Economic Impact of The Iraq War on The US Economy

The Iraq War is one of the main topics of discussions at many forums, both at national and international levels. One of the most ignored aspects of the war is the economic impact of the conflict on the US economy. It is recognized fact that the human cost of the conflict is far more than the economic one. However, it is not a valid argument to ignore the economic implecations of the conflict (Bilmes, Stiglit 2008).

Many economists and financial experts believe that war and the resultant increase in military spending is good for the US economy. Practical world is often very different from economic models and this is the case here. Contrary to the expert opinion, military spending actually divert resources from useful uses. Top among the list of these uses are domestic consumption and investments.

The impact of the War in Iraq can be felt in the slowed economy. In general, War in Iraq has damaged the US economy in two significant ways. First, it has redirected the national GDP to less useful avenues. Instead of boasting the domestic and international investments and savings, the war has actually shrunk these indicators of economic health. The second and the more dangerous impact of the war is the increase in national debt. This increased debt has long term significance for the US economy. The interest payments alone will be a major hurdle in the development and growth of the US economy in the coming years (Pollin, Garret-Peltier 2010)

Debt servicing of this increase national debt is a very serous concern for the US economy. The value of the US Dollar will go down, as this enormous debt is services by the government. The result would affect the US imports and exports n such ...