Over the next few months, hundreds of military and economic experts will crowd our cable news channels and discuss the future of the American economy in light of the War on Terror. With thousands of American troops in Iraq, not to mention Afghanistan and other parts of the middle east, and the crises the Iraqi people are facing after the overthrow of the Iraqi government in addition to the crises here at home, expect the economy to either remain the same or decline even more.

There is no doubt that the U.S will continue to spend extraordinary amounts of money on the international crises, such as military expenses, foreign aid, and on rebuilding Iraq. The question is, what will become of the national economy? Do we sacrifice our "butter" in terms of producing more consumer goods, which would increase employment, or do we support protection of our coast from terrorist by encouraging the increase of "guns" in terms of military firepower and intelligence? And should we further fulfill a duty to spend money and help rebuild a normal society for our new, sister country, Iraq?

Because resources are scare relative to the virtually unlimited wants they can be used to satisfy, people must choose among alternatives. More "guns" means less "butter." In the current U.S. crises, the amount of "butter" that must be given up to get more "guns" is the opportunity cost according to the needs of our economy. In other words, the more money spent to support our troops overseas; to rebuild Iraq, and to increase foreign aid cost us something - a luxury or even a necessity - here at home.

Many believe that too much money is being spent elsewhere other than here at home, and that money could be used to increase government spending on programs that assist the poor and working poor in America. Instead, the money is being used to finance a war that those same people feel was unnecessary from the start. These people want "butter." However, the fact that the war did happen and now that America has demolished Iraq and reeked havoc in the lives of Iraqi people, these anti-war people have to realize that America now has an obligation to help rebuild that country. They cannot have the "butter" they want right now, they are going to have to wait it out.

Others believe that since we did launch the war on Iraq and have now since occupied it, we have to support our troops and live up to our obligation to rebuild a normal society in Iraq. However, of those who believe this way, they too want "butter" but realize that "guns" are necessary too. They are more willing to sacrifice goods and programs here at home in return for protection from terrorism in the long run. The bottom line is can we endure an economy in decline over a period of time to secure a long-term plan for safety.

Either the Bush administration extremely underestimated the aftermath of the war, not expecting a looting problem and lawless society after the government regime collapsed, or they had planned to spend money regardless of the outcome as part of a long-term occupation of Iraq. Not only do the U.S. have to fight to secure the borders of Iraq from surrounding nations who may be anxious to get a piece of the Iraq pie, but they have to police the streets, build an Iraqi government base, and provide for the civilians of Iraq. This means long-term spending away from home no matter how one looks at it; the American economy will have to suffer for a while.

On the other hand, America could altogether abandon the Iraq crises, like they did after the Gulf war, which is something no one expects them to do since they are so deep in it now. They cannot abandon the Iraqi people now so they must spend money on "guns." At the same time, they cannot allow the American economy to continue to decline, this would for sure bring animosity against the present administration.

Expect the economy to either stay the same or decline in the future. There is no way that this government can build this economy while at the same time commit to the Iraqi crises. If anything in America gets better, it will be the gas prices. Think about that.

© April 2003 by CR Hamilton