Nobel prize winning economist on Slowdown

[Secretariat]

http://www.theaustralian.news.com.au/story/0,25197,23286149-2703,00.html

Iraq war 'caused slowdown in the US'
Peter Wilson, Europe correspondent | February 28, 2008

THE Iraq war has cost the US 50-60 times more than the Bush administration predicted and was a central cause of the sub-prime banking crisis threatening the world economy, according to Nobel Prize-winning economist Joseph Stiglitz.

The former World Bank vice-president yesterday said the war had, so far, cost the US something like $US3trillion ($3.3 trillion) compared with the $US50-$US60-billion predicted in 2003.

Australia also faced a real bill much greater than the $2.2billion in military spending reported last week by Australian Defence Force chief Angus Houston, Professor Stiglitz said, pointing to higher oil prices and other indirect costs of the wars.

Professor Stiglitz told the Chatham House think tank in London that the Bush White House was currently estimating the cost of the war at about $US500 billion, but that figure massively understated things such as the medical and welfare costs of US military servicemen.

The war was now the second-most expensive in US history after World War II and the second-longest after Vietnam, he said.

The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit. "

[Gibbon]

You had to go all the way to Australia to find that story.
I suppose the Azzies need some rationalization to pull out.

[Secretariat]

You had to go all the way to Australia to find that story.
I suppose the Azzies need some rationalization to pull out.

When you can't the get the truth from the conservative American press, you look at the press of the coalition of the willing, our allies over there. Rationalization to pull out? Nothing like the rationalization that got us involved. I think most of our major allies have or are already pulling out of Iraq. Something the conservative american press also fails to report.

[JustRalph]

You are working fast...............this week..........


that article has been pushed to the Dem Websites all night long...........

you didn't wait 3 days this time........... :lol:

[GameTheory]

A) GDP-wise, this war has been downright cheap.

B) The war caused banks to be lazy in their credit criteria? That's silly. If that's true, why not give it some credit for some of the good things that happened in the same time period. Maybe the war should be credited for the drop in the teen pregnancy rate?

[bigmack]

When you can't the get the truth from the conservative American press...
I think most of our major allies have or are already pulling out of Iraq. Something the conservative american press also fails to report.
This "conservative American press" is about as rare as a Bat Boy.

http://i165.photobucket.com/albums/u70/macktime/250px-Batboy_Steals_MINI.jpg

[Tom]

I'm sorry....I will have a talk with him.

[Tom]

I know, I know, but one of us has to spend more time at home on week nights.

[JustRalph]

This "conservative American press" is about as rare as a Bat Boy.

http://i165.photobucket.com/albums/u70/macktime/250px-Batboy_Steals_MINI.jpg

What were the 3 states ? Rhode Island, Jersey and ??? I don't think a Mini Cooper gets that good a mileage....... :lol:

Yay!! Bat Boy :ThmbUp:

[bigmack]

What were the 3 states ? Rhode Island, Jersey and ??? I don't think a Mini Cooper gets that good a mileage....... :lol:

Yay!! Bat Boy :ThmbUp:
Turns out 3 was just a start. B2 went on a spree involving 27 states in all when finally the Feds "laid the hammer down". Or, in the very least, cornered him in a room and hit him with a tennis racquet.

http://i165.photobucket.com/albums/u70/macktime/BatBoyFBI.jpg

[betchatoo]

It's nice to know that Bruce Wayne finally got laid.

[delayjf]

I can't help but wonder how much somebody paid this guy to say that - it's plain Idiotic.

[46zilzal]

From the same article posted at Reuters: "To illustrate how the money could be spent elsewhere, Bilmes cited the annual U.S. budget for autism research -- $108 million -- which is spent every four hours in Iraq. A trillion dollars could have hired 15 million additional public school teachers for a year or provided 43 million students with four-year scholarships to public universities, the book says.

Stiglitz and Bilmes say they were excessively conservative in calculating the $3 trillion figure, overcompensating for their bias in having opposed the war."

[skate]

Hey $100 Million, aint that what the TWO (as in 2) NEODeoms are spending per Month while only trying to beat each other.


Now you could argue that at least those two NeoConDems, have a much more bewildering opponent, Than does UncleGeorge.

For the time being "Go George":cool:

[delayjf]

For 2007, the budget rose to US$439.3 billion.[1] This does not include many military-related items that are outside of the Defense Department budget, such as nuclear weapons research, maintenance and production (~$9.3 billion, which is in the Department of Energy budget), Veterans Affairs(~$33.2 billion) or the wars in Iraq and Afghanistan (which are largely funded through extra-budgetary supplements, ~$170 billion in 2007).[2] Conversely, the military budget does allocate money for dual-use items, such as the development of infrastructure surrounding U.S. military bases. Altogether, military-related expenses totaled approximately $626.1 billion.[3]
According to the Wikipedia - the War in Iraq and Afganistan is costing the US 170 million in 2007. The only way his numbers make any since is if he's looking at the ENTIRE military budget and lumping that into "the cost of the war" over a period of 7-8 years. Still don't see any connection with the sub-prime melt down.

[riskman]

"The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit. "

Thats the"REAL" argument--but is beyond me.

[ddog]

"The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit. "

Thats the"REAL" argument--but is beyond me.

I agree, by the time you figure the out-year costs we are committed to and the replacement and ongoing costs, we are not out of there by a long shot, the 3T seems likely , maybe low.

Lots of the money we are spending(wasting) over there is NOT in the DOD figures.

The "credit crisis" was not brought about from anything I can see from the war, although on the margins, it doesn't help once the crisis is on.

