2002 October 16 Wednesday
Robert J. Samuelson Examines Iraq War Economics

Even if military cost of the war went as high as $100 billion that is still less than 1 percent of GDP. Compared to US historical standards for military spending that is not much. The greatest threat would appear to come from either political upset in other countries (eg say revolution in Saudi Arabia) or if Saddam could somehow manage to damage oil fields in Saudi Arabia and other gulf oil producers before he goes down. Iraq's own oil production is already so low that its temporary loss would make little difference:

If Iraq's oil exports "are lost, it wouldn't be a big factor," says John Lichtblau of the Petroleum Industry Research Foundation. Iraq is now exporting about 700,000 barrels a day out of total world demand of almost 77 million barrels daily. The Saudis could offset any shortfall, he says. Moreover, the U.S. economy has become less energy-intensive and is less sensitive to higher prices.

As for the prospects of revolution in Iraq's neighbors: Can someone name the last successful popular revolution in an Arab country? Iran is not an Arab country and so you have look further back. Domestic uprisings leading to revolution in Arab countries are unlikely. The Arab regimes are very effective at controlling dissent. Terrorist attacks against oil fields seem a more plausible threat. But it isn't clear that a US attack on Iraq would increase the probability of that happening.

Share |      By Randall Parker at 2002 October 16 12:32 AM 


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