESTOR'S BUSINESS DAILY
January 22, 2008

Taxation: The Democrats won't say it — in fact, they have consistently said the opposite so they can perpetuate class warfare — but the federal tax system has become more progressive due to the Bush tax cuts.

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Related Topics: Budget & Tax Policy

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From former Sen. Tom Daschle's misleading 2001 Lexus-and-a-muffler illustration to Sen. Hillary Clinton's recent comment to the New York Times that the tax code is "so far out of whack" in favoring the rich, the Democrats have viciously railed against President Bush's tax cuts.

Naturally, the mainstream media have recited the Democrats' talking points and act as if this deception is unassailable fact. It's not.

Michael Stroup, a professor of economics and associate dean of the Nelson Rusche College of Business at Stephen F. Austin State University in Texas, shows that the U.S. tax code has in reality grown more progressive after every major tax bill over the last 15 years.

In a study for the National Center for Policy Analysis, Stroup shows that from 1986 to 2004, the total share of the income tax burden paid by the top 1% of income earners grew by nearly half, rising from 25.8% to 36.9%. Over that same time, the burden of the bottom 50% of earners was almost halved, falling from 6.5% to 3.3%.

We suggest those who are inclined to ignore Stroup's work because he doesn't teach at an Ivy League university or a "respected" left-wing college on the West Coast look at the real world. In Washington, lawmakers are arguing over who should get economy-stimulating tax rebates, and the debate is revealing.

Republicans say the rebates should go to taxpayers only — which makes sense, since they are "tax" rebates. Democrats reject this.

The left-leaning Center for Budget and Policy Priorities says that by using the taxpayer measure, as many as 19 million American households — not individuals — whose tax liabilities are less than the proposed rebate amounts would get only partial benefits.

More telling, though, is the group's contention that the 58 million U.S. households — out of roughly 115 million total — that have no tax liabilities or simply don't have to file would get nothing.

Seems to us that if Washington is having a hard time finding taxpayers who are eligible for tax rebates, then a lot of Americans must have been wiped off the tax rolls.

And if they're not paying the taxes, then who is? Despite fewer taxpayers, the flood of tax revenues into the capital hasn't abated. In 2008, personal income tax receipts will have increased for four straight years following a recession-caused dip in the early 2000s.

The shrinking of the tax rolls is no secret. The Tax Foundation has noted that in 2000, a year before the first tax cuts under Bush, roughly 30 million tax returns had no income tax liability; every dollar those earners made they kept. By 2004, a year after the second round of cuts was passed, 43 million returns had no tax.

In all, the Tax Foundation says, more than 25 million Americans have been wiped off the federal tax rolls. Thanks to President Bush.

No honest person could look at the data and say that the system favors the rich over the poor. So that leaves two possibilities for those who continue to say the Bush tax cuts foster inequality: They are lying for political gain, or they are ignorant.

Either way, those who hold such divisive and plainly wrong views disqualify themselves from political office by failing to live up to even minimal standards.

It’s Just Unbelievable How Damn Dumb Is The Federal Government.!

Fiscal Steroids vs. Real Economic Growth

by Newt Gingrich (more by this author)
Posted 01/23/2008 ET

There is something ironic about having Congress -- which is holding hearings on steroid use in baseball -- trying to solve our current economic challenges with the economic equivalent of fiscal steroids.

The maneuvering and posturing in Washington has assumed all of its normal pre-failure patterns.

The fact is, there could be no greater contrast between the approach I outlined in my new book, Real Change, and the traditional insider politics of Washington.

A Washington Insider Economic Package That Is Too Small and Too Temporary

Republican staff advisers are developing an economic package within the timid boundaries allowed by the Washington establishment. The package they are working on is too small, too temporary and clearly inadequate for the scale of the economic problems we face.

To make matters worse, the Democrats who control Congress will begin demanding even less-useful and more-destructive economic proposals that will spend a lot more money with even less hope of helping the economy.

The Federal Reserve chairman will forget that his primary job is protecting the stability and strength of the dollar and will become a complicit political player in trying to develop an insider package that will only weaken the dollar still further. We saw evidence of this yesterday, when Chairman Bernanke and his colleagues reduced the Federal Reserve's federal funds rate three-quarters of a percentage point. As a result, the dollar dropped in global markets almost immediately.

In short, the normal patterns of Washington, D.C., are likely to lead to temporary, marginal tinkering when what America really needs is long-term, fundamental reform to protect the dollar, increase productivity and create jobs.

A Familiar Pattern of Failure

We are witnessing the same destructive pattern that led to "stagflation" in the 1970s -- the economic disaster that ultimately led Gov. Ronald Reagan to win the presidency on the dual pledges of anti-inflationary monetary policy and a fiscal policy of cuts in non-defense spending, regulation and taxes in order to revive the economy.

This same destructive pattern led the first Bush Administration to break its "no new taxes pledge," which set the stage for the Democratic victory of 1992.

And it was this same pattern that led the Clinton Administration to adopt the largest tax increase in history in 1993 and set the stage for the Contract with America and the first Republican House majority in 40 years.

Why a Washington Insider Stimulus Package Is Doomed to Fail Politically

This pattern of Washington insider negotiating and posturing is doomed to fail politically because of the power of the world financial news system and because this gimmicky approach goes against the fundamental desires of the American people.

Just open the financial pages from yesterday: The world markets have already condemned the initial administration proposals.

If the stimulus package was designed to be a confidence builder, it is clearly failing.

On Monday, London fell 5.48%, Germany 7.16%, China 5.14%, Hong Kong 5.49% and India 7.41%. This was the world's investors' way of making clear they were not reassured.

Furthermore, to make the situation even more intense, the power of the markets is amplified by the global financial news system. Market reactions are transmitted instantly, 24 hours a day, by cable news and other news outlets.

I was on the new Fox Business Channel as a guest on Neil Cavuto's show Monday evening (read a transcript here). By then, it was clear that the on-air analysts were joining the investors in condemning the stimulus package as inadequate and ineffective.

Americans Want Long-Term Solutions

The American people will ultimately reject the stimulus package, because it violates one of their deepest beliefs. Americans believe in long-term solutions, not short-term fixes. This Washington insider maneuvering is politics as usual at a time when the American people are crying out for a change of course.

In our American Solutions polling last summer, the American people told us by a margin of 92% to 5% that our goal should be to provide long-term solutions instead of short-term fixes. You can find this and other economic data in the Platform of the American People in Real Change and at AmericanSolutions.com.

Overwhelmingly, the American people told us that they are prepared to be told the truth and for large, fundamental changes.

Short-term fixes are going to be rejected by the American people, and the politicians who endorse them are going to find their reputations suffering as a result.

Why a Washington Insider Stimulus Package Will Fail Economically

The stimulus packages being discussed won't just fail politically, they'll also fail economically. The size of the challenge is much bigger than the size of the current solutions being offered by Washington.