[robert99]

According to the Wikipedia - the War in Iraq and Afganistan is costing the US 170 million in 2007. The only way his numbers make any since is if he's looking at the ENTIRE military budget and lumping that into "the cost of the war" over a period of 7-8 years. Still don't see any connection with the sub-prime melt down.

Part of the noble economist's argument is:
"The regulators were looking the other way and money was being lent to anybody this side of a life-support system," he said.

Now both my dog and I are too intelligent to be economists, but if the huge additional hidden sums of money were being spent on the war, how could that same money be used to loan out to house mortgages at the same time. Are we fighting Al-Qaeda types by throwing mortgage deeds at them?

[chickenhead]

The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit. "

This makes absolutely no sense to me.

[delayjf]

The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit
What financial drain?? We are estimated to spend 4.3% of GDP on defense in 08. We spend 4.6 % in 91 - Historically speaking military spending has been at it's lowest levels (as a % of GDP) the past 20 years.

[dylbert]

The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit. "Damn economist... I can't resist good fight. Here is link to Federal Reserve Board with latest money supply information (M1 & M2).

http://www.federalreserve.gov/releases/h6/current/

I can't see where Fed is printing money or "flooding the American economy with cheap credit." If anyone is at fault, it is liberal foreign press for publishing such rubbish. I guess reporter missed that day in his Money and Banking class!

[Secretariat]

Another article on Nobel Prize Laureate Stiglitz.

http://www.guardian.co.uk/world/2008/feb/28/iraq.afghanistan

There's a wealth of info in here much more comprehesive than the Australian article. Here's a piece:

"By way of context, Stiglitz and Bilmes list what even one of these trillions could have paid for: 8 million housing units, or 15 million public school teachers, or healthcare for 530 million children for a year, or scholarships to university for 43 million students. Three trillion could have fixed America's social security problem for half a century. America, says Stiglitz, is currently spending $5bn a year in Africa, and worrying about being outflanked by China there: "Five billion is roughly 10 days' fighting, so you get a new metric of thinking about everything."

I ask what discoveries Stiglitz found the most disturbing. He laughs, somewhat mirthlessly. "There were actually so many things - some of it we suspected, but there were a few things I couldn't believe." The fact that a contractor working as a security guard gets about $400,000 a year, for example, as opposed to a soldier, who might get about $40,000. That there is a discrepancy we might have guessed - but not its sheer scale, or the fact that, because it is so hard to get insurance for working in Iraq, the government pays the premiums; or the fact that, if these contractors are injured or killed, the government pays both death and injury benefits on top. Understandably, this has forced a rise in sign-up bonuses (as has the fact that the army is so desperate for recruits that it is signing up convicted felons). "So we create a competition for ourselves. Nobody in their right mind would have done that. The Bush administration did that ... that I couldn't believe. And that's not included in the cost the government talks about."

[JustRalph]

Sec, just admit it. You want all the money for the Dem social programs. You don't give a damn about defense and you wouldn't mind a bit if the Soviets or the Chinese took over the country and issued you a uniform every day as long as you get half ass health care for free.

[46zilzal]

Sec, just admit it. You want all the money for the Dem social programs. You don't give a damn about defense and you wouldn't mind a bit if the Soviets or the Chinese took over the country and issued you a uniform every day as long as you get half ass health care for free.
what a stretch!!

[betchatoo]

According to the Wikipedia - the War in Iraq and Afganistan is costing the US 170 million in 2007. The only way his numbers make any since is if he's looking at the ENTIRE military budget and lumping that into "the cost of the war" over a period of 7-8 years. Still don't see any connection with the sub-prime melt down.
Notes and Sources: Cost of War Counter

The Cost of Iraq War calculator was set to reach $456 billion September 30, 2007, the end of fiscal year 2007. As of October 1, 2007, it is ticking at the same rate, though Congress has not yet appropriated money for fiscal year 2008. The Cost of Iraq War calculator is occasionally reset based on new information and new allocations of funding and will be re-set depending on the decisions made by Congress.

The numbers include military and non-military spending, such as reconstruction. Spending only includes incremental costs, additional funds that are expended due to the war. For example, soldiers' regular pay is not included, but combat pay is included. Potential future costs, such as future medical care for soldiers and veterans wounded in the war, are not included. It is also not clear whether the current funding will cover all military wear and tear. It also does not account for the Iraq War being deficit-financed and that taxpayers will need to make additional interest payments on the national debt due to those deficits.

source
http://www.nationalpriorities.org/cost_of_war_counter_notes

[Tom]

what a stretch!!

Do you think for a second that a dem congress would cut spending and give it back to us?
They already have it all earmarked for such nonsense as "green progjects."
Spending will not go down a nickle under a dem prez. It will go up. Read my lips.

[delayjf]

$456 billion
That's 456 billion over the cost of the military over 7 years - we have not spent 3 trillion dollars on this war. Also, funny he says nothing about the effect of entitlements on "fund drain" at the Federal Reserve. And again, does he mention that most of this money spent on the military will be recirculated through the American economy.

The notion that the US government would spend this so called 3 trillion on housing, health care etc is pure BS. If we didn't do it in the 90s with no war while running a surplus, we won't do it now. To bad, I'd love a free house.

[IBCNU]

When you can't the get the truth from the conservative American press, you look at the press of the coalition of the willing, our allies over there. Rationalization to pull out? Nothing like the rationalization that got us involved. I think most of our major allies have or are already pulling out of Iraq. Something the conservatie american press also fails to report. Conservative? American Press?!! OHH MY GOD!!