(War bonds ad from the 1940s, from “Found in Mom’s Basement” blog.)
As Bruce Bartlett explains in his Forbes column, when a war is deficit financed, people tend to (way) underestimate its economic cost (like all other things that are deficit financed), and that tends to tilt the subjective cost-benefit analysis done in the heads of Americans in favor of engaging in war–or at least not opposing the war:
[George W.] Bush and his party, which controlled Congress from 2001 to 2006, never asked for sacrifices from anyone except those in our nation’s military and their families. I think that’s because the Republicans understood, implicitly, that the American people’s support for the wars in Iraq and Afghanistan has always been paper thin. Asking them to sacrifice through higher taxes, domestic spending cuts or reinstatement of the draft would surely have led to massive protests akin to those during the Vietnam era or to political defeat in 2004. George W. Bush knew well that when his father raised taxes in 1990 in part to pay for the first Gulf War, it played a major role in his 1992 electoral defeat…
In his 2008 book, What a President Should Know, [former Bush economic adviser Larry] Lindsey said that lowballing the cost of the war was a “tactical blunder” because it allowed Bush’s enemies to claim that he lied us into war. But at the same time, Lindsey acknowledges that the administration never rose to “Churchillian levels in talking about the sacrifices needed.” He also says that asking for sacrifice in the form of spending cuts and tax increases would have served the important purpose of involving the American people in the war effort. As it is, war is largely out of sight and out of mind…
Well, just like my former boss, Charlie Rangel, tried to reinstate the draft as a way of getting the war back in the sight and mind of all Americans (several years ago when the war was a new war that wasn’t even supposed to last very long), now David Obey, the House Appropriations Committee chair, is calling for a tax (on Americans broadly, not just the richest Americans) to pay for the additional costs of the war in Afghanistan for largely the same reasons. As Bruce explains it (emphasis added):
The White House has given no indication of how it plans to pay for expanding the war in Afghanistan. More than likely, it will follow the Bush precedent and just put it all on the national credit card. But at least some members of Congress believe that the time has come to start paying for war. On Nov. 19, Rep. David Obey, D-Wis., introduced H.R. 4130, the “Share the Sacrifice Act of 2010.” It would establish a 1% surtax on everyone’s federal income tax liability plus an additional percentage on those with a liability over $22,600 (for couples filing jointly), such that revenue from the surtax would pay for the additional cost of fighting the war in Afghanistan.
It’s doubtful that this legislation will be enacted. But that’s not Obey’s purpose. He will probably offer it as an amendment at some point just to have a vote. Republicans in particular will be forced to choose between continuing to fight a war that they started and still strongly support, or raising taxes, which every Republican in Congress would rather drink arsenic than do. If nothing else, it will be interesting to see those who rant daily about Obama’s deficits explain why they oppose fiscal responsibility when it comes to supporting our troops.
What Bruce fails to recognize or at least doesn’t mention is that the Republicans don’t actually “rant daily” about Obama’s deficits, because “Obama’s deficits” aren’t really Obama’s deficits–as the Obama Administration has been quick to repeatedly point out. The “deficits” under the Obama budget are not from new policies that Obama is proposing (those policies he actually pays for), but from the fiscally irresponsible policies of the George W. Bush administration that the Obama Administration now wants to both blame and extend. The Republicans are ranting daily about Obama himself and Obama’s policy priorities–not “Obama’s deficits” or Obama’s fiscal irresponsibility. The Republicans don’t “oppose fiscal irresponsibility” as long as it’s attached to policies they favor–whether it be war or tax cuts or more checks for seniors.
Come to think of it, the Democrats also don’t often “oppose fiscal irresponsibility” as long as it’s attached to policies they favor–whether it be economic stimulus or universal health care…or (come to think of it!) more checks for seniors…
In fact, Bruce points out (I believe correctly) that David Obey’s objection to deficit-financing the war has more to do with the “war” part than the “deficit-financing” part–and that Obey’s worried mainly about spending on war “crowding out” other government spending–no matter what the effect on the budget deficit (emphasis added):
Obey makes no secret of his motives. He knows that deficits need to be reduced at some point and this will put pressure on spending programs he supports. “If we don’t address the cost of this war, we will continue shoving billions of dollars in taxes off on future generations and will devour money that could be used to rebuild our economy,” Obey explained in a press statement.
He is not alone in his fear that war presents a threat to the Democratic agenda. As Boston University historian Robert Dallek told Obama at a White House meeting earlier this year, “war kills off great reform movements.” He cited the impact of World War I in ending the Progressive Era, World War II in killing the New Deal, the Korean War in terminating Harry Truman’s Fair Deal program and the Vietnam War in crushing Lyndon Johnson’s Great Society.
So the problem with deficit financing a war is that deficits get bigger and the war goes on unscrutinized, just like everything else that’s deficit financed. (Bruce says the historical evidence shows that deficit-financed wars drag on for longer than tax-financed ones.) And our kids and grandkids get stuck with a big bill for something they didn’t ask for and maybe even their parents and grandparents didn’t want either but didn’t realize they were supporting by voting for “fiscally responsible” politicians who want to keep taxes low at all cost regardless of what they want to do on the spending side.
And the scariest part is that letting a deficit-financed war go on for too long because it’s deficit financed has much larger costs than letting something like economic stimulus or tax cuts (or even a prescription drug program or a “doc fix”) go on for too long because they’re deficit financed–because the toll isn’t just economic but human.