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Thursday, May 01, 2008

 

The Costs of war vs. the Benefits

Crossfire on NBC lately has been covering the war vs. our economy, and most of the important information is there but they fail to see where one expenditure affects another in war. In todays United states economy, war surrounds us in every direction. someone has to pay for it, such as the American taxpayers. Disregarding the legitimacy of actually entering a war, the following post will attempt to show what Iraq war does or does not do in an economy, and the example used will be the United States economy.

The first and easiest factor affecting the United States economy is that war affects the deficit that is occurred. The United States entered the war under an economic deficit, and since all wars cost money, the Iraq war has only skyrocketed the deficit. A deficit is paid for mainly by taxes, however the United states economy is so tight, that tax cuts have been a number one priority. As a result we see an ever increasing deficit. our government budgeted about 9 billion in debt through 2008, we are already at 13 billion in debt.

We shouldn't be too hard upon a county's economic deficit. Deficits do have an important task in the economy, and that is that the Fed will sell or purchase bonds to pay for, or broaden the deficit. many in the economy depend on this relationship for investment purposes. The problem is is that foreign banks and foreign agreements have taken over the ownership of our debt. So far we have been able to pay these debts off, however we are taking this relationship for granted that our foreign partners are going to be there to continue lending us money. One thing that we have seen in the last 11 years, is that foreign loans are costing us more and more, since interest rates are continuously rising.

In some of the past wars, the United states has boosted the economy and GPD due to spending withing the United states. This relationship worked well, beings that it got us out of our first major Great depression. however in the Iraq war, all of our war-type candidatures are being spent in other countries. One way that we are helping the Iraq government take off, is by signing contracts with the Iraqi's for our supply. This is great incoming capitol for them, however those available "investments" are not flowing to the American people.

If we must be at war, ok! however we need the United states government to bring war investments and expenditures back to the American people. We also need to think about the rate that the national debt is rising, and how our government and majority of citizens are focused on tax cuts and economic stimulus packages.

By Brandon Weber

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