Economists Predicted Prolonged US Presence In Iraq Could Spark Recession

In yesterday's press briefing, a reporter asked White House Press Secretary Dana Perino about the tie between the current U.S. economy and the Iraq war. Perino quickly dismissed the reporter's question, insisting that the U.S. economy has been "very strong" and adding that the money was necessary to "take the fight to the enemy" after 9/11...

...Oil prices are at approximately $88 a barrel, although they have dropped from the record high of $100 earlier this month. As Nobel laureate Joseph Stiglitz recently noted in Vanity Fair, "The soaring price of oil is clearly related to the Iraq war. The issue is not whether to blame the war for this but simply how much to blame it."

Before the war, economists were predicting that oil prices at just $75 a barrel could potentially send the U.S. economy into a recession. Therefore, the current economic situation should not come as a complete shock to the Bush administration.

Read more, and watch video, here.

Comments

[ljsfolly]

The recession party started when the housing market started to go belly up and the middle class went poor. Too bad the war and all the trillions being sent into the sewer as porky pigs and the warlords being paid off. The under the table selling of weapons and the outright giving away of many more all the while the interior of this country is broken down. The middle class has been stomped into the ground and SCHIP we really need being vetoed as we are not poor enough to get medcaid. The miltiary forced to use broken vehicles, weapons and they have to beg for supplies from home to be able to dress themselves and put armor on. Those who made it home maimed are hitting the streets cause they live there. The system fails them from start to end. They have no GI bill for college if they can find a way to eke out a life and the ones who mental health will never make it's way to them will be front page news for the wrong reasons. Economy. Even my stupid with numbers brain has figured out the investments by other countries we don't even have anyone talking to like China and s. america and russia all have large stakes in our country owning bridges building and companies far beyond what anyone has mentioned in the media. I know all this and it has scared me for the seven years of bushdoom. All the while people have had their little news stories and bush cheney has whipped up lies and distortins to redirect our vision when they thought we might find these things out. And I am smart enough to know I don't know it all and if this is bad what is happening has to be hundreds times worse.

[outnow]

But Paul Wolfowitz said that the war would pay for itself. Donald Rumsfeld said it was a cake walk and said that we would be welcomed with flowers and candies.

What does spending 2 trillion and paying 100 dollars per barrel for oil have to do with the economy?

Joseph E. Stiglitz holds a Nobel Peace in economics. Energy conservation, alternative energy, rebuilding crumbling infrastructure?

Only dropping bombs seems to get people's adrenaline going. How else can these guys prove that they are real men except to kill?

Lower emissions do nothing for the weak neocon ego and sexual identity. Federal support for state educational budgets or helping middle or low income families is for "economic girly men." The day of reckoning has come.

[zendem1]

Yes..But we're being kept safe from the terrorists.Aren't we?

[dryfactoidobotanoid]

commenters here have the right focus (wasting trillions in Iraq).

the recession is caused by (1) throwing trillions of dollars into the "burn pit" that Iraq has become, (2) loose regulation of subprime lending fraud. sure, a few billionaires are made along the way, but at the cost of trillions to the country and its future.

oil at $100 is nothing, that's how much energy should cost when taxed on negative externalities (like climate change). the world economy absorbed oil going from $20 to $100 like it was nothing. governments were too politically lazy to tax oil and keep the revenue for themselves, so Saudi Arabia, Venezuela, and Russia end up getting the revenues from the effective "tax" of neglecting peak oil until it is too late.

the energy story will completely change when renewable solar and wind and algae biodiesel fall in price until it is twice as cheap as fossil fuels. but the financial looting conduited through financial services and the military industrial complex will go on, especially if Hillary is elected President.

[sparkandy]

I thought we WERE in a recession already. I guess the fat cats at the top are just now figuring out that once they cut the buying power of the peons, we won't be sending our money their way any more. Duh! And how much intelligence does it take to figure out that a trillion dollar war does nothing for the economy - just makes a few more coporate whores a lot richer?

[Mike169]

I guess a gazillion dollars a year down that rat hole ain't enough!

[pascaljim]

WEll.......DUH!

[NABNYC]

Not just economists. Normal people did too.

You take $435 billion and give it to Halliburton and the defense industry to build guns, tanks, weapons, send them to Iraq, blow it all up. There is no return on investment. Not one penny.

If we had taken that $435 billion and spent it here in the U.S., our economy would be doing great. For example, we could have used that money to provide health care for all Americans -- good health care, which would mean more jobs for doctors, nurses, hospital workers. More construction jobs to build hospitals, clinics.

We could have spent that money building new schools, replacing the ones that have deteriorated. Get every single schoolchild a computer. Have our communities provide internet access to every home for free. Hire teachers to teach children how to work with computers for the new world.

We could have spent that money building low-income and affordable housing for seniors and for single moms. Build modest apartments that can be afforded by seniors living on social security.

We could have spent that money providing daycare to every single child with working parents.

We could have spent that money establishing a healthy community program to get every single family in cooking and nutrition classes, including children's cooking, get every single family in a regular exercise program with other members of their community. Cut down on obesity and diabetes, save money in healthcare down the road.

So yes, it was known to many of us that pissing billions of dollars away on a needless war would have a devastating economic effect on this country. Hillary voted for the war. Apparently lots of Democrats support her. So maybe ask her exactly what she had in mind when she voted to support George Bush in -- anything.

[sugarmoes]

i'm not an economist or numbers guy of any sort but even i can figure out that FLUSHING TWO TRILLION FUCKING DOLLARS DOWN THE TOILET is not a very good idea.

[scooperss]

I see perino is still lying about 911 and Iraq.

[studlyguy]

who are this self proclaimed economist,pleeeeassssse could be in a recession ,hate to break it to these so called expert economist were already in a recession heading into a depression