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The Pentagon spends 85% more than it did eight years ago, but US forces are stretched almost to the breaking point.  In the midst of recession, with new threats on the horizon, will Barack Obama have to increase strength and readiness at the same time he decreases spending? We hear radically different views. Also, the auto industry continues its push for a bailout, and consumer princes dropped by a record amount in October. Is it time to worry about deflation?

Banner image: Sen. Jack Reed (D-RI) (R) speaks during a briefing on operations in Iraq by Army Gen. David Petraeus (R), commander of the Multi-National Force in Iraq, as then-Senator Barack Obama (D-IL) (3rd-L), Sen. Chuck Hagel (R-NE) (L), and Ryan Crocker (2nd-R), US ambassador to Iraq, listen July 21, 2008 in Baghdad, Iraq. Photo: Lorie Jewell/U.S. Army via Getty Images

Making News Auto Industry Continues Its Push for a Bailout 6 MIN, 2 SEC

The CEO's of the Big Three were back on Capitol Hill today, testifying before the House Finance Committee. General Motors CEO Rick Waggoner testified that the rescue package would help them get through next year. Republican Congresswoman Candace Miller of Michigan, who credited the domestic auto industry with creating the America's middle class, insisted that Detroit was asking for a loan, rather than a bailout. Jim Puzzanghera is a staff writer for the Los Angeles Times.

Jim Puzzanghera, Los Angeles Times

Main Topic Rebuilding a Struggling Military at a Time of Fiscal Crisis 35 MIN, 18 SEC

Bailouts, infrastructure and financial stimulus will require big money during a deepening recession. Barack Obama also needs to worry about defense. The US spends almost as much on defense as the rest of the world combined, and more than any time since World War II. But it's stretched too thin to cover both Iraq and Afghanistan. Potential new threats might come from Iran, North Korea, Russia or China, from unstable countries like Somalia or from Pakistan with nuclear arms, not to mention terrorists of increasing sophistication. Will future threats be from conventional warfare or counterinsurgency? Will they require more troops or more high-tech equipment for smaller forces? We look at some of the toughest questions the next president will have to answer.

Winslow Wheeler, Center for Defense Information
Kathleen Hicks, former career officer, Department of Defense
Dan Goure, Lexington Institute (@dgoure)

Reporter's Notebook Drop in Consumer Prices Raises Deflation Fears 7 MIN, 41 SEC

Consumer prices took a dive last month, the biggest monthly decline in 61 years. Pollsters say falling prices make people hopeful, and that's good for the economy. But last month's record decline has raised another concern. Is it a warning sign that America could be hit with deflation? Robert Manning, Research Professor of Consumer Finance at the Rochester Institute of Technology, is author of Credit Card Nation: The Consequences of America's Addiction to Credit.

Robert Manning, Rochester Institute of Technology

Credit Card Nation

Robert Manning

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