Monday, January 28, 2008

Economy and war in Iraq linked

The NY Times asks, Will George W. Bush be remembered as the president who lost the economy while trying to win a war?
Mr. Bush has spent years presiding over an economic climate of growth that would be the envy of most presidents. Yet much to the consternation of his political advisers, he has had trouble getting credit for it, in large part because Americans were consumed by the war in Iraq.
Americans weren't consumed by the war in Iraq - Bush and friends were. Ironically, it's because of their war that our economy is in such bad shape.

Jon Soltz of
But, every time the president talks about it, just keep one thing in mind. You cannot separate the economy and the war in Iraq, which has cost billions of dollars. Whether one believes in the cause of the war or doesn't, an unobjectionable truth is that it has been a drain on the economy and Americans have not been asked to sacrifice to lessen the impact. We've now entered the Iraq Recession, another point the president is unlikely to admit.
The president is unlikely to admit this either:
A proposed economic stimulus plan could boost this year's deficit by $100 billion, but political leaders believe the flood of red ink is worth the cost if it keeps the country from falling into a prolonged recession.
How prolonged?
Worries that any recession could be a severe one, far surpassing the last two mild, brief downturns in 1990-91 and 2001.
Finally, I doubt you'll hear the president relate how the world views our economy:
In Switzerland, the World Economic Forum has wrapped up after five days of talks. Joseph Stiglitz, the former chief economist of the World Bank, was one of several economists attending the summit in Davos to issue grave warnings about the state of the economy.

"There really are some deep structural problems. The fact that the U.S had to borrow in 2006 $850 billion from other countries-the richest country in the world; fundamental global imbalances, financial systems that don't know how to manage risk. These are not symptoms of what you might call a fundamentally strong economy."
It turns out our economic climate of growth was all smoke and mirrors. There's nothing to envy about that.

1 comment:

Lew Scannon said...

Not only has the war in Iraq created a deficit, it also drove up oil prices world wide, which is adding to people's economic woes as well.