Is a president responsible for the overall state of the economy? Can any president really control something so large and diverse? Isn't real responsibility also with the Fed and Congress?
Not when this President made the decision, all by himself, to go to war, and according to this estimate, threw $1.9 TRILLION out the window over the next decade in direct costs and lost GNP growth:
http://www.nytimes.com/2004/10/24/business/yourmoney/24view.html?oref=loginProfessor Nordhaus calculated how much output the economy would lose, based on two possibilities: a quick victory or a long conflict. Although he has not updated his results, the long-conflict version has turned out to be pretty accurate so far. He estimated that such a conflict would result in $140 billion in direct government spending, a figure that we are already near. He also predicted that oil prices would spike and that heightened uncertainty would hurt the economy. In addition, he expected large additional costs associated with the occupation and peacekeeping operations as well as with reconstruction and nation-building efforts.
Adding it all together, he came up with a whopping figure of $1.9 trillion in costs during the decade after the invasion.
OF course, any analysis of the war's economic impact over time is not complete without considering the potential future benefits to the United States and the rest of the world. Increased political stability in the Middle East, stable energy markets and diminished global terrorism could pay major dividends. In fact, many people in Washington hope that the benefits will ultimately outweigh the costs, however large.
So far, though, 19 months into the conflict, those kinds of benefits remain beyond the horizon. And until more time passes, estimating the likelihood and magnitude of those benefits lies in the realm of politics, not economics.
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