The Cost of the Iraq War on the American Economy

Essay by wataguanCollege, UndergraduateB, February 2009

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The Cost of the Iraq War on the American Economy

President Bush's invasion of Iraq has severely impacted the United States economy in recent years. The value of the dollar has constantly diminished in the stock market since the offset of the war. According to Hazel Henderson in Globalist, "In the past 12 months, the U.S. dollar has lost some 30% of its value against the European euro". Despite this fact, the budget for the war in Iraq still remains incredibly high each year. As the American economy grows weaker in strength, there is much debate and uncertainty as to how much more money will be spent on recruiting soldiers, providing ammunition, and servicing war veterans. The war on terror has negatively impacted the economy as more troops are sent to war-front, leading to higher expenditure rather than generating revenue for the nation. This has resulted in increased fiscal deficit; a situation where government's total expenditures exceed the revenue that it generates.

Robert Pollin and Heidi Garrett-Peltier in The Nation reveal that: "The federal fiscal deficit in 2007 was $244 billion, shutting down the Iraq War and using the fiscal savings to cut the deficit would mean a 57% deficit reduction".

A different school of thought gave opinion on the budgetary allocation of the Iraqi war as to what the effects would be in the long run, taking a look at the issue of increased government spending during war, with the majority of the budget focusing on the military. With the military receiving so much funding from budget allocation, lack of finances towards other major sectors of the economy such as the education sector, health sector and infrastructure have dwindled. Without this war, profound concentration would be put towards building other areas of the economy without the distraction of...