Doesn't taxing the Afghanistan war work against stimulus?
Responding to my support for a surtax to fund the war in Afghanistan, Ostap asks, "aren't you one of those people who regularly proclaim that opponents of the so-called stimulus package are nuts, and that in fact we should have more stimulus, deficits be damned, because otherwise we'll all soon die painful deaths? Please reconcile those posts with this one, where you praise higher taxes in the name of deficit reduction."
Fair question. First, there's no doubt that war spending is a form of stimulus. It's not the best form of stimulus (think how much leaks out to, well, Afghanistan), but it is undoubtedly a form of stimulus. And we should, in general, have more stimulus right now.
But that's not the context in which this argument is taking place. Direct spending on the Iraq and Afghanistan wars is at about $950 billion, and counting. Indirect spending (medical care for wounded veterans, lost productivity, etc.) brings the total substantially higher. And none of this has been paid for. The surtax Obey is proposing would pay for a mere 6 percent of the total. And the political system is rejecting even that.
What began as fiscal irresponsibility is slowly transforming into hard precedent. The original deployment to Afghanistan was a rapid reply to a devastating attack that took place amidst an economy shaken by terrorism and the stock market collapse. I get why no one stopped to levy a new tax. It was arguably the right decision.
But then the war in Iraq, which was a war of choice begun amidst a stronger economy, wasn't paid for either. The surge in Iraq, and the escalation in Afghanistan, both will be strategies of choice, and they won't be paid for.
We've had wars of necessity, wars of choice, and the escalations of those wars stretching across both good and bad economies, and both Democratic and Republican presidents. And none of them have been paid for. The political system is learning to think of war as an off-budget expense, which is bad both from the perspective of the deficit, but also from the perspective of forcing us to confront the costs and tradeoffs of war.
Which is why, given the choice between $60 billion or so of war stimulus and using the inflection point of the Obama administration to reestablish the principle that wars cost money, I'd choose the latter. It is bad from the question of stimulus, though it's hardly the dumbest thing we're doing (it's much more important to get more aid to the states than to avoid an Afghanistan surtax). But some things are more important than stimulus.
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