It's The Iraqonomy Stupid

I got interviewed by one of my favorite reporters earlier this week, someone who not only actually understands new media but also does shocking things like actually talk to real people and not just take campaign talking points as fact.

The question was now that the economy is the Number One issue and not Iraq, how does that impact the candidates and their chances? The article and the quote at the end from yours truly is here.

As I was speaking with Christina, I was thinking about a chart that Hale Stewart had included in a great post here recently, and I fully admit to being a huge fan of Hale's. When you read through the post, and see the number of charts that Hale uses, and Hale loves his charts, you start to see a basic economic trend.

The numbers really aren't that bad until 2004 when a couple of things happened. The full impact of the Bush Tax Cuts started to be felt, especially the emergency cuts that were enacted in 2002. What George Bush did was, for the first time in our history, take a nation at war and instead of asking for sacrifice, he slashed the government's revenue.

This mantra of "borrow and spend" versus "tax and pay" meant that as the country faced the growing expense of the war, we had less and less money to pay for it. It's the same simple economic fact that is happening to millions of Americans right now. If you have less money and more bills, you go into debt. Your personal credit suffers just like our nation's credit has suffered -- see far more smarter people than I about the issue of the weak dollar.

While there are a number of factors behind the rise of the cost of oil, the fact is that oil was under $40 a barrel before the Iraq War was started, and since that time, it has gone straight up -- why? We created tremendous instability in the largest and most important oil producing part of the world. Instability causes increases in price.

What is the further impact of the war?

It's trickle down impact is real, and massive. Tens of thousands of National Guard members leaving their jobs and not earning their salaries at their full time jobs, real impact. The cost to cities and towns as they make up the cost of replacing firemen and policemen.

In fact, as I was looking at the impact of the National Guard, Bobby Muller and the folks at Veterans For America released a staggering report on the toll the war in Iraq is taking on the members of our National Guard. OUR National Guard, the men and women who are civilian soldiers and whose purpose is to help defend our country and support local officials in times of emergency.

Unfortunately as VFA clearly details, from now to the end of the Bush presidency, almost half of the troops scheduled to deploy to Iraq are members of the National Guard. Of those deploying, more than half are from units that have already served a tour of duty.

We have stretched our military so thin, the only way to continue the nightmare that is Iraq is for this administration to take our National Guard and send them over time and time again.

The National Guard scenario is the perfect example of where Iraq and our economy meet. Not only are these tens of thousands of men and women who are going overseas, and suffering financially for it, they are going to continue a mistake ad infinitum.

From now to November, the smart play is to talk about the two great issues facing our country, the challenges of our economy created by the travesty that is now, and will be till we withdraw, Iraq.

Comments

[SolarPowerGuy]

Since about 2005, in various Internet forums, I have written: "The war IS the economy, stupid." I soon realized I wasn't the first to say so -- but it is nice to see the realization repeated. More Americans need to know that they're being robbed.

[Novista]

I am so tired of hearing the "stretched our military so thin" statement -- given the 737 military bases in 130 countries. Does Germany really need 19 bases to protect 'us' from the cold dead hand of the Cold War?

Is S. Korea still at risk after 55 years?

I can guarantee you, if we pulled our bases out of Okinawa, the women there would cheer.

Since the U.S. spends as much on military/defence as the rest of the world -- combined! -- maybe a total re-evaluation of priorities is in order?

[dshwa]

Not likely. If Social Security is the "third rail" of American politics, Military spending is the 4th. Too many Americans have locked in their minds an America that is the sole remaining Super Power, who see America's worth in the world only through it's ability to project military force, that any attempt to cut military spending is a non-starter.

This mindset is also the one that drives the true American fear of terrorism, which is not that some citizens will die, but that America will be seen as less powerfull if we are attacked again. Every percieved weakness must be addressed, and any method to used prevent an attack is acceptable, no matter what constitutional principles are trampled, or what ethical lines are crossed.

[bascombe]

they already use the national guard and the equipment. someone been under a rock and just come out?

