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War Debt!

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Wade Hampton III

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War Debt!

PostMon Nov 13, 2017 7:56 pm

BY CAROLINE HOUCK...STAFF CORRESPONDENT...

The post-9/11 wars in Iraq, Afghanistan, and elsewhere have been fought with borrowed
money, enough to require up to $8 trillion in interest payments in coming decades, a
new report says. Unlike America’s previous wars, its 21st-century conflicts have been
paired not with a tax hike or massive sale of U.S. bonds, but a tax cut. The federal
government has been operating at a deficit since 2002, accruing a national debt that
now totals $20 trillion and counting. “We have to recognize that we have been borrowing
for 16 years to pay for military operations,” said Sen. Jack Reed, the ranking member
of the Senate Armed Services Committee. It’s the “first time really in history with any
major conflict that we have borrowed rather than ask people to contribute to the national
defense directly, and the result is we’ve got this huge fiscal drag…that we’re not really
accounting for or factoring into deliberations about fiscal policy as well as military
policy.” The 2017 report from Brown University’s Costs of War Project arrives as U.S.
lawmakers and President Donald Trump strive to enact tax changes that will add at least
$1.5 trillion to the national debt.

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By coincidence, $1.5 trillion is also roughly how much the United States has spent on
wars since 2001, at least according to the Pentagon’s most recent estimate. But the
Cost of War Project researchers take a broader view of “war-related spending” by the
federal government. They include State Department security funding, care for veterans,
and interest on the related debt. Their latest annual report, released today, calculates
that the last 16 years have seen the United States spend $4.3 trillion on the wars. So
far, they estimate, the U.S. has paid $534 billion on interest on borrowed Overseas
Contingency Operations funding. That will only grow. “Even if the U.S. stopped spending
on war at the end of this fiscal year, interest costs alone on borrowing to pay for the
wars will continue to grow apace,” says the report, written by Neta Crawford, a political
science professor at Boston University. “By 2056, a conservative estimate is that interest
costs will be about $8 trillion unless the U.S. changes the way that it pays for the wars.”
Concerns about how the government is paying for its overseas footprint were enough to
persuade the ranking member on the House Armed Services Committee, Rep. Adam Smith, break
from his colleagues in their full-fledged support of the National Defense Authorization Act.
Both Armed Services Committees agreed on Wednesday to pass a $700-billion defense
authorization bill for 2018. That’s about $85 billion more than allowed by the 2011
Budget Control Act.

The NDAA announcement came as Republican lawmakers worked to whip up enough votes to
pass a tax reform bill by year’s end. The Congressional Budget Office says the GOP tax
plan would add $1.7 trillion to the national debt over the next decade. Sen. David
Perdue, R-Georgia, a member of the Armed Services Committee, said “the greatest threat
to our national security is the national debt.” He also said the tax cut wasn’t compounding
the problem. It’s a short-term “investment.” “You can’t fix this long-term problem unless
you grow the economy and you’re not going to grow the economy unless you fix taxes,” he
said. Whether the GOP tax plan is enacted or not — and minority leader (Jew) Sen. Chuck
Schumer was ebullient and emboldened about Democrats’ chances to scuttle or reshape it
after Tuesday’s state elections — the current model of funding U.S. wars overseas will
have to be reckoned with. In the early years of the war when the deficits started blooming,
the U.S. had a relatively low debt. As it compounds, that changes the calculus on defense
spending, said Todd Harrison, who directs defense budget analysis at the Center for
Strategic and International Studies. “I think we’re in a different place now than we
were in 2001,” Harrison said. “ All of these factors did not exist then and now start
to conspire to depress defense spending. They very well may weigh on the defense budget
in the 2020s…Then when you combine that with tax cuts which are also going to make the
deficit higher, it’s all putting downward pressure on defense budgets.”

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