The Student Room Group

TSR Economics society

Scroll to see replies

austrian guy


Source: http://www.publicintegrity.org/wow/report.aspx?aid=65 (excellent article, really worth reading)


Umm i dont really agree with any of what youre saying, firstly you have to look at the broader picture and not only the gains of a couple of companies. I mean your quote from this article says that companies earned around $8 bn, that sounds like a lot but it really isnt (as a percentage of total US GDP).. Yes several energy companies did gain a lot form the war , but overall the warcost more than any gains!


This is very true. As for the Iraq war, which let the unemployment rate decrease and the company invest rate increase.


Are you seriously suggesting that companies tend to invest more during a war?? You must be out of your mind!! If you look at and consumer / producer confidence charts you will notice that during September 11, Iraq War ad other War crisis, they were at an all time low!

:eek:

I agree that war can be beneficial in the short run - but only for a handful of companies, but as a wholemost of the effects on an economy are negative. You just have to apply basic economic theory to realize this. The amount of financial and material assets a country uses in a war poses an oppertunity cost! The money could be spent else where.

We are talking about the overall economic picture - you say that a couple of firms benefit, but the whole economy is nt determined by these companies.

Another point about why a war is not beneficial to an economy:
During the Iraq war Oil prices have soared - because fuel is a basic commodity that every household needs, rising oil prices leads to a contraction in a households disposable income, meaning that consumption goes down and so does investment since its more costly for firms to produce goods and services (since fixed costs go up). Therfore Aggregate demand falls meaning Unemployment!!

How could you say a war leads to an increase in employment? stop looking at all these sources and look at basic economic theory!
How could you say a war leads to an increase in employment? stop looking at all these sources and look at basic economic theory!

I was talking about the evident decrease of unemployment because many unemployed joined the army. I didn't say that new jobs were created, solely that there were less registeres unemployed.

We are talking about the overall economic picture - you say that a couple of firms benefit, but the whole economy is nt determined by these companies.

All of the extra money these firms earn with expansion flows back to the US. So if many companies earn more than they would have, then the american economy does benefit from it.

Umm i dont really agree with any of what youre saying, firstly you have to look at the broader picture and not only the gains of a couple of companies. I mean your quote from this article says that companies earned around $8 bn, that sounds like a lot but it really isnt (as a percentage of total US GDP)..


Even in the broader picture $8 bn is far more than the $0 they would have earned in that region if there would still be a regime in Iraq. Secondly the specific post you are mentioning was more meant to be a proof of the relations between the Bush administration and these firms.

P.S.: I also have some arguments for your position, but one should only have one point of view and I wanted to get a discussion started. As I already said, it really varies. War can be beneficial, but it must not.
The extra money spent on the war is money that will not be spent elsewhere. The war can be funded in a combination of three ways:
*Increasing taxes
*Decrease spending in other areas
*Increasing the debt

Increasing taxes reduces consumer spending, which does not help the economy at all. Suppose we decrease government spending on social programs. Firstly we've lost the benefits those social programs provide. The recipients of those programs will now have less money to spend on other items, so the economy will decline as a whole.

Looking at the Iraq war i agree that there are some benefits. The economy of the United States could improve in the long run due to the war for a couple of reasons:

*An increased supply of oil
if a regime with better American relations were set up in Iraq, the supply of oil to the United States would increase. This will drive down the price of oil, as well as driving down the costs of companies that use oil as a factor of production which will certainly help economic growth. However this is ONLY after the war has ended and peace and security is in place - however this looks to be far far far away in the case of Iraq

*Stability and Economic Growth in the Middle East
If peace can somehow be established in the Middle East, the U.S. government might not have to spend as much money on the military as they do now. If the economies of the countries in the middle east become more stable and experience growth, this will give them more opportunities to trade with the United States, improving both the economies of those countries and the U.S.

Personally I do not see these factors outweighing the short term costs of the war in Iraq, but you can make a case for them.

--------------

*Lets not forget that the military is the largest single government bureaucracy. It produces nothing. It only consumes resources which it takes from taxpayers. all these resources are directed toward the building and maintenance of weapons. It does not create wealth. It diverts it from more productive uses.
Normally war is financed with money that doesn't have to come from new sources (the Iraq war is a bad example here, because the US strategy didn't work so they had to get more monex).

