Iraq Marshall Plan Financing
Using the Peace Dividend

Some people may be concerned about using an Iraq War "peace dividend" for financing an Iraq Marshall Plan because they are so badly in need, in their own financially pressed communities or states, of whatever peace dividend money there may be. So there is urgent need for research on the net early peace dividend payout to the U.S. from the "Marshall Plan" financial investment in the recovery effort.

  1. Assuming that good macroeconomic leadership is available to manage the recovery program (under UN control), for a "moral equivalent of war" rate of recovery, how much "peace dividend" ("outside") money would be needed to finance such a Marshall Plan to "full employment" recovery and economic self-sufficiency?
  2. Assuming the continuation of oil prices of at least $100 a barrel, and that maximum effort (and capital) is put into rehabilitating the Iraq oil industry (with minimum sabotage, theft and corruption), how long would it take for Iraq oil income to pay for the recovery program and make Iraq self-sufficient?
  3. If there is adequate commercial credit availability, how long would it take for Iraq businessmen (and public enterprises) to build enough consumer goods output to meet the growing consumer goods and services demand of newly employed workers and their families, without inflationary shortages.
  4. How large would the "peace dividend" be, over the course of three years, of ending the war quickly and bringing all the troops and equipment home within one year? This estimate would be based on the present rate of Iraq War cost less the cost of maintaining these forces back in the US and not in combat (preferably including the post-war repair and replacement cost of equipment "used up" in Iraq with the war costs, rather than with the post-war maintenance costs.)

Once it is determined what the magnitude of such financial commitment is established, it then becomes a matter of determining the source of such funds. In considering this, it is worth bearing in mind the extreme levels of waste in the Defense budget, such as reported in a recent GAO report (see analysis or the original (4.5Meg) original), and the fact that a significant shift in U.S. foreign policy away from an interventionist approach would reduce the need for significant portions of that budget.

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