Larry Kudlow has a great piece in NRO Financial that says that a war in Iraq won’t send the US into economic chaos. He’s right. The war will be over long before we run out of reserves, and the Gulf states need to sell us their oil more than we need to buy it. As Condoleeza Rice pointed out, the Gulf states can use oil as a weapon, but they’ll starve themselves if they do.
At the very worst, a war in Iraq will consume 1-2% of the US national income, with a more realistic figure being around .9%. This is hardly enough to cause widespread economic panic. Even in this downturn, we’re set to grow more than enough to offset the costs of a war.
War in Iraq is not only an idea that’s condusive to the peace and stability of the region politically, but it will also ensure that a sizeable reserve of oil is no longer in the hands of a dictatorial madman. Invading Iraq won’t cause the next great depression – but waiting until Iraq develops nuclear capability just might.
