Bankrupting on the Eternal War Plan
Oh goodie! Report: Wars cost average U.S. family $20,000
Laurence Kotlikoff's latest article in the Federal Reserve Bank of St. Louis Review has instigated a flurry of commentary on the state of domestic policies. Kotlikoff poses the question, "Is the United States Bankrupt?" In Kotlikoff's view, the United States is not yet in bankruptcy, but -- it's headed that way:
Countries can and do go bankrupt. The United States, with its $65.9 trillion fiscal gap, seems clearly headed down that path. The country needs to stop shooting itself in the foot.
However, while the rest of us are worried about the mundanities of things like money and the bottom-line, others of us know what's really important, and for some (not all, but some) Republicans -- Nothing Matters But the War. Cato.org had this excellent blog post on the topic:
William Kristol, a top Republican strategist and editor of the Weekly Standard is pushing Democratic senator Joe Lieberman for vice president, on the strength of Lieberman’s full-throated support for the war without end. Pete Wehner, the leading intellectual in the Bush White House (OK, but still–that carries some weight in the Bush party), backs the idea in National Review.
True, Lieberman is one of the few Americans still solidly behind Bush’s war. But that couldn’t be sufficient for Republicans to put him a heartbeat from the presidency, right? He must share Republican values on other issues, right? Not really. As Robert Novak pointed out back when Republicans were endorsing Lieberman for reelection, Lieberman followed the liberal line in opposing oil drilling in ANWR, Bush tax cuts, overtime pay reform, the energy bill, and bans on partial-birth abortion and same-sex marriage. Similarly, he voted in support of Roe vs. Wade and for banning assault weapons and bunker buster bombs. His only two pro-Bush votes were to fund the Iraq war and support missile defense (duplicating Sen. Hillary Clinton’s course on both). Lieberman’s most recent ratings by the American Conservative Union were 7 percent in 2003, zero in 2004 and 8 percent in 2005.
In a previous speech, Lieberman called for a tax increase so that we could continue the war without “squeezing important domestic programs, as we have been doing”–his view of a period during which federal spending rose by one trillion dollars Only if you believe that continuing to support the war in Iraq outweighs all other issues combined–for the next five years–could a conservative reasonably support Joe Lieberman. And apparently some Republicans and conservatives are willing to toss aside his commitment to high taxes, higher spending, more regulation, and entitlement expansion in order to get a vice president firmly committed to long-term entanglement in Iraq.
If all this drives you crazy and you want to experience some venting vicariously, check out this Cato Institute sponsored CSPAN's Book TV forum for Ethical Realism: A Vision for America's Role in the World where American Progress Senior Vice President Joe Cirincione excoriated neo conservatives for their failed vision for Iraq and the dangers it has presented to US national security.
Perhaps in the end Iraq is a symptom of a larger problem: the belief that beyond the protection of life, liberty and property, BIG Government can better the world and it's occupants with social engineering and long-range, comprehensive planning . . .
PostScript: While many liberal bloggers (e.g., Liberal Avenger, Daily Kos) are also appalled by the cost of the war, they don't seem bothered so much by the cost but rather by what else the money could have been spend on. While this is a good point, they miss the larger point of the problem of out of control spending and the dark, stormy fiscal clouds now looming ominously on the national horizon.
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This is right on: Spending obligations under current government pension and health-
care benefits "will put enormous pressure on the federal budget in coming years," Bernanke told a US Senate hearing in Washington.
The result may be "a vicious cycle" in which large budget deficits rapidly push up the national debt and interest payments, he said.
"Ultimately, this expansion of debt would spark a fiscal crisis,which could be addressed only by very sharp spending cuts or tax increases, or both," Bernanke said.
Yes, this is scary stuff. Our nation has done nothing to prepare for this onslaught of obligation. Instead, it has continued to focus on a completely meaningless fiscal metric – 'the' federal deficit – censored and studiously ignored long-term fiscal analyses that are scientifically coherent, and dramatically expanded the benefit levels being explicitly or implicitly promised to the baby boomers.
How much is $65.9 trillion dollars?
"This figure is more than five times U.S. GDP and almost twice the size of national wealth," writes Kotlikoff.
"One way to wrap one's head around $65.9 trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143 percent.