The three authors, writing in the Wall Street Journal today, describe the economic costs of a nuclear Iran: “After the looming fiscal cliff, the next major challenge facing the United States will be preventing Iran from obtaining a nuclear weapons capability. Living with a nuclear Iran is strategically untenable. Like the fiscal cliff, this is a matter of both economic and national security. Preventing Iran from acquiring nuclear weapons carries various risks, but inaction has its costs, too—especially to the price of oil and, in turn, to the U.S. economy.”
The report calculates the total additional risk premium that an informed oil market might reflect after Iran has crossed the nuclear threshold—that is, the amount added onto the price of oil due to the possibility of supply disruption. The report concluded that the collective risk of the various scenarios that could come to pass if Iran were allowed to go nuclear would cause significant economic harm to the United States and the global economy:
• Oil prices could rise by 10% to 25% in the first year (or $11 to $27 more per barrel). As instability and tensions remain high, so will prices, even rising as much as 30% to 50% ($30 to $55 per barrel) within three years.
• Consequently, gasoline prices could jump 10% to 20% in the first year. Within three years, the cost of gas could rise more than 30% (or more than $1.40 per gallon). Such sustained price increases would have a pronounced negative impact on the U.S. economy.
• U.S. gross domestic product could fall by about 0.6% in the first year—costing the economy some $90 billion—and by up to 2.5% (or $360 billion) by the third year. This is enough, at current growth rates, to send the country into recession.
• The unemployment rate could also rise by 0.3 percentage points in the first year and by nearly 1% two years later, resulting in some 1.5 million more Americans becoming jobless.
The authors conclude in their Wall Street Journal article: As American and other policy makers contemplate what it will take to thwart Iran’s nuclear ambitions, they must not dwell exclusively on the potential short-term impacts of economic pressure or military action. Over the medium and long term, the economic costs of a nuclear Iran may be no less real and far more enduring.
The NCRI and PMOI (MEK) has on many occasions maintained that the Iranian regime perceives a Western policy of conciliation towards it as a sign of weakness that emboldens it in its aggressive pursuit of nuclear weapons, export of terrorism, support for the Syrian regime, dominance and negative influence in Iraq. The Iranian opposition movement has stated that if the region were to see peace and stability, then a firm policy against the Iranian regime is essential in order to encourage moderate forces in the region towards democracy and peace and establish an international front against extremist anti-democratic religious fundamentalists that so threaten their own people and the world.