Quote :

"Inflation and War Finance by Ron Paul Jan 30, 2007 The Pentagon recently reported that it now spends roughly $8.4 billion per month waging the war in Iraq, while the additional cost of our engagement in Afghanistan brings the monthly total to a staggering $10 billion. Since 2001, Congress has spent more than $500 billion on specific appropriations for Iraq. This sum is not reflected in official budget and deficit figures. Congress has funded the war by passing a series of so-called “supplemental” spending bills, which are passed outside of the normal appropriations process and thus deemed off-budget. This is fundamentally dishonest: if we’re going to have a war, let’s face the costs – both human and economic – squarely. Congress has no business hiding the costs of war through accounting tricks. As the war in Iraq surges forward, and the administration ponders military action against Iran, it’s important to ask ourselves an overlooked question: Can we really afford it? If every American taxpayer had to submit an extra five or ten thousand dollars to the IRS this April to pay for the war, I’m quite certain it would end very quickly. The problem is that government finances war by borrowing and printing money, rather than presenting a bill directly in the form of higher taxes. When the costs are obscured, the question of whether any war is worth it becomes distorted. Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular. The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny. Monetary policy is utterly ignored in Washington, even though the Federal Reserve System is a creation of Congress. The result of this arrangement is inflation. And inflation finances war. Economist Lawrence Parks has explained how the creation of the Federal Reserve Bank in 1913 made possible our involvement in World War I. Without the ability to create new money, the federal government never could have afforded the enormous mobilization of men and material. Prior to that, American wars were financed through taxes and borrowing, both of which have limits. But government printing presses, at least in theory, have no limits. That’s why the money supply has nearly tripled just since 1990. For perspective, consider our ongoing military commitment in Korea. In Korea alone, U.S. taxpayers have spent $1 trillion in today’s dollars over 55 years. What do we have to show for it? North Korea is a belligerent adversary armed with nuclear weapons, while South Korea is at best ambivalent about our role as their protector. The stalemate stretches on with no end in sight, as the grandchildren and great-grandchildren of the men who fought in Korea give little thought to what was gained or lost. The Korean conflict should serve as a cautionary tale against the open-ended military occupation of any region. The $500 billion we’ve officially spent in Iraq is an enormous sum, but the real total is much higher, hidden within the Defense Department and foreign aid budgets. As we build permanent military bases and a $1 billion embassy in Iraq, we need to keep asking whether it’s really worth it. Congress should at least fund the war in an honest way so the American people can judge for themselves."

If democrats really wanted the war to end, they would instigate a special war tax.

1/30/2007 11:59:32 AM

NO, FUCK THAT.

1/30/2007 12:03:50 PM

i wouldn't and don't know anyone that would

1/30/2007 12:06:44 PM

I didn't read that massive text dump but I'd say no.

It seems like the majority of Americans don't support the war without a new tax. I'd imagine that even fewer would support it with one.

1/30/2007 12:10:13 PM

ever seen that movie Syrianna? it has Clooney, Matt Damon, and that guy who is always typecast as an Arab...

there's this quote where the educated prince (not the corrupt one that becomes Emir and is in the pockets of the oil companies), says something to the effect of :

"the US spends 5 times the combined amount of the rest of the world on its military, and that is a surefire sign of a civilisation in decline because it has to run shit by constantly flexxing"

i don't remember the exact quote or the figure he mentions, but i caught the meaning. it may not be true, but it definitely shed some validation on hunches i've been having.

1/30/2007 12:14:49 PM

HELL NO!!!!!!! i'll be like:

http://brentroad.com/message_topic.aspx?topic=457158

before I do that shit.

1/30/2007 12:16:33 PM

While I agree with the sentiment that you can't be dishonest about it and print money like wildfire, it is overkill to suggest that the money supply has tripled since 1990 because of war. I know that isn't what the writer intended to imply, but it was the result.

Besides, has inflation really been a big problem since 1990? I think not.

1/30/2007 12:27:45 PM

I was going to point out, I don't see how wars cause inflation if we aren't currently experiencing it.

1/30/2007 12:36:38 PM

Inflation is quite high right now, just not historically high.

That said, the inflation we are experiencing has nothing to do with war and everything to do with the independent actions of the Federal Reserve.

1/30/2007 2:13:50 PM

But wouldn't you agree that the Fed's practice of printing money to pay for this war are definitely contributing to inflation? Perhaps the strong economy might be hiding or delaying the effects longer than usual.

A fiat money system comes in handy when you need a lot of cash fast, but it also allows the temptation for a President to involve us in questionable wars.

1/30/2007 3:39:58 PM

I would, if the Fed was printing money to pay for the war.

As it is, the Fed is printing money to maintain capital market liquidity. Sure, in my opinion it is printing too much and the excess liquidity is spilling into non-capital markets and causing imbalances, but the war had nothing to do with the decision to print so much. I disagree with the degree to which it is printing, not the necessity to print.

1/30/2007 3:47:32 PM

Quote :

"Would You Pay An Extra Tax to Support the War?"

"Hell no," which is why it's a great idea.

1. We'll be out of Iraq by sunrise tomorrow
2. If not, we at least won't be taking a financial crap on our kids' heads.

1/30/2007 3:50:18 PM

Quote :

"A fiat money system comes in handy when you need a lot of cash fast, but it also allows the temptation for a President to involve us in questionable wars."

There are plenty of other temptations that are much more abused involving the fiat money system. The thing is, though, the gains we get from a fiat system are infinite by comparison.

1/30/2007 3:56:18 PM

Quote :

"..the gains we get from a fiat system are infinite by comparison."

The good feelings you get from this gain are similar to the high a drug addict gets. At the beginning of inflationary spending, the effects feel great. But at the other end, it's a real downer.

As Kris's pal Keynes said:

"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction."

1/30/2007 4:14:24 PM

I guess you missed my reply...

We are not debasing the currency because of the war but because debasing the currency is in vogue.

1/30/2007 5:39:32 PM

A war tax, if it were instituted, would never be repealed by the Democrats, even when we were finished with the business in Iraq.

I would only support a war tax if the military was exempt from paying it.

Heck, the military should be exempt from paying any tax.

1/30/2007 7:20:19 PM

lets go back to war bonds

1/30/2007 7:33:23 PM