The war in Iraq has already caused the death of 40 American and British soliders and the capture or disappearance of 14 others. Apart from the immeasurable price of human physical and psychological harm, the war against Iraq will cost the United States up to $75 billion, President Bush announced yesterday.
At the Pentagon yesterday, Bush said Congress should pass his $74.7 billion war expense package – which includes $62.5 billion for direct costs of the war – swiftly to pay for the first six months of the war in Iraq.
“That’s a lot of money but, I think it’s worth it if we can get (Saddam Hussein) out,” SNRE sophomore Nels Carlson said. “He’s such a horrible person.”
The expenses involved in the current war are surpassing those of the first Gulf war, which cost $61.1 billion in 1991.
“I think (Bush) is very short-sighted to send that amount of money on a war overseas when domestically we have so much that need to be done,” said Jenny Nathan, vice chair of the College Democrats.
Nathan said the government should focus on easing the pain of Americans caused by the economic downturn and spend more money on education, welfare and fighting terrorism.
Besides direct war costs, Bush’s price tag includes funding for humanitarian aid in Iraq, expenses for increasing homeland security and aid to Afganistan, Israel and Jordan.
“It doesn’t make sense to me,” Nathan said.
“We are spending all this money to go to war, knowing that the war is going to cause (a greater) security threat in this country.”
As the country engages in a costly war effort, Bush is also proposing a massive tax cut – reducing $726 billion in tax revenue over 10 years – in order to stimulate the flailing economy.
But the U.S. Senate voted yesterday to halve the tax cut proposal to around $350 billion, citing the high cost of the war.
Business School Prof. Joel Slemrod said tax cuts in wartime are unusual, and unheard of in the past century.
Although Bush and other Republicans said tax cuts will move the economy out of the doldrums, Slemrod said he sees little short-term impact on the economy.
“I don’t expect (the tax cuts) to provide much stimulus, especially now when many businesses and consumers are waiting to see how the war turns out,” he added.
Due to the tax cuts, Americans will pay the government less in the near future, but Slemrod said consumers will use that money to pay off debts or build up their savings because, sacrifices will have to be made in the long run.
“Increasing spending on the military and having tax cuts mean that sometime in the future there will be higher taxes or cuts in some government programs,” Slemrod said.
Business School Prof. Richard Sloan echoed Slemrod’s view and said the tax cuts would actually keep people from spending.
“The government borrows money and the only way to pay it back in the long-run is by taxing more,” Sloan said. “When people anticipate that (the government will) tax more in the future, they will save more today, and that creates a negative effect to the demand side of the (gross domestic product).”