The Electric Commentary

Friday, July 02, 2004

Coalition Building: Money Talks

During Gulf War I, G. H. W. Bush built a coalition of financial backers. Although the US contributed the bulk of military might, we were reimbursed for 90% of the cost of war, largely by Japan and Germany.
Some factors that drive up interest rates (the Fed increased the rate from a historic low this week) are beyond control, but government spending is not. Although I may be a “latte drinking, sushi eating, New York Times reading left-wing freak,” I am for a bit of restraint. Our deficit is growing along with the bill from Iraq. Had we done a proper job of building international support, our economy would be better off.
In a survey conducted by the Urban-Brookings Tax Policy Center, 13 of 18 papers published by leading academic economists concluded that high projected deficits lead to higher interest rates. I know that cutting taxes (for the wealthy) is a cornerstone of Bush policy, but given the events of 9/11, Bush had the opportunity to ask the country and the world for a bit of sacrifice. I am sure Bush supporters would understand if the administration decided to cancel those tax cuts to engage in America’s new war. As the current bill for Gulf War II and the size of our deficit continue to balloon, it’s obvious we should have done a better job of finding a “coalition of the paying.”

1 Comments:

  • And the complete lack of any sacrifice by the administration. Not only did they keep the tax cuts as is, they did not divert any domestic spending to the war effort. Where do they think it will come from?

    By Blogger PaulNoonan, at 12:34 PM  

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