Consider these economic indicators:

• Gold has been hitting record highs ($914.30 an ounce a week ago). Gold was up 32% in 2007.
  

• U.S. Treasury notes, historically the best store of currency value, have lost 20% compared to gold since August 2007.
  

• Silver has hit a 24-year high ($16.60 an ounce last week).
  

• Platinum has skyrocketed to $1,592 an ounce (and if platinum is a primary metal in the next generation of cars, the world's supply will run out in 15 years, according to some estimates).
  

• Oil hit $100 a barrel but has slid to about $90 a barrel on recession news. (A weak economy means declining oil prices, a strong economy means rising oil prices.)

Harbingers of Inflation

High commodity prices like these are usually harbingers of inflation.

The declining dollar has been a similar indicator of inflationary pressures coming.

• The producer price index was up 7.7% through November 2007. That is the biggest jump in 34 years.
  

• The consumer price index was up 4.2% through November 2007. That is the biggest jump in 17 years.

The Role of the Federal Reserve: To Protect the Value of the Dollar

In this setting, it is important for Chairman Ben Bernanke and the Fed to remember their primary mission: protecting the value of the dollar.

People want their government to keep the value of its currency. We won't save and invest if we think politicians are going to steal our earnings and savings by inflating the currency.

The Fed should focus its eye firmly on strengthening the dollar and driving inflation down to 2%.

If the world came to believe the Fed was serious about protecting the dollar, the price of oil would decline substantially, the price of gold would decline substantially, the world's capital flows would return to the United States and the economy would be inherently healthier.

Creating Jobs and Productivity While Stabilizing the Dollar

If the Federal Reserve should focus on creating a stable dollar, the President and Congress should focus on increasing productivity and creating jobs.

Our political leaders should concentrate on making the American worker more successful in competing with China, India, Japan and Europe. They should also ensure that long-term productivity gains in the United States result in real prosperity that would enable Americans to pay off their debts and increase their savings for their retirement years.

Recognizing the Reality of Democratic Control of Congress

Any economic plan has to start with the recognition that Democrats control Congress. That means they get to have a large say in a successful package.

The difficulty here is compounded by the fact that the Democrats have a lot less to lose by allowing nothing to happen, because they will blame any economic problems on President Bush and the Republicans.

The key is to give the Democrats substantial influence over half the economic growth package -- the half aimed at increasing consumer spending -- but insist that the President and Republicans control the other half of the package aimed at increasing productivity and creating jobs.

Give Democrats Control Over Half the Stimulus Package. . .

If Republicans were proposing consumer stimulus plans, an ideal change would be to offset the payroll tax for both individuals and employers. Almost nothing would increase take-home pay for working Americans as fast or enable businesses to hire more people.

A second good option would be a significant increase in the tax allowance for children. This would help working families and single working mothers and could have a very positive impact.

For their part, the Democrats will almost certainly want some kind of direct giveaway program of rebates or some other payment.

As long as the amount is capped at half of a very robust package (say $150 billion of a $300 billion package), it should be the price Republicans pay to get a productivity-increasing bill through a Democratic Congress.

Here's the bottom line trade-off: Republicans should offer relative freedom to the Democrats to design the consumer stimulus part of the bill but then insist on similar freedom to design the productivity increasing portions of the bill.

. . .With a Big 'If'

There is a big "if" involved in this approach.

The Republicans have to be prepared to play hardball. They have to stand firm for a powerful productivity- and growth-oriented component or be prepared to accept the failure of the package.

The Democrats will attempt to panic the Republicans into giving up all their principles just to get "something" passed quickly.

It is very important for the President and House and Senate Republicans to stand firm for a sophisticated package that would actually increase productivity.

The first key to productivity improvements is that they have to be permanent so people can rely on them.

A Bold Plan for Economic Growth

What America needs is deep, fundamental reform to make American businesses more competitive so American workers have better paying jobs with greater job security.

The change from the current situation to a powerfully competitive American future is a much bigger change than anyone in Washington is contemplating.

Here are a few proposals that would begin to move us in the right direction:

1. Adopt the Rangel proposal for a corporate income tax cut.

When even liberal Democrats such as Ways and Means Chairman Charlie Rangel (D-N.Y.) recognize that the United States is killing jobs at home by having the second-highest corporate income tax in the world, there is a possibility of getting something done. In Rangel's generally bad bill of massive tax increases there is a provision for a corporate income tax rate cut. Republicans should simply lift that section from his bill and propose it in his name.

2. Abolish or index the capital gains tax.

A plurality of Americans favor abolishing the capital gains tax (American Solutions polling found a margin of 49% to 41%). This number will go up as Americans look at the disastrous impact of the financial meltdown on their planned retirement funds and their children's college education funds.

Abolishing the capital gains tax would lead to an immediate jump in the value of the stock market, leading to an immediate jump in the value of every retiree's 401(k). More importantly, it would lead to a burst of new investments in the United States, creating a foundation for long-term economic growth.

If abolishing capital gains is politically impossible for Democrats (who tend to be anti-capital in between high-dollar fundraisers) to accept, then the fallback position should be to index the capital gains tax so inflation does not erode capital gains. As Richard Rahn has pointed out, this would have a big effect on increasing investment in America.

3. Allow 100% expensing of all investments in new equipment.

If American businesses could write off 100% of their new equipment within one year of its purchase, there would be a boom in equipping American workers with the best and most modern equipment so they can compete with any economy in the world.

These kinds of real, permanent changes would begin to make America more competitive and more productive. They will allow the dollar to increase in value as investors start to buy up dollars to invest in the low-tax U.S. economy. In turn, this will give the Fed more room to keep interest rates low. These changes would be a step toward permanent, long-term, improved economic health.

And Don't Forget About Scoring

It is essential to remember that anything good for the American economy will be scored badly by the bureaucrats at the Joint Tax Committee and the Office of Management and Budget. Both bureaucracies have a history of being anti-capitalist, anti-market and anti-growth in predicting how economic policy changes will effect economic growth and government revenue.

The answer, however, is simple.

Establish a margin of error equal to how wrong they were in scoring revenue from the last cycle of tax cuts. Then declare that anything within that margin of error is scored as acceptable.

The fact is that it is impossible to establish sound policy for economic growth with Socialist scoring. However, in the short run, it is impossible to change these two entrenched bureaucracies.

Therefore, the answer is simply to publish the degree to which the bureaucrats were wrong in the last two or three tax-cutting cycles and write the bill within that margin of historically provable inaccuracy.

Good News From Innovative Governors: Sanford Proposes an Optional Flat Tax

In the Platform of the American People, there is overwhelming support for an optional flat tax with a one page tax form. South Carolina Gov. Mark Sanford (R) has picked up on this overwhelming desire for real change in how we pay taxes.

