Topic: CHALLENGE: Iran
Found my topic for you, Flint.
Note to everyone: This is a challenge between Flint and myself. Please refrain from making comments regarding the arguments in the debate itself. Thank you.
Alright... you have stated that you would like us to bomb Iran into the stone age, essentially.
I believe that Obama should negotiate with Iran.
Here's my justification:
Iran's economy is solely dependent on oil revenue. Ninety percent of government revenue is based on oil production.
This connection to oil means that Iran's overall ability to project power around the world is based on its ability to create revenue from oil. So, for example, last year, Iran was a huge hegemonic power because the nation was able to amass large revenues from high oil prices in order to conduct terrorism, make friends with other nations who hate the US by giving them money, and create all kinds of subsidies for its people.
So when oil prices were at their high mark, Ahmadinejad screwed up big time in his country: he thought high oil prices would last forever. In 2005, Iran established an Oil Stabilization Fund, which is basically a fund to put extra oil revenue so that when oil prices are low, the government could take money from the savings fund and continue as normal. Most oil nations have a program similar to this (I believe Iraq is the exception).
Anyway, the only way you could take money from this fund was to submit a request to some committee which would determine if the spending was emergency spending. Ahmadinejad thought the committee was stupid, and disbanded it, giving himself full control over the OSF. Then he spent like a drunken sailor on social programs such as subsidizing food and gasoline purchases.
Flash forward to November. The financial crisis began only two months earlier. Ahmadinejad laughed at the West because the sanctions against Iran managed to isolate the nation from the crisis. Or so he thought.
Oil prices dropped from $150 to $60. Iran's budget was set to pass based on $90 per barrel oil. When the government suggested dipping into the OSF to continue operations... the results were less than pleasing (the funds estimated in the fund at this time range from $7 billion to $40 billion).
The government attempted to alleviate the crisis by establishing a 3% sales tax. As a result, the financial sector in Iran went on strike. In addition, members of the financial and economic academic communities in Iran petitioned to remove Ahmadinejad. Even the parliament (don't know what the chamber is actually called) started to abandon him.
That's where the US comes in. Iran is currently in a huge economic crisis. Ahmadinejad's ass is on the line. As long as the recession in the West continues, oil purchases will be low, and thus oil prices will be low. He can thus do one of the following to avert the crisis:
A: Increase taxes. But if he does this, as was empirically shown by the bazaar strike, this option creates huge amounts of unrest. People in Iran don't see it as some patriotic obligation to pay taxes. They see it as covering up for Bozo screwing up their country. A tax burden on the people, even if small, would be able to rally the people against the government, making a coup inevitable. And the US will know that it wants this coup to occur, because since the motivation behind the coup is economic, the new government will be motivated primarily to restore economic prowess to the nation.
B: Reduce social spending. However, this would have the same effect as above. In 2007, Ahmadinejad tried to ration gasoline to curb imports and reduce the cost of the subsidies for gasoline purchases. Epic fail. Massive protests against him occurred, and he reversed it. The only reason why this and the previous instances of social unrest didn't result in serious political upheaval was because Ahmadinejad was quick to reverse his policies. But this time, he has no choice.
C: Reduce military spending. This involves things like terrorism, his nuclear program, his aid programs to other nations such as Venezuela, and funding bombing in Iraq. Now I doubt Iran would close down the nuclear program because they couldn't afford it. However, if Iran does reduce its military capabilities... it gives the United States much more clout in the negotiations because the US can always threaten invasion, and Iran can't do shit about it because they cut their spending.
D: Borrow money. Okay, here's where it gets fun. The government can't obtain the liquidity it needs domestically in order to continue running for a long period of time. In addition, if it were to borrow domestically, it would trade off with businesses borrowing money for capital investments, stopping short and long term growth of non-oil sectors, further entrenching the Iranian economic collapse.
That means Iran can ONLY borrow abroad. But... oops, they can't! The international community put the lock and key on all financial institutions that would bank with Iran! That means the ONLY way they can get money is through the IMF. Who controls, in large part, the IMF? You guessed it... the US.
I'm going to be blunt: With oil prices at huge low prices and the Iranian people used to subsidized gas and no taxes, the US has Iran by the balls. Ahmadinejad and the rest of the government want to stay in power. Because Ahmadinejad screwed up funding the OSF, Iran has been left with no other choice than to either risk a revolution in Iran or negotiate with the US. And unlike other negotiations, this would be one where the US was the nation holding all the cards, not Iran. Even if Ahmadinejad says no to agreements now, the US only has to sit back and let him feel the pressure of economic collapse and the looming threat of a coup in the wake of his disastrous presidency.
And the best part of this is that all that we need is for the US to extend an offer. If Ahmadinejad rejects an offer by the US that would result in boosting its economy, that rejection would become another justification to the people that their leader is retarded on economic issues, furthering the revolutionary movement.
And before you answer, remember that my scenario is based specifically on the unique scenario unfolding right now. When oil prices were at $150 per barrel, Ahmadinejad thought that revenue would last forever, and didn't prepare for a possible collapse. There have been instances of low oil prices in the past. However, they haven't been at a time when Iran has been left so unprotected from the slump, and left with so few options to be saved from doom.
Have fun, Flint!
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