Mistake. I love belonging to the American generation that put a war on the credit card.
The Iraq War is second most expensive war in US history after World War II and the only war in US history not paid for by increased taxes. Rather than cutting spending or instituting a tax to pay for the war, Bush cut taxes and put the cost on the credit card. Here is how we used to pay for our wars:
Civil War: Increased tarrifs and instituted an Income Tax
Spanish American War: Instituted Telephone, Telegraph and Message Excise tax.
World War I: Instituted and increased Federal Income Tax, Re-instituted Telephone Excise tax.
Word War II: Increased all tax rates, reduced exemptions. Collections rose by 18 times between 1941 in 1945.
Korean War: 1950 and 1951, congress Increased taxes by 4% of GPD to pay for the war.
Viet Nam: 1968: Tax 10% Surcharge, Reduded to 5% in 1969
/article then cites the info if you want to know where the figures come from
How did we pay for the Iraqi war? Special allocations. Guess who ended that?
Obama: No More War Spending Tricks
By Nathan Hodge 02.25.097:00 AM 2009
In his address last night on the economic crisis, President Barack Obama made it official: No more budgetary sleight-of-hand at the Pentagon.
As we have noted here before, the U.S. military has largely paid for the wars in Iraq and Afghanistan through emergency spending measures, in effect keeping wartime costs off the books. In addition to masking skyrocketing budget growth at the Department of Defense, this process has allowed the services to treat budget supplementals as a piggy bank for new procurement. Members of Congress may have grumbled about poor oversight, but they have largely acquiesced.
Obama’s message? Not anymore.
"That is why this budget looks ahead ten years and accounts for spending that was left out under the old rules – and for the first time, that includes the full cost of fighting in Iraq and Afghanistan," he said. "For seven years, we have been a nation at war. No longer will we hide its price."
This is the first real move toward belt-tightening at the Pentagon; we’ll see if the new Defense Department budget reflects it, and Obama’s pledge to stop "paying for Cold War-era weapons systems we don’t use."
Meanwhile, the president is weighing the options for a withdrawal from Iraq. In his speech, Obama said he would "soon announce a way forward in Iraq that leaves Iraq to its people and responsibly ends this war."
What that means is that combat troops could likely be out of Iraq by the end of next summer. The Washington Post quotes anonymous officials as saying Obama will announce a withdrawal plan later this week that would have U.S. forces out by August 2010. A substantial force may stay on, however, to train and advise the Iraq military and conduct limited counterterrorism missions. As the New York Times notes, one of Obama’s national security advisers said during the campaign that that the force could number between 30,000 to 55,000 troops.
Meanwhile, the fighting in Iraq is not over. In the volatile city of Mosul, gunmen in police uniforms opened fire on U.S. soldiers, killing a U.S. soldier and an interpreter.
Link to Obama's full address on the matter: (it's very long and covers many topics)