[FreedomBeforeDemocracy]

"What George Bush did was, for the first time in our history, take a nation at war and instead of asking for sacrifice, he slashed the government's revenue." Federal receipts in 2003 were $1.66T (2000 dollars). They"ve grown every year since and were $2.13T (2000 dollars) in 2007. How is that slashing revenue?

"Instability causes increases in price." At least we agree on something.

[dshwa]

And those slight increases in revenue have been far outpaced by spending on the war. How much greater would those increases have been if we hadn't cut taxes?

[FreedomBeforeDemocracy]

Defense spending including the war is actually below the 45-year average. It the domestic spending (the stuff the Feds aren't supposed to be involved in) that is actually leading the deficit. Bush and the Republicans are as much to blame (if not more) than the Democrats for that. However, one of the major things the Federal government is constitutionally supposed to take care of, defense, is not.

The year before the 2003 tax cuts revenue actually fell by 6.33%. That's why tax cuts actually are economic stimulus.

[unitedstates]

your right iraq is a fuckup and killing our economy but we can't run now.. too late. obama nor mccain will pull out .. the only difference is mccain is being upfront.

[MGhamma]

What do you mean it's to late? The Iraqis are asking us to leave fer christs sakes.

[bascombe]

it has always been about the money. ALL OF IT!

The oil,
The military contracts
the direct umbilical to the treasury.

have a look at the forbes global 500 and you see who is really running this war.

[pmag88]

For the media to continually try and separate the economy from all the underlying issues that actually make up the economy; particularly the war in Iraq, looks really bad to anyone paying attention.

Barack has already tied the war in Iraq to the economy, while McCain does just the opposite. Listening to McCain, if it takes a hundred years and we win, we'll all be rich, our debt will disappear and things will be better than ever. But, if we call it a win now, get out and let the Iraqi's have their country back, we'll never recoup the trillions we"ve already "invested".

[4President]

"...,we'll never recoup the trillions we"ve already "invested".

Some might suggest that is the evil we should avoid. Anyway, you think that is Your investment? You think you are going to benefit from this. You should look at the Global 500 and look into the profiteering.

[Grannybj]

The National Guard used to be available for use here in our own nation. It's been needed for the fires out of control in California, which have burned for three weeks before the governor assigned a few guardsmen to help. The men and equipment needed are in Iraq. Just one more disaster as a result of the war.

[vipersdad]

Dr. Obama needs to perform a "troop extraction" as quickly as possible - two patients will improve as a result (Iraq and the US of A)

Great piece - Every Dem running for Public office needs this to be on the top of his or her stump speech from now until November.

"Want the US Economy to turn around?" Stop borrowing money from your childrens' children to pay for oil you will never get in a country that doesn't want us there.

[ErnestineBass]

Good piece. Well done.

[Maxual]

Well put. The fact that the MSM refuses to acknowledge that our economy is completely tied to Iraq is completely baffling. This "now that Iraq isn't a big issue, the economy becomes #1" is a connect the dots game a 2 year old could solve.

[Grannybj]

The only product of the U.S. is war. It accounts for 2/3 of the economy. Manufacturing has been outsourced abroad. Our country's riches are based on death and destruction. Without war, we can't afford our iPhones.

[coloradosiren]

Yup. Tanked economy=Iraq or Iraq= tanked economy. Obama should pound it every opportunity he gets. InSanes willingness or determination to remain in Iraq will continue to drain our economy. Oh yeah, and more tax cuts for the wealthy.

[OrangeSam]

I hope things don't take an Iranianic twist.

[BillZBubb]

But the corporate media and the Republicans have told us the tax cuts worked and that the Surge(TM) is working. So, you must be wrong.

[FreedomBeforeDemocracy]

Take a look at real federal revenue since 2000. Went down for three straight years. Since the tax cuts in 2003, up four straight. Of course, some of that is the result of the using the housing industry to keep us from going into a recession (mainly by making borrowing so cheap). But we're paying for that now. That's what has caused the current credit crunch, not the tax breaks.

Tax cuts always work. If you tax something less, more of that is done. Like production. However, spending cuts also work. Let's try some of those as well.