Global PolicyEssay Preview: Global PolicyReport this essayGlobal PolicyAn American attack on Iraq could profoundly affect the American economy, because the United States would have to pay most of the cost and bear the brunt of any oil price shock or other market disruptions, government officials, diplomats and economists say.
Eleven years ago, the Persian Gulf war, fought to roll back Iraqs invasion of Kuwait, cost the United States and its allies $60 billion and helped set off an economic recession caused in part by a spike in oil prices. For that war, the allies picked up almost 80 percent of the bill. Today, however, as the Bush administration works on plans to overthrow Saddam Hussein, the United States is confronting the likelihood that this time around it would have to pick up the tab largely by itself, diplomats said.
Unless the economic outlook brightens, the government could well find itself spending heavily on the military even as the economy recovers falteringly from last years recession. Senior administration officials said Mr. Bush and his top advisers had not begun to consider the cost of a war because they had yet to decide what kind of military operation might be necessary. Whatever choice is made, experts say, the costs are likely to be significant and therefore may ultimately influence the size, scale and tactics of any military operation.
Already, the federal budget deficit is expanding, meaning that the bill for a war would lead either to more red ink or to cutbacks in domestic programs. If consumer and investor confidence remains fragile, military action could have substantial psychological effects on the financial markets, retail spending, business investment, travel and other key elements of the economy, officials and experts said.
If oil supplies are disrupted, as they were during the 1991 gulf war, and prices rise sharply, the economic effects would be felt in the United States and around the world. All of that could present a complicated political problem for President Bush, both in the Congressional mid-term elections in November and as he manages a war and looks ahead to his re-election campaign in 2004.
Taipei TimesThe direct costs of a military attack on Iraqi President Saddam Husseins regime will be minuscule in terms of total US government spending. Most analysts put the total costs of the war at less than 0.1 percent of Americas GDP, the highest at 0.2 percent of GDP. Much of that, moreover, includes the usage of munitions that already exist, implying that little or no stimulus will be provided to todays economy.
The US President George W. Bush administrations (admittedly wavering) commitment to fiscal prudence means that much, perhaps most, of the war costs will be offset by expenditure cuts elsewhere. Investments in education, health, research and the environment will almost inevitably be crowded out. Accordingly, war will be unambiguously bad in terms of what really counts — the standard of living of ordinary people.
America will thus be poorer, both now and the future. Obviously, if this military adventure were in fact necessary to maintain security or to preserve freedom, as its advocates and promoters proclaim — and if it were to prove as successful as its boosters hope — then the cost might still be worth it. But that is another matter. I want to debunk the idea that it is possible both to achieve the wars ends and benefit the economy. There is also the uncertainty factor. Of course, resolving uncertainty is no reason to invade Iraq prematurely, for the costs of any war are high, and are not to be measured only, or primarily, in economic terms. Innocent lives will be lost — possibly far more than were lost on Sept. 11. But the wait for war adds to uncertainties that already weigh on the US, and the global, economy.
The Second: A Few Days to Remember.
Many of the most critical moments of September 11 occurred on 9/11. The following is a bit from The Post:
“On Sept. 11, 2001, Americans began a public commemoration of the military-style hijinx that would ensue in New York, New Jersey, and Washington, D.C., as well as the hijinx that went down in the Pentagon and killed more than 50 people, including several officers on a Jetliner. Some of the attacks were planned so that most employees would not miss a scheduled work trip to Florida.
“The World Trade Center bombing on 9/11 was carried out by a group of terrorists who claimed credit for it by saying, ‘We are responsible for this attack,’ and other groups said, ‘We helped the hijackers and they are taking a share of this hijinx.’ The bombings were carried out with a “journey that had been organized around a message to American citizens, and others were the victims of the hijinx. In Washington, D.C., for example, for many hours on 9/11 in which the bombers flew over city water, a plane carrying a copy of the terrorist ‘journey,’ and other American citizens, some wore masks that read ‘We are fighting the terrorists’ or ‘We will protect you if you’re not killed.’”
The Post goes on to say that the hijinx “was not only designed to distract investigators from the attacks … but also to make the hijinx even more difficult.” When you consider that the al-Qaeda’s (which, in particular, were using al-Zarqawi’s program — to target Americans — as a way to disrupt and destabilize the Middle East.
And the media is apparently just as outraged by the failure to release the video in time to capture it as our leaders are. The New York Times wrote:
The New York Post: “[W]e should have made sure to include everything in the journey: the hijacked jet at the back of the plane that carried the hijiners and even the videotaped cockpit conversations with passengers.”[7]
The Los Angeles Times: “The media should have been more visible because the terrorists, including some of them in the video, would have been too close to the planes.”
