The economy in the US went to shit in the late 70’s. Interest rates went up, a period of high price inflation combined with slow output growth, high unemployment and a general recession. I have heard people blame Jimmy Carter, Government regulation of the economy enacted by LBJ & Nixon, but mostly I heard people say this was a result of the Viet Nam war artificially driving the economic growth of the 60’s & early 70’s coming to an end. Other causes of the economic malaise include OPEC raising prices of crude oil helping Japan’s fuel efficient cars take over the main auto manufacturing spot, the loss of the US Steel manufacturing to Japan, and nothing new to further stimulate the economy. I understand that this is overly simplified.
The USSR invaded Afghanistan in 1979 and stayed there for 9 years. They fought against a guerilla force much like the US did in Viet Nam. They withdrew in March of 1989 and the Soviet Union dissolved at the end of 1991.
What were the effects of “staying to course” in Afghanistan on the Soviet economy? Did it make the rest of the world see them as hard asses, not to be trifled with, and did their pull out make the rest of the world see the USSR as a bunch of pussies to tease and terrorize for their entertainment? How much did the Afghanistan misadventure contribute to the fall of the Soviet Union and specifically the collapse of Russia’s economy? Didn’t the Soviet Invasion create Afghanistan’s Mujahadeen & it’s branches the Taliban and Al Qaida? Did this indirectly cause the later Chechen rebellion?
Lots of questions, but mainly I’m interested in the economic effects and how the US’s current misadventure in Iraq might effect our economy when we finally drag our asses home from this mistake.
a. the collapse of the Soviet Union was due to events that were in motion long before their fiasco in Afghanistan.
b. The gross domestic product of the U.S. is about 13 trillion dollars. Last year (2006), the GDP increased increased 6.4 percent, or $798.1 billion. Current-dollar GDP increased 6.3 percent, or $743.3 billion, in 2005. The economy is doing well.
If the war in Iraq is costing about 100 billion a year, that is about .0076 of our GDP.
The entire military budget is about 4-5% of the GDP. For comparison’s sake, during WWII military spending was about 38% of the GDP.
The Iraq war will have a negligible effect on the U.S. economy.
The FSU became heavily invested in supporting Afghanistan and Afghanistanis. A particular tactic for fighting the “insurgency” in Afghanistan was to destroy the farms and houses of the folks who “harbored the insurgents”. As a result, Afghanistans backward-ass infrastructure and economy were even further wrecked. So in addition to the expense of keeping an army afield for an extended period, (something that may have been warned against in a military treatise or two for some unfathomable reasons), the FSU then began to subsidize the Afghani army and govt, all the while pretending domestically that everything was going peachy in Afghanistan.
The FSU couldn’t really afford the additional expense.
While the invasion of Afghanistan may not have been the anvil to the FSUs head, it was yet another straw on the camel’s back.
Lynwood, have you considered what the effects that the invasion has had on prices outside of their direct costs?
Or the differing means of financing the two markedly different endeavors - WWII and OIF? Again, if the campaign is protracted, the resources of the State will not be equal to the strain
There is no instance of a country having benefited from prolonged warfare.
As a metaphor, think of fighting a extended foreign war as being like the flu. A healthy person will get a bad case of the flu and be really sick but will make a full recovery with no long-standing effects. But a person who has an existing health problem, even one that is stable and not life-threatening, can catch the same flu and die of it.
And that’s what happened with Vietnam and Afghanistan. The United States was a fundamentally sound country and eventually recovered from Vietnam. The Soviet Union had some fundamental flaws and Afghanistan turned out to be lethal.
The USA had no real business in Vietnam, while the Russian Empire was fighting a war on its borders with Islamic fanatics - otherwise known as Black Arses.
Since a large part of the Russian Empire was composed of Moslems of a race that that Russia did not really like, they had a choice of imploding or fighting a war that they could not win.
Having massive natural resources in Siberia, they sensibly withdrew to maintainable borders, but logically were unwilling to give up Chechenya or influence over their neighbours.
If, in the late 1970s, the USA had refrained from training and arming Afghanis, then Afghanistan would probably be a lot more civilized today - however losing one, meant that it was either a war of attrition or retreat, or a rapid retreat arming the ‘right guys’.
Sadly, with hindsight, the ‘right guys’ in Afghanistan were the Communist Government.
At least they were in favour of the 2oth century, women’s education and secularism.