Here's what Gov. Sanford had to say about the optional flat tax in his State of the State address:

"A flat tax alternative that would allow someone the option of forgoing exemptions and instead pay a 3.4% flat tax in this state. We continue to believe finding ways to lower the marginal tax rate is vital to our economy, vital to competitiveness and in this case vital to the taxpayer's pocket. It is worth noting that a recent report from the Federal Reserve documented the connection between lower income tax rates and higher economic and employment growth. This is something we can do to better the economy of our state, and I'd thank Rep. Merrill for introducing a bill toward this end."

Louisiana's Jindal Starts With Accountability and Transparency

Newly elected Louisiana Gov. Bobby Jindal (R), one of the brightest and most creative people in public life, began his governorship with an executive order making state spending transparent and ordering it to be posted on the Internet so every citizen could see how their tax money is being spent.

For a Louisiana governor, this was an enormous step toward reform.

Transparency in government spending is a growing movement among the states and, like so much of the innovation on the state level in America, it's an idea the President would do well to make his own.

Publishing all non-classified federal spending on the Internet would put the power to unearth fraud and abuse in the hands of the American people.

It would be a step toward real accountability in government.

In other words, it would be real change, just what we need in Washington right now.

Newt Gringrich

P.S. -- There is a documentary opening next Friday in selected cities across the country that I'd like to draw your attention to. It's titled Shoot Down, and it reveals new details about the 1996 downing of two American civilian aircraft in the Florida straits by Cuban fighter jets. The director of Shoot Down is the niece of one of the four Americans who lost their lives that day while attempting to help Cuban refugees reach freedom in America. It's a riveting, controversial and important story. Go to TheShootDown.com to find out when Shoot Down will be playing in your area.

P.P.S. -- Long-time readers of this newsletter will recall I have proposed that we experiment with offering children in poor neighborhoods cash incentives for learning math and science. The Learning Makes a Difference Foundation, in cooperation with the Fulton County Schools in Georgia, is about to embark on a pilot program to do just that. You can read about it in today's Atlanta Journal Constitution. I am particularly proud of my daughter, Jackie Cushman, who helped organize this project.

Coming Socialized Medicine

“Health Care Reform” will dominate the conversation as the election approaches. “Health Care Reform” is a euphemism for “single-payer health care” which is, in turn, a euphemism for socialized, government-controlled, medicine. Health care in this country is a huge mess BECAUSE of the unholy alliance between government and the insurance companies. Don’t be seduced by the populist plea for socialized medicine and more government control because, as has been said so frequently before, “Government is not the solution, government is the problem.” See below:

The Truth About Health Costs

By INVESTOR'S BUSINESS DAILY
January 10, 2008

Health Care Reform: Democrats claim high medical costs are a "failure of the free market," and they demand a government takeover. But a new study says government's to blame.

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Related Topics: Health Care

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Public health programs account for almost half of the $2 trillion spent on U.S. health care, a Hoover Institution report says. An astonishing 80% or more of all medical-care pricing is based on government reimbursement rates set by Medicare.

As for private costs, they would be lower if government didn't interfere in the market. Regulations imposed on the industry cost more than $330 billion a year, Hoover says.

Perverse tax policies have created a third-party payer system. Patients no longer have first-dollar responsibility for medical bills thanks to employer insurance.

Someone else is paying, so inflation goes unchecked and unabated.

"Patients have no idea what their doctor visits, surgeries, diagnostic studies or other medical services — whether urgent or elective — will cost until the bill comes weeks later," said Dr. Scott W. Atlas, a senior Hoover fellow and chief of neuroradiology at Stanford University Medical School.

Even then, they seldom flyspeck the bill. Why bother, when they're responsible for just 10% to 20% of it?

Meanwhile, demand climbs higher and higher, and insurance premiums along with it, taking a bigger bite out of employer paychecks and putting health care completely out of reach for a growing number of Americans.

So if Uncle Sam made health care so unaffordable, why do so many voters like Democrats' plans to expand government control of health care? Because they've bought into the myth that the private sector has failed and begs for government rescue.

Democrats' solution to this failed government-heavy system is more government in the form of mandatory health coverage. Public plans offered by Hillary Clinton, John Edwards and Barack Obama all boast of "using government to lower costs and ensure affordability for all."

But if you think health care is expensive now, just wait until government makes it "free."

Hillary calls for expanding coverage through public health plans like Medicare or the Federal Employees Health Benefit Program. Yet Medicare already costs more per capita than any other industrial nation's public medical program.

The way to control costs isn't to expand a health care bureaucracy that already is divorcing patients from market-price decisions. The answer is letting them choose between health care and money.

Most of the Republican plans would help patients make that choice by expanding health savings accounts with high-deductible insurance plans. HSAs are tax-deferred accounts that patients set up to pay for routine medical care and to save for future unexpected medical expenses.

The key, however, is making the accounts attractive enough to shift incentives from the current employer-based system of insurance to the individual market.

Right now only about 17 million Americans buy their own health insurance. If 50 million did so through HSAs, we'd see at least a 30% reduction in medical costs, studies show, thanks to increased competition in the market.

By putting the patient back in charge of health care, making him a buyer as well as a user of care, a nationwide HSA rollout would create a large enough consumer-driven market to control costs.

Then the health care market would work more like a real market.

The medical costs Americans complain about were caused by government, not the private sector. This is a little recognized fact.

More government will not only ramp up costs, but deteriorate the one thing American patients seldom complain about — the quality of their health care.

Federal Tax Policy Made Simple

Federal Tax Policy Made Simple

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

* The first four men (the poorest) would pay nothing.

* The fifth would pay $1.

* The sixth would pay $3.

* The seventh would pay $7.

* The eighth would pay $12.

* The ninth would pay $18.

* The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

* The fifth man, like the first four, now paid nothing (100% savings).

* The sixth now paid $2 instead of $3 (33%savings).

* The seventh now pay $5 instead of $7 (28%savings).

* The eighth now paid $9 instead of $12 (25% savings).

* The ninth now paid $14 instead of $18 (22% savings).

* The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

The Global Climate Change Hoax

You'll never hear the following facts on global climate change from the hard-left news media or that despicable huckster, Al Gore.

Open Letter to the Secretary-General of the United Nations

Dec. 13, 2007

His Excellency Ban Ki-Moon
Secretary-General, United Nations
New York, N.Y.

Dear Mr. Secretary-General,

Re: UN climate conference taking the World in entirely the wrong direction

It is not possible to stop climate change, a natural phenomenon that has affected humanity through the ages. Geological, archaeological, oral and written histories all attest to the dramatic challenges posed to past societies from unanticipated changes in temperature, precipitation, winds and other climatic variables. We therefore need to equip nations to become resilient to the full range of these natural phenomena by promoting economic growth and wealth generation.

The United Nations Intergovernmental Panel on Climate Change (IPCC) has issued increasingly alarming conclusions about the climatic influences of human-produced carbon dioxide (CO2), a non-polluting gas that is essential to plant photosynthesis. While we understand the evidence that has led them to view CO2 emissions as harmful, the IPCC's conclusions are quite inadequate as justification for implementing policies that will markedly diminish future prosperity. In particular, it is not established that it is possible to significantly alter global climate through cuts in human greenhouse gas emissions. On top of which, because attempts to cut emissions will slow development, the current UN approach of CO2 reduction is likely to increase human suffering from future climate change rather than to decrease it.

