A New War Would NOT Help the Economy

George Washington's Blog
Wednesday, Dec 03, 2008

Maybe you've heard it . . . people whispering that we need a good war to rescue our economy.

You know that the hawks are whispering it into Obama and Bush's ears. Someone I've known for years even said it to me the other day.

But would a war really help the economy?

A War Would Devastate What is Left of the Economy

A war would actually devastate what is left of our economy.

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Initially, the Iraq war will end up costing at least $3 trillion. That didn't help the economy, did it? We're still in that war, but our economy has tanked.

Moreover, the bailout is costing more (even after adjusting for inflation) than the Marshall Plan, Louisiana Purchase, moonshot, S&L bailout, Korean War, New Deal, Iraq war, Vietnam war, and NASA's lifetime budget combined. We just don't have the money to start another war.

In addition, contrary to popular belief, the reason that WWII stimulated the U.S. economy was not because of America fighting the war. Instead, America producing arms for the British before the U.S. entered the war was the thing which stimluated our economy.

Finally, wars which do not produce a quick victory actually devestate the economy. As a PhD economist explains:

"War always causes recession. Well, if it is a very short war, then it may stimulate the economy in the short-run. But if there is not a quick victory and it drags on, then wars always put the nation waging war into a recession and hurt its economy."

Can America go beat up some poorly-armed country to get a quick war?

Its unlikely. Given that the entire world knows that the U.S. started the Iraq war based on false pretenses, and that the U.S. has tried to expand its empire at the expense of everyone else, even a war against a small, poorly-armed and resource-poor country would be considered a proxy war. Therefore, the other heavily-armed countries would fight the U.S. through local proxies, and the war would drag on.

For all of the above-described regions, a new war would NOT help the economy. It would finish it off.