Government 'investment' doesn't create jobs; the private sector does

By: Examiner Editorial 01/30/11 8:05 PM

With unemployment remaining above 9 percent and showing no signs of going down any time soon, there's lots of talk in Washington about job creation. For President Obama and congressional Democrats, unemployment is an opportunity for government "investment" in massive public works projects such as manufacturing solar shingles and building high-speed rail lines. At best, such big-spending projects by the federal government mainly create temporary jobs while building things of dubious consumer value. More often, these government spending projects funnel tax dollars to Democratic political allies like the unions that benefit from Project Labor Agreements. These PLAs bar nonunion workers, thereby driving up costs to taxpayers.

The problem is that big-government public works projects allow Washington politicians in both political parties to claim to be "doing something" about high unemployment. But the reality is that every dollar spent by government is one less that is available for the private sector to invest in new businesses and technologies that spur the creation of permanent jobs. Indeed, if increased government spending were the solution to high unemployment, the U.S. economy would be short of workers. Just since the last two years of the Bush administration, the federal budget has grown 36 percent, from $2.7 trillion to $3.7 trillion annually. Discretionary spending has gone up 25 percent. The Heritage Foundation's Brian Reidl projects that the national debt will grow nearly $20 trillion by 2021, reaching 100 percent of gross domestic product that year. The annual budget deficit will exceed $1 trillion every year for the next decade.

But it's exactly that tidal wave of federal spending, along with the trillions borrowed from China and other overseas creditors and thousands of pages of new federal regulations, that's preventing the economy from creating new jobs and growth. House Speaker John Boehner got it exactly right on "Fox News Sunday" when he said, "There has been a spending spree going on in Washington these last couple of years that is beyond control. ... By running up the debt by spending money we don't have, running up these huge budget deficits, we create more uncertainty in the private sector. This is where cutting spending will create jobs because it is going to bring greater fiscal responsibility here in Washington, D.C." The speaker repeated over and over again during the interview that the American people want government spending reduced so that jobs can be created. After the midterm elections, it's a wonder that the Beltway crowd needs reminding.

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Decision Time for Senator John Thune

Thursday, Jan. 27, 2011

Scott J. Ferrell/Congressional Quarterly/Getty Images

By Michael Crowley

Political talent scouts have called South Dakota's John Thune "the Republican Obama" because his low profile, youth and presidential bearing recall the unknown Illinois Democrat circa January 2007. And in the next month or two, Thune says, he will likely decide whether to make the jump from junior U.S. Senator to presidential candidate in 2012.

For some Republicans, Thune is the answer to their anxieties: the current crop of GOP contenders is dangerously weak, party leaders privately grumble. (Mitt Romney? Been there. Sarah Palin? Too divisive. Tim Pawlenty? Yawn.) His fans say Thune, 50, offers voters a fresh face, a tall and square-jawed profile plus a solid set of conservative credentials. He's been a GOP hero ever since he unseated then Senate majority leader Tom Daschle in 2004. His home state's proximity to all-important Iowa doesn't hurt either. And he has at least one prominent cheerleader in the current Senate Republican leader, Mitch McConnell. "I'm a big John Thune fan," McConnell said on Jan. 25. "I think he should [run]." (Can Obama and McConnell make Washington work?)

Thune is not without his problems as a national candidate. He cast some hard-to-explain Senate votes, like one in support of the 2008 bank bailout — a potential deal breaker for Tea Party foot soldiers. Thune also struggled to defend the roughly $100 million in earmarks he tucked into a spending bill late last year, another irritant for party activists. (He argued awkwardly that he backed the projects but opposed the bill.) In Washington, some Republicans are skeptical that Thune has the fire in the belly for the brutal campaign process and note that he has yet to make a mark on policy issues. (Comment on this story.)

