ISSN 2736-1608
International Journal of Law and Legal Studies ISSN 2463-5634 Vol. 6 (3), pp. 001-009, March, 2018. © International Scholars Journals
Full Length Research Paper
Wars and the current crisis in the American economy
Adil H. Mouhammed
University of Illinois, Springfield, USA. E-mail: [email protected].
Accepted 22 October, 2018
Abstract
The purpose of this paper is to explain clearly that the recent economic crisis in the U.S. economy is grounded in the wars in Afghanistan and Iraq aimed at controlling world oil and the globe. These goals reflect the dominance of militarism, of oil corporations, and of the financiers represented by the Federal Reserve (Fed) . These institutions represent the dominant triangle of the American higher-plane capitalism. On the one hand, the wars have been increasing government spending on militarism, which generates huge budget deficit and public debt and a higher rate of inflation and a lower exchange rate of the dollar. On the other hand, the two wars are increasing the prices of oil, which contribute significantly for increasing the cost of doing business. The Fed had to defend its position by increasing interest rates by reducing lending. For their own survival, businesses have to increase prices and cut cost. All these private and public actions cumulatively generate stagflation (high inflation and unemployment) and the Great Recession of December 2007.
Key words: Militarism, oil corporations, financiers, budget deficit, inflation, unemployment, peace economy, Veblen, Melman.