The good impact comes from an increased demand in tanks and warfare equipments. However this is only a small factor in growth as the GDP will increase with the government spending more and more on defense. The cost to keep the defense system top rate and its maintenance might just place a heavy burden on the economy. 

Let us not forget how the Persian Gulf War cost the United States and its allies $60 billion. Let us recall how that combined with the rise on oil prices set off a recession even though the allies paid about 80 percent of the bill. The next time the US may have to foot the entire bill. In times like the recent recession, one has to carefully consider war even after the September 11 catastrophe. The outflow of money for defense will not help the economy rise. This might mean a reduction in domestic programs. It will also affect business investment, tourism, retail spending and financial markets. 

Another question is how will the government balance economic policy. This might further push the already fragile economy into a greater recession. 

America’s global commitments are noble, but will it be able to fund them? Helping other countries, and defending its own territory might well have a negative impact on the economy. This is not to say that America should abandon its military programs. Rather, the government might have to think of alternative and other channels to combat terrorism and strife.

More Articles :

• Advantages And Disadvantages Of Planned Economy
• Automobile Industry Impact On Us Economy
• Comparing World Economies
• Economy In Liberia
• Economy Recession Causes
• How Is The Economy In Los Angeles ?
• Ranking World Economies
• Tax Cuts To Stimulate The Economy
• Wars Effect The Economy
• What Signs Tell You The Economy Is Turning Around ?
• What Type Of Economy Does Iraq Have ?
• World Economy News