BE-201-51 Extra credit

BE-201-51 Extra credit - -1 Molly McMahon Dr Mahajan...

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-1 Molly McMahon McMahon 1 Dr. Mahajan BE201-51: Wed. 6:00-8:45pm 20 April 2009 Extra Credit Assignment Economic Consequences of War in Iraq Typically speaking, war becomes very intertwined with the economy and many wars are based on economic reasons. In some cases, war has brought many nations great prosperity. For example, The Great Depression ended as nations increased their production of war materials at the start of World War II. Most often, the cost of war draws funding away from other governmental programs and assistance. There is an interesting discussion going on in the economics world about the impact of the cost of the Iraq War on the United States’ economy. According to economic theory, the War should have stimulated the American economy, but it does not seem to have done so. In addition, considering Iraq is the main supplier of most of the world’s foreign oil, the impact of the War on international oil prices also seems to have been disputed. According to Joseph Stiglitz and Linda Bilmes, authors of the book entitled, “The Three-Trillion Dollar War”, financing the War in Iraq has accelerated the transition of global power away from the United States. This is the truth; the United States is no longer the omnipotent superpower that it once was. Currently, we see countries such as China, Japan, and Russia rising to power. On the other hand, this “three-trillion dollars” is only referring to the cost to America; not to mention that the cost to the rest of the world is as much again, based on the professional opinion of Stiglitz during an interview with economic journalist David Smith. Economist Paul Krugman points out in his article, “An Iraq Recession?” published several months ago in the New York Times, that war is generally expansionary, at least in the short-run, and from an economics perspective, a government borrowing all that money and then spending it should stimulate the economy at the expense of the future generations who get to pay off the loan: “World War II, remember, ended The Great Depression. The $10
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This note was uploaded on 03/31/2010 for the course ENGLISH 102 taught by Professor Kim during the Spring '10 term at Hong Kong Shue Yan.

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BE-201-51 Extra credit - -1 Molly McMahon Dr Mahajan...

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