Republican presidential candidates rarely come from out of the blue, and Thune's low national profile and small political operation, relative to those of other 2012 contenders, mean he would need an earlier start than most. He may also be hesitant to commit as Obama's poll numbers climb, making the President look less vulnerable to defeat than he did a few months ago. Thune can't wait much longer, though. "Obviously," he told a South Dakota television station on Jan. 21, "I'm going to have to make a final decision here in the not-too-distant future."

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Foot-dragging on Fannie Mae reform

By John E. Sununu

January 31, 2011

WHEN IS a deadline not a deadline? When you are the US government. At least that’s the message from the Treasury Department, which today was supposed to submit a recommendation for restructuring Fannie Mae and Freddie Mac, the government mortgage giants. The date has come, and will pass with a big shrug; and when Treasury finally sends a report to Congress — in a few weeks, or a month, or whenever — it is unlikely to include any real recommendation at all. Instead, Congress will be given a few ideas and some lukewarm encouragement. If you have ever looked back in time and wondered how we manage to miss opportunities to fix festering problems, this is Exhibit A.

Consider the facts: since the beginning of the financial crisis, the two private companies have cost American taxpayers over $130 billion. Last week, adding insult to injury, it was revealed that taxpayers have also been stuck with $160 million in legal bills to defend former executives against fraud claims. By comparison, the Capital Purchase Program, the largest component of the TARP, will ultimately return more to the Treasury than the $205 billion that was originally lent out. In short, taxpayer losses from Fannie and Freddie will dwarf the cost of any other financial bailout by a factor of ten.

With a new Congress comes the opportunity to wipe the slate clean, restructure these companies, and ensure that taxpayers are never exposed to the kind of risks that led to such incredible losses. But Treasury’s procrastination sends the wrong message and jeopardizes chances for reform. As the housing market slowly recovers, the firms’ strength will be restored as will their political clout, making real change even tougher.

Fannie and Freddie didn’t start out this way — in the movies at least, monsters never do. They were supposedly taken off the government books 40 years ago, but retained a government charter to finance mortgages issued by your local bank or mortgage lender. The modest benefits of the charter, including exemption from local taxes and a Treasury credit line, translated into a significant financing advantage over competitors. The two could borrow at favorable rates because investors (correctly) assumed the government would bail them out in a crisis.

This combination of privatized profits and subsidized losses created enormous moral hazard, a concern that led me to join Nebraska Senator Chuck Hagel in 2005 to write legislation strengthening Fannie and Freddie oversight, and reducing their speculative investment portfolios. Critics called our fears overblown, just a

smokescreen to disguise an effort to limit suppo rt for housing. We lost that fight, and the rest is history. The question now is, where do we go from here — back to a world of subsided risk taking, or to one that removes the exposure from the taxpayers’ purse?

Even in today’s weakened state, the two firms still sow fear and uncertainty in the minds of Congress. This is partly due to long memories of their days as a tremendous, and sometimes terrifying, lobbying force. Fannie and Freddie made charitable grants in communities across America, and translated their support for housing initiatives into votes on the House and Senate floor. If a member of Congress took them on, an army of homebuilders or realtors would arrive in their office in what seemed like a moment’s notice. No one wants to be labeled “anti-housing.’’ Add to this the complexity of mortgage finance — the securitization process doesn’t come easily to anyone, let alone a typical politician — and it becomes difficult to explain in simple terms why dramatic changes are needed to prevent another crisis.

Instead, many members of Congress have already begun to look for the easy way out — a restructuring that allows them to say “this time it will be different’’ but still maintains government guarantees and subsidies that flow through to homebuyers. Although an honest return of this business to the private sector would affect mortgage rates, the benefit in lowered mortgage rates produced by Fannie and Freddie in their heyday was estimated by the Congressional Budget Office to be just 0.25 percent. And nothing is free. Most taxpayers would question the wisdom of subsidizing $700,000 mortgages even if the moral hazard hadn’t already cost them $130 billion.

When we finally see the Treasury report, it will be the bureaucratic equivalent of a stern look. It will offer several dry options, stripped of emotion, with vaguely written pros and cons for each. There may well be a choice that truly takes taxpayers off the hook, but no one in the administration will have the courage to push for it. In effect, they will punt the ball back to Congress with serious intonations calling for “timely and expeditious action.’’

