A Buck is a Buck
By David Henderson
Nick Schulz takes on Ezra Klein and me, calling our argument “preposterous.” Recall that Ezra and I had both argued that in response to 9/11, which I presume Osama bin Laden was behind, the U.S. government spent a lot of extra money on war and on “homeland security.” This spending, we argued, is helping drive the U.S. government toward bankruptcy.
What’s Nick’s argument? That the major contributors to future U.S. bankruptcy are the “poorly constructed entitlement programs,” namely, Medicare, Medicaid, and Social Security. Nick is right. I certainly never disagreed with that. But a dollar is a dollar. Spending on the two wars and on homeland security accounts for about an extra $200 billion a year. That is not small change. Nick uses a graph that a reader who looks quickly will likely misinterpret. His graph shows that U.S. spending on “defense” [it includes a whole lot of offense] accounted for a smaller and smaller share of federal spending from the Korean war to 2000, with blips up for Vietnam and for the early 1980s Reagan defense build-up. But it also shows that after reaching its trough in 2000, defense spending increased as a share of federal spending, which is one of the points on which Ezra and I agreed.
Would we be heading to national bankruptcy had 9/11 never happened? Absolutely. But did the U.S. government’s response to 9/11 take us more quickly in that direction? Absolutely. That’s not “preposterous.” It’s just a fact.