Democrats demand surcharge for war — forgetting that LBJ’s war surcharge smashed the economy

American voters elected Democratic majorities in Congress for one overwhelming reason: to end the Iraq War. Democrats have not done so. So much for “the will of the people” and “democracy.”

Now, Democrats have dug into their dark past for a really bad idea: a war surtax:

The plan, unveiled by Reps. David Obey, D-Wis., John Murtha, D-Pa., and Jim McGovern, D-Mass., would require low- and middle-income taxpayers to add 2 percent to their tax bill. Wealthier people would pay an additional 12 to 15 percent, Obey said.

It’s true that the war is being paid for on borrowed funds, meaning today’s little children will be paying for this war long into the future. That’s shameful.

But a tax increase would be even worse. In the late 1960s, Democratic President LBJ — whose initials stood for “Lying Bull(expletive deleted) Johnson” — and a Democratic Congress imposed a 10% surtax to pay for another really bad war, the one in Vietnam. The late, great economist Jude Wanniski explained what happened next:

The U.S. economy began to sour in 1967 because of the LBJ war surtax, which was a progression on top of a progression. The Dow Jones hit 1000 in midday trading in January 1966 and then began its long decline in real terms — taking the real wages of workers down with it as one error after another was made. Nixon campaigned on ending the war and the surtax. When elected, he was persuaded by Chairman Paul McCracken of his Council of Economic Advisors and Herb Stein, a member of the CEA, to defer elimination of the surtax in order to narrow the budget deficit. He was also encouraged to raise the capital gains tax, with Stein the culprit along with Peter Flanigan, who ran Nixon’s council on international economic policy. The stock market fell and the economy followed. (I seem to recall the number of IPOs dropped from 300 in 1968 to one or two in 1969.)

That’s what would happen again if a surtax were imposed. Bush has been so wrong on the war, but at least he has been right in opposing tax increases.

But the Democrats likely will give us a surtax next year under President Hillary.

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