Sen. Nelson Floats War Bonds Idea

(Dec. 9) -- Now that a proposed "war tax" has been shot down by House Speaker Nancy Pelosi, Sen. Ben Nelson is suggesting a new twist on an old idea: He's introduced a bill that would authorize the Treasury Department to sell war bonds to fund the conflicts in Afghanistan and Iraq.

The United States War Bonds Act of 2009 is based on the law that established bond drives during World War II. Instead of imposing a tax surcharge on the wealthy -- or on all Americans -- as some Democrats suggested, people who support the wars could choose to help finance them by purchasing bonds.

"War bonds are a cost-effective way to reduce our dependence on foreign creditors and create an outlet for Americans to express their patriotism and support for our servicemembers and America's mission," Nelson said in a statement Wednesday.

"I don't believe our first instinct should always be a rush to tax," the Nebraska Democrat added. "The government has gone to great lengths to address the economic downturn and adding new taxes right now could undermine those efforts."

Sen. Joe Lieberman recently called war bond sales "a great idea." But the Connecticut independent also told NBC "we shouldn't shrink from a war tax in which everybody is asked to contribute a little bit to this effort."

Nelson deserves credit "for pointing out the hard fact that wars actually cost money; just don't actually expect anyone to listen," Alex Salta said on the OhMyGov! blog. And Townhall.com's Jillian Bandes predicted the war bonds bill "probably won't go anywhere."

Firedoglake's David Dayen dismissed Nelson's bill as "profoundly silly."

The biggest complaint among skeptics is that revenue from bonds isn't free money. The Treasury eventually has to pay back investors with interest.

"In order to accomplish that, the government has to use money it gets from ... well, from tax dollars," noted Salon's Alex Koppelman.

On Antiwar.com, blogger Jason Ditz compared Nelson's proposal to the Patriot Savings Bonds introduced by the Bush administration shortly after 9/11. Although the bonds would be presented as a way to fund the wars in Afghanistan and Iraq, all the money borrowed -- as with the anti-terrorism bonds -- would go "directly into the general fund," Ditz said.