Ironically, with a bit of administration leadership, this could have been a chance to work cooperatively with House Republicans. The Treasury staff who understand this issue are much more sympathetic to conservatives’ viewpoint than many of their politically appointed overseers. But there has been no congressional consultation, no public leadership, and no indication that any of this will change in the next few weeks. If you thought a deadline was really a deadline, you were mistaken. Now, sit back and watch as the opportunity for meaningful reform turns into something else as well.

John E. Sununu, a guest columnist, is a former US senator from New Hampshire. 

Franken introduces bill to cut prescription drug costs

Published January 29 2011

U.S. Senator Al Franken (D-Minnesota) has introduced the Prescription Drug and Health Improvement Act to cut prescription drug costs for seniors in Minnesota and across the country by allowing the federal government to negotiate lower prices for Medicare beneficiaries.

By: Staff Report, Alexandria Echo Press

WASHINGTON, D.C. – U.S. Senator Al Franken (D-Minnesota) has introduced the Prescription Drug and Health Improvement Act to cut prescription drug costs for seniors in Minnesota and across the country by allowing the federal government to negotiate lower prices for Medicare beneficiaries.

“When I travel around Minnesota, I always hear from seniors that they’re still paying far too much for prescription drugs,” said Franken. “This bill will help make prescription drugs more affordable for Minnesota’s Medicare beneficiaries and save taxpayers billions of dollars. This is a common sense measure to cut spending without taking away any vital services.”

Franken said his measure would eliminate the prohibition against such negotiations put in place when the Medicare drug benefit was enacted several years ago. Specifically, it empowers the Secretary of Health and Human Services (HHS) to negotiate drug prices with pharmaceutical companies on behalf of all Medicare beneficiaries.

Under current law, drug prices are negotiated directly between pharmaceutical companies and private insurance companies contracted by the government to deliver the drug benefit, thereby preventing HHS from using the leveraging power of the nearly 50 million Medicare beneficiaries to get the best drug prices possible, according to Franken.

Last year, Medicare spent $68 billion on the Part D drug program, and Franken said his bill could save up to $24 billion annually. The legislation would allow Medicare to adopt negotiating tactics used by other federal agencies, including the Department of Veterans Affairs, where a recent study found that the agency was able to get the 10 most prescribed drugs at costs nearly 50 percent less than Medicare, Franken said.

Times article: modernisation of the NHS

Monday 31 January 2011

Prime Minister David Cameron has written an article for The Times on modernisation of the NHS.

Read the article

Two weeks ago I set out the government’s plans to modernise the NHS. Since then there’s been a whole flurry of debate – with The Times among those leading the way. It goes to show just how much people care about our NHS. Well, let me tell you: I care too. A lot. I have huge respect and admiration for our doctors and nurses and I am more determined than ever to deliver a world-class health service for all. The debate today is about the best way to achieve that. But as ever with debates like this, some myths have crept in about the changes we plan. And here, I want to take them head on.

The first myth is that we don’t need change. This simply isn’t the case. Just look at what’s coming down the line. The number of people with three or more long-term health conditions is set to rise by 30% in just 8 years. The cost of drugs has been growing by £600 million a year and medical technologies are continuously advancing. Now ask yourself: do you think the NHS will be able to cope with all this if we just put in a little money and carry on business as usual? The answer’s no. Fail to modernise, and the NHS is heading for crisis. Already our health outcomes lag behind the best in Europe. Without modernisation, the principle we all hold dear – that the NHS is free to all who need it, when they need it – will become unaffordable. That’s just not acceptable. We simply can not stand by and let that happen. But we will only prevent it if we change the way we do things so we really promote excellence and get value for money too.

