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I am not an economist, but I think it has something more to do with a credit crisis hitting the major banks than Iraq. Alot of the money being 'committed' to Iraq is already spent money, money for bombs that were already being built, money for soldiers wages that were already being paid and so on. That said, I said prior to day 1 that the whole Iraq war business was a load of shit, but lets not blow it completely out of proportion.
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