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The Hidden Cost of War
Old 06-20-2005, 06:03 PM   #1
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The Hidden Cost of War

From Texas Representative Ron Paul – A lengthy commentary on the hidden cost of war. Wars have bankrupted nations in the past. This could potentially be a threat to our RE dreams!

http://www.house.gov/paul/congrec/co...5/cr061405.htm

Summary
1. The costs of war are always much more than anticipated, while the benefits are much less.

2. The cost of war is more than just the dollars spent; it includes deaths, injuries, and destruction along with the unintended consequences that go on for decades.

3. Support for offensive wars wears thin; especially when they are not ended quickly.

4. The Iraq war now has been going on for 15 years with no end in sight.

5. Ulterior motives too often preempt national security in offensive wars.

6. Powerful nations too often forget humility in their relationships to other countries.

7. World history and religious dogmatism are too often ignored and misunderstood.

8. World government is no panacea for limiting war.

9. Most wars could be avoided with better diplomacy, a mutual understanding of minding one’s own business, and respect for the right of self-determination.

===
The following is from the full article. The article stresses the monetary aspects of war in greater detail than the summary above:

Without the Fed’s ability to create money out of thin air, our government would be severely handicapped in waging wars that do not serve our interests. The money issue and the ability of our government to wage war are intricately related. Anyone interested in curtailing wartime spending and our militarism abroad is obligated to study the monetary system, through which our government seductively and surreptitiously finances foreign adventurism without the responsibility of informing the public of its cost or collecting the revenues required to finance the effort.
Being the issuer of the world’s premier currency allows for a lot more abuse than a country would have otherwise. World businesses, governments, and central banks accept our dollars as if they are as good as gold. This is a remnant of a time when the dollar was as good as gold. That is no longer the case. The trust is still there, but it’s a misplaced trust. Since the dollar is simply a paper currency without real value, someday confidence will be lost and our goose will no longer be able to lay the golden egg. That’s when reality will set in and the real cost of our extravagance, both domestic and foreign, will be felt by all Americans. We will no longer be able to finance our war machine through willing foreigners, who now gladly take our newly printed dollars for their newly produced goods and then loan them back to us at below market interest rates to support our standard of living and our war effort.

The payment by American citizens will come as the dollar loses value, interest rates rise, and prices increase. The higher prices become the tax that a more honest government would have levied directly to pay for the war effort. An unpopular war especially needs this deception as a method of payment, hiding the true costs which are dispersed and delayed through this neat little monetary trick. The real tragedy is that this “inflation tax” is not evenly distributed among all the people, and more often than not is borne disproportionately by the poor and the middle class as a truly regressive tax in the worst sense. Politicians in Washington do not see inflation as an unfair seductive tax. Our monetary policy unfortunately is never challenged even by the proponents of low taxes who care so little about deficits, but eventually it all comes to an end because economic law overrides the politicians’ deceit.

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Re: The Hidden Cost of War
Old 06-20-2005, 06:40 PM   #2
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Re: The Hidden Cost of War

Quote:
The higher prices become the tax that a more honest government would have levied directly to pay for the war effort.
So should we buy more inflation hedges?
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Re: The Hidden Cost of War
Old 06-20-2005, 06:49 PM   #3
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Re: The Hidden Cost of War

From "The Art of War" Written by Sun Wu, 200+ years ago:

"A nation can be impoverished by the army when it has to supply the army at great distances. "

I think that the negative economic affect of the Iraq war is something that should be prepared for. How? Now, that is a question.
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Re: The Hidden Cost of War
Old 06-20-2005, 07:15 PM   #4
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Re: The Hidden Cost of War

How? - You round up the usual suspects. They're showing Casablanca on Turner Classic Movies here tonight.

Soooo - like when the chickens came to roost long after Vietnam - skip the freeze dryed food this time around(unless you backpack) - gold, precious metals - short fixed instruments, real estate(maybe too late here) - and weird stuff (collectibles - art, wine, scotch, coins, guns, thing a ma bobs). Resource stocks - oil may be already out of the barn. The old timers say copper has a Phd in inflation.

Expect to see all kinds of love spread over things like: Aussie and New Zealand currencies, iShares Australia, BHP Billiton, Rio Tinto, Caterpillar.

And it's not 1840 anymore so instead of one yard of British textile per Chinese - this time it's resources and the Aussie's are closest.

Hey! - at least it's not opium. More International, real estate, resources, oil, gold, etc.

Like I said - dust off the usual suspects - and any new kids as in* grown son's of usual suspects.

Yawn! - even in remake - I've seen the movie too many times before.

Break out the popcorn - De Gaul and the Norwegian widow salute you.
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Re: The Hidden Cost of War
Old 06-20-2005, 08:16 PM   #5
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Re: The Hidden Cost of War

unclemick2,
Why not the Euro also? I understand the other currencies

Caterpillar? Why will this stock rise?

Mountain_Mike,
I too fear inflation as a result of the war and the printing of money. But, it may be more like stagflation. High unemployment and rising prices.
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