War's Cost May Dwarf Stimulus Effect (washingtonpost.com)

The cost to the Treasury of a war with Iraq could be as low as $100 billion over the next decade or as high as $1.6 trillion, he concluded. Most likely, the economy would take a $391 billion hit in the next two years, Nordhaus predicted, which would dwarf the cash infusion the president is offering.

A recent analysis by experts convened by the Center for Strategic and International Studies predicted that any war would knock down stock prices by as much as 25 percent, more than undoing the anticipated benefit of the dividend tax elimination.

"If energy prices spike up, it wouldn't take much to offset all of this stimulus," said William G. Gale, a tax economist at the Brookings Institution.

"Whenever the president talks about war, he talks about a spirit of shared sacrifice," Gale said. "But for rich people, shared sacrifice appears to be accepting tax cuts, and for the poor, it seems to be accepting cuts in social spending. There seems to be a disconnect bordering on the dishonest."

Fumed Rep. Charles B. Rangel (N.Y.), the ranking Democrat on the tax-writing House Ways and Means Committee, "Never in a time of war have we reduced the tax burden on the most privileged."

"I understand you can't just put everything on the back burner and ignore it," said Sen. John Breaux (D-La.), a key ally in the battle over the president's 2001 tax cut. "But what you can do is take modest steps, and $670 billion is more than modest."

This is not a true stimulus package and going to war is going to push down the economy much more. In many ways this is a repeat of LBJ's guns-and-butter plan - except he wanted social programs and war and Bush wants tax cuts for the rich and war.