When the first cruise missiles were launched at Baghdad on March 21st, there was almost a sense of relief that the long, uncertain grind toward war was over. There was also hope that the war’s biggest supporters, crusading neo-conservative hawks like Kenneth Adelman and Paul Wolfowitz, were right: The regime would collapse, the battle would be brief, the Iraqi’s wouldn’t fight, and few lives would be lost.

The war’s outcome isn’t in doubt, although the war’s duration is uncertain. The era of building peace in postwar Iraq is fast approaching. Still, the fog of war makes for tough times analytically. All forecasts are deeply hedged, and with good reason.

That said, odds are the economy is on the brink of another recession. Factories are running at recessionary levels. Retail sales are flagging. The housing market is cooling off. Business confidence is off forty percent since February, according to the economic consulting firm, Economy.com.

Yet if days of peril and weeks of uncertainty over war were the only imponderable, the right economic forecast would be cautious optimism. Business and consumer confidence will pick up when the war ends. Oil prices should come down, and capital spending will revive along with the stock market. Fiscal and monetary policy will shore up the economy. Any double dip recession will be relatively brief.

But here’s my nagging concern: What if the economy doesn’t regain its 1990s vigor during the next rebound. The worry is geopolitical: If the neo-cons have their way-and they wield power now--Iraq is only the opening salvo in a much larger global military commitment. Already, the U.S. is expanding its geo-military commitments to Korea, Colombia, Iraq, Afghanistan, the Philippines, Djibouti, Qatar, Yemen, and Bosnia/Kosovo. The neo-cons are eager for regime change in North Korea and Iran. Everyone knows that the Administration’s nearly $75 billion request to pay for war in Iraq and homeland security is only a down payment on a much larger occupation and reconstruction bill. But the price tag could soar to mind-boggling levels if the U.S. embarks on a much more ambitious geopolitical strategy.

What sort of cost am I talking about? International economists at UBS Warburg came up this rough calculation: The military budget could more than double from 3.5 percent of gross domestic product to as much as eight to nine percent of GDP in coming years. At the higher end of their estimate, that translates into federal budget deficits of eight to nine percent of GDP.

It’s still too early to say how the Administration will ensure peace in the postwar Iraq world. Will it continue a policy of regime change? Or will the government return to a more traditional diplomatic, multilateral approach? The economy’s long-term vigor largely rests on geopolitical strategy.

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