Monday, May 28, 2018
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Guns or butter

War first, then tax cuts. That's the Republican economic program as enunciated by Speaker of the House Dennis Hastert. He makes it sound so easy.

“We have to remove these clouds of war and terrorism first,” Mr. Hastert told a chamber of commerce luncheon just down the road in Findlay last week. “We have to clear the air.”

While the speaker was outlining how, once Iraq was quickly subdued, the GOP-led Congress would “kick start” the economy with President Bush's latest tax-cut plan, the Congressional Budget Office back in Washington had some startling economic news.

The CBO, Congress' supposedly nonpartisan bean counter, projected that the President's budget proposal - $1.45 trillion in tax cuts, combined with $1.25 trillion in extra spending - would produce deficits totaling $1.82 trillion (with a T) over the next 10 years.

Mr. Hastert, of course, did not mention this bleak forecast to the Findlay crowd. That would have spoiled the mood of calming optimism exuded by the administration and its supporters.

The idea that a brief, walkover war with Iraq won't much delay plans to slash tax rates is undoubtedly what the public wishes were true and desperately wants to hear. But reality has to intrude sometime, and the scenario is too good to be true.

First, the deficit projections don't include the cost of war with Iraq, mainly because the administration won't put a price on it for fear of frightening the folks in Findlay and around the country.

And the CBO figures don't include the cost of a prescription drug benefit for seniors and reform of Medicaid for the poor, also the subject of overly optimistic administration forecasts.

It must be remembered that the CBO has been wrong before. This is the same agency whose projections two years ago of annual budget surpluses fell flat - but not before they were used by Mr. Bush to force his initial $1.35 trillion tax cut through Congress in 2001.

But even if the numbers aren't precise, they're not pointing toward economic vitality. Deficits come with debt service costs that drive up long-term interest rates and sponge up money that could better be used elsewhere

Combine those inevitable consequences with residual fear from the war on terrorism and a bellicose foreign policy that promises to extend expensive military operations around the world for years to come, and the American people could be faced with an unwelcome choice: guns or butter.

A U.S. president embroiled in a foreign misadventure nearly 40 years ago promised the nation that we could afford a huge military machine along with ambitious social programs. But the strain of paying for it all proved too much and what we got instead of prosperity was years of economic chaos.

War first, then tax cuts. Will we allow ourselves to be fooled again?

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