October 24, 2001

9:59 AM

Why do they (our goverment representives) do this? Do they think that no one pays attention or do they know that there is nothing we can do about it? Don't buy the war bonds.
posted by bas67 (15 comments total)

Sorta offtopic, but the first war bonds were introduced during the Civil War, not WW2, as the author states.. They were a huge success due to the efforts of Jay Cooke. Just FYI.
posted by Darke at 10:09 AM on October 24, 2001

Darke, you're mostly right. Bonds were issued right after the Revolutionary War to pay for war spending, but that was under the Articles of Confederation (so they weren't issued by the United States) and they weren't called war bonds.
I wrote this about war bonds last week.
posted by Holden at 10:24 AM on October 24, 2001

i heard on tv that the treasury dept even admitted they wouldn't help that much. like people/economy/govt would be better off if you just bought a car or hamburger or something.

Even Treasury Secretary Paul O'Neill was evidently embarrassed by the bill, dismissing its more outlandish components as "show business" designed to impress campaign donors.
posted by kliuless at 10:29 AM on October 24, 2001

Of course it is really convenient that none of our duly-elected representatives are currently accepting mail. I think the President still is though, har har. Anyway, what is there to do about this? The majority of Americans are committed to living as citizen-employees of a giant all-encompassing corporation that calls itself The Government.
posted by donkeymon at 10:30 AM on October 24, 2001

Yeah, and Bush's mail is all that oh so lovely green. God Ble$$ America.
posted by fold_and_mutilate at 10:36 AM on October 24, 2001

even the kids are chipping in :)
posted by kliuless at 10:40 AM on October 24, 2001

Part of the reason for war bonds is to give people a chance to help out. Robert Putnam ("Bowling Alone") pointed out in the NYT last week that even WWII Treasury Sec Henry Morganthau admitted war bonds were an inefficient way to raise capital. But they help people express their patriotism, and that's important.

As to Krugman's column, I'm impatient with his argument that we should only do a good thing if we eliminate each bad thing first. OK, so the tax bill favors the rich, there's lots of porkbarrel spending, etc. Should I not buy a DVD player until I replace my roof/replant my lawn/replace my clutch etc.etc.?

I say move forward on the war bonds. They're illogical and inefficient, but more useful than just flying flags.
posted by luser at 10:49 AM on October 24, 2001

I think that there are a lot of people, myself included, who would say that yes, you should fix your roof and your clutch before you buy a DVD player. It is sometimes called "fiscal responsibilty" but that sounds like such a buzzword. Nonetheless, buying a DVD player when reain is just going to fall on it and short it out is not really sensible.
posted by donkeymon at 10:54 AM on October 24, 2001

War bonds are a bad idea because they're inflation-fighters. We don't have an inflation problem. We did during World War II, when there was full employment of civilians and rationing of food, clothing, tires and fuel. There was a lot of money floating around and nowhere to spend it, so war bonds soaked up some of the excess money.
The situation is different now, with corporations announcing tens of thousands of layoffs today alone. The Treasury, the Fed and Congress would rather we spend our money on roofs, clutch replacements and DVD players instead of saving it. Consumption increases employment.
posted by Holden at 11:03 AM on October 24, 2001

The referenced article makes a bad blunder in assuming that just because this war isn't currently eating a large part of the GNP that it never will. This war is almost certain to escalate -- if the anthrax attacks did indeed originate with a foreign state, you can strike the "almost". Add to this heady brew the knowledge that we were on our way to a recession before 9.11, and you face some stark problems with no easy solutions.

I don't think most people yet appreciate how incredibly expensive this war is going to be. Afghanistan is not the war; it is the first battle. There be other (and larger) ones. We are going to have to find some way to fund those operations without dramatically lowering the quality of life at home, and this is going to be tricky business indeed.

War Bonds may not be the answer, but let's not dismiss them out of hand.
posted by mrmanley at 11:14 AM on October 24, 2001

War bonds? should I use the money I got back from Bush? I recall buying war stamps (you saved them till you could buy a bond) during WWII. In my classroom, a poor kid who had no money to spend was singled out as a nazi sympathizer.
Since I want to protect the capitalist system, I will use it and invest myh money where it earns the most money. Isn't that what the GOP stands for?
posted by Postroad at 11:20 AM on October 24, 2001

But they help people express their patriotism, and that's important.

(War bonds are) illogical and inefficient, but more useful than just flying flags.

So encouraging consumer spending as a patriotic activity is still leaving a hole in our nationalistic fervor that must be filled?

What the government's saying: "We'll give the rich folks back a bunch of money, and then all the folks should give us some to feel good about being American." Capitalist nationalism at its finest.
posted by liam at 11:24 AM on October 24, 2001

Why can't I buy peace bonds, to express my disapproval for this futile, ill-considered military action? I'd be willing to wait a few years, but the peace dividend at the end ought to make it a worthwhile investment.

-Mars
posted by Mars Saxman at 12:21 PM on October 24, 2001

(War bonds are) illogical and inefficient, but more useful than just flying flags

No, actually they're less useful. To fly a flag you have to buy it first, and that stimulates the economy. Buying a war bond slows the economy and supports government spending. Government spending in a demand-side economy is not nearly as efficient as Consumption in stimulating the economy. WWII was in a supply-side situation which is why it was more effective then. The article is pointing out the double negative whammy that not only are bonds pulling money away from consumption but in this case the government spending is on supply-side incentives which will do us no good. Economics 101.
It's like buying a leaky can of peas; not only are they canned peas (which are bad by themselves) but they've gone rotten.

mars--
same goes for Peace Bonds, sorry, but giving money to a Peace charity is a positive. 'Course that does nothing about the politics involved.. but it may actually make a difference.
posted by dness2 at 1:35 PM on October 24, 2001

You misspelled 'AmeriKKKa', f&m. Anyway, could you repeat that catchphrase a few more times? Man, it never gets old.
posted by darukaru at 2:17 PM on October 24, 2001