See, we did find a compromise. War can be beneficial, but it must not I think we need a new topic to debate about, because in this topic it really depends too much on all of the circumstances.

The most american wars are beneficial, because they are very far away from the US. The situation would be totally different if somebody would attack the US at home.

However this is ONLY after the war has ended and peace and security is in place - however this looks to be far far far away in the case of Iraq

Yes. And until that peace is secured it is american companies and american contractors making money securing other companies or oil depots. Its a vicious circle, no matter how long this goes on for, in the long run the US will profit.

--------------

Lets not forget that the military is the largest single government bureaucracy. It produces nothing. It only consumes resources which it takes from taxpayers. all these resources are directed toward the building and maintenance of weapons. It does not create wealth. It diverts it from more productive uses.


It produces jobs. It decreases unemployment and it makes major contracts with firms, who by producing weapons and know-how, help the economy.
austrian guy

Even in the broader picture $8 bn is far more than the $0 they would have earned in that region if there would still be a regime in Iraq. Secondly the specific post you are mentioning was more meant to be a proof of the relations between the Bush administration and these firms.


You say that 8bn is more than nothing, well the total cost of the iraq war was $231,617,206,152 (source: http://nationalpriorities.org/index.php?option=com_wrapper&Itemid=182)!!!! so how can you deny that the wwar was more costly than the gains!

Yes all the costs of the war add to US gdp, however this money could have been used in other more productive parts of the economy which would have resulted in increased standards of living within the economy, ie spending on educatio, health care, etc.

And bytheway just look at the USs Budget deficit!
__WiZaRD__
You say that 8bn is more than nothing, well the total cost of the iraq war was $231,617,206,152 (source: http://nationalpriorities.org/index.php?option=com_wrapper&Itemid=182)!!!! so how can you deny that the wwar was more costly than the gains!

Yes all the costs of the war add to US gdp, however this money could have been used in other more productive parts of the economy which would have resulted in increased standards of living within the economy, ie spending on educatio, health care, etc.

And bytheway just look at the USs Budget deficit!


Yes, but the US would have spent money on weapons etc anyway (not as much). And as I said, the Iraq war was the greatest failure, this is not a good example. But normally the cost of going to war isn't that high and you can gain more money in the long run. Even through the Iraq war the US will benefit in the long run.

As soon as there is peace in Iraq and the Iraqi population starts to be able to afford buying things etc. the great profiteur will be the US, they have established a great network (in all fields) and the money will start coming back long after the war has been forgotten. maybe it will take over 25 years, but at some stage these $231,617,206,152 will have come back through the investments that were enabled through the war.
austrian guy
Yes, but the US would have spent money on weapons etc anyway (not as much). And as I said, the Iraq war was the greatest failure, this is not a good example. But normally the cost of going to war isn't that high and you can gain more money in the long run. Even through the Iraq war the US will benefit in the long run.

As soon as there is peace in Iraq and the Iraqi population starts to be able to afford buying things etc. the great profiteur will be the US, they have established a great network (in all fields) and the money will start coming back long after the war has been forgotten. maybe it will take over 25 years, but at some stage these $231,617,206,152 will have come back through the investments that were enabled through the war.


You know thats total and utter bullsh*t!!!! give me an example of a "network" of which you speak of, which will be profitable to the US?? :cool:
__WiZaRD__
You know thats total and utter bullsh*t!!!! give me an example of a "network" of which you speak of, which will be profitable to the US?? :cool:


the most firms that are profiting from the reconstruction of Iraq are american. Therefore these firms will start to make profits throughout the next years which will all flow back to the states.

