The War Is Moving the Economy, but at What Price?

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Many predicted that the war in Iraq would be a drag on the economy, but in the second quarter, the gross domestic product grew by 2.4 percent, compared to estimates of 1.6. Much of that increase was due to defense spending. US defense spending hasn-t grown so fast since the Korean War, providing a boost for a lagging economy. But are the short-term gains worth what they cost in the long run? The Pentagon is notoriously wasteful, and its instruments of destruction take manpower and other resources away from more productive activities. Is defense spending just for national security? Does it also provide a crude form of economic planning? We examine the impact of defense spending with a reporter for the Wall Street Journal, a military historian, and economists with specialties in military spending.
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Murphy-s article on car bombing

2nd Quarter Gross Domestic Spending (GDP)

Department of Defense



Warren Olney