The second myth is that we plan a revolution at the heart of the NHS. This is not revolution. It’s evolution. GP-led commissioning, patient choice, payment-by-results and Foundation Trusts have all existed in one form or another over the past fifteen years. And the NHS has always worked with a range of social enterprises, charities and private companies. The difference is that we plan to make these changes effective right across our NHS. Under the last Government, it was all far too piecemeal – and far too half-hearted. We understand that all parts of the NHS are connected, and they all need to be developed together in a clear and consistent way.

The third myth is that doctors are being forced to do something they don’t want to do. These are not like the changes of recent years, with politicians and bureaucrats bossing, controlling and re-organising from on-high. Our plans take ministers and management out of decision-making, and give doctors much more freedom. We propose commissioning by consortia, not individual practices, and it will be up to the GPs involved to decide how active a part they want to play. What we’re finding though, is that when you put that decision in their hands – they want to do this. Already 141 GP-led consortia have come forward, covering half the country. That, in anyone’s book, is an extraordinary response.

The fourth myth is that this is privatisation by the back door. That, somehow, GP consortia will be ‘forced’ to use the private sector to help them commission services. Again, not true. We have set no quotas and made no demands. This is about the freedom for GPs to choose whatever is best for their patients. That’s not privatisation – it’s progress. We simply can’t allow prejudices about the public, private or voluntary sectors to get in the way of what is best for patients.

The fifth and final myth is the most important: the suggestion that patient care will suffer. The opposite is true. Our changes draw on some simple logic – that professionals, not managers or politicians, are best placed to understand the needs of patients. And when you couple that professional freedom for doctors and nurses with choice and transparency for the patient, you get a mix that will expose poor performance and drive standards up.

GPs have been telling me about the new possibilities open to them. One said that instead of his patients waiting two weeks for an ultrasound scan, he wanted to commission one for the same day he saw them. Another described how in Bexley, one of the first areas where GPs have taken on commissioning responsibilities, dozens of patients with suspected heart conditions have already been able to get specialist CT scans at a private clinic in Harley Street, free on the NHS.

Nurses too will continue to play a vital role. GP consortia will have a statutory duty to work with nurses and other healthcare professionals, ensuring they have a real voice in shaping better care for patients. Many nurses are already taking advantage of greater freedoms to improve care for their patients by striking out and forming their own staff-run social enterprises.

These sorts of changes are only possible with the modernisation we plan. Only by modernising can we achieve the world class care that we all want to see. That is why this matters so much and it’s why I’m so determined this coalition government will see it through.

Egypt protesters increase pressure

Opposition movement calls for "march of millions" on Tuesday in a bid to topple president Hosni Mubarak.

Egyptian Protesters have called for a massive demonstration and a rolling general strike on Tuesday in a bid to force out president Hosni Mubarak from power. 

Our producer in Egypt reports on the latest developments

The so-called April 6 Movement said it plans to have more than one million people on the streets of the capital Cairo, as anti-government sentiment reaches a fever pitch.

The call came as Mubarak swore in a new cabinet in an attempt to defuse ongoing demonstrations across the country.

But opposition groups say personnel changes will not placate them and have said they will continue until the president steps down.

"The whole regime must come down," Hassan, a construction worker and protester told the Reuters news agency.

"We do not want anyone from Mubarak's retinue in the new government, which the people will choose. We want a civil government run by the people themselves."

Army presence

Our producer in Egypt reports on the latest developments in Tahrir Square

Up to 250,000 people are continuing to demonstrate in Cairo's Tahrir square after hundreds remained camped out overnight, defying a curfew that has been extended by the army.

There is a heavy army presence around the area, with tanks positioned near the square and officers checking identity papers.

However, the army said in a statement on Monday that it would not use force against the protesters.

One of Al Jazeera's correspondents said military attempts to block access to the square on Monday by closing roads was not working as more people were arriving in a steady stream.

"Protesters say they'll stay in this square for as long as Mubarak stays in power," she said.

Protesters seem unfazed by Mubarak's pledge to institute economic and political reforms. Our correspondent said people feel that such pledges "are too little, too late".

