Question: If the US attacks Iran, What Effect Would That Have On Our Economy? Short/Long Term?

[Blackhatjack]

Would the flow of Government dollars to defense suppliers and contractors have a positive effect on our economy?

Would it forestall an economic nosedive caused by other factors?(ie. tanking dollar, foreclosures, credit crunch, trade imbalance, etc.).

[Recursion]

1. It's something of a Marxist myth that wars help capitalist economies

Though the paranoid right is just as bad at seeing bankers behind every war; nobody tried harder than the Roethschilds to stop WWI, but they still get blamed for it.

War increases uncertainty for businesses, which means resources are wasted securing against risk rather than in production. The Iraq war has damn near ground this economy to a halt and we simply don't have the money for another one -- for one thing, China's not going to sit on all those dollars forever if it looks like the dollar is going to tank.

[Possumpoint]

3. Question Is?

What effect would an attack on Iran have on the flow of Oil through the Persian Gulf and Straits of Hormuz? It is only 21 miles wide with Iran being the north shore. It is the only access to the open sea for the oil to move through. Would just the threat of Iranian attacks on tankers drive the insurance costs through the roof? All of that costs would be passed to the consumers. Oil futures would go through the roof and this would play into the hand of Russia. They have already shown a complete willingness to use energy or denial thereof as a state weapon.

Oil is already at record highs. This would drive oil futures through the roof. IMHO we would be looking at $6-$7 a gallon. That in itself would slow our economy way down.

[Lone_Star_Dem]

2. What effect did the US attacking Iraq have?

More of the same but even worse this time.

The Feds can't pull the how-low-can-we-go stunt again. There is no more easy credit to keep the economy afloat. Our economic growth just isn't there and the fuel driven inflation is already a big issue.

[wuushew]

4. Military Keynesianism doesn't exist any more

The Economic Impact of the Iraq War and Higher Military Spending
May 2007, Dean Baker

In order to get an approximation of the economic impact of the increase in U.S. military spending associated with the wars in Iraq and Afghanistan, CEPR commissioned the economic forecasting company Global Insight to run a simulation with its macroeconomic model. It produced a simulation of the impact of an increase in annual U.S. military spending equal to 1 percent of GDP, approximately the actual increase in spending compared with the pre-war budget. Global Insight's simulation shows higher military spending raises interest rates, which reduces net exports, housing construction and car sales, thereby slowing the economy and job creation.


http://www.cepr.net/index.php?option=com_content&task=view&id=1155&Itemid=8

[whistle]

5. Disastrous for both short and long term, another trillion dollars further in debt

....hyperinflation, drain on resources, manpower, taxes would have to go up to cover the cost and the whole world political climate would be turned up-side-down :wtf:

War Is A Racket!

[Blackhatjack]

6. So if an attack on Iran would 'slow' the economy, why act against self-interest & promote attack?

It would have to be a relatively small number of individuals and corporations who would benefit from the attack taking place.

Everyone else is going to take a bath if the attack on Iran materializes.

So why is Congress hesitant to step in and prevent this?

[kineneb]

7. answers, as I adjust my tinfoil tiara...

1. Acting against self-interest: The PNAC crowd look at ideology first, not the logical outcomes of their actions. They start stuff but they don't have any idea how to get out of their messes.


2. Profits: In the meantime, the Military-Industrial-Petroleum Complex is making tons of money (sometimes literally). Like most American corporations, their desire is for short-term profit, not long term stability. (Hubby worked in the computer industry, and I saw this happen all the time...WorldCom anyone?) It is all about the next quarter, not the next year.

Big Oil will just jack up their prices, and won't take any hits. So Bush's Base would not be affected... well, if they glow in the dark it might be inconvenient.

What happens to the folks at the bottom is of little concern to The Base.

3. Congress: a. Donations from corporations to keep the political machine going. b. Anthrax (blackmail), perhaps?