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      Friday
      Feb182011

      On Wisconsin: End the War, Invest at Home

      Cost of Iraq: $3 trillion [projected]
      Cost of Afghanistan: $1 trillion [projected]
      California budget gap: $28 billion
      Wisconsin budget gap: $138 million
       
      The details can be debated, but these figures make clear that the budget crises faced in places like Wisconsin and California can be ended by rapidly ending the wars in Iraq and Afghanistan.
      California taxpayers have contributed no less than $146.3 billion to these wars since 2001; Wisconsin taxpayers, $18.4 billion. California taxpayers are projected to pay $21.8 billion in Iraq and Afghanistan war spending in 2011; Wisconsin taxpayers, $2.7 billion. Direct monthly costs of the wars - $12.5 billion in Iraq, $16 billion for Afghanistan – are more than enough to close the gaps in those two states.
       
      It is time for our most prominent liberal economists to broaden their analysis of the domestic crisis to include spending for these unfunded wars. Only Joseph Stiglitz has done so.
       
      Where are the others? Are they ambivalent about ending the wars? If so, they should explain their reasons. Are they afraid of the counter-attack by the right? It is more likely that their conventional economic models simply discount the factor of war expenditures. If that’s the reason, a quick adjustment of their analysis would make a huge contribution to the national debate.

      Many national liberal organizations have been silent on the costs of Afghanistan, too. For example, the AFL-CIO bluntly stated that they would not participate in last October’s march on Washington if Afghanistan was part of the platform. AARP never mentions the trillions for war, even as the dismantling of Social Security is on the horizon. Where is the NAACP? Where is MALDEF? Or the National Organization for Women?
       
      It was important that over 100 city councils signed up as “cities for peace” during the height of the Iraq War, and a ray of hope that a similar effort is beginning today.
       
      The domestic constituencies facing budget cuts and pension losses need to recognize that only a drawdown from war and a transfer of funds to domestic needs can turn this crisis around. The option of raising taxes is blocked by the Republicans. Further cuts will worsen the recession. The corporate community cannot be forced to invest the billions they are sitting on. Incentives for private investment cannot guarantee that job creation at home will be the result.
       
      Our commander-in-chief, however, backed by congressional Democrats and honest fiscal conservatives, can plan and direct a responsible phase out from Iraq and Afghanistan, and the redirection of the savings to job creation and deficit reduction. It’s entirely plausible that Obama can be re-elected on such a platform in 2012.
       
      First, the domestic wing of the Democratic Party has to decide to stop denying and ignoring the cost of the war at home. In the Detroit of my childhood, it’s true that the Great Depression was ended when workers – including Rosie the Riveter - turned out jeeps and tanks in the manufacturing plants. The current wars, funded through deficit spending and borrowing, rely on high-tech weapons like drones, and require a fraction of the troops deployed in World War 2, Korea and Vietnam.

      If these wars are not put on the chopping block, it will be health care, pension funds and Social Security. It’s that simple. Cheaper ways will have to be found to defend our vital national security interests, or the budget wars will devour us at home.

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      Reader Comments (4)

      These unjust wars cost not only trillions of dollars for Americans but the lives and livelihood of millions of Iraqis, Afganis and inhabitants of neighboring countries. The drug trafficking has increased since the invasion of Afganistan. The violence against women and children has also reached all time high. When is United States going to realize it has to stop policing the world and start solving its own problems?

      February 21, 2011 | Unregistered CommenterJaneway

      We also need to consider reforming our monetary system. There are systemic reasons for our inflationary growth based economy (e.g. The year I was born my father earned less than $4,000 while I was the fourth of five children and he held a mortgage; this was a middle class family in 1952). While our growth model was somewhat sustainable as we exploited the resources of the 'new world' (even if morally questionable), it is rapidly destroying the planet. It's time to recognize that allowing currency to act as a 'store of value' has cost the environment & society great harm. Our best 'store of value' is in healthy living systems - both physically and spiritually, and I think the economist Silivio Gesell has the best model for how to get there within a competitive market system. He believed that money should have a small 'holding fee' or negative interest rate.

      Silvio Gesell believed currency has a privileged position relative to labor and real assets because money does not depreciate in the same way that other consumables do, which is at the root of the usury problems. Allowing dollars to become a non-neutral instrument of exchange creates more demand for the currency than for the human infrastructure it's meant to facilitate our creation of. Economist Silvio Gesell proposed a “free” currency (free from its privileged bias in the market) that ‘depreciates’ in value in the same way that real assets do, which has been shown to encourage investment in human infrastructure over hoarding of currency.

      We've only begun to understand the 'free market' - and haven't yet learned to balance the forces within the market very well. It took nature eons to evolve ecosystems & we are basically attempting something similar. Currency flows thru the market like biomass does in an ecosystem - and when we see that 90% of the currency flows into the hands of 5% of the population - that's an indication that something is out of balance.

      The divide between the rich and poor widens because the escalating interest flows reallocate capital from those who pay more interest than they receive to those who receive more interest than they pay. This interest income is made possible because currency is designed to be hoard able. Placing a holding fee on currencies (demurrage fee) increases the velocity of currency and frees material goods, which are subject to natural cyclic processes of renewal and decay, from their linkage with money that only grows, exponentially, over time. To store demurrage currency and protect it from depreciation, the money can be invested into businesses that need capital, and the borrower will pay the depreciation while they are using the money.

      February 21, 2011 | Unregistered CommenterJill Harrison

      Good point about the cost of war, but bottom line - this isn't about money or balancing a budget. This is about greedy elitist capitalists using the meat puppet politicians they buy to try to crush and eradicate unionized workers.

      February 22, 2011 | Unregistered CommenterPeter McNamee

      Response to Peter Mcnamee's comment:

      Like it or not, greedy capitalist and politicians, if nothing else, are a reflection of and represent the people. They need the People's help here. Can we guide this democracy in a better direction? Setting a specific goal to begin with might help. It might, also, be wise to work with the leaders of the government and captains of industry.... And I dare say the military. At this time, I'm not advocating doing away with our warriors. I do believe that beginning with reshaping our defense department and reallocating tax payer funds is a mighty good start.

      Not only will we be helping US residents by peacefully protesting wars, but the good will can prove to be a better example for the world.

      Sincerely,
      Elizabeth Lerer

      February 22, 2011 | Unregistered CommenterElizabeth Lerer
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