Lawrence Lindsey, who was head of Bush’s Council of Economic Advisors, warned a few months ago that if the interest the Treasury pays to borrow money simply rises to the 20-year average of 5.7 percent, this will add another $4.9 trillion to the national debt in the next decade – more than wiping out the savings the congressional “supercommittee” is supposed to agree upon.
Lindsey’s is a credible voice. Before the invasion of Iraq, when Lindsey was working in the Bush White House, he said an American occupation of that nation would cost about $200 billion a year. Defense Secretary Donald Rumsfeld called Lindsey’s estimate “baloney.” At that time President Bush was asserting an irresponsible fiction that an attack on Iraq would be quick and cheap. Bush wanted to run the war entirely on borrowed money, thus foisting the cost onto future generations – not to raise taxes for war, the honorable course, as was done during World War II and Vietnam. Bush fired Lindsey shortly after he issued his cost estimate, because Lindsey said something the president and defense secretary did not want the public to hear. So far, according to the Congressional Budget Office, the Iraq occupation has cost about $1.3 trillion over eight years, about what Lindsey predicted. Every penny of that cost, under Bush and now Obama, has been billed to the young, so the reckless men and women running Washington can spend without accountability.
In recent years, Bush and Rumsfeld have tried to argue away their blunder in Iraq by saying they had no way of knowing how costly it would be. They claim this even though the White House chief economist warned them! If interest rates rise, and the national debt skyrockets owing to debt-service expenses, look for Obama and Nancy Pelosi to claim they had no way of knowing that could happen.