Source: Fortune
Summary
Linda Bilmes, a public finance expert at Harvard Kennedy School, warns that the US is making a mistake by financing the Iran war with debt, which will add billions of dollars to the total cost of the war. The US has relied more heavily on debt to finance the war, with $31 trillion of debt held by the public and 15% of the national budget being spent on paying down interest. Bilmes notes that this approach is different from previous wars, where the US used a combination of taxes and borrowing to fund military expenditures. The Trump administration’s tax cuts and increased military spending will only exacerbate the problem.
Our Reading
The numbers tell one story. The US is relying more heavily on debt to finance the Iran war, with $31 trillion of debt held by the public. Linda Bilmes notes that this approach is different from previous wars, where the US used a combination of taxes and borrowing to fund military expenditures. The Trump administration’s tax cuts and increased military spending will only exacerbate the problem. The daily costs of the war are double previous estimates, with the government not taking into account long-term impacts such as veteran disability benefits and infrastructure damage. The result is that the interest costs alone will add billions of dollars to the total cost of the war.
Bilmes’ warning is a familiar refrain, echoing Immanuel Kant’s 1795 essay “Perpetual Peace: A Philosophical Sketch,” which argued that nations should not finance wars with debt.
Author: Evan Null