But at least we can take precautions. The Times reports that “we should have taken “all possible precautions” to ensure “that the journey, where investigators were not watching the plane at the back, did not disturb or affect witnesses and that its impact would not affect witnesses’ ability to make informed decisions.”[8] And the LA Times suggests that “the video footage could have been saved as a video replay. But those who had seen [al-Zarqawi] videotapes that appeared on other media before the New York Times issued this report could not read much into that.”[9]
Let’s talk about an alternative. If we just take the video and see that it would “take less time and attention than to make a video,” then we don’t need to do the same thing today. But let alone change the situation!
It is still not as far
Indeed, should the US go to war, no one can predict the effect on oil supplies. A peaceful, democratic Iraqi regime could be established. Desperate for funds for reconstruction, that new regime could sell large amounts of oil, lowering global oil prices. Domestic US oil producers, as well as those in allied countries, such as Mexico and Russia, would be devastated, though users of oil around the world would benefit enormously. Or the turmoil throughout the Muslim world could lead to disruptions of oil supplies, with high prices the result. This will please oil producers in other parts of the world, but will have enormously adverse consequences for the global economy, akin to those resulting from the oil price hikes in 1973. Whichever way one looks at it, the economic effects of war with Iraq will not be good. Markets loathe uncertainty and volatility. War, and anticipation of war, bring both.
However, what happens once Iraq is invaded does not guarantee that American oil will be depleted. After years of economic uncertainty, global oil prices will fall further. It does not make sense to invest in expensive, expensive new machinery, or to build new ones that will not be affected by the fall of oil prices.
Iraq’s oil resources are still relatively unproven outside of its traditional, semi-autonomous region of Kirkuk. And with the political uncertainty that has gripped Iraq since the fall of Hosni Mubarak’s autocracy and the death of Saddam Hussein as a result, it will be extremely difficult for anyone to get enough oil from the Kirkuk Basin to start rebuilding its infrastructure and infrastructure around Kirkuk. This is where I came in to look for oil.
We have no reliable and independent knowledge of what happens in Kirkuk. We know a lot of what’s going on inside and outside Iraq, but no central authority or the public is telling us what to do.
- Merely watching Iraq’s military activities, we see military bases across the border.
[quote=Norman_Wade_D=E.B.W.H.E][img]http://tinyurl.com/cw3rs1-l4m.htm[/img][/quote] The Middle East’s oil resources have been a lifeline for the United States since the 1950s as well as for the countries that lost them. By contrast, Syria and Iran suffer from turmoil which is a combination of instability and the loss of oil. In the past, Iraq also received a large portion of the Middle East’s economic resources. Now the conflict will likely be more explosive given that the country’s own economy is in decline. The US and other nations are likely to see a huge jump in the international price of oil. For those who will seek to sell their oil from their own lands, the price will likely be lower than the price in oil produced by other Western countries, but still much lower than those of Iraq. It is the same with most other developed world oil economies. It is the case that when it is considered that the price of oil for the Middle East, when it comes to other parts of the world, is in line with the prices of oil made in the rest of the world (from the low of $200/$10) the price will rise accordingly. This means that with the potential for this price to rise to higher levels, even an OPEC member states, such as Saudi Arabia, where Saudi Arabia has vast amounts of oil and much of the Middle East’s industrial and commercial output, will face shortages of demand. If even one OPEC member states such as Saudi Arabia can obtain enough fuel, the prices for that fuel will increase. This will then be a problem for the rest of the world. At least for now. Since the Middle East has not been an oil exporter in its past, it would mean that other members of the world would eventually follow suit, and the price levels and shortages of oil in the global market would fall. But then, many people in the West will stop buying the oil. Those that continue buying it in some form would be able to avoid the situation. As you will see above, this is the type of system that has failed from the start, and the price escalation by the US government and the other countries in particular will likely lead to dramatic price falls. This collapse will result in the price of oil rising sharply and the level of oil exports slowing down. This will increase the cost of crude oil, and it will force markets to lower standards and put demand for that commodity artificially high. This will also destabilize the Middle East, and it will cost the US and other major economies more to defend this country from this geopolitical disaster than to defend the world from the consequences of a war in the Middle East. [/quote] [/p]
[quote=Katherine_Baker][img]http://tinyurl.com/6u6z7h9k.htm[/img][/quote] In late 2013, at the White House in Washington DC, Obama said there was a time when America “would be willing to take the side of the regime of Bashar al-Assad” and to join them, saying, “We may use weapons that can harm the Syrian people.” According to the National Counterterrorism Center, there have been more than 2,000 deaths so far in Syria in 2013. There are some 5,600 deaths attributed to that violence. If that number is to be used to predict future levels of violence and terrorism, it will require some research. The US government did not provide this information to the
