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BEFORE

In this election year the two biggest issues are the war in Iraq and the economy, but are these two really separate, or is there only one issue? The economic case for linking the two is the following: The war has reduced the supply of oil and pushed its price over $100 a barrel, hurting American consumers and adding to inflation. Moreover, the oil-producing countries are flush with cash and they have driven down world interest rates and encouraged over-borrowing in the US. Meanwhile, the US government has borrowed money to pay for the war, adding to the deficit and limiting its ability to use fiscal policy to keep the economy on track and to respond to the recession with an adequate stimulus. The Federal Reserve kept interest rates too low too long as a way of stimulating economic growth.
AFTER

The war in Iraq and the poor economy will probably be the deciding factors in November. Many voters view them as cause and effect; consequently, as one issue. In fact, they are two very different messes.

The economic case for linking the two is that war has reduced the supply of oil and pushed its price over $100 a barrel, draining the pocketbooks of consumers and adding to inflation. Flush with cash, the oil-producing countries have driven down world-interest rates and encouraged over-borrowing in the United States. Meanwhile, the U.S. government has borrowed money to pay for the war, adding to the budget deficit and making adequate stimulus a harder reach. The Federal Reserve kept interest rates too low, and for too long, as a way of stimulating economic growth.