Comments on: Iraq and the Economy http://www.michiganindependent.com/2008/02/25/89/ The University of Michigan's Progressive News & Views Magazine Wed, 07 Jan 2009 00:33:42 +0000 http://wordpress.org/?v=2.3.2 By: Justin http://www.michiganindependent.com/2008/02/25/89/#comment-339 Justin Tue, 26 Feb 2008 03:53:11 +0000 http://www.michiganindependent.com/2008/02/25/89/#comment-339 Withdrawing from Iraq is not the only part of the plan. It is part of an overall strategy to calm down the Middle East. Worries about stability in the Middle East is one of the major reasons why oil prices are going up. Rising oil prices are leading us into inflation. Calming this fear allows us to focus on the recession that many people say is either here or will be here soon. Remember, the problem with stagflation is that monetary policy can help fight inflation or recession, but not both. By fighting inflation with a means outside of monetary policy, we are then able to fight recession with monetary policy. That monetary policy provides the economic stimulus, not the changes in foreign policy. Withdrawing from Iraq is not the only part of the plan. It is part of an overall strategy to calm down the Middle East. Worries about stability in the Middle East is one of the major reasons why oil prices are going up. Rising oil prices are leading us into inflation. Calming this fear allows us to focus on the recession that many people say is either here or will be here soon.

Remember, the problem with stagflation is that monetary policy can help fight inflation or recession, but not both. By fighting inflation with a means outside of monetary policy, we are then able to fight recession with monetary policy. That monetary policy provides the economic stimulus, not the changes in foreign policy.

]]>