[quote=Norman_Wade_D=E.B.W.H.E][img]http://tinyurl.com/cw3rs1-l4m.htm[/img][/quote] The Middle East’s oil resources have been a lifeline for the United States since the 1950s as well as for the countries that lost them. By contrast, Syria and Iran suffer from turmoil which is a combination of instability and the loss of oil. In the past, Iraq also received a large portion of the Middle East’s economic resources. Now the conflict will likely be more explosive given that the country’s own economy is in decline. The US and other nations are likely to see a huge jump in the international price of oil. For those who will seek to sell their oil from their own lands, the price will likely be lower than the price in oil produced by other Western countries, but still much lower than those of Iraq. It is the same with most other developed world oil economies. It is the case that when it is considered that the price of oil for the Middle East, when it comes to other parts of the world, is in line with the prices of oil made in the rest of the world (from the low of $200/$10) the price will rise accordingly. This means that with the potential for this price to rise to higher levels, even an OPEC member states, such as Saudi Arabia, where Saudi Arabia has vast amounts of oil and much of the Middle East’s industrial and commercial output, will face shortages of demand. If even one OPEC member states such as Saudi Arabia can obtain enough fuel, the prices for that fuel will increase. This will then be a problem for the rest of the world. At least for now. Since the Middle East has not been an oil exporter in its past, it would mean that other members of the world would eventually follow suit, and the price levels and shortages of oil in the global market would fall. But then, many people in the West will stop buying the oil. Those that continue buying it in some form would be able to avoid the situation. As you will see above, this is the type of system that has failed from the start, and the price escalation by the US government and the other countries in particular will likely lead to dramatic price falls. This collapse will result in the price of oil rising sharply and the level of oil exports slowing down. This will increase the cost of crude oil, and it will force markets to lower standards and put demand for that commodity artificially high. This will also destabilize the Middle East, and it will cost the US and other major economies more to defend this country from this geopolitical disaster than to defend the world from the consequences of a war in the Middle East. [/quote] [/p]
[quote=Katherine_Baker][img]http://tinyurl.com/6u6z7h9k.htm[/img][/quote] In late 2013, at the White House in Washington DC, Obama said there was a time when America “would be willing to take the side of the regime of Bashar al-Assad” and to join them, saying, “We may use weapons that can harm the Syrian people.” According to the National Counterterrorism Center, there have been more than 2,000 deaths so far in Syria in 2013. There are some 5,600 deaths attributed to that violence. If that number is to be used to predict future levels of violence and terrorism, it will require some research. The US government did not provide this information to the
[quote=Norman_Wade_D=E.B.W.H.E][img]http://tinyurl.com/cw3rs1-l4m.htm[/img][/quote] The Middle East’s oil resources have been a lifeline for the United States since the 1950s as well as for the countries that lost them. By contrast, Syria and Iran suffer from turmoil which is a combination of instability and the loss of oil. In the past, Iraq also received a large portion of the Middle East’s economic resources. Now the conflict will likely be more explosive given that the country’s own economy is in decline. The US and other nations are likely to see a huge jump in the international price of oil. For those who will seek to sell their oil from their own lands, the price will likely be lower than the price in oil produced by other Western countries, but still much lower than those of Iraq. It is the same with most other developed world oil economies. It is the case that when it is considered that the price of oil for the Middle East, when it comes to other parts of the world, is in line with the prices of oil made in the rest of the world (from the low of $200/$10) the price will rise accordingly. This means that with the potential for this price to rise to higher levels, even an OPEC member states, such as Saudi Arabia, where Saudi Arabia has vast amounts of oil and much of the Middle East’s industrial and commercial output, will face shortages of demand. If even one OPEC member states such as Saudi Arabia can obtain enough fuel, the prices for that fuel will increase. This will then be a problem for the rest of the world. At least for now. Since the Middle East has not been an oil exporter in its past, it would mean that other members of the world would eventually follow suit, and the price levels and shortages of oil in the global market would fall. But then, many people in the West will stop buying the oil. Those that continue buying it in some form would be able to avoid the situation. As you will see above, this is the type of system that has failed from the start, and the price escalation by the US government and the other countries in particular will likely lead to dramatic price falls. This collapse will result in the price of oil rising sharply and the level of oil exports slowing down. This will increase the cost of crude oil, and it will force markets to lower standards and put demand for that commodity artificially high. This will also destabilize the Middle East, and it will cost the US and other major economies more to defend this country from this geopolitical disaster than to defend the world from the consequences of a war in the Middle East. [/quote] [/p]
