The Iraq Recession
While the current economic slump is of unknown depth and duration, there's no doubt that if half of what we have spent on Iraq had been spent on American infrastructure and non-carbon energy generation, we would have much greater job creation, higher wages per job, more economic growth, and a better quality of life in the United States.
I admit we need economists to study this issue and prove the magnitude of the difference between spending our treasure in the desert sands instead of within our national boundaries. But I'm not in doubt that I'm right on this one.
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Comments (12)
This time (as opposed to those WMD) there truly is no doubt. We could lead instead of follow.
February 14, 2008 11:22 PM | Reply | Permalink
Some would argue against any multiplier effect.
What we could have (presumably) hoped for is less debt servicing, a less worn out, more efficient military in both personnel and material, fewer dead, fewer physically and mentally harmed, and, perhaps, a restored New Orleans. We might have kept our reputation, have a less troubled Middle East, been in a better position to defend ourselves and others, and to do more good in the world.
Don't tell me we haven't suffered a Divider effect!
February 15, 2008 12:11 AM | Reply | Permalink
What we could have (presumably) hoped for is . . . a less worn out, more efficient military . . . .
Planning on going to war somewhere else, are you? :-)
February 15, 2008 2:05 AM | Reply | Permalink
It is difficult to say if these expenses for war will hurt the economy. The US has been spending money on its military in amounts that has alarmed many for many decades. But it doesn't seem to make any difference. We keep on spending and we remain the most powerful economy on earth. The case is made that these expenditures are a major driving force to our wealth. Maybe the only evidence to reverse this argument would be bankruptcy.
February 15, 2008 2:59 AM | Reply | Permalink
Of course it makes a difference. In Vietnam we threw away a crapload of borrowed money, and it weighed us down for a decade. Stagflation sound familiar?
That's why it's scary to hear that term being used recently. When you are broke and paying down old debt, there is less extra for growth. It's damage control, and necessary, but not any fun.
February 15, 2008 9:53 AM | Reply | Permalink
Actually, the problem is that we need reporters who write on this topic. We already have economists who study it http://www.cepr.net/content/view/1155/8/
February 15, 2008 10:04 AM | Reply | Permalink
1. Thanks for the analysis.
2. It seems a case could be made thateven the sub prime crisis was exacerbated-or at least accelerted by those Iraq-related interest rates ,altho the unsound credit policies which created that debacle meant that the melt down was inevitable war or no war.
February 17, 2008 3:31 AM | Reply | Permalink
What is never mentioned - I've read because no one knows - is the difference between the total military cost not including Iraq and the cost including Iraq. As it is, we get a total military cost as a percentage of the entire budget and because the percentage is quite low we write it off as too inconsequential to worry about.
February 15, 2008 1:21 PM | Reply | Permalink
Actually, it isn't too difficult to come up with a back-of-the-envelope estimate for what the Iraq War is costing. We know that the overall DoD budget is approaching %500B and the direct expenses for the Iraq War in the range of $200B annually. Of that $500B overall DoD budget, something like $200B is devoted to the Iraq War. So, the Iraq War is costing something like $400B directly. Funny how that just about matches what our annual Federal deficit is these days
The real issue is separating out the discretionary versus non-discretionary expenditures. Those monikers get appended to programs depending on your politics. Large chunks of the Federal budget are Social Security and Medicare, with their own dedicated funding streams. Because of their size, the Defense budget and the Iraq War budgets appear to be relatively small slices of the Federal budget. That is illusory. Take away the non-discretionary SocSec and Medicare (and for good measure interest on the total Federal debt) and the Defense budget and Iraq War budget jump up to something like 50% of the Federal budget. That means Bush and the posse like McCain are pissing away one out of every two dollars available to them over which they have a real decision-making power. That tells you their priorities.
February 15, 2008 1:49 PM | Reply | Permalink
Thank you, Bill. Why have I never heard this? Why aren't the get-out-of-Iraq bunch shouting this to the house-tops?
February 15, 2008 2:08 PM | Reply | Permalink
I'd rather spend the money saved on tax cuts rather than on government-based infrastructure or energy research projects, but just about anything is better than pushing it down the Mesopotamian occupation rathole.
February 16, 2008 3:02 PM | Reply | Permalink
Glaivester's comment is a useful political clue.
The electorate may be divided on how it feels about making use of a "peace dividend": infrastructure; debt reduction; tax cuts; "save social security first". It's much less divided on
the wisdom of creating the peace dividend by bringing to an end this distasterous Iraq caper.
McCain's honest ,but no less frightening for that, policy of 'staying the course' offers no peace dividend whatsoever. It would not be cynical for the democratic candidate to base his or her campaign just on obtaining that dividend, rather than inflicting the self inflicted wound
of prematurely committing to any one of those
potential uses.
February 17, 2008 3:14 AM | Reply | Permalink