The cost of war

Yesterday, I wrote about the brief life and presumed death of Rep. David Obey's "war tax," also known as the "Share the Sacrifice Act of 2010." Obey and his cosponsors hoped to make the Afghan war pay-go from here on out, with an income tax surtax (one percent for most earners, and higher for high earners) linked to the cost of war. 

I liked the idea precisely because so much of this war (around 40 percent) thus far has been funded with deficit spending during very good economic times, from 2001 to 2006, when high-income Americans certainly could have afforded higher taxes (which were cut by George W. Bush).

Commenters here and elsewhere asked: Why raise taxes during a recession, when the government has been deficit-spending wildly to boost the economy? Tax dollars are tax dollars, not earmarked for one use or another. Raising taxes is raising taxes. Isn't this precisely the time we're supposed to deficit spending? 

Well, yes, but not all deficit dollars are created equal, I fear. If we spend an additional $60 billion on the Afghanistan war, it does do some good for the American economy. It goes to American companies to build things like planes and armor, to hiring new soldiers, to American contractors working in Afghanistan to build roads and schools. But, down the road, the United States doesn't get those roads and schools. Soldiers stop fighting in Afghanistan, but continue to collect salaries and benefits. This means the deficit dollar spent in Afghanistan isn't as effective as the deficit dollar spent in, say, Detroit.

For some data on this phenomenon, Dean Baker at the Center for Economic and Policy Research produced a paper showing that war spending (rather than domestic spending) ultimately costs jobs and GDP.

But all of this might be moot. It seems that Congress is considering extending the estate tax, which was due to expire for a year before coming back into force in 2011. The tax only hits estates worth more than $3.5 million. I say extend it, and expand it to include less, erm, ample estates as well. That seems even better than the Obey plan. 


The Obama speech: Still not quite sure what victory looks like

Others on this site will weigh in soon with more in-depth analysis of the president's speech tonight, but a couple thoughts right off the bat.

No matter how forceful his explanation of the stakes in Afghanistan, Obama was unlikely to convince those who don't see the war as worth it. On the other hand, I think that viewers were waiting to hear the president set out an specific and achievable goal. Clearly we're not building Sweden in Central Asia, but I believe it was important for the president to give an idea of what an acceptable end-state would be, by the time troops start to pull out in 2011. Here's what he had to say:

To meet that goal, we will pursue the following objectives within Afghanistan. We must deny al Qaeda a safe-haven. We must reverse the Taliban’s momentum and deny it the ability to overthrow the government. And we must strengthen the capacity of Afghanistan’s Security Forces and government, so that they can take lead responsibility for Afghanistan’s future.

It seems likely to me that whether or not these conditions exist is still going to be open to debate in 2011. Also interesting, given his emphasis on Pakistan in the rest of the speech, is that he doesn't define the stability of Pakistan as an objective. To be fair, sending U.S. troops to die for Asif Ali Zardari is pretty much a non-starter of an argument. 

Obama's explicit rejection of the Vietnam parallel also jumped out:

First, there are those who suggest that Afghanistan is another Vietnam. They argue that it cannot be stabilized, and we are better off cutting our losses and rapidly withdrawing. Yet this argument depends upon a false reading of history. Unlike Vietnam, we are joined by a broad coalition of 43 nations that recognizes the legitimacy of our action. Unlike Vietnam, we are not facing a broad-based popular insurgency. And most importantly, unlike Vietnam, the American people were viciously attacked from Afghanistan, and remain a target for those same extremists who are plotting along its border. To abandon this area now – and to rely only on efforts against al Qaeda from a distance – would significantly hamper our ability to keep the pressure on al Qaeda, and create an unacceptable risk of additional attacks on our homeland and our allies.

This seems like a bit of strawmanship. Just because the conditions in Afghanistan don't resemble Vietnam, doesn't eliminate the potential for quagmire. Iraq doesn't look much like Vietnam either. And Obama doesn't really answer the argument of those, like his vice president, who believe that a limited counterterrorism strategy would be the least worst option considering the dysfunction of the Afghan government.

If anything, the cautious tone of this speech revealed a president far from enthusiastic about his strategy. You can expect commentators to suggest that the president's heart isn't in the fight. But I expect that the mindset Obama projected -- deeply ambivalent about the options he's faced with but resigned to what he believes is a necessity -- will resonate with many viewers much more than a guns-blazing call-to-arms would have.