OT: predictions of Inflation Post Vietnam Style and Iraq Parallel come true

User Forum Topic
Submitted by larrylujack on July 25, 2008 - 10:20pm

http://news.yahoo.com/s/ap/20080725/ap_o...

As I mentioned many, many months ago, the huge costs of the Iraq war debacle spending and economic slowdown has now put the US into serious inflation territory. History will repeat itself just like post-Vietnam. The longer the war goes on, the weaker the US economy becomes which is exacerbated by a loose monetary policy (wars are expensive after all).
My next prediction: Prepare to have your standard of living reduced (oh, wait, that has already happened, nevermind).
Just wanted to say.....I told you so....and good luck of course.
Probably others on this board anticipated it likewise, would be interesting to hear your perspectives.
LL

‹ Just who is buying foreclosures.... CA housing recovery nearly here? ›
The differences are so
Submitted by EconProf on July 26, 2008 - 6:31am.

The differences are so numerous as to make any comparison unlikely. Vietnam required 600,000 troops, Iraq 160,000 or so. Iraq costing 1/12th the number of battle deaths as Vietnam. The Iraq experience has been overblown by the media by most historical comparisons.
Most of all, our economy now is far more open and deregulated, allowing production to expand (weaker unions) and imports to enter, thus holding down inflation. The problem during the 60s and 70s was demand-pull inflation in which our capacity was constrained, monetary policy was loose, and prices had nowhere to go but up.
Cost-push inflation was also then a factor via wage increases. Now cost-push is via oil and other resource prices going up. Wage inflation is not taking hold, and compensation remains a bigger cost component for busineses than natural resources.

EconProf - nice points. I
Submitted by Want_to_Retire on July 26, 2008 - 9:54am.

EconProf - nice points. I don't have the numbers, but I wonder if these are other points to consider:

1. Iraq and Afghanistan requires far fewer troops, but despite technology advancements or perhaps because of them, it appears it requires much more money in real terms to maintain these troops.

2. Iraq is costing 1/12th of the number of battle deaths as Vietnam - due to advancements in medical technology. However, many more are returning from the battlefield with serious wounds and, not to be harsh, will require extensive rehabilitation and continued medical care - more outlays for the government.

3. The Feds will continue to print money to prop up the GSEs, and perhaps the commercial banks when the FDIC runs dry, continuing to stoke inflation.

Iraq war's total cost nearing
Submitted by bsrsharma on July 26, 2008 - 11:34am.

Iraq war's total cost nearing Vietnam's price tag

http://ap.google.com/article/ALeqM5ihrXX...

Here are the report's estimated costs of major wars, in 2008 dollars, and their costs as a percentage of GDP in each of their peak years:

American Revolution: $1.8 billion; GDP figure not available

War of 1812: $1.2 billion; 2.2 percent

Civil War, Union: $45.2 billion; 11.3 percent

Civil War, Confederacy: $15.2 billion; GDP figure not available

World War I: $253 billion; 13.6 percent

World War II: $4.1 trillion; 35.8 percent

Korean War: $320 billion; 4.2 percent

Vietnam War: $686 billion; 2.3 percent

Gulf War: $96 billion; 0.3 percent

Iraq war: $648 billion; 1 percent

Afghanstian/Global war on terror: $171 billion; 0.3 percent

Post 9/11 domestic security: $33 billion; 0.1 percent

Post 9/11 operations: $859 billion; 1.2 percent
On the Net:

* Congressional Research Service: http://www.crs.gov