Saturday, December 20, 2014

Your money and your mouth

How do we pay for a wider war in Afghanistan?

Your money and your mouth

 

 

Much will be written in the days ahead, here and elsewhere, about President Obama's imminent decision to up the ante in Afghanistan. For starters, it'll be interesting to see how we plan to pay for the wider war, given our current financial straits. A little math frames the stakes quite nicely: the reported cost of each U.S. soldier in Afghanistan is projected to be $1 million, so if we multiply that figure by roughly 30,000 additional soldiers...voila, that's another $30 billion on the national tab.

One high-ranking Democrat, House Appropriations Committee chairman David Obey, is proposing that the expanded war should be financed by - what a concept - the current generation of American taxpayers. In other words, us. He'd do this by levying a graduated surtax on upper-class and middle-class Americans. He wants to "end the practice of paying for the war in Afghanistan with borrowed money." He's arguing that if Americans (especially Republicans) truly believe that this war is vital to our national security, and that if Obama truly believes he can't finish the job without a troop hike, then those who pay taxes should be prepared to "share the sacrifice." Which I suppose is akin to saying, "Put your money where your mouth is."

Needless to say, the Obey bill's prospects for passage are virtually nil. Heck, the odds are probably way higher that a pair of reality-show airheads could traipse past the Secret Service and crash a White House dinner.

Nevertheless, Obey does raise an important point. During the George W. Bush era, we took for granted the notion that our wars could be financed by putting the tab on the American credit card and running up the debt - and allowing economic competitors such as China to buy up that debt. Obey complained about that back in 2007: "Some people are being asked to pay with their lives or their faces or their hands or their arms or their legs. It doesn't seem too much to ask the average taxpayer to pay $30 for the cost of the war so we don't have to shove it off on our kids."

Obey wasn't saying anything radical; quite the contrary, in fact. He was merely restating the traditional war-financing policy that existed in this country for nearly 200 years, until Bush came along. The War of 1812 was financed in part by higher taxes levied on retailers, and on a host of consumer staples such as sugar. The Civil War was partly financed in the North by a new estate tax levied on the rich. (You know how Republicans revere Abe Lincoln as the party's first president? Abe approved that estate tax.) The Spanish-American war, prosecuted by Republican president William McKinley, was also financed by new taxes. So was World War I, World War II, Korea, and Vietnam.

In fact, Obey could easily reference a few of Franklin D. Roosevelt's admonitions. Five weeks after Pearl Harbor, FDR said, "War costs money. So far, we have hardly begun to pay for it." Before America even entered the conflict, he had warned, "A part of the sacrifice means the payment of more money in taxes," and by the time the war was won, roughly 35 million Americans, previously untouched by the taxman, had been added to the rolls.

But that was then. This is now: Most Democrats oppose a wider war in Afghanistan, so they'd be loathe to ask today's Americans to finance it; besides, Obama promised during the campaign that he would not raise taxes on 95 percent of Americans. As for the Republicans, they'd never support the traditional notion of shared sacrifice via new taxes. As evidenced during Bush's tenure, they're perfectly happy to spill red ink in order to wage war (as opposed to spilling red ink in order to reform health care; that, they won't go for).

So this will leave Obama with only a couple options: New borrowing that will deepen the debt, or new budget requests that will deepen the deficit. In his Tuesday night speech, it will be instructive to see whether he tilts either way.

But hang on, what about the idea of war bonds? Back in the '40s, more than 130 million Americans bought these debt securities, which yielded only modest returns after a 10-year maturity, but in the meantime they helped bankroll World War II. The Hollywood crowd hawked those government bonds at huge public events, so, who knows, maybe today's celebrities would do the same for Obama's wider war. Just picture it: Folks like Lindsay Lohan, Kanye West, Paris Hilton, Britney Spears, Jessica Simpson, and Jon Gosselin out there on the stump, campaigning for the tradition of shared sacrifice...

OK, scratch that idea.
 

Dick Polman Inquirer National Political Columnist
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Dick Polman Inquirer National Political Columnist
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