The Financial Aspect of the War on Terror and the Positive Index

There is a firmament that divides modern history, a firmament after which can be found fear and a general political climate of distrust. This firmament is 9/11, 9/11 meaning the 11th of September 2001, a day on which terrorists attacked the world trade center in New York City.

The political implications of this attack was severe, resulting in the launching of a war on terror which has resulted in millions of deaths in the middle east. There have also been severe economic implications resulting from these terrorist attacks, especially after the war on terror began.

The first major impact was the deepening of the recession the America was already going through. This resulted in a dramatic decline of America’s currency, the dollar. The dollar is a major currency, with a majority of international trading being performed using US dollars as the standard currency due to its perceived solidity and stability. Hence, the sudden decline in value of the US dollar resulted in shockwaves travelling throughout the financial world, with many countries that generally conducted trade using the US dollar suffering losses due to the sudden devaluation of their most liquid asset.

The sudden decline of the US dollar affected many other countries currencies as well. This was due to the fact that many countries in Africa and the Middle East had pegged their currency to the dollar, maintaining a ratio of their currency units to a single dollar unit based on the value of the dollar. When the dollar’s value declined, these countries found the value of their own currency declining as well.

Another major financial repercussion of the war on terror was the immense financial burden it placed upon the countries involved. Wars are expensive, especially a war against an enemy as vague as “terrorism”. The amount America alone has spent on this war on terror is a massive two and a half trillion dollars. One could wonder how America was able to afford such a costly war and simultaneously fulfill the financial requirements of its own people, expenditures that are required to maintain its infrastructure. The answer to this question is simple: it couldn’t.

America simply didn’t have the money to pay for both a war on two fronts (Iraq and Afghanistan) and simultaneously pay for the expenses of maintaining its infrastructure, so it did what anybody would do when they want something they can’t afford: it borrowed. The national debt of America numbers in the tens of trillions, so high that America will likely never be able to fully pay off its debts. The economic implications of this debt is dire; America will eventually have a debt that is so high that it will struggle to pay the minimum required installment. The minimum repayment is in itself a farce as it only ends up increasing the overall debt. Once America’s debt goes past this point of no return, the result will invariably be disastrous.