Iraq war played a major role in slowdown of the US economy
March 4, 2008
According to economist Joseph Stiglitz, a Nobel laureate, the economy of the United States of America took a severe blow from the War of Iraq. He says that the war has contributed heavily to the slowdown of the nation’s economy and is delaying an economic recuperation. This view of his was let out on the 2nd of March.
For now however the US government is heavily underestimating the expenditure of the war, said Stiglitz in his book which has been named ‘The Three Trillion Dollar War’. The book is scheduled to be published on the 3rd of March.
The Iraq war till date has cost the treasury of the nation almost $845 billion as direct expenses. The war, which started almost 5 years ago, was said that it would generate enough money to pay for itself through the increase in the Iraqi oil exports. This in itself shows how badly the expenditure of the war was calculated.
He went on to add that there once used to be a time when it was believed that wars would help in making the economy stronger, but in today’s world no true economist would second this notion. This is because a war nowadays would mean taxing the State treasure heavily.
Stiglitz along with the co-author of his book is of the opinion that the Iraq war actually cost the treasury much more than what the government claims it did. Through a method they call as ultraconservative method, they say that the actual cost of the war was almost $3 trillion. They say that it might have been more than the cost of World War II also which after adjusting for inflation would have been somewhere around $5 trillion.
Since the direct cost of a war would not include the expenses incurred as interest on the amount of money that was raised as debt to fund the war and the medical expenses for the war veterans heading back home the total expenditure would be short by a very huge amount indeed. The direct expense further excludes the costs for replacing that hardware which got destroyed or degraded in their capacity of work as a result of the war. These are also things which would need a lot of money. To top it all, there are expenses which are not accounted in the budget. Some such expenses are the increasing oil prices and other social and macroeconomic expenses. These are however expenses that would be recorded in this book.
The issue attains a new dimension when we come to know that the total amount of money that has been allocated for Autism research in the latest US budget is $108 million. The truth is that this is the amount of money that is being spent on Iraq every 4 hours. He says that the cost of the war could have been used in many other ways to enhance the state economy. It would also have meant that the US economy would not have been facing such a bad time.