Don Davis

Afghanistan Peace Dividend Stimulus Lotto? OK!

Filed By Don Davis | May 12, 2011 1:00 PM | comments

Filed in: Politics
Tags: Afghanistan, Congress, economic policy, Green Energy, Iraq, Labor, Medicaid, Medicare, Pakistan, Social Security, Somalia, war, War on Drugs, White House, Yemen

They told us "We're dropping about $10 billion a month in Afghanistan so we can catch that Bin Laden guy but, eventually, we're gonna catch him and as soon as we do you can imagine that folks will be wondering why we're still over there," and I gotta tell ya, I'm one of those people.

I mean, we're over here talking about how we're so broke that we have no choice but to cut a couple of billion from heat assistance for the poor, Lotto Prayerand a billion-and-a-half from the Social Security operations budget, and money from food stamps and childcare assistance and tornado forecasting in Alabama but every single month, just as regular as clockwork, we seem to be able to find another $10 billion to spend in Afghanistan, even as we have an economy that could badly use another round of truly productive stimulus.

And I don't think y'all even realize just how much money $10 billion really is - but today we're gonna see if we can't fix that with a bit of a thought exercise.

Imagine if we set up a program that took that Afghanistan money and spent it right here at home for a year or two - and it was spent in the form of a lottery, where we stimulate the larger economy, help fix the mortgage crisis, and create a more energy-independent nation, all at the same time.

I got all we need except a catchy name; with that in mind let's move on to the description of how the Happy Super Fun Day Peace Lotto Stimulus Thingy works.

...In this world, the two cities - the earthly and the heavenly - are commingled; but hereafter the predestinate and the reprobate will be separated. In this life we cannot know who, even among our seeming enemies, are to be found ultimately among the elect...

--Bertrand Russell, explaining St. Augustine, in the book "A History of Western Philosophy"

So it couldn't be any simpler: what I have in mind, to illustrate our point, is a giant national lottery, and it wouldn't cost a dime to enter.

First prize would be directed toward cleaning up the mortgage crisis by either getting folks out from "under water", lowering their current monthly payments, or converting them from renters into homeowners: if you're one of the 10,000 first place winners, you get $250,000 to spend on either paying down your mortgage or to buy a house of your choice if you don't have one now.

Second prize involves "greening" America's homes; the idea being that if we cut America's heating, air conditioning, and hot water bills, we free up billions of newly productive dollars to create long-term self-sustaining consumer demand - and that means you can take some of that power bill money and go out and have a nice dinner with the kids again.

10,000 winners would each get $50,000, and with that you could easily replace a whole lot of windows with better-insulated ones...or you could get some solar panels, or put up that rooftop wind generator you've been thinking about, and you could pay for the electrical connections to get you in the business of selling power back to your utility. Don't own your house? That's OK, we'll "green" it up anyway, with the owner's permission - and if that can't be arranged, then maybe we'll have to just award you third prize instead.

The idea behind our third prize is to lower the amount of money we spend every year on imported oil; to that end we would give 50,000 third place winners $40,000 to spend on a vehicle that gets 40 MPG or better - and because we don't want to "disincentive" inexpensive green cars, if you can arrange to buy two cars for $40,000, we'll do that, too. (And hey, just to be fair: if you were "bumped down" from second place, let's make your "car credit" $50,000.)

That's 70,000 winners, folks, who could end up with a new house, or a new car, or a newly energy-efficient home - and that doesn't give a complete picture of just how much we're really spending right now blowing up Afghanistan.

You see, we're spending so much right now that we could give away all this stuff every single month of the year with all the money we're dumping "Over There" instead - and even that doesn't tell the whole story, because all that stuff - all the houses and all the cars and all the energy improvements - represents only 50% of what we're spending every month Over There.

And all that money doesn't even include what we're spending on our other wars, overt and covert, in Iraq, Pakistan, Libya, Somalia, the Philippines, Yemen, Iran, Mexico, Columbia, Venezuela, and, of course, the one we fight right here in the good ol' USA: The War On Drugs.

So whaddaya think, America?

Should we continue the endless war and keep on looking for those last 100 or so Al Qaeda fighters in Afghanistan, to the tune of $100 million a month for each guy, for the next decade or so - or would you rather do a giant lottery for a couple of years, for half the cost of what we're spending every month over there now, that creates lots and lots of jobs and permanently lowers our national energy bill?

I think I know which one you want - and that's just too bad, because we aren't gonna get it anytime soon, now are we?