Contractor Value Value FY02 Agency
Abt Associates Inc.
Iraq $43,818,278 USAID
Advanced Systems Development, Inc.
Iraq $259,958.56 DoD
AECOM
Iraq $21,610,501 DoD
Alexander, Deborah Lynn
Afghanistan $168,625 USAID
AllWorld Language Consultants
Iraq $4,051,349 DoD
American International Contractors, Inc.
Iraq $1,500,000,000 DoD
American President Lines Ltd.
Iraq $5,000,000 USAID
Anteon International Corporation
Afghanistan $6,800,000 DoD
AOS, Inc.
Iraq $866,988 DoD
Artel
Iraq
Atlas Case, Inc.
Iraq $17,243 DoD
Bald Industries
Iraq $35,734 DoD
Baldino, George F.
Afghanistan $263,000 USAID
Bea Mauer, Inc.
Iraq $9,920 DoD
BearingPoint Inc.
Afghanistan $64,100,00 USAID
BearingPoint Inc.
Iraq $240,162,668 USAID
Bechtel Group Inc.
Iraq $2,829,833,859 USAID
Blackwater Security Consulting L.L.C.
Iraq $21,331,693 DoD
CACI International Inc.
Iraq $66,221,143.19 Interior
Camp Dresser & McKee Inc.
Afghanistan $1,700,000 USAID
Capital Shredder Corporation
Iraq $11,803 DoD
Cartridge Discounters
Iraq $40,492 DoD
CDW Government, Inc.
Iraq $35,174 DoD
Cellhire USA
Iraq $1,465,983 DoD
CH2M Hill
Iraq $1,528,500,000 DoD
Chemonics International Inc.
Afghanistan $167,759,000 USAID
Chugach McKinley, Inc.
Iraq $3,068,407 DoD
Comfort Inn
Iraq $47,324 DoD
Complement, Inc., The
Iraq $3,358 DoD
Contrack International Inc.
Iraq $2,325,000,000 DoD
Contrack International Inc.
Afghanistan $500,000,000 DoD
Creative Associates International Inc.
Afghanistan $60,000,000 USAID
Creative Associates International Inc.
Iraq $273,539,368 USAID
Cybex International
Afghanistan $4,838 DoD
Dataline Inc.
Iraq $1,028,851.89 DoD
Dell Marketing L.P.
Iraq $513,678.88 DoD
Detection Monitoring Technologies
Iraq $5,584,482 DoD
Development Alternatives Inc.
Iraq $39,523,857 USAID
Development Alternatives Inc.
Afghanistan $9,594,000 USAID
DHS Logistics Company
Afghanistan $378,000 $288,000 DoD
DHS Logistics Company
Iraq $223,497 DoD
Diplomat Freight Services Inc.
Afghanistan $2,604,276 $2,604,000 State
DynCorp (Computer Sciences Corp.)
Afghanistan $43,559,421 $130,000 State
DynCorp (Computer Sciences Corp.)
Iraq $50,000,000 State
Earth Tech, Inc.
Iraq $65,449,155 DoD
EGL Eagle Global Logistics
Iraq $111,000 USAID
EHI Company
Iraq $3,956 DoD
Electric Generator Store, The
Iraq $6,974 DoD
Environmental Chemical Corporation
Iraq $1,475,000,000 DoD
EOD Technology Inc.
Iraq $71,900,000 DoD
Expedited World Cargo Inc.
Iraq $55,004 USAID
Explosive Ordnance Technologies Inc.
Iraq $1,475,000,000 DoD
Export Depot
Iraq $21,182 DoD
Federal Data Corporation
Afghanistan $1,991,770 DoD
Fluor Corp.
Iraq $3,754,964,295 DoD
Force 3
Iraq $274,651.95 DoD
Foster Wheeler Co.
Iraq $8,416,985 DoD
General Electric Company
Iraq Value Unknown DoD
General Electric Company
Afghanistan $8,525,498 DoD
Giesecke & Devrient America
Iraq $72,700 DoD
Global Container Lines Ltd.
Iraq $1,850,000 USAID
Global Professional Solutions
Iraq $590,232 DoD
Global Services
Iraq $910,468 DoD
GPS Store, Inc., The
Iraq $19,761 DoD
GTSI Corp
Afghanistan $70,220 DoD
Hardware Associates
Iraq $4,304 DoD
Harris Corporation
Iraq $165,000,000 DoD
Inglett and Stubbs LLC
Iraq $1,826,974 DoD
Inglett and Stubbs LLC
Afghanistan $6,348,271 DoD
Intelligent Enterprise Solutions
Iraq $19,835 DoD
International American Products Inc.
Iraq $628,421,252 DoD
International American Products Inc.
Afghanistan $20,080,636 $683,000 DoD
International Global Systems, Inc.
Iraq $157,383.40 DoD
International Resources Group
Afghanistan $1,230,000 USAID
International Resources Group
Iraq $38,000,000 USAID
J & B Truck Repair Service
Afghanistan $1,353,477 DoD
John S. Connor Inc.
Iraq $34,153 USAID
JSI Inc.
Iraq $3,376 DoD
Kellogg, Brown & Root (Halliburton)
Iraq $10,832,000,000 DoD
Kellogg, Brown & Root (Halliburton)
Afghanistan $599,000,000 $114,999,000 DoD
Kollsman Inc
Iraq
Kroll Inc.
Iraq Value Unknown USAID
Kropp Holdings
Iraq $11,880,000 DoD
Lab Safety Supply
Iraq $53,379 DoD
Laguna Construction Company, Inc.
Iraq $19,536,683 DoD
LandSea Systems, Inc.
Iraq $47,750 DoD
Landstar Express America Inc.
Iraq $24,396 USAID
