High Stakes

2 Pages 462 Words

HIGH STAKES
How the war may affect global economies, U.S. politics, and diplomacy


The war in Iraq has had and will have lasting effects on economies throughout the world. “The U.S. and world economy are extremely fragile,” says Allen Sinai, Chief global economist of Decision Economics Inc. consultants. “A prolonged war would likely trigger a full-fledged global recession.” Many U.S. executives are in unisons saying that a short, decisive war is necessary to spark the economy. The degree of impact, negative or positive, depends greatly on the longevity and outcome of the war. Oil prices have skyrocketed to $38 per barrel from a low last November of $25. The consumers with their war jitters are not spending thus driving consumer spending down to its lowest in nearly a decade. However, triumph on the battlefields could put an end to this gloom. Even before the troops moved into Iraq, oil prices fell 27% to $29.88. Yet with the still underlying threat of new theorists attacks, the price of oil still looms in the valley of the unknowns. If Saddam knocks out key oil fields, the resulting shock would possibly trigger a slump. Other industries such as the airlines are also very vulnerable to war. Many airlines on the verge of bankruptcy may succumb to the drop in air travel. Many flights have been cancelled—people are bracing for the worst. The stock market, the U.S. indicator of “financial emotions”, is also displaying vast uncertainties among Americans.
Will the war in Iraq have an effect on our economy? The answer is, of course, yes. But how much will the war have an impact is really uncertain. The major stake in this “undeclared war” is certainly our freedom, which at this moment, does not stir major concern on our home front; however, our nation does thrive on the “demand and supply” of fuel oil, corporate survival and the stock market. All of these factors play a major role in our economy. ...