Ec301 Term Paper

DOES WAR IN IRAQ BENEFIT OUR DOMESTIC ECONOMY?

OIL MARKET STABILITY, TROOP SUPPORT, AND FOREIGN INVESTMENT

John Smith

Park University

EC301 Intermediate Macroeconomics

1 October 2011

Introduction

The war in Iraq has been heavily criticized by economists, other Americans, and the international community alike. This is partly because no war is ever backed 100% by everyone and also because violence is never a desirable means to solve a conflict. But what about the economic impacts of war? Billions have been spent to finance the military operations and thousands of service members have died in combat. The costs of the war in Iraq have made many people forget why the fighting began in the first place, since no substantial gains have emerged from the war in that specific country. There are, however, some intangible gains that have emerged from the war and these are evaluated in this paper.

Economic costs of the war

Reports revealed that the biggest problem with the war in Iraq was that the Bush administration underestimated the cost of the war (Wilson, 2006). According to BBC economist reporter Schifferes (2008), there was great concern that the war in Iraq was costing too much money. An estimated $752 billion had already been spent in both Iraq and Afghanistan by 2008 and 80% of this was used in Iraq alone. The report also indicated that the reason why the war was costing so much was because it had gone on for so long. The war began in 2003 and US troops are still in the Middle Eastern country right now. By adding the economic costs of the war, the loss of more than 4,000 lives and hostility caused by the war, it appears as though the war in Iraq has been nothing but a burden to the domestic economy of the US (Lindsey, 2008).

Economic benefits of the war

Many people may not realize but the war in Iraq has boosted the domestic economy of the US. In order for economic activities to be carried out successfully, the political climate must be...