Liberty Shipping Group Ltd.
Iraq $7,300,000 USAID
Logenix International L.L.C.
Iraq $29,000 USAID
Louis Berger Group
Afghanistan $10,228,894 - $300,000,000 $5,229,000 USAID
Louis Berger Group
Iraq $27,671,364 DoD
Lucent Technologies World Services, Inc.
Iraq $75,000,000 DoD
Management Systems International
Afghanistan $14,700,000 USAID
Management Systems International
Iraq $15,116,328 USAID
McNeil Technologies, Inc.
Iraq $716,651 DoD
Mediterranean Shipping Company
Iraq $13,000 USAID
MEI Research Corporation
Iraq
Michael Baker Jr., Inc.
Afghanistan $1,471,238 DoD
Michael Baker Jr., Inc.
Iraq $4,528,328 DoD
Midwest Research Institute
Iraq $1,765,000 DoD
Military Professional Resources Inc.
Iraq $2,608,794.74 DoD
Miscellaneous Foreign Contract
Iraq $3,026,630 DoD
Miscellaneous Foreign Contract
Afghanistan $10,463,180 DoD
Motorola Inc.
Iraq $15,591,732 DoD
MZM Inc.
Iraq $1,213,632 DoD
NANA Pacific
Iraq $70,000,000 DoD
Native American Industrial Distributors Inc.
Iraq $123,572 DoD
Night Vision Equipment Company
Iraq $153,118 DoD
Nuttall, James S.
Afghanistan $187,000 USAID
Ocean Bulkships Inc.
Iraq $5,000,000 USAID
Odebrect-Austin
Iraq $1,500,000,000 DoD
Outfitter Satellite, Inc.
Iraq $33,203 DoD
PAE Government Services Inc.
Afghanistan $7,007,158 $5,714,000 State
Paro, Amy K.
Afghanistan $94,457 $94,000 USAID
Parsons Corp.
Iraq $5,286,136,252 DoD
Parsons Energy and Chemicals Group
Iraq $43,361,340 DoD
Perini Corporation
Iraq $2,525,000,000 DoD
Perini Corporation
Afghanistan $14,000,000 - $25,000,000 DoD
Raytheon Aerospace LLC
Afghanistan $91,096,464 $2,044,000 DoD
Raytheon Technical Services
Iraq $12,412,573 DoD
Reabold, Miguel (Michael)
Afghanistan $136,603 USAID
Readiness Management Support LC (Johnson Controls Inc.)
Afghanistan $40,792,343 $828,000 DoD
Readiness Management Support LC (Johnson Controls Inc.)
Iraq $173,965,104 USAID
Red River Computer Company
Iraq $972,592.90 DoD
Redcom Laboratories
Afghanistan $24,375 DoD
Research Triangle Institute
Iraq $466,070,508 USAID
Ronco Consulting Corporation
Iraq $12,008,289.60 DoD
Ronco Consulting Corporation
Afghanistan $12,423,633 $6,771,000 USAID / State / DoD
S&C Electric Company
Afghanistan $34,800 DoD
S&K Technologies Inc.
Iraq $4,950,384.80 DoD
Sampler, Donald L.
Afghanistan $81,000 USAID
Science Applications International Corp.
Iraq $159,304,219 DoD
Sealift Inc.
Iraq $4,000,000 USAID
Segovia Inc.
Iraq $320,636 DoD
SETA Corporation
Iraq $3,165,765 DoD
Shaw Group/Shaw E & I
Iraq $3,050,749,910 DoD
Signature Science
Iraq $4,704,464 DoD
Simmonds Precision Products
Iraq $4,412,488 DoD
SkyLink Air and Logistic Support (USA) Inc.
Iraq $27,344,600 USAID
Smith Office Machines Corporation
Iraq $2,961 DoD
Social Impact Inc.
Afghanistan $1,875,000 USAID
Sodexho Inc.
Afghanistan $324,120 $324,000 State
SPARCO
Iraq $9,215 DoD
Stanley Baker Hill L.L.C.
Iraq $1,200,000,000 DoD
Stanley Consultants
Iraq $7,709,767 DoD
Staples National Advantage
Iraq $4,194 DoD
Stevedoring Services of America
Iraq $14,318,895 USAID
Stratex Freedom Services
Afghanistan $1,978,175 DoD
Structural Engineers
Iraq $1,113,000 DoD
TECO Ocean Shipping Co.
Iraq $7,200,000 USAID
Tekontrol, Inc.
Afghanistan $85,146 DoD
Tetra Tech Inc.
Iraq $1,541,947,671 DoD
Titan Corporation
Iraq $402,000,000 DoD
Total Business
Iraq $4,696 DoD
Transfair North America International
Iraq $19,351 USAID
Triumph Technologies
Iraq $228,924 DoD
Tryco Inc.
Afghanistan $400,000 DoD
Unisys Corporation
Iraq $320,000 DoD
United Defense Industries, L.P.
Iraq $4,500,000 DoD
University of Nebraska at Omaha
Afghanistan $7,072,468 USAID
USA Environmental Inc.
Iraq $1,541,947,671 DoD
Vinnell Corporation (Northrop Grumman)
Iraq $48,074,442 DoD
Ward Transformer Sales & Services
Iraq $115,000 DoD
Washington Group International
Iraq $3,133,078,193 DoD
Washington Group International
Afghanistan $500,000 - $500,000,000 DoD
WECSYS
Iraq $3,040 DoD
Weston Solutions, Inc.
Iraq $16,279,724 DoD
World Fuel Services Corp.
Afghanistan $19,762,792 DoD
Young, Brian
Afghanistan $106,150 $39,000 State
Zapata Engineering
Iraq $1,478,838,958


