War in Iraq and the US Economic Growth- History of the war in Iraq Essay Example for Free

struggle in Iraq and the US Economic Growth- History of the struggle in Iraq Es wordIraq was also known as occupation of Iraq began in 2003 march 20th led by United States. The president of US then George W. Bush, the Prime minister of United Kingdom by then Tony Blair, Prime minister of Spain by then Jose Maria Aznar, and house servant foreign supporters accused Iraq of possession of weapons of mass destruction, which was against the 1991 agreement to uncondition each(prenominal)y give them up. This triggered one of the most historically long contends since the Vietnam War. Its estimated that the war has caused as m each deaths and resources as the Vietnam War.(BBC news 26 Nov 2007). The war is inactive on but key figures in the war have already been eliminated. Among them ar sadaam Hussein and his sons. bear upon of the War on US Economy As Wall Street reports the most recent advances of the battle, in Iraq, Economist argon on the other peck worried that the war might be touching employment, consumer confidence, and a service industry show down. According the government activity realized labor figures on April 4 statistics showed that economy had lost 108,000 jobs in March, more than than the expected number which was 36,000.More so, the unemployment number was steady at 5. 8% following discouragement of more muckle (hopes for quick war April 2003). The increase in unemployment non only affects the individuals but also the economy at large since the government invests a lot on charity in ordinate to take care of citizens who cannot afford basic needs In addition, the hatred rates are increasing at a faster rate. As manufacturers on the other hand lay off workers, there is a belittle in the institute for supply managements index for non manufacturing businesses in the service industry.This industry indicates 85% of US economic activities. Thus a fall basically means that a big percentage of economic activities are reducing. Consumer confi dence has also been greatly reduced. According to study from university of Michigan consumer confidence was lowest in 9 years. With consumers hope gone volume tend to do negligible buying especially of high worth assets. This brings about less coin in supply and thereof a diminish exitment of economic progress due to minimal economic activities. Economic offset has slowed in the US. This is due to the softness of the economy.Long circumstance goals of the government to fervidness Iraq take a breather unclear. This is slowing the US economy because a large portion of money has already been injected in the war, placing other government plans to broaden the economy at a stand still. Little or no help is likely to be coming from other nations to build Iraq. The Bush Administration alienated so many of its European allies with its unilateral action it also put European bidders so off the beaten track(predicate) from USA government contracts for reconstruction projects. This m eans the only people who might benefit from such contracts are the Americans.Britons can not hence fund the Americans to do what will only benefit Americans. Financial markets are taking a sliminess view due to the engagement of the government in war that has brought a calculate deficit. This is leaving the state money in circulation less than normal. As a result the likely investors in investment company Market cannot access enough liquidity to invest. With a commonwealths stock index going town, economic growth is mostly low due to the fact that many economies growth is de terminal figureined partly by economic activities and financial performance. The war in Iraq might be of contradict impact too.Now that uncertainties from war in Iraq have not ended and souring crude prices are trying though not yet the uncertainties might not be eliminated in a little time and the war might not be economic benefit to US. With the US government misfortunate a budget deficit, it might be difficult for the economy to move forward. Analyst approximated $100 billion, to rebuild and secure Iraq. Such and expenditure added to the already existing deficit will not only slow the entire economic growth of American but also drag it behind. Since the start of the Iraq war, the price of oil shot up from $37 a barrel to over 90$ a barrel.Consistent disruptions from the war have abnormal oil prices however one cannot argue that the Iraq war is wholly responsible for the acclivity in the oil prices. Oil prices have brought negative financial status in the US by transferring approximately $124 billion from US to other oil producing companies in different counties between 2003 and 2008. (Jeannine Averssa Economics author Tue. Nov. 13) High oil price can slow economic growth of a particular country especially by slowing the spending and rate of investment by consumers and business. This is through limiting the circulation of money.When people reduce the spending power, financial institutions like banks dont get to lend more hence the bank loans, sale of government securities and activities economic development automatically slows down. Interest changed on money borrowed to by the US Government according report had over $850 billions. Recently the debts interests hit $9 meg. With an economys money existence moved out at such rates economic growth of any particular economy has to be slowed (Associated press 2007) U. S decided that it will keep its short term interests rates unchanged.The US federal reserve (Fed) s back up in a statement that the hesitancy of the US economic expansion appears to owe importantly to oil price premiums and other aspects of geographical uncertainties. The fed has tonic that policy makers couldnt assess the risks of future US economy given all the uncertainties over the Iraq situation. (Xinhua intelligence service Agency march 22, 2003). This is a dangerous report for any particular economy since the central government is res ponsible for giving confidential report concerning the governments position economically.This means the fed is genuinely foreseeing a dark if not unpredictable future. The Iraq war has also created division among US residents and between bush establishments and opposition leaders. This is being reflected on the economic growth of the country. Currently the US is divided between those who feel that the Bush administration is right, and those that totally oppose it, especially those parents whose sons died in Iraq war and those whose sons are still in Iraq. As a result of the division team spirit has been lost for the country.This is affecting the nation economically since productivity rate is low. However, Bush administration, is trying out economic recovery strategies like conducting a highly responsible monetary policy, like taxing the richest individuals heavily. However, economists urge that tax cuts are for more political than they are simulative. Effects in Our Economy today P eople pointed out how war against Iraq may not be compensated for presently enough by other oil producing countries. This is because most members of organization of petroleum exporting countries do not have much additional production capacity.The decline in world prices for oil may not go down as people expect. (JEANNINE 2000) The Iraq war has hence led to our economy being stirred by the oil prices moving up. The hiking of oil prices, in the global economy has resulted to high commodity prices all over the world Economists will urge that many commodities that incur transportation cost in order to be sold, will raise price with a rise in oil prices. This shifts the entire living(a) standards high without increasing the income of individuals.The war in Iraq has hence worsened humanitys standards of living globally. War in Iraq has also reduced the funding of 3rd world countries by developed countries. Countries that received aid from US for instance have had their economies run b ankrupt since the US is facing a deficit budget also. This calls for other stable economies like Japan to cost share by lending to poor countries. the disturbance of these other countries brings about extra cost on their side and thus what could have been done say by Japan cannot be done simply because it used the cash to help.This is lowering the chances for innovation by technologically improved countries like Japan and generally lowering the standards of living instead of improving them. heart global energy supplies are declining yet the worlds economy cannot grow beyond its energy budget. The Iraq war has affected this negatively since the worlds civilization will decline with its energy budget. This will happen has the American President instructs his citizens to hold on. If this happens oil will be available still as it will remain in the ground.But then it will be useless as the cost of extracting it will move than the cost selling the oil itself. Conclusion Many theories a nd suggestions have been advanced regarding the impact of Iraq war and magnitude. Considering the many articles written different opinions aired via media and internet, yes their might be an advantage of the Iraq war to our general economy or the US economy to be more specific, but so far the war seems to have been more of a disaster than problem solving decision.Works citedJEANNINE AVERSA Cost of Iraq war could surpass $1 trillion .Report Puts Hidden war Costs at $1. 6T, AP Economics Writer Tue Nov 13, 621 PM ET world-wide Interdependence The war in Iraq and the u. s Economy Markets buoyed by hopes for quick war,, but long term outlook is dim. Date Posted on Global Envision April 16, 2003 Martin Wok. Chief economics correspondent. MSNBC. Updated 425 p. m. PT, Fri. , March. 17, 2006 I. f stone . An institute for the rest of us. Institute for policy studies. 1963 Dean Baker. The economic impact of Iraq war and higher military spending. Center for economic and policy research Washing ton . 2000