that america will go into a great depression when the USA GOES to war with iraaq.

As long as the government doesn't try to protect an ailing economy through demand side policies I think we will be fine. I personally don't think it will be nearly as bad as the media would have most people believe.

I agree neil... but now i pose a new ? to you. Since you dont believe america will be in such a bad depression, do you think we should hellp other countrys during the soon to be war

Could you please be more specific? Do you mean foreign aid?

yes

We already spend next to nothing in "foreign aid." Most of what we call foreign aid is money that goes to US based defense contractors, whom the government pays to build hardware which we then give to other countries. In non defense areas, it is much the same. I can't put my finger on the source data, but of western industrialized nations, we have one of the lowest percentages of foreign aid.

Definetly not

When Iraq is out of the way, the Geopolitical situation will be much more stable (hopefully)

I think the odds are that the US will go into a depression (though I hope not). But not because of a war with anybody. Wars don't cause a depression. (Though people might become depressed if we go to war.)

Do I think we'll go into a depression as a result of war with Iraq? Nope.

A depression is defined as:

A period of drastic decline in a national or international economy, characterized by decreasing business activity, falling prices, and unemployment.

I don't think a war where we will be such an overwhelming force could have that large of an effect on the economy.

Mike

[edit] Created new topic to address quarkhead's comments... [/edit]

America will not fall into a depression because of the Iraq war.
It is already sliding into one.

The war will actually stimulate the economy by offering the populace a united cause.
Modern warfare generates jobs.
Jobs create income.
Income stimulates spending.
Spending eases depression.

Mind you, it only works as long as there is no collateral damage on the home soil.

Our economy is awfully strong and I do not think that the Iraq war would be the cause of a depression. However I am concerned about the coincidence of policies in our government between the present and the 1920s. Many of the things I teach about the problems in the economy that we addressed in the aftermath of the stock market crash seem to be around in our economy today. But still, I see no depression on the horizon, just causes for concern.

I only foresee an economic depression occurring if "W" is re-selected in '04.

The chief cause of the Great Depression was the shrinking of the money supply, that is not happening today.

Shrinking of the money supply? In the superheated economy of the late 1920s the Fed encouraged more speculation by the market by lowering interest and then after the crash raised interest rates in the beginning of the depression. This is similar to saying the Depression was caused by unemployment.

I have read a little on this subject. The text books I have within reach cite the following causes of the Great Depression.
Unequal distribution of wealth, margin loans for the stock market (hurt the banks who were left holding the bag), the stock market crash, the overproduction of agriculture that led to a long term agricultural depression that started after World War I, overproduction of factories, lack of consumer demand after installment purchasing plans prolonged a period of high consumption of new electric appliances and automobiles (also caused by unequal distribution of income, too much capital too little consumer spending), holding companies that cause an incestuous relation between corporations that pulled each other down causing some healthy companies to go bankrupt along with the inefficient ones.

Money was available after the crash but corporations were too frightened to invest in many new production facilities. The shrinking economy shrunk the money supply.

The 8 week rally at the NYSE in October & November 2002 blew that theory out

The U.S. economy is just in a small slump but will come back when the worries of Geopolitics slow down

You are given reasons for the recession, not the depression. The money supply shrunk by nearly a third between 1929 and 1933, turning a recession into a depression.

There are few things 90+% of economists agree on, one of them is you do not let the money supply shrink during a recession.

Oh, If Friedman's "Capitalism and Freedom" happens to be within your arm's reach read Chapter 3.