How come Iraq & Afghanistan spending haven't hurt the economy like Vietnam did?

[Ignacio Upton]

One of the main reasons why the economy was so fucked up from about 1969-1982 was because of stagflation, which happened because Johnson tried to have his cake and eat it too with regard to spending a shitload of money on both the Great Society and the Vietnam War. Nixon continued Johnson's spending and used price controls as a bandaid to act as a political ploy for the 1972 election. I'm wondering though, why Bush's spending on Iraq (and to a lesser extent Afghanistan and other commitments) hasn't brought about the same economic problems that spending on Vietnam did? I know that military spending isn't even included in the deficit, so the deficit is much bigger than the White House wants us to believe.

[liberal N proud]

1. Because no is talking about the deficit

The stock market is working for the wealthy and the don't report anything else

[Tempest]

4. Wall Street is ignoring the deficit

They're too busy congratulating themselves for record profits after years of cutting labor costs by outsourcing jobs.

[izzie]

2. Easy we are using credit cards. Our grand children will pay.

Go for it Bush. It is the smart money know how of the GOP money men who figured this out.

[Tempest]

10. Here's a real horror story

Traditionally 40%-45% of consumer purchases are made on credit.

In the last four years, 88% of consumer purchases were made on credit.

When the credit crunch comes, it won't be pretty for anyone.

[Sanity Claws]

3. Give it time

My recollection was that stagflation did not hit until late 1970s, about three years after withdrawal from Nam.
Sometimes it takes a while for the chickens to come home to roost.

[Ignacio Upton]

21. I would hate to be President in 2008-2016

If we win we will have a bigger economic crisis than in the early '90s.

[Ignacio Upton]

22. Inflation was a problem during the Nixon Administration

When we were still in Vietnam. Nixon used wage and price controls, even though he opposed them economically, for political gain for the 1972 Election. When we took them off, inflation skyrocketed yet again.

[butterfly77]

5. It is , but everyone doesn't know it yet...

[Sapere aude]

6. Because so far we haven't printed a shit load of money and flooded the

country with it.

[aquart]

11. Welllllllllllll........... we don't really know that.

Because, a little while ago, our government stopped posting the amount of money in circulation, leading some extremely suspicious people to suspect they didn't want us to know they were printing money like confetti.

[Tempest]

14. Bush is printing money faster than we can cut down the trees for the paper

http://www.billcara.com/archives/2005/12/us_money_suppl...

[Tempest]

13. Oh, yes we have

www.billcara.com/archives/2005/12/us_money_supply.html

The thing is, foreign governments are willing to buy everything we print.

For now.


How does the US Dollar Defy the Law of Gravity?
http://news.goldseek.com/GoldSeek/1161628344.php

[Not Me]

19. And that is why gasoline went up 3x in the past 5 years.

The oil producing countries know the real value of our dollar.

[aquart]

7. Uh, you don't think we're in stagflation now?

Ho, ho, ho.

Meantime, the more panicky the Republicans, the more jubilant and optimistic Wall Street is.

[Jacobin]

8. Its driving the deficit through the roof

Which means the fed will have to increase interest rates to keep foreign investors in the T-Bill market to pay for the deficits. Its already happened to some extent, but it will inevitably get worse and as interest rates rise, the economy will slow down.

We are living on borrowed time

[focusfan]

9. Ifthe U.S. was a business it would be bankrupt

[Tierra_y_Libertad]

12. Our infrastructure is crumbling to pay for the war.

Education, health care, the environment, etc, are being cut or ignored so the politicians and generals can wave their jockstraps and show everyone how "tough on terrorism" they are.

[Double T]

15. All you say is true AND..........

China, along with other countries, are financing OUR HUMONGOUS debt. The 'debt', 'deficit' and 'inflation' are MUCH LARGER than bushco's phony economy indicates.

[enid602]

16. Viet Nam

Careful, here. The bad economic news from Viet Nam mostly came after the war ended, because it was THEN that we had to start paying off the debts. Remember low growth, high unemployment and stagflation of the '70's. I fear it will be the same with Iraq.

[applegrove]

17. Because the wages of Americans are not going up right now. And jobs

are lost. Though in the future it may be the case that War spending jumps inflation into hypergrowth.

What matters for inflation is the aggregate..that means if everyone's wages and prices are rising..then you can get stagflation. In this case spending on war and tax cuts only affect a few people. The vast majority of people are either not seeing good wage growth, seeing negative growth, are under-employed..going bankrupt because of health care costs or something not so good.

In the 1970s the wages for women and men were rising. So when the Opec Oil crisis and spending on Vietnam happened...it was growth of costs in every sector of the economy. And inflation took off.

[BootinUp]

18. Give it a little more time.

its coming, bend over.

[whistle]

20. It is money which is being looted from the Social Security Trust funds

...and Medicare/Medicaid trusts. Bush is spending the future and allowing the rich to keep more of what they make by giving them tax breaks