http://www.publicintegrity.org/wow/bio.aspx?act=pro

This is my so called "network"
Reply 48
i agree with wizard. i'm bored of seeing all these quotes and figures that have been taken off websites
anyone think of a new thing to debate about?
Hello everyone!
Can I join this society? :smile:
yea, i think we need a good topic to debate about - something with more real economics invlved? How about a Keynesians VS Classical Economists Debate!?
Reply 51
First of all, austrian guy and Lykabelle added to the members list. Welcome to the society :wavey:

Wizard 2 points, Austrian guy 4 points.

Right new topic. Good thinking wizard but wont the topic be too vast? It will take months to end! If all of you want it no problem, we will go ahead with it. So what are your opinions?

Oh another update, from now on 3 eco points for giving idea for a topic that is selected.

--------------

AlphaX
Does anyone have a copy of last years June (2005) AQA Economics Unit 1 and Unit 2 Exam papers or know where I can get them?


http://www.aqa.org.uk/qual/pdf/AQA-5141-6141-6841-WRE-Jun05.pdf

This is the examiners report. The markscheme is not in their website yet.
The topic is too broad in my opinion. I would be for a topic related to the pros and cons for the european economy due a possible accession of Turkey to the European Union.
Reply 53
I found a link to the book (ebook should I say) "The General Theory of Employment, Interest and Money" by Keynes. I dont know whether it is the full version, but it is interesting enough.

http://etext.library.adelaide.edu.au/k/keynes/john_maynard/k44g/index.html
I want to be a member!
Reply 55
shauniemac added.
topic 1: that I suggest, see above: Turkey
topic 2: Facing the giant China, which measures should the EU take
Wow @ me not getting points when NONE of my opinions were copy and pasted.
whos opinions were copied and pasted?
i think a really intresting debate would be one on protectionism and how it effects developing/developed countries. Whether the CAP is justified..

Anyone?

Quick Reply

Latest

Trending

Trending