Oh, yeah -- that's going to hurt McCain

[jducoeur]

I had suspected it, but this poll from CNN confirms it -- most people think that the Iraq War is part of why the economy is tanking.

Regardless of whether it's true (I happen to think it is, but I'm sure it will be argued), it's a very potent weapon for the eventual Democratic nominee. An argument that boils down to "Your War is why Americans are losing their jobs" is wildly over-simplistic, but likely to hit home quite effectively. McCain has put his entire reputation on the war, and while he may be able to sway people on the moral argument, I suspect that winning the pragmatic one is going to be a lot harder. The more people think about this link, and see McCain's justifications for the War, the crankier they're likely to get. Even Clinton can argue that she's been trying to disengage for a good while now, and that that might have spared the country the worst of the economic impact.

(Of course, this assumes that the economy is still in recession in November. I suspect that it will at least be perceived that way, even if a turnaround has started by then -- it takes time to shift the public perception, and I don't expect this particular setback to be either mild or quick...)

Comments

[alexx-kay.livejournal.com]

spending related to the war, as massive as it is, is probably miniscule next to overall spending of the nation.

Is it? (Alexx goes off and googles...)

War spending so far, approx .5 trillion, so call it .1 trillion per year.
US GNP in 2006: approx 13.13 trillion.

So the war is costing a little under 1% of the GNP. I wouldn't personally call that miniscule in this context, but one might.

[be-well-lowell.livejournal.com]

That's a good point. To connect that cost to the problems in the economy, it might be more useful to compare it to the mortgage debt in the country (thus tying it to goldsquare's post today).

The total amount is roughly similar to the GDP, so by a back-of-the envelope estimate, I'd say that the amount of money taken out in home mortgages in a single year is similar to the cost of the war (order-of-magnitude kind of similarity). Given that all of that war cost has been financed by public debt, how can all that extra borrowing have not contributed to, say, the mortgage crisis?

[onebuckfilms.livejournal.com]

What tax increases have there been as a result of war spending?

[alexx-kay.livejournal.com]

No direct tax increases. Significant amounts of deficit increases, and the likelihood of strong inflation. No matter how much Bush pretends that money spent on Iraq "doesn't count", it will all get paid for by taxpayers in the end, one way or another.

[be-well-lowell.livejournal.com]

If there had been tax increases, it wouldn't be "public debt." That's kind of the meaning of the term. [Really. You can look it up if necessary. While you're at it, you might want to check into the concept of "interest," which is a closely associated concept.]

[onebuckfilms.livejournal.com]

But if it hasn't been taken out of the economy via taxes, there is no basis for it affecting the economy.

Of course, when taxes DO go up, then THAT WILL have an effect.

But there is no cause yet.

[jducoeur]

But if it hasn't been taken out of the economy via taxes, there is no basis for it affecting the economy.

That's simply not true -- it's a very naive view of how the economy works. It's instead being taken out of the economy as *debt*, as reduced available credit for the government to use (a serious problem when we're we're facing imminent stagflation), as damage to bond ratings, as imminent inflation because the government is forced to print money, as damage to the dollar (which affects nearly every sector of the economy), and so on.

These problems aren't as *visible* to the average guy in the street, but they certainly cause considerable economic damage, just less directly. Indeed, they are far more damaging to the economy than simple income tax rises are: they're much more systemic, and harder to adjust for...

[onebuckfilms.livejournal.com]

Now google and compare defense (war) spending against general Government spending.

See how overtaxed we are?

[alexx-kay.livejournal.com]

I make defense spending to be over 24% of the budget, up from about 21% last year. Given the low level of threat we currently face, I do find that excessive.