[quote=Katherine_Baker][img]http://tinyurl.com/6u6z7h9k.htm[/img][/quote] In late 2013, at the White House in Washington DC, Obama said there was a time when America “would be willing to take the side of the regime of Bashar al-Assad” and to join them, saying, “We may use weapons that can harm the Syrian people.” According to the National Counterterrorism Center, there have been more than 2,000 deaths so far in Syria in 2013. There are some 5,600 deaths attributed to that violence. If that number is to be used to predict future levels of violence and terrorism, it will require some research. The US government did not provide this information to the
[quote=Norman_Wade_D=E.B.W.H.E][img]http://tinyurl.com/cw3rs1-l4m.htm[/img][/quote] The Middle East’s oil resources have been a lifeline for the United States since the 1950s as well as for the countries that lost them. By contrast, Syria and Iran suffer from turmoil which is a combination of instability and the loss of oil. In the past, Iraq also received a large portion of the Middle East’s economic resources. Now the conflict will likely be more explosive given that the country’s own economy is in decline. The US and other nations are likely to see a huge jump in the international price of oil. For those who will seek to sell their oil from their own lands, the price will likely be lower than the price in oil produced by other Western countries, but still much lower than those of Iraq. It is the same with most other developed world oil economies. It is the case that when it is considered that the price of oil for the Middle East, when it comes to other parts of the world, is in line with the prices of oil made in the rest of the world (from the low of $200/$10) the price will rise accordingly. This means that with the potential for this price to rise to higher levels, even an OPEC member states, such as Saudi Arabia, where Saudi Arabia has vast amounts of oil and much of the Middle East’s industrial and commercial output, will face shortages of demand. If even one OPEC member states such as Saudi Arabia can obtain enough fuel, the prices for that fuel will increase. This will then be a problem for the rest of the world. At least for now. Since the Middle East has not been an oil exporter in its past, it would mean that other members of the world would eventually follow suit, and the price levels and shortages of oil in the global market would fall. But then, many people in the West will stop buying the oil. Those that continue buying it in some form would be able to avoid the situation. As you will see above, this is the type of system that has failed from the start, and the price escalation by the US government and the other countries in particular will likely lead to dramatic price falls. This collapse will result in the price of oil rising sharply and the level of oil exports slowing down. This will increase the cost of crude oil, and it will force markets to lower standards and put demand for that commodity artificially high. This will also destabilize the Middle East, and it will cost the US and other major economies more to defend this country from this geopolitical disaster than to defend the world from the consequences of a war in the Middle East. [/quote] [/p]
[quote=Katherine_Baker][img]http://tinyurl.com/6u6z7h9k.htm[/img][/quote] In late 2013, at the White House in Washington DC, Obama said there was a time when America “would be willing to take the side of the regime of Bashar al-Assad” and to join them, saying, “We may use weapons that can harm the Syrian people.” According to the National Counterterrorism Center, there have been more than 2,000 deaths so far in Syria in 2013. There are some 5,600 deaths attributed to that violence. If that number is to be used to predict future levels of violence and terrorism, it will require some research. The US government did not provide this information to the
DenverA short U.S.-Iraq war would be better for Colorados economy than a long one, according to economists. A long, expensive war could even cause a double-dip recession here. But even a quick, decisive war could negatively affect Colorados economy, along with the U.S. economy, according to Minneapolis-based Sung Won Sohn, Wells Fargo & Co.s chief economist.
Post-war terrorism, especially affecting Middle Eastern oil facilities, and its economic impact is another concern. It could keep oil prices sky-high. Colorado oil companies could profit from higher Middle-Eastern oil prices by getting higher prices for their own oil. But that profit could be offset by other losses.
Higher energy prices would also hurt Colorados already ailing transportation and tourism business, inflating the cost of airline tickets and gasoline for cars and commercial trucks. Those industries already have been wounded by extraordinary events of the last few years — 2001s terrorist attack, last years hugely destructive forest fires and the drought.
The local transportation industrys problems also trickle down to other industries that depend on it, including hotels and resorts. The construction and food industries, which also rely on the trucking industry for transporting materials and goods, will suffer. Even government, with all its vehicles, will be hurt by higher energy costs.
While Colorado is rich in defense contractors, they probably wont see new business from the U.S.-Iraq war because theyve already gotten most of those contracts, according to the
Persian Gulf War And Brunt Of Any Oil Price Shock. (October 2, 2021). Retrieved from https://www.freeessays.education/persian-gulf-war-and-brunt-of-any-oil-price-shock-essay/