Al Jazeera reporters in Cairo also said police had been seen returning to the streets, directing traffic, after being absent since Friday.

"We are waiting for the minister of interior to announce in what form they are going to come back onto the streets and why they disappeared after Friday prayers, on the 'second day of rage'," one correspondent said. 

"The absence of police has given looters a free rein, forcing ordinary citizens to set up neighbourhood patrols. Many people are wondering where the police disappeared to.

"There are two schools of thought as far as the police are concerned: One is that many of them decided to join the protesters.

"The other is that the regime was saying to the people, 'You want to protest. We'll pull back the police and you feel what anarchy feels like'," our correspondent said.

After deadly clashes in which around 125 people were killed in Cairo and other cities, protesters complained that police were using excessive force.

But an Al Jazeera correspondent said some locals greeted police as "long-lost friends" on Monday.

"It's almost as if the population of Cairo is suffering from selective amnesia ... We saw one small boy carrying a tray a of tea to a group of policemen. Another man got out of his car, kissed and hugged the policemen."

Panic and chaos

Meanwhile, many people are reported to be panic buying in Cairo amid the unrest.

"I walked into a supermarket and saw complete mayhem," an Al Jazeera correspondent said.

"People are stocking up on supplies as much as they can. There are very few rations available in the stores. They are running out of basic supplies, like eggs, cheese and meat. Deliveries have not been coming for days."

Chaos has also been reported at Cairo's international airport, where thousands of foreigners are attempting to be evacuated by their home countries.

As the protests continue, security is said to be deteriorating and reports have emerged of several prisons across the country being attacked and of fresh protests being staged in cities like Alexandria and Suez.

Thirty-four leaders from the Muslim Brotherhood were freed from the Wadi Natroun jail after guards abandoned their posts.

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Israel braces for 'new Middle East'

Israelis are watching events in Egypt with uncertainty as they debate how they will impact regional politics. Mya Guarnieri Last Modified: 31 Jan 2011 08:38 GMT

