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CNN Live At Daybreak
Hidden Costs of War
Aired March 03, 2003 - 05:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: A war with Iraq would come with a multi-billion dollar price tag. But economists say just the threat of war is taking a heavy toll on the U.S. economy.
CNN's Patty Davis counts up the hidden costs of war.
(BEGIN VIDEOTAPE)
JIM PAZIENZA, UNIGLOBE TRAVEL AGENCY: OK, if you want to add the air fare on from San Antonio.
PATTY DAVIS, CNN CORRESPONDENT (voice-over): There are fewer customers these days at Jim Pazienza's travel agency in Washington, D.C. due to a weak economy and uncertainty over war with Iraq is cutting into profits, too.
PAZIENZA: We've noticed people staying closer to home, not traveling to Europe as much.
DAVIS: While the cost of a war could, according to administration sources, reach $95 billion in bullets and bombs, the cost to the U.S. economy is already being felt.
DIANE SWONK, CHIEF ECONOMIST, BANK ONE: There is a bit of paralysis being created by the fear of war itself and once the sand settles, you know, in Iraq, we'll be in a better situation to sort of figure out where we are, where we can go from here.
DAVIS: In Oceanside, California, the fact that thousands of marines from Camp Pendleton have been deployed to the Middle East is hurting local businesses.
UNIDENTIFIED MALE: Sometimes you have to fight to get a seat here, you know, but now it's easy. I just walk on in. You know, it's pretty sad.
UNIDENTIFIED FEMALE: The last few weeks, the last month have been pretty slow. We haven't had any business whatsoever.
DAVIS: Economists say a short and decisive war could actually benefit the U.S. economy.
(on camera): Those marines and their spending power might return more quickly, oil prices fall and business investment and consumer spending pick up.
(voice-over): But if the war drags on, Iraq uses weapons of mass destruction and there are heavy U.S. casualties, economists say, all best are off.
LAURENCE MEYER, FORMER FEDERAL RESERVE GOVERNOR: We could lost four and a half percentage points of GDP in the following year. That would push the global economy into recession. Unemployment rate would be about two percentage points higher.
UNIDENTIFIED MALE: Move your team across.
DAVIS: Most economists agree the U.S. economy is in much better shape to endure war this time than the last Gulf War in 1991. For now, consumers are playing it safe. Jim Pazienza is determined to wait them out. With business down 15 percent, he's put a hold on hiring and is looking for ways to cut costs.
Patty Davis, CNN, Washington.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired March 3, 2003 - 05:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: A war with Iraq would come with a multi-billion dollar price tag. But economists say just the threat of war is taking a heavy toll on the U.S. economy.
CNN's Patty Davis counts up the hidden costs of war.
(BEGIN VIDEOTAPE)
JIM PAZIENZA, UNIGLOBE TRAVEL AGENCY: OK, if you want to add the air fare on from San Antonio.
PATTY DAVIS, CNN CORRESPONDENT (voice-over): There are fewer customers these days at Jim Pazienza's travel agency in Washington, D.C. due to a weak economy and uncertainty over war with Iraq is cutting into profits, too.
PAZIENZA: We've noticed people staying closer to home, not traveling to Europe as much.
DAVIS: While the cost of a war could, according to administration sources, reach $95 billion in bullets and bombs, the cost to the U.S. economy is already being felt.
DIANE SWONK, CHIEF ECONOMIST, BANK ONE: There is a bit of paralysis being created by the fear of war itself and once the sand settles, you know, in Iraq, we'll be in a better situation to sort of figure out where we are, where we can go from here.
DAVIS: In Oceanside, California, the fact that thousands of marines from Camp Pendleton have been deployed to the Middle East is hurting local businesses.
UNIDENTIFIED MALE: Sometimes you have to fight to get a seat here, you know, but now it's easy. I just walk on in. You know, it's pretty sad.
UNIDENTIFIED FEMALE: The last few weeks, the last month have been pretty slow. We haven't had any business whatsoever.
DAVIS: Economists say a short and decisive war could actually benefit the U.S. economy.
(on camera): Those marines and their spending power might return more quickly, oil prices fall and business investment and consumer spending pick up.
(voice-over): But if the war drags on, Iraq uses weapons of mass destruction and there are heavy U.S. casualties, economists say, all best are off.
LAURENCE MEYER, FORMER FEDERAL RESERVE GOVERNOR: We could lost four and a half percentage points of GDP in the following year. That would push the global economy into recession. Unemployment rate would be about two percentage points higher.
UNIDENTIFIED MALE: Move your team across.
DAVIS: Most economists agree the U.S. economy is in much better shape to endure war this time than the last Gulf War in 1991. For now, consumers are playing it safe. Jim Pazienza is determined to wait them out. With business down 15 percent, he's put a hold on hiring and is looking for ways to cut costs.
Patty Davis, CNN, Washington.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
