DU Economists: Is Iraq\The Iraq War An 'Economic Engine' ???

[WillyT]

The other day as I was rushing out the door, somebody being interviewed on an AAR show was saying that Iraq had become an economic engine for the U.S.

After getting immediately nauseous at the very idea, I wondered about it. I would think that it is no engine, because it does not generate products, goods, services, et. al.

Being an economic idiot myself, I was wondering if any of our nimble minded DU economists could explain what the dude meant.

Is Iraq now propping up our economy? And what would our economy look like if we took Iraq out of the equation???

I always assumed this war would be a drain on our economy.

What gives???

:shrug:

[noahmijo]

1. Well I'm not an economist but I am about to graduate with a bs in business

And I would say he was just alluding to how Iraq is about to become (already is actually) a real fertile ground for money to be made.

At the same time WHO is going to plant some business there and WHO is going to really benefit is what matters to us no?

To this day I have been predicting that this fertile ground for business to be done in Iraq is the tool Kerry will use to get the UN involved. He's going to give them the business stakes in Iraq that Bush refused to give them because of his cowboy attitude.

[Jane Austin]

10. I have a different take on it.

I used to have a fair amount of stock in a timber products company.

My stockbroker told me recently that its price had doubled owing to the fact that all its plywood had been bought up to rebuild Iraq.

The first use was to put floors in tents.

I guess there's full employment in the plywood business now, and I wonder how many other industries are prospering because of the war.

I also wonder if the slight improvements we've seen in the economy are only because of all the stuff that's need in Iraq, from baby wipes to television sets and air conditioners.

[WillyT]

12. I Think You May Be Right !!!

What little I heard of the interview sounded like what you're saying here.

Makes some sort of sense... I guess.

Just trying to imagine its being vast enough to prop up an economic recovery!

:shrug:

[Jacobin]

2. Actually, this excuse was one of the "reasons" talking heads

used not to end the Vietnam debacle. "Won't it hurt the economy"?

This country is sick sick sick sick.

[Nite Owl]

3. I wouldn't call myself an economist but

it seems to be good for the defense contractors and some oil companies but has put a drag on the economy because of the deficits that it has drained and if we remain that will continue.

[troublemaker]

4. Short term gain

A fair percent of recent GDP gains are actually just increases in military outlays. But they're just tacked onto the deficit, and any other comparable deficit spending would have the same stimulative effect. (Like sending everyone in the US a thousand bucks just for the heck of it)

War can only be an economic boon to the degree it increases productivity. Our cold war need for a national hwy system, for instance.

Making bombs and such is, however, not productive. They exist simply to be destroyed, and are thus no more productive than a hurricane. (Destruction is not economically productive. You sometimes hear foolish people say after natural disasters that they spur economic growth, which, if true, would beg the question of why we don't bomb resort towns ourselves during years with too few hurricanes.)

[rogerashton]

5. According

to a crude sort of Keynesian theory, war production increases aggregate demand and so can increase employment. But what seems to result is inflation, and perhaps that is what we are seeing.

[Cleita]

6. I suppose, if running two countries into bankruptcy is good

economics, then the Repigs rule, I guess.

[Old and In the Way]

7. Only for connected Republican investors.

Think of this as the first foreign country occupied exclusively for the benefit of the Bush political economic patronage system.

[WillyT]

8. Thanks Everyone !!!

I'm still wondering what would happen to our economic numbers if we subtracted out the Iraq War.

Don't really know if that can be done, but wondering how our "economic recovery' would look without it.

:shrug:

Again thanks for your insights!!!

:yourock:

[info being]

9. No. It would be good for the economy...

to take our tax money and use it for education, healthcare, and infrastructure in this country. That way, people get paychecks and we build a better country rather than destroying it.

But Conservatives are pro-wasting tax money. They don't want their tax dollars used to benefit them. They are not practical and they like waste.

[blm]

11. It's always easier for crooks to steal BIG $$$ from a war budget.

That's what they do. They must have been salivating over Clinton's surplus.