Aussie Paper: "Iraq war 'caused (economic) slowdown in the US'"

[El Pinko]

http://www.theaustralian.news.com.au/story/0,25197,23286149-2703,00.html



Iraq war 'caused slowdown in the US'

Peter Wilson, Europe correspondent | February 28, 2008

THE Iraq war has cost the US 50-60 times more than the Bush administration predicted and was a central cause of the sub-prime banking crisis threatening the world economy, according to Nobel Prize-winning economist Joseph Stiglitz.

The former World Bank vice-president yesterday said the war had, so far, cost the US something like $US3trillion ($3.3 trillion) compared with the $US50-$US60-billion predicted in 2003.

Australia also faced a real bill much greater than the $2.2billion in military spending reported last week by Australian Defence Force chief Angus Houston, Professor Stiglitz said, pointing to higher oil prices and other indirect costs of the wars.

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.

[Mountainman]

1. I don't get the connection between the war and the housing bubble.

I always thought the housing bubble was caused by deregulation of the financial markets. Lenders did not follow rules that prevented, in the past, the huge risks taken this time.


If you can really prove to the American people there is a connection between the bad economy and the war then McCain's plan to stay in the war means the bad economy will last longer and he will have a harder sell. People would rather have a job and eat even though they feel less safe. What good is safety when you are starving and unemployed?

[El Pinko]

4. I'm not sure about that connection either, but the trillion $ long-term drain of the war is real.

Was deregulation and easy credit caused by a fed that wanted to obscure the economic toll of an outlandishly expensive war, or was it brought about by the usual suspects, corps and investment houses who bribe politicians to grease the way for them to come up with these wonderful "investment vehicles" like CDOs that they concocted over the last few years?

[Mountainman]

6. The cheap credit existed in the 90's long before the war.

Maybe the central bank extended the cheap credit during the war, I don't know.

[The Backlash Cometh]

8. I'm going to go out on a limb here.

Maybe, just maybe, more real estate homes meant, more taxes to the government. They had a stake in this scam.

Remember that these homes were being financed by Hedge Funds. i.e., rich people were risking large amounts of money, which the government didn't have to spend, to spur the economy through construction and home sales. All of that means that the government would get money through taxes, without having to shell out a penny. Remember, this is a Republican administration. They don't want to raise taxes for any reason, so they looked the other way as their Hedge Fund cash cows kept reeling in the money, because it needed HUGE amounts of money to run the country and pay for the war.

What happened? Outsourcing and the rest of the bleeding free market crap which caused people to lose their jobs.

[mother earth]

2. When will there be an end to the madness George Bush has

wreaked upon us? This is what Bush is known for, running a company, only now it's a country, into the ground.

It's disgusting that the only thing that gets investigated or pursued is whether or not Clemens is guilty of something, when the real criminals are fleecing the country and it goes on with no consequences and nary a peep from Congress.

[NightWatcher]

3. kinda like the Cold War bankrupted the Soviets???

stupid, never ending war is not a boon to any economy other than that of the war profiteers

[El Pinko]

5. And more specifically, the occupation of Afghanistan...

...which we are now occupying, also at an extremely heavy cost, ironically...

[L. Coyote]

7. And, the value of the dollar collapsed for the smae reason. Gas cost more in dollars!

But, check the value of a barrel of oil on a chart of other currencies. It is simply not the same for other countries as for the US, because you need more dollars to buy the same number of imported items, no matter which imported commodity.

[goforit]

9. Now this is a brilliant analysis!!!!