The IPCC Summaries for Policy Makers are the most widely read IPCC reports amongst politicians and non-scientists and are the basis for most climate change policy formulation. Yet these Summaries are prepared by a relatively small core writing team with the final drafts approved line-by-line by ­government ­representatives. The great ­majority of IPCC contributors and ­reviewers, and the tens of thousands of other scientists who are qualified to comment on these matters, are not involved in the preparation of these documents. The summaries therefore cannot properly be represented as a consensus view among experts.

Contrary to the impression left by the IPCC Summary reports:

1. Recent observations of phenomena such as glacial retreats, sea-level rise and the migration of temperature-sensitive species are not evidence for abnormal climate change, for none of these changes has been shown to lie outside the bounds of known natural variability.

2. The average rate of warming of 0.1 to 0. 2 degrees Celsius per decade recorded by satellites during the late 20th century falls within known natural rates of warming and cooling over the last 10,000 years.

3. Leading scientists, including some senior IPCC representatives, acknowledge that today's computer models cannot predict climate. Consistent with this, and despite computer projections of temperature rises, there has been no net global warming since 1998. That the current temperature plateau follows a late 20th-century period of warming is consistent with the continuation today of natural multi-decadal or millennial climate cycling.

In stark contrast to the often repeated assertion that the science of climate change is "settled," significant new peer-reviewed research has cast even more doubt on the hypothesis of dangerous human-caused global warming. But because IPCC working groups were generally instructed (see http://ipcc-wg1.ucar.edu/wg1/docs/wg1_timetable_2006-08-14.pdf) to consider work published only through May, 2005, these important findings are not included in their reports; i.e., the IPCC assessment reports are already materially outdated.

The UN climate conference in Bali has been planned to take the world along a path of severe CO2 restrictions, ignoring the lessons apparent from the failure of the Kyoto Protocol, the chaotic nature of the European CO2 trading market, and the ineffectiveness of other costly initiatives to curb greenhouse gas emissions. Balanced cost/benefit analyses provide no support for the introduction of global measures to cap and reduce energy consumption for the purpose of restricting CO2 emissions. Furthermore, it is irrational to apply the "precautionary principle" because many scientists recognize that both climatic coolings and warmings are realistic possibilities over the medium-term future.

The current UN focus on "fighting climate change," as illustrated in the Nov. 27 UN Development Programme's Human Development Report, is distracting governments from adapting to the threat of inevitable natural climate changes, whatever forms they may take. National and international planning for such changes is needed, with a focus on helping our most vulnerable citizens adapt to conditions that lie ahead. Attempts to prevent global climate change from occurring are ultimately futile, and constitute a tragic misallocation of resources that would be better spent on humanity's real and pressing problems.

Yours faithfully,

Signatories of an open letter on the UN climate-conference

Published: Wednesday, December 12, 2007

The following are signatories to the Dec. 13th letter to the Ban Ki-moon, Secretary-General of the United Nations on the UN Climate conference in Bali:

Don Aitkin, PhD, Professor, social scientist, retired vice-chancellor and president, University of Canberra, Australia

William J.R. Alexander, PhD, Professor Emeritus, Dept. of Civil and Biosystems Engineering, University of Pretoria, South Africa; Member, UN Scientific and Technical Committee on Natural Disasters, 1994-2000

Bjarne Andresen, PhD, physicist, Professor, The Niels Bohr Institute, University of Copenhagen, Denmark

Geoff L. Austin, PhD, FNZIP, FRSNZ, Professor, Dept. of Physics, University of Auckland, New Zealand

Timothy F. Ball, PhD, environmental consultant, former climatology professor, University of Winnipeg

Ernst-Georg Beck, Dipl. Biol., Biologist, Merian-Schule Freiburg, Germany

Sonja A. Boehmer-Christiansen, PhD, Reader, Dept. of Geography, Hull University, U.K.; Editor, Energy & Environment journal

Chris C. Borel, PhD, remote sensing scientist, U.S.

Reid A. Bryson, PhD, DSc, DEngr, UNE P. Global 500 Laureate; Senior Scientist, Center for Climatic Research; Emeritus Professor of Meteorology, of Geography, and of Environmental Studies, University of Wisconsin

Dan Carruthers, M.Sc., wildlife biology consultant specializing in animal ecology in Arctic and Subarctic regions, Alberta

R.M. Carter, PhD, Professor, Marine Geophysical Laboratory, James Cook University, Townsville, Australia

Ian D. Clark, PhD, Professor, isotope hydrogeology and paleoclimatology, Dept. of Earth Sciences, University of Ottawa

Richard S. Courtney, PhD, climate and atmospheric science consultant, IPCC expert reviewer, U.K.

Willem de Lange, PhD, Dept. of Earth and Ocean Sciences, School of Science and Engineering, Waikato University, New Zealand

David Deming, PhD (Geophysics), Associate Professor, College of Arts and Sciences, University of Oklahoma

Freeman J. Dyson, PhD, Emeritus Professor of Physics, Institute for Advanced Studies, Princeton, N.J.

Don J. Easterbrook, PhD, Emeritus Professor of Geology, Western Washington University

Lance Endersbee, Emeritus Professor, former dean of Engineering and Pro-Vice Chancellor of Monasy University, Australia

Hans Erren, Doctorandus, geophysicist and climate specialist, Sittard, The Netherlands

Robert H. Essenhigh, PhD, E.G. Bailey Professor of Energy Conversion, Dept. of Mechanical Engineering, The Ohio State University

Christopher Essex, PhD, Professor of Applied Mathematics and Associate Director of the Program in Theoretical Physics, University of Western Ontario

David Evans, PhD, mathematician, carbon accountant, computer and electrical engineer and head of 'Science Speak,' Australia

William Evans, PhD, editor, American Midland Naturalist; Dept. of Biological Sciences, University of Notre Dame

Stewart Franks, PhD, Professor, Hydroclimatologist, University of Newcastle, Australia

R. W. Gauldie, PhD, Research Professor, Hawai'i Institute of Geophysics and Planetology, School of Ocean Earth Sciences and Technology, University of Hawai'i at Manoa

Lee C. Gerhard, PhD, Senior Scientist Emeritus, University of Kansas; former director and state geologist, Kansas Geological Survey

Gerhard Gerlich, Professor for Mathematical and Theoretical Physics, Institut für Mathematische Physik der TU Braunschweig, Germany

Albrecht Glatzle, PhD, sc.agr., Agro-Biologist and Gerente ejecutivo, INTTAS, Paraguay

Fred Goldberg, PhD, Adjunct Professor, Royal Institute of Technology, Mechanical Engineering, Stockholm, Sweden

