It is widely known that wars create short term economic stimulus. Government prints more money and gives money to soliders and business which in turn comes back to the U.S. and spurs consumer spending in the short term. Once the war in Iraq ends the slowdown in the sectors related to the war will be huge. Take a look at just BOEING and how many jobs they layed off after the first gulf war and do the math yourself.
"When Boeing did that the last time, in 1996 and 1997, after the Gulf War downturn, its assembly lines became so snarled that the company lost money for the first time in nearly a half century.
A clearer picture of what may be in store for the commercial business will emerge Thursday, when Boeing announces third-quarter earnings and for the first time provides more specifics about airplane deliveries in 2003. Boeing has said it hopes to deliver about 500 planes this year and around 400 next year, though those numbers could change. Boeing has not made any predictions about 2003. But many analysts are forecasting that Boeing will deliver only about 300 planes that year, perhaps fewer.
Last week, Boeing began notifying the first 9,000 of what could be as many as 30,000 workers who will likely lose their jobs by the end of 2002 because of the current downturn. Many of those laid off work in the Puget Sound region.
During the last downturn, Boeing's employment fell steadily for five years, from 161,000 to 105,000 by the end of 1995."
http://seattlepi.nwsource.com/business/42812_boeing15.shtml
Thats over a *35%* reduction in work force after the gulf war slow down for Boeing.... Next down turn is going to be much worse because the engagement is much bigger and longer with much more resources not to mention engineering and construction companies will see layoffs due to the pull out from Iraq.
Here some numbers to ponder, number of employees in some of the top U.S. defense related companies publicly traded.
120,000 NOC
153,000 BA
140,000 LMT
81,000 GD
80,000 RTN
5,100 AH
18,600 COL
59,500 LLL
116,00 HON
222,200 UTX
300,000 GE
106,000 HAL
Over 1.4million people employed just in the publicly traded defense and Iraq reconstruction related companies. Add in the private sector and others that I failed to list we are easily talking about +2 million people that have job security directed tied to the War in Iraq. A 50% reduction would be 1 million high paying jobs lost... I doubt we would lose that many but for the sake of things I will be conservative and say 25% of those workers get layed off from slow down in business (end of Iraq War). Thats still 500,000 people layed off and it can have a big effect across the nation not to mention jobs being lost in the Auto and Construction industries.
The storm is brewing just wait and see., the real estate slow down will just make matters worse. Also take into account the massive amount of people that will soon be retiring and taking rather then giving into the system, we have some major economic problems to deal with.