Kudlow’s Money Politics

What Is the Cost of Freedom?

Surprise, surprise. Having failed to penetrate General Petraeus’s story about the great improvements on the ground in Iraq, liberals are now trying to make the case that the cost of the Iraq war may have somehow undermined the economy, and even caused the current slowdown. What complete and utter nonsense.

First point: The U.S. has spent roughly $750 billion for the five-year war. Sure, that’s a lot of money. But run the numbers and the total cost works out to a miniscule 1 percent of the $63 trillion GDP over that time period. It’s miniscule.

More important, the real question we ought to be asking ourselves is what is the cost of freedom? While the Left refuses to acknowledge it, the undeniable fact is that the United States homeland has not been attacked since September 11. Meanwhile, over in Iraq, al Qaeda and other extremist terrorist groups have been utterly routed by U.S. forces. It’s another fact the Left hates to acknowledge.

Perhaps the anti-war forces should recall the portion of John F. Kennedy’s inaugural address, where he called on Americans to pay any price, and bear any burden, in order to preserve freedom, liberty, and democracy. Do these folks actually think 1 percent of GDP is too large a price, too heavy a burden? I sure hope not.

And by the way, despite the current slowdown, during the five years of the Iraq war the U.S. economy has performed remarkably well. Real GDP has increased by 16 percent, or 3 percent annually. The unemployment rate has hovered below a historically low 5 percent for quite some time. Nearly 10 million jobs have been created. Household net worth has increased by $20 trillion. Industrial production has expanded by 13.5 percent.  Even home prices, despite the current correction, have increased by 20 percent.

Lest we soon forget, anti-freedom, anti-capitalism jihadists were attempting to drive a dagger through our economy. Not only did they fail miserably on that front, they also failed to stem the rising tide of free-market capitalism throughout the world. Global GDP has averaged nearly 5 percent annually. The capitalization of the world’s stock market increased 159 percent — or $35 trillion. Meanwhile, new emerging-market economies saw their stock market index collectively rise by 223 percent.

So with all respect, I say to Nobelist Joe Stiglitz and others of his ilk: You are wrong.

Larry Kudlow is the author of JFK and the Reagan Revolution: A Secret History of American Prosperity, written with Brian Domitrovic.

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