Circular Economics

Real or imagined, everyone is whining about a downturn in the U.S. economy. One bright spot: exports, and it seems foreign markets are still hot for U.S defense gear.

And none may be hotter than Iraq.

Yes, it seems invade a nation, defeat it, dismantle it, rebuild it, execute a former leader or two along the way, reconstitute its military (assuming we have done a better job in Iraq than the Republic of Georgia), and KA-BOOM! You have a ready-made market. Get Congress to approve a few BILLION in aid, and you have a paying customer. Brilliant.

The world of foreign military sales is alive and well, and Iraq (armed with a U.S.-provided shopping list?) might prove to be a U.S.-created cash cow clamoring to be milked until America’s next tussle. Iraq reportedly has spent more than $3 billion since early 2007. The Defense Security Cooperation Agency (DSCA) has notified Congress of a possible $8.7 billion in additional wares in the past two months alone.

On July 31, DSCA notified Congress of a possible $2.16 billion contract with Iraq for 140 modified M1A1 Abrams tanks. (Conspiracy theory: We destroyed everything they had so we could sell it all back to them, make money, and be sure we could destroy it again if we had to.) General Dynamics, Honeywell, and General Motors will belly up to the bar on this tank deal.

DSCA announced July 30 a possible $2.4 billion sale to Iraq of 24 Bell Armed 407 Helicopters or 24 Boeing AH-6 Helicopters, along with engines, missiles, ammo, etcetera. Bell or Boeing will make the bucks, and we should be able to blast these out of the sky, if needed.

DSCA also announced a possible $3 billion contract for light armored vehicles with our friends in Iraq. Talk about spreading some cheer: General Dynamics, Raytheon, and BAE among others stand to profit

Iraq might prove to be quite the windfall for a defense industry that might be looking at pared-down U.S. defense orders — sort of like the tobacco companies finding markets outside the U.S.

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