Do Wars effect the economy? Well, is the war in Iraq effecting the economy today? Yes, war in any country effects the United States economy. Why? Because the United States doesnt have all of the resources other countries have. So, we get our food, oil, cars, gas, clothing, toys and many other matierals from theses other countries such as China, Japan, and Iraq. When we go to war or when theres a war in these countries, the prices increase. When import prices increase, there's less demand and consumer spending decreases.
The war in Iraq, for example, is hurting the economy "in some ways that are obvious, such as higher federal deficits and higher oil prices" which is effecting the economy in various negative ways. Though, the "biggest impact on the U.S. economy is through oil prices." Also, there has been a major "surge in federal defense spending" which adds to "the record federal budget deficits". So, the real question isnt, "Do wars effect the economy", its "How much do these wars effect the economy?"
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