Quote:
Originally Posted by afchic
But given the economic hardships we find ourselves in as a nation, is that a bad thing? I don't know the answer, but could a nation "at war" driven us even further into the economic abyss?
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That's a very good question - one I don't claim to know the answer to.
With that disclaimer in place, I cannot help wondering if going to a war footing might not be best. Since 9/11 we have increased debt, both for government at all levels and privately. However, increased debt produces diminishing returns in terms of economic activity. We may be close to a critical point when additional debt produces no added growth.
In contrast, a war footing might discourage consumption and encourage savings, particularly in war bonds. In addition, we might end the war more quickly, resulting in less expenditure of both blood and treasure overall. Reduced consumption would reduce U.S. business activity - but it would also decrease global business activity. Might this put downward pressure on oil prices, thus giving a little economic pain to the very nations that support the Taliban, Al Qaeda, and so forth?
Of course, such a decision would require some degree of political courage, and hence remains in the realm of fantasy.