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Wednesday, January 02, 2008
Bring The Money Home
The Bush administration has consistently tried to make the war in Iraq seem like a costless effort. But we pay for every dollar spent in Iraq, particularly in terms of opportunity costs. Every dollar spent in Iraq is lost potential spending in domestic programs.
This is one reason it's important that John Edwards, a Democratic candidate for president, today promised to all but end the US presence in Iraq in less than a year if elected. Ballpark estimate of the fiscal consequences of doing this: it'd save $100 billion a year, which could and should free up money to put towards domestic priorities. Other candidates have made similar pledges.
The money is badly needed. According to the Wall Street Journal ($) today, allowing the Bush tax cuts for the very rich to expire would only bring in about $50 billion a year. Other proposals for closing tax loopholes and enforcing tax laws better would help, too, but I'm skeptical that we're talking about an increase in revenue that would finance the many new spending projects Democratic candidates have proposed. And Congress still doesn't want to touch tax rate increases with a ten-foot poll.
Of course, deficit-financing new spending is a viable way to put programs in action, but there's only so much of that be done in a sustainable way. Reduced war spending opens up new opportunities for domestic spending on top of what can be borrowed.
War spending is a trade-off, like any other kind of spending. Whoever's president will probably have to take significant resources out of the Iraq war to pay for new domestic spending. And the more money that's not being spent in Iraq, the more that could be spent here.
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