November 19, 2002

Economics 101: No Free Wars

According to Andrew Gumbel, writing The Independent, the economic burden of the war against Iraq will be great, maybe enough to plunge the world into recession.

According to a Professor Nordhaus, quoted in the article, "The Bush administration has not prepared the public for the cost or the financing of what could prove to be an expensive venture. Perhaps the administration is fearful that a candid discussion of wartime economics will give ammunition to sceptics of the war; perhaps it worries acknowledging the costs will endanger the large future tax cuts, which are the centrepiece of its domestic policy. None the less, the price must be paid, by raising taxes, by cutting expenditures, or by forcing the Federal Reserve do the job by raising interest rates. One way or another, Americans will pay for the war."

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