Vincent Gray, PhD, expert reviewer for the IPCC and author of The Greenhouse Delusion: A Critique of 'Climate Change 2001, Wellington, New Zealand

William M. Gray, Professor Emeritus, Dept. of Atmospheric Science, Colorado State University and Head of the Tropical Meteorology Project

Howard Hayden, PhD, Emeritus Professor of Physics, University of Connecticut

Louis Hissink MSc, M.A.I.G., editor, AIG News, and consulting geologist, Perth, Western Australia

Craig D. Idso, PhD, Chairman, Center for the Study of Carbon Dioxide and Global Change, Arizona

Sherwood B. Idso, PhD, President, Center for the Study of Carbon Dioxide and Global Change, AZ, USA

Andrei Illarionov, PhD, Senior Fellow, Center for Global Liberty and Prosperity; founder and director of the Institute of Economic Analysis

Zbigniew Jaworowski, PhD, physicist, Chairman - Scientific Council of Central Laboratory for Radiological Protection, Warsaw, Poland

Jon Jenkins, PhD, MD, computer modelling - virology, NSW, Australia

Wibjorn Karlen, PhD, Emeritus Professor, Dept. of Physical Geography and Quaternary Geology, Stockholm University, Sweden

Olavi Kärner, Ph.D., Research Associate, Dept. of Atmospheric Physics, Institute of Astrophysics and Atmospheric Physics, Toravere, Estonia

Joel M. Kauffman, PhD, Emeritus Professor of Chemistry, University of the Sciences in Philadelphia

David Kear, PhD, FRSNZ, CMG, geologist, former Director-General of NZ Dept. of Scientific & Industrial Research, New Zealand

Madhav Khandekar, PhD, former research scientist, Environment Canada; editor, Climate Research (2003-05); editorial board member, Natural Hazards; IPCC expert reviewer 2007

William Kininmonth M.Sc., M.Admin., former head of Australia's National Climate Centre and a consultant to the World Meteorological organization's Commission for Climatology Jan J.H. Kop, MSc Ceng FICE (Civil Engineer Fellow of the Institution of Civil Engineers), Emeritus Prof. of Public Health Engineering, Technical University Delft, The Netherlands

Prof. R.W.J. Kouffeld, Emeritus Professor, Energy Conversion, Delft University of Technology, The Netherlands

Salomon Kroonenberg, PhD, Professor, Dept. of Geotechnology, Delft University of Technology, The Netherlands

Hans H.J. Labohm, PhD, economist, former advisor to the executive board, Clingendael Institute (The Netherlands Institute of International Relations), The Netherlands

The Rt. Hon. Lord Lawson of Blaby, economist; Chairman of the Central Europe Trust; former Chancellor of the Exchequer, U.K.

Douglas Leahey, PhD, meteorologist and air-quality consultant, Calgary

David R. Legates, PhD, Director, Center for Climatic Research, University of Delaware

Marcel Leroux, PhD, Professor Emeritus of Climatology, University of Lyon, France; former director of Laboratory of Climatology, Risks and Environment, CNRS

Bryan Leyland, International Climate Science Coalition, consultant and power engineer, Auckland, New Zealand

William Lindqvist, PhD, independent consulting geologist, Calif.

Richard S. Lindzen, PhD, Alfred P. Sloan Professor of Meteorology, Dept. of Earth, Atmospheric and Planetary Sciences, Massachusetts Institute of Technology

A.J. Tom van Loon, PhD, Professor of Geology (Quaternary Geology), Adam Mickiewicz University, Poznan, Poland; former President of the European Association of Science Editors

Anthony R. Lupo, PhD, Associate Professor of Atmospheric Science, Dept. of Soil, Environmental, and Atmospheric Science, University of Missouri-Columbia

Richard Mackey, PhD, Statistician, Australia

Horst Malberg, PhD, Professor for Meteorology and Climatology, Institut für Meteorologie, Berlin, Germany

John Maunder, PhD, Climatologist, former President of the Commission for Climatology of the World Meteorological Organization (89-97), New Zealand

Alister McFarquhar, PhD, international economy, Downing College, Cambridge, U.K.

Ross McKitrick, PhD, Associate Professor, Dept. of Economics, University of Guelph

John McLean, PhD, climate data analyst, computer scientist, Australia

Owen McShane, PhD, economist, head of the International Climate Science Coalition; Director, Centre for Resource Management Studies, New Zealand

Fred Michel, PhD, Director, Institute of Environmental Sciences and Associate Professor of Earth Sciences, Carleton University

Frank Milne, PhD, Professor, Dept. of Economics, Queen's University

Asmunn Moene, PhD, former head of the Forecasting Centre, Meteorological Institute, Norway

Alan Moran, PhD, Energy Economist, Director of the IPA's Deregulation Unit, Australia

Nils-Axel Morner, PhD, Emeritus Professor of Paleogeophysics & Geodynamics, Stockholm University, Sweden

Lubos Motl, PhD, Physicist, former Harvard string theorist, Charles University, Prague, Czech Republic

John Nicol, PhD, Professor Emeritus of Physics, James Cook University, Australia

David Nowell, M.Sc., Fellow of the Royal Meteorological Society, former chairman of the NATO Meteorological Group, Ottawa

James J. O'Brien, PhD, Professor Emeritus, Meteorology and Oceanography, Florida State University

Cliff Ollier, PhD, Professor Emeritus (Geology), Research Fellow, University of Western Australia

Garth W. Paltridge, PhD, atmospheric physicist, Emeritus Professor and former Director of the Institute of Antarctic and Southern Ocean Studies, University of Tasmania, Australia

R. Timothy Patterson, PhD, Professor, Dept. of Earth Sciences (paleoclimatology), Carleton University

Al Pekarek, PhD, Associate Professor of Geology, Earth and Atmospheric Sciences Dept., St. Cloud State University, Minnesota

Ian Plimer, PhD, Professor of Geology, School of Earth and Environmental Sciences, University of Adelaide and Emeritus Professor of Earth Sciences, University of Melbourne, Australia

Brian Pratt, PhD, Professor of Geology, Sedimentology, University of Saskatchewan

Harry N.A. Priem, PhD, Emeritus Professor of Planetary Geology and Isotope Geophysics, Utrecht University; former director of the Netherlands Institute for Isotope Geosciences

Alex Robson, PhD, Economics, Australian National University Colonel F.P.M. Rombouts, Branch Chief - Safety, Quality and Environment, Royal Netherland Air Force

R.G. Roper, PhD, Professor Emeritus of Atmospheric Sciences, School of Earth and Atmospheric Sciences, Georgia Institute of Technology

Arthur Rorsch, PhD, Emeritus Professor, Molecular Genetics, Leiden University, The Netherlands

Rob Scagel, M.Sc., forest microclimate specialist, principal consultant, Pacific Phytometric Consultants, B.C.

