Politics & Policy

Who’s Paying For The War?

We need some straight talk.

Do wars come free?

For all that the critics rail against the war in Iraq, surprisingly little time is given to decrying the sheer cost of it. Somebody, somewhere, was cluck-clucking about $87 billion, back during the Democratic high jinks that preceded the ouster of Howard Dean and the anointment of John Kerry. We do hear of ancillary costs. For instance, with the call-up of the National Guard, the state governors are running out of the backup manpower they habitually look to for help with crime and fire-fighting. You can let crime slide for a while, but not forest fires. And that means extra expenses to lure men and women from retirement or to train recruits.

But how are we feeling the pinch of the direct expenses of the war? We coast along as if we can take care of that kind of thing simply by borrowing. In the last two years, our deficit spending has been in the neighborhood of $800 billion. If you are sitting at the national poker game you can get away with a fugitive smile by counting in current inflation. At three percent, we can figure that the $7 trillion national debt gives us back $210 billion, inflated away (whsk!). But reasoning along those lines wouldn’t make much political headway in an election year. We need some straight talk, and straight talk speaks of impositions on U.S. citizens, foremost of which is — taxation.

We have been waiting for word from Senator Kerry. Here is his most recent on the subject: “George Bush wants to defend giving a tax cut that’s permanent to people who earn more than $200,000 a year. I’m fighting to roll back George Bush’s unaffordable tax cut for the wealthy and invest it in–”a new and better army? a new fleet of aircraft carriers? A missile defense? increased pensions for soldiers?

Oh no. ” — invest it in health care, education, job creation, and to build America again.” Therefore, raise taxes in order to increase social spending. That leaves — untouched — the expenses of this war and any correlative privations. Again, wars are free.

The Democrats would certainly be entitled to call on President Bush to advise the public in the matter. Using political language, it’s his war, not the Democrats’ war, and the costs of it should be his to apportion. The administration has made no public accounting of the cost of the war framed in this language. Candidate Kerry could seek to reorient the whole question by telling us what we have forfeited on account of the war — more health care, education, job creation, and America-building. But he can’t do this effectively without first telling us how to do away with the war in Iraq and its attendant implications. To talk about raising taxes on the wealthy may be effective boob bait, but it leaves unanswered the question of how to finance national defense operations.

President Bush can try to skim over the question much as President Reagan did. If the economy grows, so do tax returns at current levels. But Mr. Bush has to take a very deep draught of optimism to explain how we are going to alter the current forecasts, other than by inflation. The debt is at $7 trillion and is projected, in ten years, to be at $9 trillion. That figure can only be attenuated by a relative rise in income, over against outlays. Or — by inflation, which, whatever its incidental benefits, is the surest enemy of stable growth and an impartial reward to savings and enterprise.

The administration isn’t in a position to establish absolutely that the tax relief for the wealthy generated more for the economy than the amount of that tax relief. Mr. Bush profoundly believes that this is so, and practitioners of supply-side economics accept this as a doctrinal matter. But Mr. Bush has to arrive prepared to cope with the immediate appeal of Candidate Kerry’s call for more taxes for the wealthy. This is not easy to do, because the imagination tends to freeze, when higher taxes on the rich are pleaded. In the good old days we could begin our thinking the other way around, not by saying that the tax cuts help or hurt, but by saying simply: The money is theirs, not ours. So think of something else.

Mr. Bush has some fine writers on his staff. Add this one to their special challenges.


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