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October 09, 2008

The Iraq-Credit Crunch Connection

It’s somewhat surprising that so many pundits commenting on the financial melt down seem to be at a loss as to how it all came about. They even seem surprised that it has pushed the Iraq war off the front burner as an election issue.

Have they forgotten so quickly about guns and butter? We tried to fight an expensive war in Viet Nam without cutting civilian consumption and paid a high price for that classic error. One feature is that Viet Nam's cost was ultimately worsened because Nixon’s policy of prolonging the war intersected with an important economic turning point: in 1973 the US became a net oil importer for the first time. An additional factor, clearly more important with respect to Iraq, is that when tax dollars are spent on armaments, they at least stay in the economy; when they are stolen by theives, they are rarely invested in wothwhile projects.

The current war in Iraq, eminently avoidable and never amenable to traditional “victory,” has proven even more expensive than Viet Nam because so many military support functions were privatized by the Bush Administration; to say nothing of the futility of continually rebuilding an infrastructure that's being destroyed in a war in which the outcome is still uncertain.

Doctor Tom

Posted by tjeffo at October 9, 2008 05:25 AM