Saturday, March 01, 2008

Did The Iraq War Cause Our Recession?

Our current economic downturn is being attributed to many different things. That includes the price of oil, the housing crisis, the sub-prime mortgage fiasco and the ridiculous amount of national and personal debt that we hold in the country. But what about Iraq. We waste billions upon billions over there, that has to account for something....something many Republicans do not want to even accept as a topic for debate. Joseph Stiglitz, a Nobel Prize winning economist, does want to make it an issue. And I am willing to go out on a ledge and say that he can debate any Republican politician willing to argue the other side and it would be a cakewalk for Stiglitz.

From The Australian News:

Professor Stiglitz told the Chatham House think tank in London that the Bush White House was currently estimating the cost of the war at about $US500 billion, but that figure massively understated things such as the medical and welfare costs of US military servicemen.

The war was now the second-most expensive in US history after World War II and the second-longest after Vietnam, he said.

The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit.

"The regulators were looking the other way and money was being lent to anybody this side of a life-support system," he said.

That led to a housing bubble and a consumption boom, and the fallout was plunging the US economy into recession and saddling the next US president with the biggest budget deficit in history, he said.

Professor Stiglitz, an academic at the Columbia Business School and a former economic adviser to president Bill Clinton, said a further $US500 billion was going to be spent on the fighting in the next two years and that could have been used more effectively to improve the security and quality of life of Americans and the rest of the world.

The money being spent on the war each week would be enough to wipe out illiteracy around the world, he said.

Just a few days' funding would be enough to provide health insurance for US children who were not covered, he said.


Well it doesn't take a Nobel Award winner to tell me that we could have paid to wipe out illiteracy or provide health insurance for underprivileged kids with that blood war money. Maybe he could get through to Bush on this....or perhaps Congress. Too bad the former doesn't care and the latter is too weak to act to help their constituents.