Tom V. Segalstad, PhD, (Geology/Geochemistry), Head of the Geological Museum and Associate Professor of Resource and Environmental Geology, University of Oslo, Norway

Gary D. Sharp, PhD, Center for Climate/Ocean Resources Study, Salinas, CA

S. Fred Singer, PhD, Professor Emeritus of Environmental Sciences, University of Virginia and former director Weather Satellite Service

L. Graham Smith, PhD, Associate Professor, Dept. of Geography, University of Western Ontario

Roy W. Spencer, PhD, climatologist, Principal Research Scientist, Earth System Science Center, The University of Alabama, Huntsville

Peter Stilbs, TeknD, Professor of Physical Chemistry, Research Leader, School of Chemical Science and Engineering, KTH (Royal Institute of Technology), Stockholm, Sweden

Hendrik Tennekes, PhD, former director of research, Royal Netherlands Meteorological Institute

Dick Thoenes, PhD, Emeritus Professor of Chemical Engineering, Eindhoven University of Technology, The Netherlands

Brian G Valentine, PhD, PE (Chem.), Technology Manager - Industrial Energy Efficiency, Adjunct Associate Professor of Engineering Science, University of Maryland at College Park; Dept of Energy, Washington, DC

Gerrit J. van der Lingen, PhD, geologist and paleoclimatologist, climate change consultant, Geoscience Research and Investigations, New Zealand

Len Walker, PhD, Power Engineering, Australia

Edward J. Wegman, PhD, Department of Computational and Data Sciences, George Mason University, Virginia

Stephan Wilksch, PhD, Professor for Innovation and Technology Management, Production Management and Logistics, University of Technolgy and Economics Berlin, Germany

Boris Winterhalter, PhD, senior marine researcher (retired), Geological Survey of Finland, former professor in marine geology, University of Helsinki, Finland

David E. Wojick, PhD, P.Eng., energy consultant, Virginia

Raphael Wust, PhD, Lecturer, Marine Geology/Sedimentology, James Cook University, Australia

A. Zichichi, PhD, President of the World Federation of Scientists, Geneva, Switzerland; Emeritus Professor of Advanced Physics, University of Bologna, Italy

Memo To The Next President

It is common knowledge that the federal government is hopelessly broken on virtually all fronts. Here is a reasonable proposal that would go a long way to fixing that problem if only the next president would take it seriously.

Rx For America: Cost-Benefit Budgeting

By ERNEST S. CHRISTIAN AND BILL FRENZEL

Thursday, December 06, 2007

Rudy Giuliani says he's a turnaround expert, a take-charge guy who came into a bad situation (New York City) and fixed it. Mitt Romney makes the same claim (the Olympics), and he is really smart with money.

If these guys are as good as their records suggest, then what America needs is a good strong dose of Rudy-Mitt in fixing the situation in Washington, where costs are exceeding benefits by a wide margin.

Step one for the next president should be to tell the American people the truth about the federal government. It is not the source of their well-being. Most of the jobs it creates are for lawyers, lobbyists and bureaucrats. Mostly, it spends other people's money.

Congress No Help

When government spending goes up, taxes go up, the private-sector economy suffers and most people who depend on it for a living are worse off. The collateral and direct damage from a dollar of tax increase often exceeds by a factor of two the benefit from a dollar of government spending. Much government spending is simply a waste, and everybody in America knows it.

Step two is to fix the problem — a task that will require an extraordinary effort by an extraordinary president. The Congress will not be of much help. In its present state, it's an institution addicted to spending and dedicated to concealing its cost.

The new president can succeed by directly involving the American people in a new kind of federal budget process that weighs the high cost of taxes against the generally low value of government spending. We call it the Cost-Benefit Budget.

The government's own Office of Management and Budget already has a performance rating technique called PART.

Under the new budgeting procedure, PART would be refined, expanded and used to reveal — for each federal spending program — both the amount spent and the benefit achieved. An independent top-level analytical unit would be established in the Treasury Department to determine the real economic cost of taxes and to inform the public.

Knowing The Score

Armed with this information, the president would identify federal programs to be curtailed or eliminated because their benefit ratings under PART are less than the damage done by taxes necessary to pay for them. At the end of the year, the president would first declare a tax cut "dividend" for the American people — to be paid for by specifically identified spending reductions.

After an appropriate public comment period, he would ask the Congress to cut both taxes and spending accordingly. All this would be conducted out in the open. The voters would know what is going on — what is being given up, what is being gained — and allowed to participate.

All newly enacted spending programs would by law be accompanied by a "cost-benefit impact statement" that states in detail (1) the benefits to be achieved, how and by when and (2) the nominal and real costs in terms of tax cuts foregone or tax increases imposed.

Everyone would know the cost-benefit score. There would be no more earmarks. No more secret deals. Two years after enactment, each new spending program that passed the initial test would be subject to the regular Cost-Benefit Budget curtailment or elimination process based on benefits achieved in relation to cost.

Telling the voters the truth always has large consequences. Obviously, enactment and successful application of a Cost-Benefit Budget at the federal level would cause an enormous change in public finance all across the board.

Finally, Truth

There could also be a historic realignment of the relationships between government and the governed. Government "spending" no longer would automatically mean "benefits."

Instead, spending increases would become a synonym for higher taxes. Higher taxes would correctly be understood by an informed public to mean a smaller economy and lower incomes. Conversely, in the new lexicon of truth-telling, spending cuts would mean a tax cut, a larger economy and higher incomes.

When it comes to providing the most benefit to the most people for the longest period of time, it is only the best and the most efficient government spending programs that can compete with higher incomes and lower taxes.

A simple exposition of that powerful truth by the next president could change politics in America forever.

Christian, an attorney, was a deputy assistant secretary of Treasury in the Ford administration. Frenzel is a former Republican congressman from Minnesota who served on the Ways and Means and Budget committees.

Iran: National Intelligence Estimate

Abstract: We assess with high confidence that Iran has the scientific, technical and industrial capacity to produce nuclear weapons … We assess with high confidence that Iran currently is determined to develop nuclear weapons despite its international obligations and international pressure … We assess with moderate-to-high confidence that Tehran is keeping open the option to develop nuclear weapons.

Score: Iran - 1, U.S. - 0.

Iran: Nuclear Intentions and Capabilities
Official Statement From The Office Of The Director Of National Intelligence

POSTED: 1:50 pm EST December 3, 2007
UPDATED: 4:59 pm EST December 3, 2007

The Director of National Intelligence serves as the head of the Intelligence Community (IC), overseeing and directing the implementation of the National Intelligence Program and acting as the principal advisor to the President, the National Security Council, and the Homeland Security Council for intelligence matters.

The Office of the Director of National Intelligence is charged with:

 Integrating the domestic and foreign dimensions of US intelligence so that there are no gaps in our understanding of threats to our national security;

 Bringing more depth and accuracy to intelligence analysis; and

 Ensuring that US intelligence resources generate future capabilities as well as present results.