Israelis are questioning whether a change of guard in Egypt will lead to a shift in regional politics [GALLO/GETTY] As massive protests rocked neighbouring Egypt, the Sunday edition of a popular Hebrew-language daily announced the arrival of "the New Middle East". While most Israelis are not ready to make such bold claims, they are keeping a close eye on Egypt, watching with a mixture of excitement, admiration, uncertainty and fear. It is widely understood here that a change of guard in Egypt could bring about a seismic shift in regional politics - and some worry that this might upend the uneasy peace between Israel and Egypt, never mind the treaty that the two signed in 1979 - so it is unsurprising that few Israelis are indifferent. But interviews revealed something shocking: Some Jewish Israelis, fed up with the stalled peace process and frustrated with the status quo, said that they hope to see an uprising similar to Egypt's sweep through their own country. Amongst them is a 33-year-old Jewish Israeli woman who lives in Tel Aviv and works in education. When asked if anti-government protests - which began in Tunisia and have spread to Egypt, Jordan and Yemen - might erupt here, she answered: "We're far from it. And I say this in happiness and sadness." She explained that watching events unfold in Tunisia made her value Israel's stability. But, she added, "I think the appropriate thing here would be a revolution." Why? What the interviewee calls Israel's "hidden dictatorships" - political wheeling and dealing that gives the religious right a disproportionate amount of power and allows the Jewish settlers to keep on building illegally. Rita, a 38-year-old housewife who asked to be identified by a pseudonym, remarked of Egypt's protests: "I wish that we had people that would go out to the streets like that." 'God will protect us' But these women are, admittedly, part of the minority. Speaking of the unrest in Egypt, Ron Chayek, a 35-year-old website manager, said: "What do I care if they're dying or killed?" "The only problem it's going to give us is [in regards to] peace. But, otherwise, let them kill themselves." Unlike interviewees who fear that a new government in Egypt might mean a new war for Israel, Chayek is not concerned. "You look in the sky," he said, pointing up, "and I'm speaking 100 per cent serious. He's going to take care of us." Chayek, who seems proud that he served in the Givati Brigade, an infantry unit that was active in the Gaza Strip during Cast Lead, added: "They've attacked us many times before, the Arabs, and we've managed to defend ourselves. God protects all the time - God and the army. "I'm not worried at all. If the people in Egypt want to kill themselves," he shrugged. "You write in Al Jazeera that Ron Chayek said 'a good Arab is a dead Arab'." End of an era Many Israelis believe the protests in Egypt signal the end of an era in Israeli-Egyptian relations [GALLO/GETTY] Meir Nabat, the 53-year-old owner of a restaurant equipment store and an enthusiastic Al Jazeera fan, felt a deep sympathy for the Egyptians. "It's a pity that the people are dying," he said, adding: "I hope that there will be a change to their benefit ... I hope that there will be democracy." While some Israelis have expressed concern that extremist groups could use the unrest in Egypt as an opportunity to seize control of the country, Nabat remarked: "I think the young guys with Twitter and Facebook won't let it happen. They aren't suckers." Nabat doubted that Israel would see protests like those in Egypt. Both Jewish Israelis and Palestinian citizens of the state are too comfortable financially, he said. "But in Jordan, yes, because it's a domino effect." What about the West Bank? Might the Palestinians rise up against the Palestinian Authority? And, by extension, the Israeli occupation? Eyal Zisser, the head of Tel Aviv University's Department of Middle Eastern and African History, answered: "I don't know. It's a good question and I have no answer for that." What Zisser and a slew of Israeli op-ed writers seemed certain of, however, is that the protests signal "the end of an era in Israeli-Egyptian relations". "It will not be the same, no doubt about it. The optimistic way of thinking of it is that it will be much colder," Zisser said, adding that a new regime might sever all ties with Israel. "We'll have to wait and see." Mubarak: 'Friend of the West' A 28-year-old student, who preferred to remain anonymous, is concerned about the unrest in Egypt because the Israeli media tells him that it pleases Iran. "I read that Iran is supporting the protests in Egypt because in 1979 there were protests like this in Iran and that's how the Islamic government came in," he said. "And I don't think that's what the [Egyptian] protesters want." "It wouldn't be good for us," he added. "Mubarak is a friend of the Western world." He emphasised that he trusts the Israeli media only "to a limited extent". When asked if he is worried that the anti-government protests and unrest could make their way to Israel, the student answered: "It's possible that it will happen but I'm not scared." Why? "Because they won't arrive to Tel Aviv," he said, with a laugh. If there is one feeling that seemed to unite all of Israel's citizens - Jewish and Palestinian - it is uncertainty. Anat, a 44-year-old woman who works at a toy store in Jaffa (or Yafo), commented that the protests in Egypt are "really scary because what will become of the peace with Egypt? That's what I'm thinking about all the time". A middle-aged Muslim housewife joined the conversation, adding: "I hope there won't be a mess here. That's all I hope." 'All the people' A Muslim man who owns a small shop in Jaffa and preferred to remain anonymous, explained that he was speaking not for himself but for "a lot of people who think like me" and are excited about the protests. "It's not one political party that did it," he remarked. "It's all the people. All the people." And what about here? Will the people rise? He laughed. "I don't think so. Even with all the mess here, we have democracy. Yesterday there was a protest in Yafo [Jaffa]," he said, referring to a demonstration against racism in Israel and the growing presence of Jewish settlers in the area. "Here, it's possible to express what you feel," his wife added. "But there [in Egypt] it was forbidden." But there is legislation currently making its way through the Knesset that many observers call anti-democratic. And the uncertainty that comes with regional unrest could allow an even more hawkish government to take hold of Israel - threatening what remains of democracy in the state and, perhaps, giving rise eventually to a Mubarak-like regime. Both the security establishment and the local media seem to be doing their best to whip up fear, paving the way for this. So what do the changes in Egypt mean for Israel? The husband answered: "Right now, the most important thing is democracy for [the Egyptians]." Related The Syrians are watching In the tea shops and internet cafes of Damascus, Syrians are asking what events in Egypt may mean for them. ( 30-Jan-2011 ) From economic seeds ... Is Egypt ready for real change? The Tunisia effect In Pictures: Egypt in turmoil Egypt: The youth perspective Chasing Gamal Mubarak

