Financing the Fight Against Terrorism Op-Ed

The federal government has already approved an additional $55 billion in spending -- $40 billion of emergency appropriations to aid in recovery and rebuilding from the attacks, and $15 billion to support the reeling airline industry. Congressional appropriators have proposed another $25 billion for...

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Bibliographic Details
Published inThe New York times
Main Author Tyson, Laura D
Format Newspaper Article
LanguageEnglish
Published New York, N.Y New York Times Company 08.10.2001
EditionLate Edition (East Coast)
Subjects
Deficit financing
Federal budget
Fiscal policy
Medicare
Social security
Tax cuts
Terrorism
BERKELEY, Calif
India
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Summary:The federal government has already approved an additional $55 billion in spending -- $40 billion of emergency appropriations to aid in recovery and rebuilding from the attacks, and $15 billion to support the reeling airline industry. Congressional appropriators have proposed another $25 billion for defense, education and emergencies for the 2002 budget year. Meanwhile, Washington is considering proposals for additional tax cuts, many of them permanent, costly and ineffectual, ostensibly to head off a recession. At the same time, a multiyear, multifaceted war on terrorism will impose substantial new costs. There's nothing wrong with a temporary raid on the Medicare and Social Security surpluses now. Indeed, isolating them to save for the future is a bad idea when the economy is sinking. And dipping into them is justifiable to pay for military efforts, intelligence gathering, enhanced air travel security and safeguards at embassies in waging the war on terrorism. Like wars with more conventional and identifiable enemies and more limited objectives, our war on terrorism will require unavoidable budgetary tradeoffs. Guns versus butter is elementary economics: a society that chooses to spend more of its resources on defense and security will have less available for things like education, health, retirement security, productive investment and personal consumption. If the tax breaks passed last spring are not rolled back, paying for a strong assault on terrorism will require either cuts in other parts of the federal budget or a return to deficit spending -- as soon as next year, according to recent forecasts.
ISSN:0362-4331