Iraq pulls down U.S. economy

kenmabmcc · Posted: Wed Jul 09, 2008 6:28 am Post subject: Iraq pulls down U.S. economy

http://www.nationalpost.com/opinion/columnists/story.html?id=999e7591-...f-49f4-

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But the Iraq war is monstrously expensive and, unlike Vietnam, not stimulative economically speaking.

That is because, like Wall Street, Washington has put the cost entirely on the tab. It is a war paid for on credit obtained from foreigners. This means tens of billions of dollars flow out of the currency and economy to outside creditors and will do so for decades if warmongering Republicans keep getting elected.

The war, and its reckless execution, affects the world by hurting the economy, trade flows, fragile credit markets and currency values.

The war, and America's foreign indebtedness, is contributing to soaring gold and other commodities' prices, the U.S. dollar's demise, scary credit markets, consumption drops, lower economic growth among trading partners who buy American goods, and, most likely, a guarantee that a Democrat will occupy the White House come the fall.

Now, seven out of 10 blame the war for economic problems as do seven out of 10 who disapprove of the Bush administration.

This restores my faith in Americans: The war was supposed to cost US$50-billion, which is what it is costing every three months.

By the end of 2008, the tally is set to hit US$875-billion, including future military benefits and rebuilding costs.

Of course, that is not all..

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Washington is borrowing US$15-billion a month for Iraq and Afghanistan, a burn rate that will likely total US$3-trillion by 2017, according to the latest book by Joseph Stiglitz, a Columbia University professor and winner of the Nobel Prize in economics in 2001.

He estimates that for one-sixth of the cost of the war the United States could fully fund social security for 50 years without benefits being lowered or contributions raised.

A little more funding for healthcare too...?
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kenmabmcc · Posted: Thu Jul 10, 2008 5:51 am Post subject: Iraq pulls down U.S. economy

http://www.smirkingchimp.com/thread/15748

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Yet clearly, the invasion and subsequent war and occupation of Iraq which was purely the result of Bush/Cheney machinations, has been a major, if not the major cause of oil price increases.

By destroying Iraq's oil production, and by hindering much of Iran's production (Iran, seen as an enemy by the US, has been frozen out of capital markets, blocking it from being able to modernize and even maintain its own huge oil infrastructure), and putting even Kuwait's and Saudi Arabia's production at risk, the US war in Iraq has jeopardized about one-third of the world's oil capacity--a fact not lost on oil speculators. Every rumor of a longer occupation or a wider war in the Middle East--especially a possible attack by the US on Iran--has pushed up oil prices further, as has every attack on a pipeline.

It is no secret why crude oil, over the course of five years, has soared four or five times in price. Demand has certainly not gone up by that amount. It hasn't even doubled. What has happened is that the Middle East has been thoroughly destabilized by American military action.

The rise in oil prices has been the major cause of the US dollar's stunning collapse, which in turn has limited the hand of the Federal Reserve, which cannot risk lowering interest rates as much as it would like to stimulate economic growth, for fear of further undermining the dollar. This in turn has allowed the mortgage crisis to fester and grow worse.

It has been a bush calamity on many levels.
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