Tuesday, February 09, 2010

America Needs a War Tax

February 9, 2010, 9:30 p.m.

War on the Cheap Is the Most Expensive
(brought to you by FromDC2Iowa.blogspot.com*)

It's highly unlikely I would ever "join" the Tea Party, or know how to go about doing so, or where to find "it" should I change my mind.

But I do share at least one concern with many of those who do so identify themselves, and that is our nation's mounting debt. Any regular reader of this blog already knows that.

When I was in government I recall the year President Lyndon Johnson pulled out all the stops to keep the budget from going over $100 billion dollars. He thought there was something symbolic about that number. That's right, a budget in the "billions" not "trillions." President Obama's budget is 30 to 40 times that amount. The interest alone is multiples of what it took then to run every government agency and program, fund the new "Great Society" social programs, and the Viet Nam War.

Nations are reluctant to go to war when their people see and feel the costs. That's why those who have reasons for wanting war have reasons for wanting to hide the costs.

There's nothing like a draft to bring that cost to every kitchen table in America. Among those who honestly, analytically, and thoughtfully believed the Viet Nam War was a great mistake were those of draft age. But clearly there were young men and women, and their parents, whose objections were intensified by the prospect of family members, friends and neighbors having to travel thousands of miles abroad to fight in a war from which they might never return.

As Country Joe and the Fish put it in the lyrics to "I Feel Like I'm Fixin' to Die Rag,"

And it's one, two, three,
What are we fighting for?
Don't ask me, I don't give a damn,
Next stop is Vietnam;
And it's five, six, seven,
Open up the pearly gates,
Well there ain't no time to wonder why,
Whoopee! we're all gonna die.
I can never forget watching on a military air base as soldiers boarded one plane, headed for Viet Nam, while a couple hundred yards away coffins of the fallen were being unloaded from another plane, and taken into the same hanger from which the solders had emerged.

It's easier for a nation to support a war politically if the military only takes volunteers, and since that's nowhere nearly enough men and women, "outsources" the rest of the tasks to high-priced mercenaries.

It's easier when, instead of rationing gasoline, tires, sugar, and other essential items in the war effort, the president responds to an attack on our country by encouraging everyone to go shopping.

It's easier when, instead of foxholes, trenches, and hand-to-hand combat, wars can be fought from 30,000 feet, where pilots are at relatively less risk -- or better still, with drones over Pakistan that don't even require pilots, and can be controlled like simulated objects in a video game by CIA operatives from thousands of miles away in the U.S..

It's easy for the wealthy to support a war, or be agnostic about it, when the president is simultaneously cutting their taxes -- instead of increasing them for a pay-as-you-go war.

It's hard to pick what's worst about war. But an aspect of those we're now fighting that gets all too little attention in the midst of the media's coverage of individual battles and "collateral damage" is the costs we're putting on our nation's maxed out credit card.

What are we thinking? What are our options? One possibility is a decimated dollar and the resulting wild, raging inflation -- a cruelty that is hard to imagine, and harder still to impose on those with fixed incomes. Another is to declare the nation bankrupt, and default on all our loans. The third is to leave it to multiple future generations to devote their lives to paying off the interest and debt we have run up with our irresponsible and immoral folly and merely left, like trash after a college football game, for someone else to pick up.

Meanwhile, the only folks who benefit from this are the same bankers to whom we gave the trillion-dollar bailouts (who earn the multi-billion-dollar interest on the government's bonds and T-bills), the munitions manufacturers, and the mercenary operations owners.

I usually would not use extensive excerpts from an article, but those that follow are such a useful contribution that I'm going to do so on this occasion.

Here it is.

Eric Margolis, "Wars sending U.S. into ruin; Obama the peace president is fighting battles his country cannot afford," Toronto Sun, February 5, 2010:

More empires have fallen because of reckless finances than invasion. The latest example was the Soviet Union, which spent itself into ruin by buying tanks.

Washington's deficit (the difference between spending and income from taxes) will reach a vertiginous $1.6 trillion US this year. The huge sum will be borrowed, mostly from China and Japan, to which the U.S. already owes $1.5 trillion. Debt service will cost $250 billion.

To spend $1 trillion, one would have had to start spending $1 million daily soon after Rome was founded and continue for 2,738 years until today. [And see, Nicholas Johnson, "A $14 Trillion Opportunity Cost," January 27, 2010.]

Obama's total military budget is nearly $1 trillion. This includes Pentagon spending of $880 billion. Add secret black programs (about $70 billion); military aid to foreign nations like Egypt, Israel and Pakistan; 225,000 military "contractors" (mercenaries and workers); and veterans' costs. Add $75 billion (nearly four times Canada's total defence budget) for 16 intelligence agencies with 200,000 employees.

The Afghanistan and Iraq wars ($1 trillion so far), will cost $200-250 billion more this year, including hidden and indirect expenses. Obama's Afghan "surge" of 30,000 new troops will cost an additional $33 billion - more than Germany's total defence budget.

No wonder U.S. defence stocks rose after Peace Laureate Obama's "austerity" budget.

Military and intelligence spending relentlessly increase as unemployment heads over 10% and the economy bleeds red ink. America has become the Sick Man of the Western Hemisphere, an economic cripple like the defunct Ottoman Empire.

The Pentagon now accounts for half of total world military spending. Add America's rich NATO allies and Japan, and the figure reaches 75%.

China and Russia combined spend only a paltry 10% of what the U.S. spends on defence.
There are 750 U.S. military bases in 50 nations and 255,000 service members stationed abroad, 116,000 in Europe, nearly 100,000 in Japan and South Korea.

Military spending gobbles up 19% of federal spending and at least 44% of tax revenues. During the Bush administration, the Iraq and Afghanistan wars - funded by borrowing - cost each American family more than $25,000.

Like Bush, Obama is paying for America's wars through supplemental authorizations -- putting them on the nation's already maxed-out credit card. Future generations will be stuck with the bill.

This presidential and congressional jiggery-pokery is the height of public dishonesty.

America's wars ought to be paid for through taxes, not bookkeeping fraud.

If U.S. taxpayers actually had to pay for the Afghan and Iraq wars, these conflicts would end in short order.

America needs a fair, honest war tax.

Excerpts from: Eric Margolis, "Wars sending U.S. into ruin; Obama the peace president is fighting battles his country cannot afford," Toronto Sun, February 5, 2010.

Clearly our war policies need more than "a fair, honest war tax," but that sure would be a good start on the return road to reality.

* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself.
-- Nicholas Johnson
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Steve Groenewold said...

Just like Social Security and Medicare are split out on your paycheck, we should do the same with the other elephant in the budget room, defense spending.

John Neff said...

Excessive borrowing is an example of positive feedback. The lenders see increased risk and demand a higher interest rate causing the debt to increase at a faster rate further increasing the risk.

The reason we are in this situation is that there are no political consequences for increasing the debt limit. We know from the experiences of other countries there are hard limits to the amounts they can borrow so it is reasonable to assume that there is a hard limit to how much we can borrow. We probably will find out what that is the hard way.