The budget lies that haunt us
By Derrick Z. Jackson
Boston Globe
MITCH DANIELS and Lawrence Lindsey are footnotes who continue to kick us from behind. Lindsey was the chief economic policy adviser to President Bush who predicted in 2002 that invading Iraq would cost $100 billion to $200 billion.
It is largely forgotten that Lindsey said this not to warn Americans that this would blow a hole in the domestic agenda of the United States. He said this to make the president look good, swatting away fears that a war even at that level would hurt the economy. As the Wall Street Journal wrote, Lindsey "dismissed the economic consequences of such spending, saying it wouldn't have an appreciable effect on interest rates or add much to the federal debt, which is already about $3.6 trillion."
The Journal quoted Lindsey asking himself what one year of war spending would mean. Lindsey said, "That's nothing."
To Lindsey's surprise, his service to the president was considered a betrayal. Two days later, Daniels, the director of the Office of Management and Budget, called Lindsey's estimate "likely very, very high." Within a week, the Washington Post further quoted Daniels as saying that whatever Bush decided about Iraq, it could be managed by "rotating resources from things that are of less than life and death importance to meet the life and death imperatives of the moment."
It was political death for Lindsey, who was hounded into resigning within a few weeks. It did not matter that Yale economist William Nordhaus subsequently published a 50-page study that determined that a long war could cost up to $1.9 trillion and "claim the scarce resources and attention of the United States for many years."
By Dec. 31 of that year, Daniels - now governor of Indiana - conveniently replaced Lindsey's $100 billion to $200 billion estimate with one of $50 billion to $60 billion. Daniels told The New York Times that his estimate was based on "prudent contingency planning."
(Continued here.)
Boston Globe
MITCH DANIELS and Lawrence Lindsey are footnotes who continue to kick us from behind. Lindsey was the chief economic policy adviser to President Bush who predicted in 2002 that invading Iraq would cost $100 billion to $200 billion.
It is largely forgotten that Lindsey said this not to warn Americans that this would blow a hole in the domestic agenda of the United States. He said this to make the president look good, swatting away fears that a war even at that level would hurt the economy. As the Wall Street Journal wrote, Lindsey "dismissed the economic consequences of such spending, saying it wouldn't have an appreciable effect on interest rates or add much to the federal debt, which is already about $3.6 trillion."
The Journal quoted Lindsey asking himself what one year of war spending would mean. Lindsey said, "That's nothing."
To Lindsey's surprise, his service to the president was considered a betrayal. Two days later, Daniels, the director of the Office of Management and Budget, called Lindsey's estimate "likely very, very high." Within a week, the Washington Post further quoted Daniels as saying that whatever Bush decided about Iraq, it could be managed by "rotating resources from things that are of less than life and death importance to meet the life and death imperatives of the moment."
It was political death for Lindsey, who was hounded into resigning within a few weeks. It did not matter that Yale economist William Nordhaus subsequently published a 50-page study that determined that a long war could cost up to $1.9 trillion and "claim the scarce resources and attention of the United States for many years."
By Dec. 31 of that year, Daniels - now governor of Indiana - conveniently replaced Lindsey's $100 billion to $200 billion estimate with one of $50 billion to $60 billion. Daniels told The New York Times that his estimate was based on "prudent contingency planning."
(Continued here.)
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