The Economy during Desert Storm and the Present

Essay by EssaySwap ContributorUniversity, Bachelor's February 2008

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The economy has its up's and down's as we sometimes say. But what happens when a war is on our hands? How does the public react? How do businesses react? And most importantly, how do our wallets react? Operation Desert Storm had some pretty disheartening affects on the U.S. economy at the start of the 90's and put us into a vast recession. One of the biggest problems we have faced during war is fear and lack of confidence. The events of war that took place in the early 90's seem to have formed a trend that is being followed as we speak. With the war in Iraq upon us, our confidence as a nation has dropped significantly causing the economy to plummet. Businesses have been making massive spending cutbacks as well as over a half million layoffs. The key to the future is employment and with unemployment through the roof, it is evident that things need to pick up significantly if we are going to pull ourselves out of this slump.

People are fearful to spend their money and they are holding on tightly. I will further explain the affects that the war in 1990 and the current war have, and are currently having on the U.S. economy. I will focus mainly on how consumer and business spending has been affected, and the reasons behind the changes.

"American consumers react to war and hard times by hunkering down, embracing reality and trying to find a few bright spots." This phrase holds a great truth behind Americans. When bad things happen, we quickly try to pick up the pieces, and put them back together. The war in August of 1990 caused a great deal of fear as well as apprehension upon Americans to spend. They postponed all types of big...