With so many bad economic dominoes falling into place creating a perfect storm of problems for the American economy, ranging from sharply higher energy prices, inflation, an economic and real estate slowdown and a sinking American dollar, you cannot help but blame the failed 'war for oil' in Iraq as being the cornerstone that helped to trigger this latest downfall for the American economy.
The last time that the American economy faced such a number of similar problems was the lagging stagflation results of the Vietnam War in the 1970's, when our economy slowed the dollar lost buying power as the government needed to print more and currency to pay for the massive war costs.
The oil company proponents for the 2003 Iraq War had hoped for easier access to 225 billion barrels of suspected undiscovered oil in Iraq, which is considered to be perhaps the largest supply of oil in the world, and a 98 year supply for the U.S. at current consumption levels.
Instead the American occupation of Iraq quickly fell into a battle with insurgents and then a protracted battle with rival Shiite and Sunni militia groups and Al Qaeda radicals that made any real large scale development of new oil assets in Iraq far too dangerous and expensive for oil exploration.
And at a current total cost of $498,185,370,000 dollars, or $275 million per day, or $4100 per American family in taxes, Iraq has been a budget busting disaster for the U.S. resulting in a higher national debt, deficit spending and increased bond sales to Chinese, Japanese and South Korean banks to help bail out the budget mess for the U.S.
Just like the 1980's Soviet invasion of Afghanistan which only helped to create the financial and internal political collapse of the old Soviet Union by 1991 because of the enormous costs both economic and personally for this endless war, Iraq is causing serious challenges for the American economy.
Not only did the Iraq War fail to deliver more oil and cheaper oil as the oil industry had once hoped, but the huge costs of the war and all the budget busting costs of the war have only resulted in the American dollar falling like a rock against world currencies. For example, the dollar has lost 12% of it's value against the Euro in just the last 12 months. And since the price of oil is determined in dollars in the world markets, it has only helped to spur more demand for oil overseas especially in the booming economy in China, creating a tighter world supply of oil and sharply driving up oil prices for the American consumer.
Iraq once produced 2.6 million barrels of oil a day before the 2003 Iraq War. But since the war, production has often slowed down to around 1.9 million barrels a day, taking 600,000 barrels a day off the world market, creating a tighter world supply of oil at a time just when demand for oil is increasing.
The American political discussion of the run-up to the 2003 war really needed to also include a serious discussion about the serious impact on the American economy where the costs of the reconstruction of Iraq and continued American policing efforts there certainly failed to be fully paid for by the oil economy of Iraq as Bush had once claimed that it would.
Everytime that Americans buy more expensive gas or oil to heat their homes, or pay for more inflation at the grocery store, the high cost of the Bush failed war for cheap oil in Iraq really hits home. If Americans like the current economy, then a McCain election would be like a third Bush term with a continued strong U.S. role in Iraq and all the economic problems that that brings home to the average American household.
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