Sunday, January 07, 2007

What should the Democrats do?

According to the NY Times, Bush apparently wants a "surge" in US troops.
The call for an increase in troops would … put Mr. Bush in direct confrontation with the leaders of the new Democratic Congress, who said in a letter to the president on Friday that the United States should move instead toward a phased withdrawal of American troops, to begin in the next four months. …

Congress has the power to halt the increases by cutting off money for Mr. Bush’s proposals. But some Democrats are torn about whether to press ahead with such a move for fear that it will appear that they are not supporting the troops.
I urge the Democrats to take the following position.
  • Argue against the troop increase.
  • But tell Bush that he can have his troop increase if he proposes a budget to pay for it.
Bush is, after all, the Commander in Chief. He gets to make the decisions — unless we think he is so incompetent that he should be removed from office. (I don't see it as likely that the Democrats will attempt to do that.) So while he is in office, he has to be allowed to make the final decisions. (Besides, there are no good decisions to be made in any case. Bush might as well be forced to make them rather than being rescued by the Democrats, who will then be blamed for the consequences.)

However, it is a responsible position for the Democrats to say that we must guard our fiscal health. It makes all the sense in the world for the Democrats to insist that if Bush wants more troops (or even the troops he currently has) he must come up with a way to pay for them. He might propose cutting the budget in various ways (some of which might not be acceptable), or he might propose a tax increase or a temporary tax surcharge. (An increase in the federal gas tax comes to mind as a way to do something useful by raising taxes. Another possibility is a tax that applies to the aggregate compensation, including stock options and separation agreements, of any corporate officer who earns more than, say, $10 million/year.) But no matter what the mechanism, Bush should be required to operate in terms of reality. We can't spend money we don't have. If he wants to continue his adventure in Iraq, the least he should have to do is to find a way to pay for it.

So the war in Iraq must be put "on-budget." And while we're at it social security taxes must be taken off budget. We can't count money collected to pay for future social security benefits as current income. It doesn't make sense. We must go back to the so-called "lock-box" concept in which social security taxes are but into the "social security trust fund" to be preserved for use in the future. Perhaps some of it might even be invested (by the trust fund, not by individuals) in equity markets. If I were in charge of that investment decision, I'd invest at least half of it in foreign equity markets. The U.S. dollar does not have a promising future. Let's invest in the rest of the world while our dollar still buys something.

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