"War ALWAYS Causes Recession" → Washingtons Blog
"War ALWAYS Causes Recession" - Washingtons Blog

Saturday, July 19, 2008

"War ALWAYS Causes Recession"

What do economists say about war?

To find out, I met with a PhD professor of economics, with a background in international conflict.

I told him that conventional wisdom holds that war is good for the economy; but that the war in Iraq seems to have destroyed America's economy.

He explained this seeming paradox:

"War always causes recession. Well, if it is a very short war, then it may stimulate the economy in the short-run. But if there is not a quick victory and it drags on, then wars always put the nation waging war into a recession and hurt its economy."
This contradicts all of the "war is good for the economy" propaganda we've all heard.

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