War & The Economy

We all know that the two World Wars brought stability to dying economies of their era. Before the bombing of the WTC and the war on terrorism, US economy wasn’t so good. George W. Bush was elected and was made a scapegoat for the slide of US economy. So here 9/11 was a perfect opportunity to improve the spiraling economy. On the side note, it’s not being ruled out that Pearl Harbor was of the same opportunity to get out of the Great Depression. The American government was rumored to have known the threat, but created an excuse to halt the isolation and enter the war. Gawd! I love American politics!

Here we are, everything going up. We’re far from another depression, so hold your horses. Why did the war on terror not solve the economic issues of the United States? Firstly, let me explain in a nutshell why war would help a bearing economy. If there is a war, a lot of hardware is needed (guns & ammos). These hardwares have to be built, thus jobs are created. However, jobs aren’t created because jobs were outsourced. The intention was not fulfilled because of the recent surge of labor outsourcing.

America is in the verge of winning the war in Iraq, so let’s look ahead and discuss what we’re going to see. Apparently, oil prices are skyrocketing to the roof because the main source of petroleum is located in the Middle East. With their leaders’ refusal to pump out more petroleum to satisfy the demand, prices of petroleum will keep rising. So did the war in Iraq backfire on America? Yes and No. No in the sense that the intention was not to gain ground on petroleum market. It was to oust Saddam and destroy the haven for terrorists. Yes because inconspicuously, the intention of gaining grounds in the Middle East was there and no one can deny that. It’s not written in paper, but we all know it is there. I have yet to decide on my thoughts whether in the long run, the relationship with the Arab nations progress.

So war did not fix the economic problems of the nation. The country is said to have a huge deficit.

What is a deficit? In layman’s term (because I’m a layman), it’s a negative balance in your bank account. Borrowed money. America has billions of borrowed dollars and the bulk of it is from China. Does that mean that America is poor? No. All nations borrow money from other nations. Borrowing money is a relationship between nations. Most of the time it’s a strategy to hold a nation’s neck. The debtor can put a creditor on a leash if he knows what he’s doing. That’s also the cause of the downward spiral of the dollars, but it’s also part of economic stimulation. Look at Euro, everything must be expensive as hell over there. I’m sensing economic war between the US and EU :)

It sounds like I’m defending the US government, but I am. Also, I would like to conclude that war will not go away because it stimulates every thing that makes the world go round. So if you’re still baked and living in the 60’s, wake up and smell the coffee because it’s perfectly brewed.

Add comment July 30th, 2008