Mubarak swears in new cabinet

Egypt's president appoints new cabinet in an attempt to quell ongoing mass street protests against his rule. Last Modified: 31 Jan 2011 13:48 GMT

Tens of thousands of people are continuing to protest on the streets of Egypt[ AFP]

Hosni Mubarak, Egypt's president, has sworn in a new cabinet in a bid to quell days of mass uprising against him and the government.

Three former senior officers are included in the line-up, suggesting a strong security presence in the new government.

Mahmoud Wagdi, a retired police general, was appointed the country's new interior minister, replacing Habib el-Adli, who was criticised for brutality inflicted on protesters.

Wagdi was previously head of Cairo criminal investigations department and also a former head of prisons.

Protesters had demanded Habib al-Adli, the former interior minister, be sacked after police used force on protesters including beatings, tear gas and firing rubber bullets.

Ahmed Abul Gheit, the foreign minister, retained his job, as did General Mohamed Hussein Tantawi, the defence minister, state television reported.

A deputy prime minister, finance minister and trade minister, were also appointed in the ceremony on Monday.

In pictures: 'Day of Anger' Update: Egypt protests Unrest in social media Debate: First Tunisia, now Egypt? Can Egyptians revolt? Egypt’s protests on Twitter Pictures: Anger in Egypt

Our correspondent in Cairo said: "With this new incoming cabinet he [Mubarak] may be saying that he wants this dealt with from a security perspective".

Despite the new appointments and pledges to institute political and economic reforms tens of thousands of people are continuing to protest on the streets of Egypt.

"We will accept no change other than Mubarak's departure," an anonymous protester was quoted by the AFP news agency as saying.

Another said: "We want a complete change of government, with a civilian authority."

Protest organisers are calling for a "march of one million" people in Cairo, the Egyptian capital, on Tuesday in an attempt to overthrow Mubarak's rule.

The so-called April 6 Movement said it plans to have more than a million people on the streets of the capital Cairo, as anti-government sentiment reaches a fever pitch.

Several hundred demonstrators remained camped out in Tahrir Square in central Cairo overnight, defying a curfew that has been extended by the army.

Thousands were back on the square by mid-day on Monday, chanting anti-government slogans. This as heavy military presence was seen in many parts of the capital.

One of Al Jazeera's correspondents said the military's attempts to block access to the square on Monday by closing roads was not working as more people were arriving in a steady stream.

"Protesters say they'll stay in this square for as long as Mubarak stays in power," she said.

Protesters seem unfazed by Mubarak's pledge to institute economic and political reforms. Our correspondent said people feel that such pledges "are too little, too late".

Meanwhile, there are reports of panic buying in the shops of Cairo.

"I walked into a supermarket and saw complete mayhem," one of our correspondents said.

"People are stocking up on supplies as much as they can. There are very few rations available in the stores. They are running out of basic supplies, like eggs, cheese and meat. Deliveries have not been coming for days."

Egypt

Fire in Cairo: Will the Army Hold?

Mubarak names head of intelligence as “vice president.”

Robert Dreyfuss

Posted January 29, 2011

Egypt's K Street Connections

As protests roil Cairo, the Egyptian government is spending big money on Washington lobbyists to help with military assistance and an image makeover.

Ari Berman

Posted January 28, 2011

Keith Ellison: US Must 'Get on the Right Side' of Middle East Democracy Wave

While Obama and Clinton chose their words regarding protests in Egypt too carefully — and Biden just gets it wrong — the Minnesota Congressman argues for bolder support of democracy.

John Nichols

Posted January 29, 2011