GUNS OR BUTTER?

I am not an economist and do not pretend to be one. But like most of you I am worried about the nation’s economy. We are paying more at the supermarket, the gas pump, the pharmacy, and the malls. People are losing their homes because they cannot pay their mortgages. Some companies are outsourcing jobs overseas, and some pension funds of longtime employees are in jeopardy. Is it any wonder that the dreaded R word (recession) is creeping into our vocabulary? And is it any wonder that when friends meet, talk of the economy is often front and center?

In a discussion group a couple of weeks ago, I asked how many had heard the words “guns and butter,” a phrase that was often used at the time of the Vietnam War. Everyone had heard the phrase, but few could explain precisely what it meant and why we no longer hear the expression. I knew its meaning only because in researching an issue for the Eppley Files, I came across an article that I had saved some years ago. It was written by Richard Cohen of the Washington Post and titled “Choose Guns or Butter.”

Cohen’s article is about two presidents from Texas and their approach to two wars: Lyndon B. Johnson and the Vietnam War and George W. Bush and the Iraq and Afghanistan War.

Johnson believed that he could fight a costly war in Vietnam (Guns) and still have the Great Society Programs (Butter), which cost billions. He soon had to admit to Congress and to the American people that the United States could not continue to fight a war in Vietnam and at the same time continue his Great Society programs without raising taxes. Americans preferred the Butter and were unwilling to raise taxes to pay for the Guns, so a year later Johnson announced that he would not run for office in 1968.

Cohen pointed out that President George W. Bush had been luckier. “He came into office -- as he did life itself -- with a huge surplus. He spent it. He now has a huge deficit.”

In Cohen’s article published in September 2005, he points out that in an effort to stave off inflation the Federal Reserve raised interest rates for the 11th consecutive time since June 2004. “Sooner or later,” Cohen wrote, “Americans are going to have to make hard choices -- guns or butter.”

Cohen cited a CNN/USA Today/Gallup poll showing that a majority (54%) favored cutting spending for the war in Iraq (Guns) over cutting domestic spending (Butter) or increasing the deficit.

Cohen’s words, written in 2005, are prophetic: “The curse of Texas is once again upon the land -- an elective war, important enough to fight, not important enough to pay for. Up to now, it’s been manageable if only because few have been asked to sacrifice anything for the grand cause of . . . well, it’s hard to say, isn’t it? On a national scale, the casualty rate is bearable and the financial cost has not been felt because the money was first looted from the surplus and then borrowed. But that borrowing will drive up interest rates, including mortgages, and it might, as happened with Vietnam, trigger inflation that lasted longer than the war itself. Everything is going to get more expensive and voters are going to get more grumpy and it’s all going to look like it once did to LBJ. That’s not someone’s nightmare scenario. That’s the hard and inescapable facts.” (italics mine)

Another hard inescapable fact is that the next president must find a way to bring the troops home immediately and pledge to the American people that in the new administration butter will be more important than guns in bringing peace to this country and to the world. Unfortunately, the new president will have very little money to provide butter. As the very conservative Wall Street Journal’s first page announced recently, “But it’s certain that when he returns to Texas next year, the president will leave behind a trail of deficits and debt that will sharply constrain his successor.”

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