Have the Bush Tax Cuts Helped Pay for Iraq?

In response to a recent post about John Edwards being unqualified to be President, I made a comment about Bush cutting taxes in a time of war. MByrne, the author of the post, replied that the tax cuts have actually helped pay for the war in Iraq. I don’t agree with his assessment and this post will explain why I think his assertion is false.

The whole idea behind the cuts was that American citizens and corporations would have more “disposable” income and would then reinvest it and spend it to help the economy. As with most things that have come out of this “Republican” era of government, that assertion is an oversimplification of the facts. Americans don’t like taxes so when someone says tax cuts, they salivate like Pavlov’s dog and jump on board. The question remains: have these tax rate cuts helped pay for the war in Iraq? The answer to that is no.

The tax rate cuts have increased tax revenue from about $1.7 trillion in 2003 to an estimated $2.5 trillion in 2007. Those are called receipts. Our debts, or outlays, have also increased since 2003 from about $2.1 trillion to an estimated $2.7 trillion in 2007. Our deficit was $248 billion last year and is projected to be about $244 billion this year. So, we were in the hole by $248 billion last year. There’s also this number called “on-budget,” which as the name suggests, is a number signifying how close we came to the President’s budget numbers. In 2006, we were $434.5 billion over budget. What was main cause of this discrepancy? An ugly little thing called supplemental funding for the war in Iraq. Supplemental funding is basically spending money that was not included in the budget, hence the $434.5 billion in over-budget spending. According to the Congressional Budget Office, Congress has provided over $503 billion in supplemental funding for mandatory diplomatic operations in Iraq, Afghanistan and other regions since 2003. Over 70% of that figure (352.1 billion) has been for Iraq. The current 100 billion supplemental request is being played out politically between the Democratically controlled Congress and the President. Of course, Iraq hasn’t been the only reason for supplemental funding (Katrina recovery, for example); however, it has been the primary reason since 2003.

The tax rate cuts provided more tax revenue for the government, but we still ran high deficits, so they didn’t actually pay for anything. It was funny money. We can argue whether or not it substantially stimulated the economy. It did put a little “money in people’s pockets,” but the federal minimum wage didn’t increase, corporate tax revenues as a share of profits[1] have fallen and the AMT (alternative minimum tax) will affect an estimated 23 million Americans this year (and up to 32 million by 2010). Not to mention increasing oil prices, the significant slowing down in the housing market, as well as median household income falling for the past five years. The DOW Jones and other indices are doing well, but that just means the corporations are making tons of money. 51% of Americans don’t own any stocks at all. Most of the stocks that Americans do own are tied to their retirement plans anyway. So while the economy is doing well for some (some of the few in my opinion), it is not doing so well for most and the cost of the war in Iraq sucks away billions of money (we don’t really have) per month with no tangible results.

Sources: Government Accountability Office, Congressional Budget Office, Tax Policy Center, White House Office of Management and Budget, Federal Reserve Bank of New York.

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[1] Alan J. Auerback, "Why Have Corporate Tax Revenues Declined? Another Look" (January 2, 2007). Berkeley Program in Law & Economics, Working Paper Series. Paper 216.
http://repositories.cdlib.org/blewp/art216

Iraq is not Vietnam (Why we need to stay)

A quick note to all of my fellow progressives: please stop comparing Iraq to Vietnam. They are not the same, although there are some similarities. The declining will of the American people with respect to fighting the war and its increasing unpopularity are two similarities. Like Vietnam, our military is fighting an insurgency. But I think that the similarities basically stop there.

Our withdrawal from Vietnam in 1975 had no significant international ramifications. Vietnam was largely an ideological battle in the Cold War, which unfortunately cost us 58,000 souls. When South Vietnam fell to the North Vietnamese communists, it really meant nothing. North Vietnam had no regional influence, no natural resources that significantly affected world markets and no wealth to speak of. Further, there was not the threat that Vietnam would become a breeding ground for international terrorism if we left.

Our withdrawal from Iraq would open the door for one of our gravest enemies, Iran, who is already meddling in Iraqi affairs and who has directly contributed to American deaths. Iran looks to Iraq with lascivious eyes, waiting for us to leave so that they can exert their influence and use Iraq's resources to better position themselves to destroy Israel and the west.

