Our Economy in Time of War

Have you ever wondered how much money our government has spent on the war in Iraq? Well to many peoples surprise according to the Congressional Research Service (CRS) The US government has appropriated well over 300 billion dollars! And according to some economists if the troops stay well through 2010 that the price may hike up to over 1 trillion! Now you may ask yourself "how exactly does the war affect our economy" well the answer to that question is that due to the war our deficit has gotten bigger and our government is pretty much borrowing money in order to pay for its spending.

Also due to the war it has raised oil prices and lowered global income. But man other economists beleive that our economy during this war isnt suffering but rather growing. Due to the war the soldier salaries are increasing and also the latest weapons can be produced. I for one am in between, sure the war may have started a few troubles here in the U.S but also it has helped with our military progress in weapons, aircraft, and other products.

http://www.cfr.org/economics/cost-iraq-war/p11943

War Can Have Long Term Benefits for the Economy

In another note, I think war is sometimes good for the economy because it not only helps the current economy, but it helps the future economy with war bonds and jobs. As the war is happening people are buying war bonds in order to help fund the war. These bonds take the people's money and pay for the war but are also a type of money saving device for the people. Later, when the war is long over, people will have money saved up from purchasing these war bonds from years before. This provides our economy with more financially stable people.

The economy is also boosted during war because many job opportunities open up when a war is in progress. More companies who build war supplies need more people to help pump out more products more quickly hire many people. Even when the war is over these companies have become very powerful and are able to keep a large number of people employed. As an example of the increase of jobs Christopher J. Tassava, an expert of war on the economy, say’s of World War II, "The organized labor movement, strengthened by the war beyond even its depression-era height, became a major counterbalance to both the government and private industry. The war's rapid scientific and technological changes continued and intensified trends begun during the Great Depression and created a permanent expectation of continued innovation on the part of many scientists, engineers, government officials and citizens."

http://http://eh.net/encyclopedia/article/tassava.WWII

War Can Stimulate The Economy

War can also be good on the economy. It is not always a negative thing. At the end of World War II the United States had made their way out of the Great Depression and were experiencing strong economic growth. "The nation's gross national product rose from about $200,000 million in 1940 to $300,000 million in 1950 and to more than $500,00 million in 1960." This shows that during this time period there was a large amount of money circulating, which was mostly due to the government investing in the war. During the war the United States supplied other warring nations with war supplies and food. This helped fuel the war and our economy.

“The enormous volume of war time expenditures has led to great industrial activity throughout most of the world, and the huge profits resulting from the rising prices connected with the war in large degree buried the financial difficulties which the outbreak of the war occasioned”. (Anderson 15) Even though the war broke things, hurt the economies of other nations and damaged the economy, there is so much money that is being spent by the government and created by the war that for the winning country the development outweighs the economic disadvantages of the war. Some industries and some countries made a tremendous amount of money on war supplies and things that supported the war.

Anderson, Benjamin M. Effects of the War on Money, Credit and Banking in France and the United States,. New York [etc.: Oxford UP, 1919. Print.

http://economics.about.com/od/useconomichistory/a/post_war.htm

Economy & War

Some things, such as war, may be necessary, but they are not “good” in anyway. The myth of war is bad but it is good for the economy is far from the truth. As Andrew explains he states, “This myth comes from an offshoot of Keynesian economics, which says war stimulates aggregate demand and therefore gets the economy going again.” The same people who believe this kind of myth are probably the people that believe that the Great Depression ended only when spending for World War II began. Neither of these could be true because wars are destructive and instead of using resources for human needs they are used for human destruction.

After World War II, Britain went nearly bankrupt and had to liquidate their empire. France, Germany, Japan, and Italy were also burnt to the ground. After World War I, the United States went into a severe recession, while Germany’s currency hyper inflated. The Austrian, Ottoman and Russian Empires all simply collapsed. The Civil War caused the South to reduce to nearly rubble and the North suffered runaway inflation. In addition, the United States suffered from recession right after the Korean War, Gulf War and Serbian War. The Soviet Union collapsed after war in Afghanistan. Many other wars also resulted in damage to a country’s economy. In some ways, war may provide a short term economic boost, but it does not stimulate the economy in any meaningful long term sense.

Andrew. "Is War Good For the Economy? - Sorry, War Is Not Good For the Economy." SwiftEconomics.com. 21 Mar. 2009. Web. 03 May 2011. .

Is War Good For the Economy?

Wars are expensive propositions, especially the sort of all or nothing idea envisioned by the War Party’s editorial board commandos. As the war in Iraq continues there are doubts on whether or not we can afford it, especially since the government finances war by borrowing and printing money rather than increasing taxes directly. Justin Raimondo explains, “When the costs are obscured, the question of whether war is worth it becomes distorted.” Since raising taxes is not politically popular, Congress has to find another way to spend. The Fed creates new money through the Treasury Department, and in exchange Congress leaves the Fed to operate as they please. The result of this situation is inflation, therefore, inflation finances war.

American savings will be eaten by inflation and the equity they worked hard to save will go down the drain. As the Federal Reserve pumps more and more money into circulation, desperate to avoid the crisis of the Warfare State, the only ones that benefit from the war are the banks, the most government protected industry of all, who will be the first to be bailed out of any crisis that occurs. Raimondo describes this issue perfectly when he states that, “The idea that warfare helps the economy is a prime example of bizarre logic… nature and logic are inverted, so that up is down, freedom is slavery, and ignorance is strength.” In conclusion, war does not benefit the economy.

Raimondo, Justin. "Is War Good For the Economy?" Weblog post. Antiwar.com. 26 June 2008. Web. 3 May 2011.

The War and Economy

In times of war, the economy can fluctuate tremendously due to the increasing cost to the government. By providing soldiers with necessary equipment needed for their survival and for a successful mission, the government is relied upon to pay for all these costs. That in itself costs the government a whole lot of money, affecting the economy.

The wars in Iraq and Affghanistan have "cost American a staggering $1 trillion to date." That price alone is the second highest ever paid falling back behind World War II when the cost was $4 trillion. Although it may seem like things are not that bad, since we paid more during World War II, the reality is that there were far more soldiers during WWII and we were only paying 67,000 per year per soldier compared to the $1.1 million a year for every soldier in the war. This of course is do to the fact that everything is much more expensive then it was back in the 40's, but it is costing the people and the economy a lot of hardships. The way things are going it will continue to increase affecting the economy even more than it already has.

http://www.nytimes.com/2010/07/25/weekinreview/25bumiller.html?scp=3&sq=us%20economy%20and%20the%20war&st=cse

War and the Economy

Usually in times of war such as during World War 1 our economy thrives on money from the war. During the war involving Iraq, our economy did just the opposite. Suffering from such economic hardship everyone is looking for some sort of relief from the recession in which we continue to build upon. The longer the war drags on the more debt we acquire thus costing the taxpayers more and more money.

Through budget assessments the cost of today's war is brought into perspective. The Korean War cost about $430 billion and the Vietnam War cost about $600 billion, in current dollars. According to the latest estimates, the cost of the war in Iraq could exceed $700 billion. Paying over $700 billion dollars on top of the money we are pouring into our economy seems to be piling onto the financial burden put onto our tax payers. But with every recession there is a following of economic prosperity it just takes time for the cycle to complete itself.

http://articles.sfgate.com/2005-07-17/news/17383398_1_normal-budget-process-war-spending-korean-war