Saturday, October 24, 2009

Budget Mendacity From the Washington Post


Have you ever seen Willie Wonka & The Chocolate Factory? Recall Gene Wilder's "protests" when the various naughty children engaged in acts that he knew would lead to very unpleasant consequences? Somehow Fred Hiatt's gang brought that image to mind with their argument that their acceptance of massive deficit spending for the wars in Iraq and Afghanistan is consistent with their insistence that healthcare reform be revenue neutral.
In principle, all wars should be paid for, just like all other federal spending. We criticized President George W. Bush for sticking with tax cuts rather than calling for national sacrifice after Sept. 11, 2001, and for failing to fund the wars in Iraq and Afghanistan.
So we start with a general statement of principle, with no indication that the Post has any interest in standing behind that principle. Hiatt's editorial board protested, Willie Wonka-style ("Oh! I wouldn't do that... I really wouldn't"), at some point in the past and, having given lip service to their principles, proceeded with full-throated advocacy of the wars and their escalation.
If Mr. Obama were to propose offsetting the cost of additional troops in Afghanistan with a gasoline or carbon tax, we would support it.
But not if he proposed such taxes to fund healthcare reform - for that, Hiatt and his crew want new taxes on the middle class. But take a step back in history to the budget surpluses G.W. inherited and frittered away on tax cuts for the wealthy and a ruinously expensive war of choice in Iraq - why not let some of those tax cuts expire to fund the war? Or to fund healthcare reform?1

Hiatt and his crew then argue that the budget games they're using to avoid funding the wars in Iraq and Afghanistan are analogous to arguments that future savings in healthcare costs should be considered when calculating the cost of a reform bill. An obvious flaw in this argument is that, at least in any modern western society, the state cannot avoid healthcare costs. It's perfectly appropriate in that context to consider how reforms might bring about savings, and how that will relate to future expenditures. When the government chooses to spend vast amounts of money on a war of choice, the baseline for spending is $0 and (unless you endorse some modern form of loot and plunder) there's no way to achieve "savings" by making that number negative.

Further, the Post combines spending for the wars in Iraq and Afghanistan, suggesting that "savings" that may be achieved from possible troop reductions in Iraq could be applied to the increased budget for the war in Afghanistan, thus bringing about a net "savings". If the Post believes this argument, then it has justified in spades what it deems to be the "creative accounting" behind the healthcare reform bill. Further, money is fungible - why not apply the Post's imagined "savings" from Iraq to healthcare reform, and pass the Post's proposed new taxes to fund the war in Afghanistan? ("Did we just say we opposed sticking with the Bush tax cuts for those wars, so that we wouldn't run up huge deficits? Well, that was so five minutes ago.")

The Post continues with a similar quality of logic:
All this assumes that defense and health care should be treated equally in the national budget. We would argue that they should not be, for two reasons. One is that wars, unlike entitlement programs, eventually come to an end. A guarantee of health care for all, particularly in the context of steadily rising costs, will bankrupt the nation if not matched by a steady stream of revenue.
Sure, wars end... Even the Hundred Years War came to an end. I suspect, though, that the Iraq war would have wrapped up sooner or perhaps not been launched at all if G.W. had told the wealthy, "Sorry, you won't be getting those tax cuts after all, and estate taxes will not be reduced." The Post's tax proposals are consistent with this - they're big on picking the pockets of working Americans, but in relative terms the proposals they're presently endorsing will have a small impact on the wealthy.

Since wars do end, it's reasonable to ask "When will these wars end, and how much will they cost?" The best answer we're likely to get from Hiatt and his boys is probably Jackson Diehl's2 "Nothing's anything like Vietnam" argument - a shrug. Who knows, who cares, it's probably best not to even ask - and don't mention long, costly wars we entered with no vision of how we would achieve victory or an exit strategy, because they're nothing like what will soon be our longest war ever with no end in sight."

The Post's slippery slope argument on healthcare costs is amusing, given the Post's strong opposition to the cheapest alternative to the status quo - a robust national healthcare plan, even a single payer plan. I find it childish to suggest that the inevitable consequence of providing health insurance to every U.S. citizen will be that the nation is bankrupted. It's not at the level of "death panels", but it's still a dishonest, fear-based argument.

The point hidden behind the hypocrisy and logical fallacy is actually a good one - when we're committing to an indefinite expenditure we should consider how we are going to pay for it. But the Post's definition of what expenditures are of a limited nature is reminiscent of how the Supreme Court has interpreted the Constitution's provisions on copyright - anything that's less that indefinite in duration is "limited". When there's no end in sight to war spending, and no plan or strategy that will bring an end to that spending, the open-ended nature of the commitment makes it little different than entitlement spending - infinity is not so much different from "infinity minus one".

The Post's last argument is that wars are necessary to defend our nation and its people, while healthcare reform is not. Again we have dubious logic - that any money spent on wars and the military, no matter how spent, is necessary to the defense of the state. Would Fred Hiatt expand that "reasoning", Candian Bacon-style, to a war of choice against Canada? Some wars aren't all that important to our defense. Jackson Diehl just got through suggesting that the wars in Iraq and Afghanistan are less important "in its consequences for the United States" than was the Vietnam War - we ended the war, the North took control of the country, it's still a communist nation, and... Americans can easily and safely visit Vietnam as tourists, and we have normalized diplomatic and trade relations. How would that have been improved by giving the Vietnam War an indefinite3, deficit-funded blank check?

Combining the Hiatt crew's assertion, "the nation's security must be the president's first priority", with Diehl's insistence that our current wars are less important than Vietnam, would the Post endorse a decision to end both the Afghanistan and Iraq wars on the ground that they're less important than Vietnam and we did pretty darn well despite having ended that war with an outcome falling far short of victory? Or would we hear Diehl shriek, "Any analogy to Vietnam is imperfect - continue the war forever (less a day) if necessary to win!" With Hiatt chiming in, "At any cost... to the middle class and future generations."

Since we're focusing on the question of what bankrupts a nation, potentially leading to collapse, it seems reasonable to ask this question: In the history of the world, how many nations or empires have collapsed under the weight of healthcare costs (or any other public benefit), and how many have collapsed under the weight of costly wars and imperial overreach? Sometimes wars end because they bankrupt the proponent.

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1. Here, they may be channeling Lionel Hutz. It says we argued "No New Taxes'? They got that all wrong. It's supposed to say 'No! New Taxes!"

2. Jackson Diehl is deputy editorial page editor of The Washington Post.

3. Limited only by the Post's assertion that all wars eventually end.

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