The mistake that American progressives make is that we think that dealing with Iran today is like dealing with the Soviet Union during the cold war. It isn't. We think that "diplomacy" alone will work. It won't. The Soviet Union was controlled by secular communists. Iran is controlled by radical Islamists. The former were guided, in the end, by conventional wisdom. They after all united with the west to destroy Nazi Germany. That is the one of the reasons that MADD worked well and that most of the battles fought between the two super powers were fought by proxy or in the shadows. The latter are guided by an extremist ideology that calls for total destruction of Israel and the West. They are not opposed to acts of terrorism including the use of nuclear weapons against the civilian populace. They are not guided by conventional wisdom, but by religious hatred.

We can’t forget this. That is the single most important reason that we must remain significant in Iraq. We can’t just pick up and withdraw. We shouldn’t have invaded in the first place, but like Colin Powell said, we broke it, so we have to fix it. The democratic politicians who call for our withdrawal from Iraq are preaching dangerous rhetoric. We must find a plan that will work and the U. S. military will be a significant part of any plan.

Darfur News

The International Criminal Court has issued the first arrest warrants over the Darfur conflict. The charges are numerous and are for war crimes and crimes against humanity. Of course, the government rejects the warrants, but at least its progress.

Coalition? What Coalition?

President Bush addressed the CENTCOM Coalition today, and spoke about the war in Iraq. It is customary for the President to recognize key individuals who are present. Since this was the “Coalition Conference,” one would expect such acknowledgements to include representatives from the 21 “allied” governments who are contributing military forces in Iraq. Surely a significant representative from the United Kingdom would have been present, since they have about 7,200 troops in Iraq. Or Korea, or Australia, whose combined troop commitment numbers about 3,150 troops. Or someone from the other 19 countries who have troops in Iraq (that number combined is about 3,902 troops, which averages to be about 205 troops per country, though Poland, Romania, Denmark, El Salvador and Georgia all have more than 300 troops each). The President only acknowledged four individuals by name, three of which were U.S. Military officers. The last was the National Security Advisor to the President of Iraq. President Bush mentioned “members of the coalition who are present” and “ambassadors who have joined us.” I find that very interesting since, last I checked, ambassadors outrank national security advisors. Further, one would assume that since this is a U.S. Central Command Conference and the head of CENTCOM, a four-star Admiral would be present, as well as General Petraeus (a four-star army general and commander of the multi-national force in Iraq), and that each coalition nation would have their top military commanders attend.

We just don’t know who was there, because there is no information on the attendees other than those expressly acknowledged by the President in his opening remarks. I find that interesting, since the word “Coalition” is thrown around like candy by everyone in the Bush administration. I would think that the President would take every opportunity to put a face on who these allies really are, but that does not seem to be the case.

The United States has approximately 145,000 troops in Iraq. Of the seven major Multi-National Force Commands, five are headed by the U.S. Military. Multi-National Division- Central South, headed by Poland, is only a Division in name, since most of its coalition forces withdrew in 2006. It is officially slated to be dissolved sometime this year. Multi-National Division- South East, headed by the U.K., is comprised of nothing more than a reinforced brigade (around 7,000 trooops) and that number is expected to draw down this year. To quickly revisit the numbers, the U.S. has about 145,000 out of approximately 159,200 troops, or 91% of all troops in Iraq. Three out of 21 countries who constitute the coalition account for 72.8% of the 14,200 troops our allies are contributing. The remaining 18 countries account for less than 28% of that number and only 2.4% of total coalition forces in Iraq. Yep, that’s 2.4%. If we create a table of the top five allies in Iraq, here’s what you get:

Multi-National Force Iraq			Total Number of Troops:		159,000
Country	Number of Troops		Percent of Total Troops
U.S.A.	145,000		91.2%
United Kingdom	7,200		4.5%
South Korea	2,300		1.4%
Australia	850		0.5%
Poland	900		0.6%

Source: http://www.globalsecurity.org/military/ops/iraq_orbat_coalition.htm

Let’s take a look at another “coalition” or allied effort. During WWII, the top five contribution allies in terms of troops, were the United Kingdom, India, the United States, the U.S.S.R and France. Here is what their chart looks like (numbers are 1945 grand totals):

Allied Forces, 1945			Total Number of Troops:		35,350,000
Country	Number of Troops		Percent of Total Troops
U.S.A.	11,700,000		33.1%
U.S.S.R	11,500,000		32.5%
U.K.	5,000,000		14.1%
France	5,000,000		14.1%
India	2,150,000		6.1%