NATIONAL INTELLIGENCE COUNCIL

Since its formation in 1973, the National Intelligence Council (NIC) has served as a bridge between the intelligence and policy communities, a source of deep substantive expertise on critical national security issues, and as a focal point for Intelligence Community collaboration. The NIC's key goal is to provide policymakers with the best, unvarnished, and unbiased information—regardless of whether analytic judgments conform to US policy. Its primary functions are to:

 Support the DNI in his role as Principal Intelligence Advisor to the President and other senior policymakers.

 Lead the Intelligence Community's effort to produce National Intelligence Estimates (NIEs) and other NIC products that address key national security concerns.

 Provide a focal point for policymakers, warfighters, and Congressional leaders to task the Intelligence Community for answers to important questions.

 Reach out to nongovernment experts in academia and the private sector—and use alternative analyses and new analytic tools—to broaden and deepen the Intelligence Community's perspective.

NATIONAL INTELLIGENCE ESTIMATES AND THE NIE PROCESS

National Intelligence Estimates (NIEs) are the Intelligence Community’s (IC) most authoritative written judgments on national security issues and designed to help US civilian and military leaders develop policies to protect US national security interests.

NIEs usually provide information on the current state of play but are primarily “estimative”—that is, they make judgments about the likely course of future events and identify the implications for US policy.

The NIEs are typically requested by senior civilian and military policymakers, Congressional leaders and at times are initiated by the National Intelligence Council (NIC). Before a NIE is drafted, the relevant NIO is responsible for producing a concept paper or terms of reference (TOR) and circulates it throughout the Intelligence Community for comment. The TOR defines the key estimative questions, determines drafting responsibilities, and sets the drafting and publication schedule. One or more IC analysts are usually assigned to produce the initial text. The NIC then meets to critique the draft before it is circulated to the broader IC. Representatives from the relevant IC agencies meet to hone and coordinate line-by-line the full text of the NIE. Working with their Agencies, reps also assign the level of confidence they have in each key judgment.

IC reps discuss the quality of sources with collectors, and the National Clandestine Service vets the sources used to ensure the draft does not include any that have been recalled or otherwise seriously questioned.

All NIEs are reviewed by National Intelligence Board, which is chaired by the DNI and is composed of the heads of relevant IC agencies. Once approved by the NIB, NIEs are briefed to the President and senior policymakers. The whole process of producing NIEs normally takes at least several months.

The NIC has undertaken a number of steps to improve the NIE process under the DNI.

These steps are in accordance with the goals and recommendations set out in the SSCI and WMD Commission reports and the 2004 Intelligence Reform and Prevention of Terrorism Act. Most notably, over the last year and a half, the IC has:

 Created new procedures to integrate formal reviews of source reporting and technical judgments. The Directors of the National Clandestine Service, NSA, NGA, and DIA and the Assistant Secretary/INR are now required to submit formal assessments that highlight the strengths, weaknesses, and overall credibility of their sources used in developing the critical judgments of the NIE.

 Applied more rigorous standards. A textbox is incorporated into all NIEs that explains what we mean by such terms as “we judge” and that clarifies the difference between judgments of likelihood and confidence levels. We have made a concerted effort to not only highlight differences among agencies but to explain the reasons for such differences and to prominently display them in the Key Judgments.

S c o p e N o t e

This National Intelligence Estimate (NIE) assesses the status of Iran’s nuclear program, and the program’s outlook over the next 10 years. This time frame is more appropriate for estimating capabilities than intentions and foreign reactions, which are more difficult to estimate over a decade. In presenting the Intelligence Community’s assessment of Iranian nuclear intentions and capabilities, the NIE thoroughly reviews all available information on these questions, examines the range of reasonable scenarios consistent with this information, and describes the key factors we judge would drive or impede nuclear progress in Iran. This NIE is an extensive reexamination of the issues in the May 2005 assessment.

This Estimate focuses on the following key questions:

 What are Iran’s intentions toward developing nuclear weapons?

 What domestic factors affect Iran’s decisionmaking on whether to develop nuclear weapons?

 What external factors affect Iran’s decisionmaking on whether to develop nuclear weapons?

 What is the range of potential Iranian actions concerning the development of nuclear weapons, and the decisive factors that would lead Iran to choose one course of action over another?

 What is Iran’s current and projected capability to develop nuclear weapons? What are our key assumptions, and Iran’s key chokepoints/vulnerabilities?

This NIE does not assume that Iran intends to acquire nuclear weapons. Rather, it examines the intelligence to assess Iran’s capability and intent (or lack thereof) to acquire nuclear weapons, taking full account of Iran’s dual-use uranium fuel cycle and those nuclear activities that are at least partly civil in nature.

This Estimate does assume that the strategic goals and basic structure of Iran’s senior leadership and government will remain similar to those that have endured since the death of Ayatollah Khomeini in 1989. We acknowledge the potential for these to change during the time frame of the Estimate, but are unable to confidently predict such changes or their implications. This Estimate does not assess how Iran may conduct future negotiations with the West on the nuclear issue.

This Estimate incorporates intelligence reporting available as of 31 October 2007.

What We Mean When We Say: An Explanation of Estimative Language

We use phrases such as we judge, we assess, and we estimate—and probabilistic terms such as probably and likely—to convey analytical assessments and judgments. Such statements are not facts, proof, or knowledge. These assessments and judgments generally are based on collected information, which often is incomplete or fragmentary. Some assessments are built on previous judgments. In all cases, assessments and judgments are not intended to imply that we have “proof” that shows something to be a fact or that definitively links two items or issues.

In addition to conveying judgments rather than certainty, our estimative language also often conveys 1) our assessed likelihood or probability of an event; and 2) the level of confidence we ascribe to the judgment.

Estimates of Likelihood. Because analytical judgments are not certain, we use probabilistic language to reflect the Community’s estimates of the likelihood of developments or events.

Terms such as probably, likely, very likely, or almost certainly indicate a greater than even chance. The terms unlikely and remote indicate a less then even chance that an event will occur; they do not imply that an event will not occur. Terms such as might or may reflect situations in which we are unable to assess the likelihood, generally because relevant information is unavailable, sketchy, or fragmented. Terms such as we cannot dismiss, we cannot rule out, or we cannot discount reflect an unlikely, improbable, or remote event whose consequences are such that it warrants mentioning. The chart provides a rough idea of the relationship of some of these terms to each other.

Remote Very Even Probably/ Very Almost unlikely Unlikely chance Likely likely certainly Confidence in Assessments. Our assessments and estimates are supported by information that varies in scope, quality and sourcing. Consequently, we ascribe high, moderate, or low levels of confidence to our assessments, as follows:

 High confidence generally indicates that our judgments are based on high-quality information, and/or that the nature of the issue makes it possible to render a solid judgment. A “high confidence” judgment is not a fact or a certainty, however, and such judgments still carry a risk of being wrong.

 Moderate confidence generally means that the information is credibly sourced and plausible but not of sufficient quality or corroborated sufficiently to warrant a higher level of confidence.

