To the Point

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

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. Making News: Car Bomb Kills 13 at Indonesia Hotel There are at least 13 dead and 150 wounded in the car bombing of a hotel in the capital of Indonesia. There is a gaping hole where the lobby of the 33-story glass and steel tower once stood. Dan Murphy, who is in Jakarta for the Christian Science Monitor, reports on the damage, intended victims, and possible links to last year-s bombing of a Bali nightclub. Reporter-s Notebook: One-Fence Solution for Israel and the West Bank? Despite reports that the Bush administration may reduce loan guarantees to show its displeasure, Israel is continuing work on a giant barrier between itself and the West Bank. Gershom Gorenberg, who wrote about the one-fence solution for the New York Times Magazine, calls the 240-foot wide swath of barbed wire, sensors and roads "a statement etched on the land.-