The Persistent Myth of “Harming the Economy”
We hear every time a finger is pointed at some tomfoolery such as the unfunded wars in Afghanistan and Iraq, that increasing taxes to finance those rather major military operations is impossible, because it would damage the economy. And yet, somehow we fought (and financed) the entire Second World War, Korean and Vietnamese wars, cheek to jowl with a booming economy. We brought our boys home to heavily subsidized university degrees and had enough left to rebuild Europe and Japan.
In fact, the military today has become a major part of that sacrosanct economy that all public-spirited politicians require to boom unrelentingly.
In things monetary, raising interest rates a point is a shivery operation and much to be avoided in the event that it would irreparably harm the economy. Alan Greenspan built an entire career out of raising or lowering his eyebrows to signal the comings and goings of various financial bogeymen. The bank prime rate in October of 1999, when the economy was roaring, …