Wednesday, April 25, 2007

Frum & Perle: Twenty-Six

Supply-side solutions to war's expenses, or the neocon wartime economy manifesto. AETE, pg 143:

It sometimes seems as if many people in the media object to everything about the war on terror except for the higher taxes they insist are necessary to pay for the war.

If it turns out that the costs of victory in the war on terror require temporary tax increases, then temporary tax increases we must have. But that's not what this argument is about [...]

[W]e do not have to weaken the economy to pay for the war. We can pay for it by holding the line on federal spending, setting tax rates at levels that promote economic growth, and borrowing the remainder. We borrowed to win the Civil War, borrowed more to win World War I and World War II, borrowed again to win the cold war. Victory triggers economic prosperity -- which in turn repays the debt we incurred to achieve victory. How to pay for the war? The same steady answer that yields growth and prosperity in more normal times: keep taxes low, keep domestic spending under control, and borrow responsibly.

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