As military strategists plan a US invasion of Iraq to unseat President Saddam Hussein, economists are busy trying to predict the operation's impact on an already struggling US economy.
Plans are still vague, and it is impossible to predict the full effect, but there is a growing consensus that it would hurt, not help.
In the first place, any attack would weigh heavily on the federal budget.
In May the Congressional Budget Office (CBO) predicted a surplus of $773 billion over the next five years (excluding government pension and medical plans). Earlier this month the CBO announced that it now expected the government to run a deficit of $153 billion.
Any invasion would add tens of billions of dollars to the deficit. Some fear that this would affect important domestic programmes, such as a controversial bill to help the elderly pay for prescription drugs, but economists say Congress would most likely simply borrow more to cover the costs of war.
In the near term, an invasion could stimulate growth, as the government spends billions on goods and services for the military. But, according to Mark Zandi, chief economist for Economy.com, it will be a long-term negative for the $6 trillion US economy.
"Large deficits mean higher long-term interest rates and slower growth. If we're devoting resources to fighting a war, we're not going to have them to spend at home," he said.
Just how much a war would cost is unclear. But a leaked Pentagon war plan suggested that the operation could require 250,000 American troops invading from several directions.
By comparison, the US employed about 340,000 American soldiers in the 1991 Gulf War. Thirty-four US allies, including Afghanistan, sent an additional 160,000 troops. The cost then was $61 billion, according to the Congressional Research Service -- $80 billion in today's dollars.
In 1991, however, US allies shouldered almost 80 per cent of the bill -- $48 billion of it. This time, no other countries have yet committed themselves to help fund an invasion of Iraq.
Analysts fear that oil prices would rise substantially, as they did following the two Opec price shocks in the middle and late 1970s and following the Gulf War. Iraq alone produces two million barrels of oil a day. Other Arab states might also cut production if they were dragged into a conflict -- or to take advantage of higher prices.
A New York Times columnist recently wrote: "We're talking about a war in the world's main gas station."
The first oil shock could be instructive, analysts say. In 1973, in the midst of the Arab-Israeli war, Arab oil-producing nations announced major cuts in production, and an embargo of shipments to the US and other nations supporting Israel.
That December the Opec cartel raised the posted price of crude oil -- which had been near $3 a barrel at the start of the year -- to near $12. The result: a massive recession for the United States and much of the industrial world.
Then there are the markets. Over the past two weeks, the Dow Jones Industrial Average has seen triple-digit rises and falls, gaining or losing as much as 500 points in a single day. Such skittishness is a result of corporate scandals at top US companies such as Enron, WorldCom and Tyco.
Investors are worried that consumers, who have continued to spend at normal levels since September 11, could be retreating from the market.
It is still possible the United States could avoid war. Last Tuesday Iraq invited the chief UN weapons inspector, Hans Blix, to Bagdad for talks, suggesting that the three-and-a-half-year ban on weapons searches could be near an end.
But the efforts may do little to avoid a confrontation. The Bush administration rejected an invitation to the UN for talks and to US Congressional members to tour suspected biological, chemical and nuclear weapons sites.
Last week Bush left little doubt that the government was still exploring military options to remove Saddam Hussein. "I will explore all options and all tools at my disposal," Bush told an audience in Madison, Mississippi, on Wednesday.
"Diplomacy, international pressure, perhaps the military . . . We see threats evolving, we will deal with them."
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