Nick Kristof presents a subtle version of the “Iraq Recession” fallacy in his latest column. He is at least honest enough to quote Bob Hormats of Goldman Sachs, who says of the war: “Is it a significant cause of the present downturn? I’d say no.” But that doesn’t stop Kristof from hyperventilating about “a bill that is accumulating at the rate of almost $5,000 every second!” Of course, we’re paying more than $5,000 a second for entitlement programs, but that doesn’t get a mention in his article. Nor does he mention the all-important point that I alluded to in my earlier CONTENTIONS posting: seen in the overall context of our economy, the cost of the Iraq War is chump change (less than 1% of GDP).
He then goes on to make a standard liberal argument: imagine all the domestic goodies we could buy if we weren’t wasting so much money on defense. “A Congressional study by the Joint Economic Committee,” he writes, “found that the sums spent on the Iraq war each day could enroll an additional 58,000 children in Head Start or give Pell Grants to 153,000 students to attend college.” He leaves unanswered a larger question: Would we really be spending untold billions domestically if we weren’t spending them in Iraq? To answer that question, consider the fact that the Iraq War is only five years old. Prior to 2003 we were not saddled with nearly as many costs for dealing with Iraq (although there were lesser costs for enforcing the no-fly zone and sanctions). And yet we weren’t making all of the spending commitments that Kristof would like to see. That suggests that our political system would not deliver the spending he advocates, regardless of what’s happening in Iraq.
His stance is a bit akin to a journalist waxing outraged about the cost of an expensive sports car. To make his case he profiles an owner of a $100,000 Porsche and offers lots of examples of more worthy projects (say a local soup kitchen) that could be funded with the money instead. Only he forgets to mention that the Porsche owner is Bill Gates, and he can easily afford not only the car but can also afford to give billions to good works.
The United States government, presiding over a $13 trillion economy, is in a similar position: we can easily afford our foreign and domestic priorities. That’s why domestic discretionary spending has actually risen during the Iraq War-another fact that Kristof neglects to mention.