 Low confidence generally means that the information’s credibility and/or plausibility is questionable, or that the information is too fragmented or poorly corroborated to make solid analytic inferences, or that we have significant concerns or problems with the sources.

Key Judgments A. We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program1; we also assess with moderate-to-high confidence that Tehran at a minimum is keeping open the option to develop nuclear weapons. We judge with high confidence that the halt, and Tehran’s announcement of its decision to suspend its declared uranium enrichment program and sign an Additional Protocol to its Nuclear Non-Proliferation Treaty Safeguards Agreement, was directed primarily in response to increasing international scrutiny and pressure resulting from exposure of Iran’s previously undeclared nuclear work.

 We assess with high confidence that until fall 2003, Iranian military entities were working under government direction to develop nuclear weapons.

 We judge with high confidence that the halt lasted at least several years. (Because of intelligence gaps discussed elsewhere in this Estimate, however, DOE and the NIC assess with only moderate confidence that the halt to those activities represents a halt to Iran's entire nuclear weapons program.)

 We assess with moderate confidence Tehran had not restarted its nuclear weapons program as of mid-2007, but we do not know whether it currently intends to develop nuclear weapons.

 We continue to assess with moderate-to-high confidence that Iran does not currently have a nuclear weapon.

 Tehran’s decision to halt its nuclear weapons program suggests it is less determined to develop nuclear weapons than we have been judging since 2005. Our assessment that the program probably was halted primarily in response to international pressure suggests Iran may be more vulnerable to influence on the issue than we judged previously.

B. We continue to assess with low confidence that Iran probably has imported at least some weapons-usable fissile material, but still judge with moderate-to-high confidence it has not obtained enough for a nuclear weapon. We cannot rule out that Iran has acquired from abroad—or will acquire in the future—a nuclear weapon or enough fissile material for a weapon. Barring such acquisitions, if Iran wants to have nuclear weapons it would need to produce sufficient amounts of fissile material indigenously—which we judge with high confidence it has not yet done.

C. We assess centrifuge enrichment is how Iran probably could first produce enough fissile material for a weapon, if it decides to do so. Iran resumed its declared centrifuge 1 For the purposes of this Estimate, by “nuclear weapons program” we mean Iran’s nuclear weapon design and weaponization work and covert uranium conversion-related and uranium enrichment-related work; we do not mean Iran’s declared civil work related to uranium conversion and enrichment. Enrichment activities in January 2006, despite the continued halt in the nuclear weapons program. Iran made significant progress in 2007 installing centrifuges at Natanz, but we judge with moderate confidence it still faces significant technical problems operating them.

 We judge with moderate confidence that the earliest possible date Iran would be technically capable of producing enough HEU for a weapon is late 2009, but that this is very unlikely.

 We judge with moderate confidence Iran probably would be technically capable of producing enough HEU for a weapon sometime during the 2010-2015 time frame.

(INR judges Iran is unlikely to achieve this capability before 2013 because of foreseeable technical and programmatic problems.) All agencies recognize the possibility that this capability may not be attained until after 2015.

D. Iranian entities are continuing to develop a range of technical capabilities that could be applied to producing nuclear weapons, if a decision is made to do so. For example, Iran’s civilian uranium enrichment program is continuing. We also assess with high confidence that since fall 2003, Iran has been conducting research and development projects with commercial and conventional military applications—some of which would also be of limited use for nuclear weapons.

E. We do not have sufficient intelligence to judge confidently whether Tehran is willing to maintain the halt of its nuclear weapons program indefinitely while it weighs its options, or whether it will or already has set specific deadlines or criteria that will prompt it to restart the program.

 Our assessment that Iran halted the program in 2003 primarily in response to international pressure indicates Tehran’s decisions are guided by a cost-benefit approach rather than a rush to a weapon irrespective of the political, economic, and military costs. This, in turn, suggests that some combination of threats of intensified international scrutiny and pressures, along with opportunities for Iran to achieve its security, prestige, and goals for regional influence in other ways, might—if perceived by Iran’s leaders as credible—prompt Tehran to extend the current halt to its nuclear weapons program. It is difficult to specify what such a combination might be.

 We assess with moderate confidence that convincing the Iranian leadership to forgo the eventual development of nuclear weapons will be difficult given the linkage many within the leadership probably see between nuclear weapons development and Iran’s key national security and foreign policy objectives, and given Iran’s considerable effort from at least the late 1980s to 2003 to develop such weapons. In our judgment, only an Iranian political decision to abandon a nuclear weapons objective would plausibly keep Iran from eventually producing nuclear weapons—and such a decision is inherently reversible.

F. We assess with moderate confidence that Iran probably would use covert facilities—rather than its declared nuclear sites—for the production of highly enriched uranium for a weapon. A growing amount of intelligence indicates Iran was engaged in covert uranium conversion and uranium enrichment activity, but we judge that these efforts probably were halted in response to the fall 2003 halt, and that these efforts probably had not been restarted through at least mid-2007.

G. We judge with high confidence that Iran will not be technically capable of producing and reprocessing enough plutonium for a weapon before about 2015.

H. We assess with high confidence that Iran has the scientific, technical and industrial capacity eventually to produce nuclear weapons if it decides to do so.

Key Differences Between the Key Judgments of This Estimate on Iran’s Nuclear Program and the May 2005 Assessment 2005 IC Estimate 2007 National Intelligence Estimate

Assess with high confidence that Iran currently is determined to develop nuclear weapons despite its international obligations and international pressure, but we do not assess that Iran is immovable.

Judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program. Judge with high confidence that the halt lasted at least several years. (DOE and the NIC have moderate confidence that the halt to those activities represents a halt to Iran's entire nuclear weapons program.) Assess with moderate confidence Tehran had not restarted its nuclear weapons program as of mid-2007, but we do not know whether it currently intends to develop nuclear weapons. Judge with high confidence that the halt was directed primarily in response to increasing international scrutiny and pressure resulting from exposure of Iran’s previously undeclared nuclear work. Assess with moderate-to-high confidence that Tehran at a minimum is keeping open the option to develop nuclear weapons. We have moderate confidence in projecting when Iran is likely to make a nuclear weapon; we assess that it is unlikely before early-to-mid next decade.

We judge with moderate confidence that the earliest possible date Iran would be technically capable of producing enough highly enriched uranium (HEU) for a weapon is late 2009, but that this is very unlikely. We judge with moderate confidence Iran probably would be technically capable of producing enough HEU for a weapon sometime during the 2010-2015 time frame. (INR judges that Iran is unlikely to achieve this capability before 2013 because of foreseeable technical and programmatic problems.)

Iran could produce enough fissile material for a weapon by the end of this decade if it were to make more rapid and successful progress than we have seen to date.

We judge with moderate confidence that the earliest possible date Iran would be technically capable of producing enough highly enriched uranium (HEU) for a weapon is late 2009, but that this is very unlikely.