Monday, November 11, 2013

Arabic States, Post War Germany and Economic Policy

Arabic States, Post War Germany and Economic Policy

This is by far my favorite chapter because I have a strong interest in wartime and post-wartime economic strategy. I strongly admire Erhard for his strong track record, free-market views, and making the change that seems so rare in our latest war. That was probably the most important thing Erhard has done, he gave his zone economic freedom that almost immediately resulted in economic growth.

This type of hard and fast action should be a mentoring ideology for our present day economists dealing with the middle east, specifically the Arab spring and the 2003 invasion of Iraq. Erhard was believer of shock therapy. One of the most recently controversial articles that has come about was regarding the aid funding towards Israel. Currently we are contributing approximately 3.2 billion in aid to Israel. The article argues that it is important we reduce aid gradually over the course of 5-10 years. Now the shock therapy in practice would not agree with this. Unfortunately, the Israel-Palestine conflict is so sensitive that removing our funding from Israel could come off as hostile not only in the eyes of them, but Israel's allies. The only way we can completely remove funding at once would be if it is initiated by Israel. While our aid in actuality is only 1% of Israel's bustling new economy's GDP, getting Israel to say "we don't need your funding, thank you" will be far from soon. As part of our aid package includes giving Israel weapons, which is in their government's best interest.

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