Source:http://www.euronet.nl/users/wilfried/ww2/ww2.htm

Before the pundits begin, let me say that I’m not attempting to equate one war with the other. It should be noted, however, that the United States has almost tripled its percentage of troops for Iraq in comparison to those sent in WWII, while Great Britain has halved its percentage in terms of troop commitment. What I am attempting to do by pointing out these discrepancies is establish some sort of definition for what in the heck constitutes a real coalition. Surely, someone in the Defense or State Department could come up with some sort of doctrine regarding these sorts of things. Common sense would dictate that based upon the Iraq chart, we have nothing resembling a coalition at all. In that case, it would make perfect sense not to have anyone of significance at the conference. Why should we? If we assume over ninety percent of the risk, we should call over ninety percent of the shots. Which begs the question: Why even call it a coalition? The world clearly understands that the war in Iraq is being fought by the United States. For good or bad, that’s the way it is.

The fact that President Bush and the administration are still holding to the pipe dream of a coalition is just another example of the insanity that exists in the Executive Branch. Mr. President, we’ve caught on. Just because you keep saying it doesn’t mean that we believe it anymore. As Joseph Goebbels can attest to, even the best propaganda is exposed as a lie in the end.

Here's A Plan Mr. President

President Bush, in usual fashion, is sticking with a course of action in defiance of all common sense and experience, thumbing his nose at Congress and the American people. His latest quote: "If you don't like my plan of action, tell me yours." First of all, Mr. President, we wouldn't be here if you had LISTENED to the State Department and the military in the days and weeks after the initial military victory over Saddam's military in March of 2003. If we had prevented the looting and guarded other things besides the Iraqi Oil Ministry, that would have been a great start. In addition, we could have fixed their water and brought their electricity up to par that would have been great, too. We should have flooded the outlying villages with State Department, Red Cross, and other humanitarian agencies to assist. Maybe not disbanding the Iraqi military and civil service would have been a great move, I don't know.

Okay, since you did None of that, here's a plan for you. Start doing some of it. The Iraqi power grid is still as unpredictable as Rex Grossman on game day, unemployment is rampant, those who have the civil service jobs get paid in a "catch as catch can" basis, the Iraqi military and police force is a JOKE and sectarian violence has plunged the country into the beginnings of a civil war. Oh, not to mention, the border is not secure. There really aren't "Iraqis." There are Shiites, Sunnis and Kurds, all using their new powers to exact revenge on their former enemies. If we think Iraq is ready to govern itself, just take a look at the execution of Saddam. That was a cluster f@*# to say the least. Or maybe you should look at the streets in Iraq. Death squads and militias rule the day and the only ones provided any humanitarian support to the people is Al Qaeda. Go figure.

A 24,000 troop increase does nothing. If you really were committed to saving Iraq, you would quadruple that number to truly pacify the country. You would mobilize almost every humanitarian asset you had available and descend on the country with a fervor to deliver services to the people. You would tell the Iraqi PM and his government that they need international help. You would go the UN and tell them that we are really committed to fix the problem, eat crow, tell them that you were wrong and that we need their help. You would tell Iran that if they didn't cease and desist with their interference in Iraq that there will be real consequences.

Lastly, I would sideline the VP on this one; it's a fact that he doesn't know what he's talking about.

They're Not Dissapointing Me

So far so good in the House of Representatives. I have to say that I'm impressed. They went straight for the jugular:

Passed a bill to provide for embryonic stem cell research;
Passed an increase to the minimum wage;
Passed a bill to implement the 9/11 commission recommendations.

The first obviously hits the President and the right wing Christians. It's good to see science prevailing over "faith" for a change. The minimum wage increase is good, although I think it should be more like $10.00 per hour instead of 7 and some change. Do I need to say anything about the third? It's obvious that the homeland is really no more secure than it was before 9/11.

It seems that they are proving me wrong. I hope they keep pressing; it's good to see something actually getting done in Washington.

The Gaggle That Is Iraq

So it's more of the same from El Presidente and his team of under-achievers. A 20,000-plus troop surge in Iraq to "pacify" Baghdad. Okay, so they'll end up slightly extending the green zone in the short term after fierce battles in which the American service members will bear the brunt of the fighting. Of course, we won't provide any social services or significant infrastructural assistance to the Iraqi people; we'll just let al qaeda do that for us since we squandered all of that money on Halliburton and countless other dead-end endeavors. So where does that leave us? Here are a few random thoughts on Iraq.