The warlords we hired as mercenaries after 9/11 and who effectively run the country now are the same murdering, raping, drug-dealing thugs Afghanistan and the rest of the world were happy to see overthrown by the Taliban, they were so awful. And as sure as sunrise they will switch sides again and put the Taliban back in power if there is the slightest hint the West is backing out.
Talk about Devil, Deep Blue Sea and a Raging Forest Fire.
Lynwood, have you considered what the effects that the invasion has had on prices outside of their direct costs?
Or the differing means of financing the two markedly different endeavors - WWII and OIF?[/QUOTE
I have considered both. To your specific question, both WWII and OIF were/are being financed by deficit spending. By 1945, the deficit was 122% of the GDP.
In my opinion, most critics of deficit spending don’t understand the issue well. For example, one thing that hampered, and almost destroyed, the recovery during the depression under FDR was his initial refusal to countenance deficit spending.
Reagan, as it is well known, used deficit spending in the military build up that played a role in debilitating the Soviet Union, yet provided the basis for the one of the greatest economic growth periods in history.
The current public debt is about 4.9 trillion dollars. The war in Iraq is, relative to the size of the debt, almost inconsequential. I am not arguing in favor or against the war – I am just saying if we are assessing it on the issue of damage to the economy (as opposed, say, to whether the funds spent there could be better spent elsewhere), then the damage, if any, is negligible. We must remember that much, if not most, of the funds spent go directly into the U.S. economy.
I blame the loss in Afghanistan on Bowden’s refusal to pull his starting QB, who was clearly having an off night. The 'Noles defense was good, sure, but asking them to bail out an offense that coughed up 5 interceptions was just ridiculous.
You have no idea how long it took me to figure out what you mean by FSU. I still can’t figure out OIF.
[QUOTE=The current public debt is about 4.9 trillion dollars. .[/QUOTE]
Allow me to correct myself:
The part of the national debt held by the public (i.e., non U.S. government holdings of debt) is 4.9 trillion. Intragovernmental holdings of debt (e.g., funds owed to the Social Security Trust fund, etc. etc.) is about 3.8 trillion.
While the “debt to public” is 4.9 trillion, the *total national debt * (including intragovernmental debt, what the government owes itself, as it were) is 8.75 trillion.
A year’s spending in Iraq adds a little more than 1.14% to the total national debt.
That’s one way of looking at it. Another way is that Reagan spent over a trillion dollars buying weapons for a war that never happened. And was then lauded by people who claim they’re opposed to government waste.
As for economic growth - of course he had a period of economic growth. Things are always great when you’re spending borrowed money - it’s repaying borrowed money that causes the decline.
To be honest, I don’t see Afghanistan as that much of a problem.
While I feel sympathy for 90% of the population, it replaces The Oman as a good live fire training ground which will probably soon be contained.
What annoyed me at the time (1979) was that it was perfectly obvious what was happening and Islamic radicalism and acephalic feudalism could have been choked off both in Afghanistan and Iran.
My enemy’s enemy is not my friend, he is probably a very nasty piece of work
“War that never happened” – I assume we agree that that is a good thing.
“repaying . . . causes the decline” You are wrong here. Declines are not caused by paying down the national debt, as long as it is not accomplished by raising tax rates. As is well known, lowering tax ratesraises the amount of taxes the government takes in due to the heightened productivity and prosperity.
The national debt will fall as productivity rises.
You need to understand - just because you think something is true doesn’t mean it’s true in the real world.
Economists who studied the actual Laffer Curve, as opposed to politicians who invoked it without understanding it, were saying that the American marginal tax rate in the 1980s was on the left side of the curve not the right side - which meant that lowering the tax rate simply lowered tax revenues.
I’ve been meaning to say this - do you have any idea just how offensive an ethnic slur that is? And that to this day, it’s used by bigoted Russian-speakers to refer to anyone of a Caucasian or Central Asian ethnicity, “Islamic fanatic” or no?
Be careful of how you use that term, lest you be accused of bigotry yourself.
Or of retreating from areas inhabited by peoples that had never wanted them there to begin with - the Russian Empire conquered the Caucasus and Central Asia by repeatedly exercising military force.
I’m using the term deliberately, to convey the past and current outlook of Russia (or a large chunk of it).
Obviously you know, but quite a lot of people don’t understand the background.
Personally I think that Russia was sensible retreating, and due to the natural resources spread over the entire area, things could work out quite nicely for all concerned.
If the USA had understood the USSR’s problem in 1979, then we might have saved ourselves some distinct unpleasantness.
