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Reason Alert: The Trillion-Dollar War

April 17, 2008

The Trillion-Dollar War
Yesterday's Democratic debate about flag lapel pins didn't leave much time for issues like the deficit and the sky-rocketing cost of the war in Iraq. In her Reason magazine cover story, Veronique de Rugy writes, "At the end of December, Congress approved $70 billion in bridge funding-a down payment to cover the gap between the beginning of the fiscal year and the passage of the actual appropriation bill-to keep financing the wars in Afghanistan and Iraq. Legislators at the time were still chewing on the rest of President George W. Bush's request for a fiscal year 2008 war budget of $196 billion. Should that funding be appropriated-and if recent history is any guide, it certainly will-then the total price tag for America's present wars will rise to at least $822 billion, approximately 80 percent of which will be spent on Iraq. That surpasses the cost of the Vietnam War ($670 billion in inflation-adjusted dollars). And the Iraq portion dwarfs the $50 billion to $60 billion cost predicted at the outset of the war by Mitch Daniels, then director of the Office of Management and Budget.

These runaway costs do not include a single dollar from the Pentagon's annual operating budget, which in 2008 reached a whopping $481 billion. If the war were being accounted for based on a rational, transparent budget process instead of an opaque and politicized shell game, Americans would be painfully aware that we are now in the seventh year of what the nonpartisan Congressional Budget Office has called a $1 trillion war.

How much money is $1 trillion? Enough to pay for the entire 1976 federal budget, adjusted for inflation. Enough to write a check for $37,500 to every Iraqi man, woman, and child. Enough to buy 169,492 Black Hawk helicopters, or 455 stealth bombers. Enough, in nominal terms, to pay for the entire federal government from 1789 to 1957. And it's 10 times more than what specialists predict it would take to eradicate malaria once and for all.

To distract people from the real price tag of a two-front war, the president and Congress have used an unprecedented and fiscally irresponsible budgetary trick: a series of 'emergency' supplemental spending bills totaling hundreds of billions of dollars. This scheme has allowed them not only to hide the costs of the conflicts but also to avoid painful budget choices while funneling billions of dollars in unvetted goodies to favored interest groups."

Obama, McCain, Clinton on Executive Power
How much power will the next president try to grab? Reason magazine's Jacob Sullum takes a look and finds Sen. John McCain "declined to identify areas where the Bush administration has overstepped its constitutional authority. [Sen. Barack] Obama, by contrast, gave half a dozen detailed examples. In general, the Illinois senator's answers to the [Boston] Globe's questions were direct, thoughtful, and complete, apparently reflecting a sincere determination to limit his own power if elected. After the election, of course, such promises may not be worth much. But on that score I worry more about Hillary Clinton. The New York senator's answers to the Globe survey, though less detailed than Obama's, were similar in substance. I just find it hard to believe them. Clinton agreed, for example, that the president has to seek congressional authorization before attacking another country, except in response to an 'imminent threat.' Yet she has bragged about urging her husband to bomb Serbia as part of an unauthorized war that had nothing to do with national defense. Although Clinton now claims to have a modest view of presidential power, she was singing a different tune a few years ago. 'I'm a strong believer in executive authority,' she told George Stephanopoulos of ABC News in 2003. 'I wish that, when my husband was president, people in Congress had been more willing to recognize presidential authority.' With the War on Terror as a rationale, her wish could be her command."

