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Spending money to lose money

Money spent on the Iraq and Afghanistan conflicts could be costing the United States more than it bargained for. According…

By Leslie Young , in 21st Century State-Building Blogs , on February 6, 2008

Money spent on the Iraq and Afghanistan conflicts could be costing the United States more than it bargained for.

According to a report by the Council on Foreign Relations, the long-term effects of military spending in those two countries could harm the U.S. economy in the future.

The report states that the U.S. has already spent about $368 billion in Iraq, plus another $45 million in associated costs. It has also spent about $200 billion in Afghanistan. This amounts to about 6.2 percent of America’s GDP. Add it together, folks.

That’s a lot of cash.

Experts don’t seem to agree on what the ultimate effects of all this spending will be.

They do point to “negative externalities” – unexpected negative economic consequences of the war that affect people not directly involved.

For example, the war in Iraq has definitely affected Iraq’s oil supply, which in turn affects the U.S. economy. To paraphrase the Council on Foreign Relations report, rising oil prices fan inflation in the States, and rising oil prices, when combined with a falling dollar, also hurt U.S. consumers at home.

Because the international economy is so tied together, it’s hard to do anything without affecting everything else. In all fairness, I highly doubt that the American recession is caused entirely by the war in Iraq. Still, something to think about.

Comments


  • I think the world is basically in a recession now. Everyone me included was on this spend more to make more attitude for the longest time and now the reality is that everyone has this attitude. I think all organizations small and large have to take stock and figure out what route is best to take. It isn’t good enough just to hope things will get better.

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