View Full Version : Iraq War puts US to recession ?
Iraqi war bill weighs on US and UK (http://news.bbc.co.uk/2/hi/business/3074499.stm)
The White House revealed this week that the cost of maintaining a force in Iraq would help push the US budget deficit to $455bn (£285bn).
That is about 50% higher than previous forecasts.
It puts the United States on course for a record shortfall, bigger even that suffered during the Reagan years.
Add to that a stagnant economy and escalating unemployment and the economic pressure on President George W Bush could hardly be greater.
If "W" gets re-elected, I will think that the average American is sado-masochist (and not the Japanese as previously thought).
I don’t know if Iraq can take all the blame for the Economic Down turn, but it did focus attention away from the economic malaise that the US is undergoing. The big killer for the budget is the Tax cuts, which have done NOTHING to pump up the economy and have contributed to a massive deficit. The current round of tax cuts, (on dividends tax) are absolutely ridiculous. Clintonomics and the Jobless recovery was based upon a runaway stock market, which popped in late 2000. But trying to recreate the conditions for a market bubble after it has burst is not going to do anything for the economy. He has completely destroyed the stable economic system Clinton devised, and replaced it with a system that has derailed the economic recovery in the US.
I think Bush’s greatest error was going to war with Iraq too early, had he of gone to war later, he may have been able to ride the post war support to another election victory. But I predict by this time next year, the Iraqi malaise will have disillusioned American voters and give the democratic candidate (Probably John Kerry) a good shot at throwing bush out of the leadership seat.
...and anyone for a bet that Bush will be re-elected? :blush:
Yes, there are of course other factors and tax cuts was just a strategy to gain the support of the electorate for reelection.
Who knows ? I wouldn't be so surprised. The biggest shock was that he was elected in the first place... And I heard a majority of Americans still support him or like him - maybe more than before being elected, which is what I don't understand.
but the budget for the Iraq war AT MOST will be 500 Billion dollars. Tax cuts: 3 Trillion dollars, for the passed one, I think the dividends tax will run another trillion or so onto that.
Also a major reason for the Problems is that the State level governments are all in major debt. Bush tranferred all the responsibility for certain programs(such as homeland security costs) that used to be federal jurisdiction, and didn't pony up the money for the state regulators to deal with them (Thats where the money for the tax cuts come from). I think California is running a budget shortfall of 39 billion dollars for the next two years. And this is repeated across most of the 50 states (only vermont is running a surplus).
Frank D. White
A lot of us Americans feel we are going to go broke like Russia from to much military spending.
Yeah, I think the military costs of fighting in Iraq alone are about 1 billion dollars a week. Under Bush the amount that the US spends on the military is about the same as what the rest of the world combined spends. That is absolutely insane and most of it is just wasted anyway.
Yes but the enormous size of the United States economy makes it quite easy for it to keep its military size. The US economy can keep the Military machine going at around 5~7% of its GDP ( it was 6.2% during the regan administration)its currently at 3%. It did so all during the Cold war without causing much trouble. It is very very unlikely the US economy will ever bankrupt like the USSR, because the two are completely different. The soviet union ran into problems when it created massive structural problems due to being a Centrally planned economy. The most visible example of it was long queues for basic goods, many of which weren't produced at the correct number because someone fudged the books. (its a simplistic explaination... If you want I can give you a more detailed answer.)
What really sunk the USSR was a whopping 30% of GDP spending in military funding throught the late 1970s and 1980s under Brezhnev. The state quickly bankrupt under the inadequate Centrally planned economy, and the wasteful spending.
Also the EU could come close to the same amount of spending... they run around 160 billion dollars per year. If all of the EU ran military spending at 3% of GDP, they would spend 300 billion as well. The only two that come close are france and UK and they are around 2.6%. Most European States spent 3~4% of GDP during the 1980s.
(senseiman, I have to post a reply to your other comment in the current events thread... I've just been pressed for time)
Yeah, I suppose if you look at it in terms of the size of the economy its not so bizzare and probably won't sink the economy or anything. Still, I think a lot of it is just wasted on pork barrel projects. Like the 60 billion they are putting into the missile defence system that doesn't work is a prime example.
I spent four years in the Canadian army so I know a little about military spending from first hand experience. The Canadian army uses the C7 rifle, which is almost exactly the same as the US M16. Our government paid about twice as much for the C7 as what they could have bought the M16 for because some well-connected politician has a big rifle factory in his riding. I imagine thats how the Americans end up spending all their money too.
And I look forward to reading your response to my other post!
The biggest shock was that he was elected in the first place...
Let's not forget that Bush was never "elected" in the first place!! :o
About recession i don´t know but sure it will gain more America haters, including me.
What is butcher doin ? sorry brothas, it stinks i know :(
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