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Leigh Anne | May 12, 2011 1:26 PM

Free money? Some of it.

We also have to discharge (lay off) the soldiers, cancel the support contracts (more layoffs), stop buying everything from food to ammunition -- more layoffs. We will save a lot on fuel, once we ship and fly all of our equipment back here. Perhaps that will help gas prices -- next year, when we've finished.

Not spending money one place in order to spend it somewhere else means creating major displacements in the economy.

It can still be a good idea, but it's not free.

you are correct to note that change in afghanistan would create displacements...but we also have to consider the concept of "opportunity cost": exactly what could we have spent the $3-4 trillion of war spending on, over this past decade, and how would the economy be better positioned if we had spent that money differently?

just in terms of the stimulative effect on the economy, we'd be better off ending that war today and dumping the money into either education, energy efficiency, or infrastructure, as each creates more jobs per dollar than war spending, now and in the future.

(one reason for that is because we're spending billions of taxpayer dollars to train troops for a career that has no civilian equivalent; that means even job training money spent on war often fails to benefit the economy unless war continues. another reason is the money spent on "war gear": most of it can only help you in a war, and if you're not fighting, those are "idle assets".)

displacements aren't always a bad thing in an economy, and we have tools like the gi bill that can be used to help troops become workers with a future, so even though i only bring this to the table as a thought exercise, i have to tell you, if this were to be adopted, i could very easily live with the displacements - and over time, i think what you'd see is net gains in jobs and disposable income pretty widely dispersed across the economy as a whole.

The war's going to continue. If anything, killing Osama and getting the country rallying again in the street strengthened people's will for it.

i'm not so sure about that, alex.

i get the impression that a lot of what people are feeling about osama's death is that it allows us to end the war in afghanistan.

i think a lot of people would say something like...

"after all, that's why we went there in the first place, right, to get osama?"

...and if that's true, then i think you're gonna see a lot of pressure to do a real withdrawal - and don't forget, there's a sort of "tipping point" now coming as the president indicated that we'd begin a drawdown in july.

if no substantial drawdown actually occurs, he'll take shots from the right and the left as '12 approaches.

finally: there are conservatives aplenty who want this to end as well, and if you don't believe me, consider this:

if john mccain and ron paul were to debate the issue today to a room full of conservatives, and mccain proposed "staying 100 years, if that's what it takes" (which he did, during the '08 campaign), and paul says, "let's end this now"...who do you think would win the debate?

if the conservatives are on paul's side...i think this war's under pressure on the home front, and it's going to be hard to keep it going too much longer.

true dat - but the real message here is: we can easily find the money to spend on a war anytime we want...but we could do so much more with that money...but whenever the idea comes up...somehow, we never have enough money.

Leigh Anne | May 13, 2011 4:34 PM

Yes, building homes and bridges adds to the wealth of a country, while building bombs and dropping them on people and structures leaves a lot of destruction -- and scrap metal -- around.

Even economic displacement, in the middle of a major recession, has significant risks.

Love your stuff, Don!

there is no doubt that when we see big changes come to an economy, some folks end up losing - and when you're talking about military "layoffs", you have some things that take place that are unique to that situation:

--if you think about a city like detroit, you've seen a lot of "dejobbing" overseas, for want of a better term, and the folks who lost the jobs, for the most part, are still in detroit, unless and until they can find their way somewhere else.

with a military "layoff", the jobs and the workers both leave at the same time.

i assume that hits local business and local government very hard, but it presumably also eases the burden on that state, as unemployment and other services aren't needed as badly as they would be otherwise.

--we know in advance what regions will be hit and exactly how hard, which is unheard of when the private sector is laying off - and that gives you the chance to plan some mitigations in advance.

--some of the laid off will be military reservists, and, oddly enough, that means some folks will see their financial situations improve as the military member returns to a better-paying civilian job. (this situation is fairly widespread among deployed military reserve officers.)

--unlike a civilian layoff, you're going to have a lot of folks automatically eligible for retraining (active duty personnel are going to have access to the gi bill's education benefits); that's not going to be automatically true for reservists, and we would need to particularly address that issue.

and just to add a bit of lbgt to all this...i do not expect layoffs to lead to a big change in the proportion of lbgt troopers, and that's because dadt did not allow lbgt folks to join the service, but simply to serve openly.

that means lots of lbgt troopers have lots of seniority, and they're probably about as likely to remain on the job as anyone else.