Economists are divided on whether the killing of Osama bin Laden will boost the global recovery. Some say it will, as it will increase investors' optimism. Others say the death of the world's most wanted terrorist could actually create economic problems, by cultivating fears of revenge attacks by terrorists in the oil-rich Middle East. But on balance, will the al Qaeda leader's death help the global economy, or drag it down?
Osama's demise could boost the economy: Rising gas prices are holding back the recovery, says Andrew Leonard at Salon. Bin Laden's death could help ease tensions in the Middle East and reinforce reformers pushing "constitutional democracy, rather than dictatorship or Islamic theocracy." And bin Laden's death will boost Obama's "mojo" in budget debates, increasing the odds that he can prevent drastic spending cuts "that would create additional unnecessary drags on economic growth."
"How will bin Laden's death affect the economy?"
Actually, this could push oil prices up: If anything, the killing of bin Laden "might spark a rise in violent activity," says David Berman at the Toronto Globe and Mail. That would mean that oil's "risk premium went up with his death, not down." But there are many factors affecting stability in the region, and the political upheaval in Egypt and Libya will probably have greater impact on the global economy than bin Laden's death.
"Oil and peace"
Bin Laden's death won't move the needle either way: "We can rejoice when an event like this occurs," says Reagan administration budget director David Stockman, as quoted by CNBC, but we're dreaming if we expect it to fix our financial problems. The economy is "totally medicated with fiscal and monetary stimulus that is now coming to an end." To speed up the recovery, we need to fix our real economic problems, such as our massive debt and a looming debt ceiling, and bin Laden's death won't change that.
"Debt overshadows economy, bin Laden death: Stockman"
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