McCain's Gas Tax Holiday Is a Bad Joke
Reason Foundation Founder Robert Poole, who has advised the last four presidential administrations on transportation issues, writes, "I was flabbergasted by John McCain's proposal to suspend collection of the federal gas tax for this summer. Suspending this user tax would deprive the Highway Trust Fund of $8-10 billion in much-needed revenue to patch potholes, rebuild failing bridges, and keep the Interstates and other key arteries from further declines in their already pathetic levels of performance. And this comes at a time when the Trust Fund is already facing a 2009 shortfall of $2-3 billion (thanks to Congress legislating more highway spending than existing gas-tax revenues can support). Plus, since the gas tax is only about 5% of the cost of a gallon of gas, the savings to motorists would be trivial. McCain's advisors have rushed forward with damage control, promising a legislative proposal that would hold the Trust Fund harmless by replacing the lost gas-tax revenue with general fund money, thereby adding another $8-10 billion to this year's ballooning deficit. That would at least make the proposal less irresponsible from a transportation policy standpoint. If politicians want to offer goodies of this kind, they should make everybody pay for them, rather than short-changing highway users. But this episode illustrates once again why motorists are losing trust in the Highway Trust Fund. Every time Congress acts on this subject, they further politicize transportation funding, turning what was once a nearly pure user fee (to build the Interstate system) into a New Deal-style public works boondoggle. The longer-term solution is to scrap the 20th-century tax-and-grant system in favor of universal tolling, managed by each state's Department of Transportation and private toll companies."

Why are Food Prices Soaring?
Are biofuels "the biggest Green mistake we've ever made"? Reason magazine Science Correspondent Ronald Bailey looks for the reasons behind soaring food prices and concludes, "In three words: stupid energy policies. Although they are not perfect substitutes, oil and natural gas prices tend to move in tandem. So as oil prices rose above $100 per barrel, the price of gas also went up. Natural gas is the main feedstock for nitrogen fertilizer. As gas prices soared, so did fertilizer prices which rose by 200 percent...Even worse is the bioethanol craze. Politicians in both the United States and the European Union are mandating that vast quantities of food be turned into fuel as they chase the chimera of 'energy independence.'...The result of these mandates is that about 100 million tons of grain will be transformed this year into fuel, drawing down global grain stocks to their lowest levels in decades. Keep in mind that 100 million tons of grain is enough to feed nearly 450 million people for a year."

Paper or Plastic?
Reason Foundation's Skaidra Smith-Heisters asks paper or plastic? And the environmentally-friendly answer may surprise you: "One hundred million new plastic grocery bags require the total energy equivalent of approximately 8300 barrels of oil for extraction of the raw materials, through manufacturing, transport, use and curbside collection of the bags. Of that, 30 percent is oil and 23 percent is natural gas actually used in the bag-the rest is fuel used along the way. That sounds like a lot until you consider that the same number of paper grocery bags use five times that much total energy. A paper grocery bag isn't just made out of trees. Manufacturing 100 million paper bags with one-third post-consumer recycled content requires petroleum energy inputs equivalent to approximately 15,100 barrels of oil plus additional inputs from other energy sources including hydroelectric power, nuclear energy and wood waste. Making sound environmental choices is hard, especially when the product is 'free,' like bags at most grocery stores. When the cashier rings up a purchase and bags it in a paper bag, the consumer doesn't see that it took at least a gallon of water to produce that bag (more than 20 times the amount used to make a plastic bag), that it weighed 10 times more on the delivery truck and took up seven times as much space as a plastic bag in transit to the store, and will ultimately result in between tens and hundreds of times more greenhouse gas emissions than a plastic bag."

Municipal Broadband Fails in Provo
iProvo, a municipal broadband system in Utah, has already posted over $8 million in losses according to a new Reason Foundation policy brief that concludes that Provo is destined to join a list of cities like Ashland, Oregon, and Marietta, Georgia, that have "thrown away millions of dollars on broadband projects that, in the end, failed to deliver any of the promised benefits." iProvo's total losses are likely to exceed $10 million by the end of this fiscal year - and that figure doesn't include the $39.5 million borrowed to launch the project, most of which still needs to be paid back. The Reason Foundation report says Provo "faces the dilemma of continuing to fund iProvo with no break-even point in sight, or it can sell and recoup as much of its investment as it can."
» Press Release
» Policy Brief (.pdf)
» Reason's Telecom Research and Commentary
» Deseret News: Unload iProvo, Critic Urges



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