Thursday, October 16, 2008

Where wasted money goes

kw: opinion, finance

Nearly every day there is a headline somewhere, particularly on the Internet media, that proclaims in huge type how we're spending anywhere from four to twelve billion dollars monthly "in Iraq". People write about this as though there were deep, dark well in Iraq somewhere, down which dollars pour in an unending Niagara. Do you know how much money we are actually spending in Iraq? Nearly nothing!

We have about 150,000 troops there, whose salaries, benefits and other overhead total a quarter billion dollars monthly. Maybe a bit more, depending on ranking officers' salaries. Most of the rest is for consumable weaponry, fuel, medical and food supplies. We may actually purchase some of our supplies from the Iraqis, but it's tiny, tiny.

The vast majority of the money is spent…guess where?…In the U.S.A.! Let's assume four billion dollars change hands every month, related to the war. Nearly all of it goes to U.S. companies and U.S. workers. It circulates in the U.S. economy, not the Iraqi or any other nation's economy. Based on the ordinary leverage factors, that four billion bucks generates twelve to sixteen billion dollars of economic activity. In fact, no matter where the U.S. government spent that four billion dollars, it would generate exactly the same amount of economic activity, right here in the U.S.!

So where's the waste? You may disagree with what the money is being spent on, but please don't say it's "going" anywhere. It is all spent right here in the U.S. economy.

No comments: