How does the war in Iraq affect our economy?

Answer 1

The war in Iraq does a lot of things to the economy, some of them that happen quickly and some that will take a while to be seen.

The major thing that we know now are the huge expenditures that the war has caused us. This has a few effects, namely our huge budget deficit (made worse by the tax cuts), but also a boost to the economy as the government spends money (often through those lovely no-bid contracts).

Now we can look at all this and say, if anything the war is actually good for our economy. After all, the government is spending money and boosting the economy, and what is wrong with running a little bit of a deficit? We have run deficits before and haven't had many problems.

The problem is that who is supporting our debt and more importantly are deficits actually fine to run? On the first point, most of our debt is being supported by foreign banks through purchase of U.S. treasury notes (bonds). People seem to think this is just fine, since we are the U.S. after all, and we would never default on our debt (we actually never could, since we just print more money, but doing that means the dollar becomes worthless). After a while though, no matter how confident someone is that the person they invest in will pay them back, if that person just keeps looking worse and worse they are going to stop lending more and more money. As our deficit gets bigger and bigger, these banks are going to keep charging us more and more to borrow money (higher interest rate), until they just say stop. That stopping point may be far off, but it may not be, no one really knows, and that is the danger.

Answer 2

The conflict easily does no longer help with the inflation that we've, yet i do not imagine that's the major reason. sure, the authorities is pouring tens of millions of greenbacks into the conflict in Iraq and Afganistan, yet compared to our previous spending, that's frequently only a reallocation of elements. basically look on the monetary equipment at present as against in the course of international conflict 2. we haven't mobilized our monetary equipment, instituted rationing and value controls, or all started promoting "Liberty bonds" or different couple of minutes period instruments to help us save spending on wartime expenditures. If we weren't scuffling with a conflict, we may basically be spending more beneficial money on nuclear guns and different expensive new guns structures to maintain the defense force-commercial complicated. i'd argue that we likely are not spending as a lot in real words as we did in the course of the Vietnam or Korean wars, and our monetary equipment is way higher now than then. we've basically had the misfortune to have a conflict at the same time that macroeconomic forces are devaluing our forex and eroding our monetary superiority. The U.S. can't protect its administration over the international monetary equipment indefinitely, and the wars of decision we are waging now are basically rushing up that lack of administration.

Answer 3

It boosts GDP(yeah) but blows the budget (boo). Don't forget people, we either win the war on terrorism on EVERY front or our lives will not be worth living. We are at war, lets not forget this. Please support our troops even if you disagree with the President and the war. They are only doing their jobs and most of them believe in what they are doing over there.

Answer 4

It boosts our economy because there is a huge increase in G.

Answer 5

It uses money that could be used here for health, education, social security and gives it to the other country, and to big business that misuses it. It does not seem to accomplish much!

Answer 6

what you can not hear the vacuum at the Treasury?

Answer 7

we are now broke so does that tell you anything? sad very sad