1. The Iraqi Army and police do not have the will to fight. At least not for the Iraqi democracy. Most of the Iraqis that actually were trained to fight and had the will now fight against us, since we disbanded the Iraqi Army after our "mission was accomplished." Also, the basic unit of loyalty and authority in Iraq is the clan/tribe; all other types and levels of authority are secondary. Hence, sectarian violence throughout the country and division in Parliament along tribal lines. They don't really understand democracy and national unity; Saddam kept them under control by force or the threat of force; he violently suppressed any organization that was threat to his power including rival tribes or clans. We westerners don't understand that.

2. It's really not up to the Iraqis to defend Iraq; it's up to the United States to do that. (here's a great perspective on that). Yes, we broke it and it's up to us to fix it. Let's get over the crap line that the politicians are using saying that it's time for the Iraqis to stand up and take responsibility for what's going on. Last I checked, they were living in a more secure environment (under a dictator, of course) but there was not open violence in the streets, there was more reliable electricity and running water. There were death squads, but everyone knew who they belonged to. There was fear of course, but not the level of fear that exists today. Let's face it; we blew it big time. If we really want to pacify the situation, we would need to commit additional troops in the hundreds of thousands; declare martial law; round up every single person suspected of being the "enemy" and make examples of them so no one else would dare to follow in their footsteps. In addition, we would need to commit billions into infrastructure repair and establishment, building schools and civil buildings, social services, etc. Seeing as we've wasted billions already, I don't see this happening, but it is OUR responsibility to ensure a stable future for the Iraqi people; it was us who brazenly invaded their country and turned their lives upside down. It is up to US to stay there and do the right things to help them; which doesn't include retreating (or redeploying) or cutting numbers of troops or increasing them by 20,000. We need 200,000 to do it right.

3. Sound Like Vietnam? It certainly should, since we are committing the same mistakes. We are trying to train people that ARE NOT warriors to be warriors. We are not providing social services to the people, but we are allowing the enemy to do so. We are fighting amongst ourselves about what to do because no one wants to admit that our sacrifice will be great in order to do the right thing. Who is suffering in the meantime? The innocent men, women and children of Iraq. We have lost them. We have lost their trust; we have lost their support. We treat them much like we treat our own poor; we talk around them and about them, but not to them. We don't endear ourselves to them; therefore, they do not endear themselves to us. They see us as invaders not liberators. They see us as enemies, not friends. There is much we must do to re-gain their trust. It would such a shame to leave the country in such shambles. This is a test of our national resolve. If we fail, our national prominence will significantly diminish. We can't keep repeating Vietnam; we have to actually do one of these things right. We should never have gone to Iraq in 2003, but now that we are there, we have to succeed.

Lag Time and Politics

A lot has happened since I last blogged, most notably, the Democrats took control of both houses of Congress. They have pledged a lot a action in their first 100 hours of legislative time and got things off to a big start by taking the day off for the NCAA National Championship game. Business as usual? I'm not sure, but it doesn't bode well.

I am happy (on the surface) that their has been a changing of the guard in our legislative branch. There are two big problems, however, that I don't think the Democrats will be able to overcome:

1. Democrats lack of audacity (aka "balls). The Democrats suffer from "over think syndrome." They talk and talk, but lack decisiveness in their actions, leading to a fragmentation that kept them out of the majority for the past 12 years. We owe this changing of the guard more to President Bush's failures than the Democrats' successes.

2. Power corrupts. Everytime a minority takes the majority, there are always promises of ethics reforms and shouts that the party taking control will "clean up" Congress. The Republicans set themselves up 12 years ago as the moral authority. They promised to deliver us from the moral scourge that was the Democrat party. 12 years and many Republican scandals later, the Dems are saying the same thing. The problem is not party related. It's money and power related. the lobbies and corporate benefactors court the party in power very heavily. When the money and favors start flowing, it's hard for any politician, regardless of party, to say no. Being the majority party in Congress really means only one thing: it's just a matter of time before the scandals surface.

I hope they prove me wrong, but I really don't think so. The other shoe will drop; it's just a matter of time.