Iraq, Afghan Wars Put 'Severe' Hit on US Finances And limited lawmakers' ability to address downturn: Study By Matt Cantor, Newser User Posted Mar 2, 2012 10:57 AM CST 67 comments Comments US soldiers patrol Baghdad's al-Fadel street on March 14, 2009. (Getty Images) (Newser) – In the short term, wars might help the US economy—but the brief uplift is just a bubble, according to a report. In the long run, wars are a serious drag on the country's finances, the Institute for Economics and Peace finds after studying all major American wars since World War II. Whether essential or not, the wars raise debt and inflation and cut consumption and investment, the report notes, according to the Huffington Post. The wars in Iraq and Afghanistan—the only ones in US history paid for entirely through debt—have been particularly harmful, helping to create "severe unsustainable structural imbalances" in US "government finances," the report says. Thanks to the first-ever wartime tax cuts, these wars "limited the scope of options that were available to policymakers" when they rushed to address burgeoning economic problems. Americans shouldn't view defense spending as a jobs program, researchers add. HuffPo has more on the report's political context.