A new book by Nobel prizewinning economist Joseph Stiglitz tracks the effect that the war in Iraq has had on the American economy. The Three Trillion Dollar War — The True Cost Of The Iraq Conflict outlines the immense downside across the globe of this policy.

In terms of the current credit crunch, which arose out the sub-prime mortgage fiasco, many had blamed Alan Greenspan, then Chairman of the U.S. Federal Reserve Bank, for keeping rates too low for too long. Combined with steeply rising house prices this gave the banks a one-way bet for lending to the trailer-park poor.

However, it’s clear from Stiglitz’s book that the low rate regime was engineered to mask the terrifying cost to the American economy of the wars in the Middle East.

We can now see the extent of the disaster to American interests the war is continuing to cause. The conflicts have led to a strengthening of Gulf, Chinese and other sovereign wealth funds which have bought up large chunks of prime U.S. assets, including blue-chip bank stock, while, in some cases, simultaneously enjoying a bonanza from higher and higher oil prices.

In ten years these bank stocks should prove exceptionally rich investments as they recover from current adverse credit conditions. The war has given them a one-way bet.

Joseph Stiglitz works out the numbers and they make depressing reading.

The American economy is now in recession. A slew of new data clearly reveals both a marked slowdown in activity, combined with a rise in inflation — something not seen since the stubborn “stagflation” period of the 1970s.

Despite all this, some economists expect a robust return to growth later in the year off the back of aggressive rate cuts by the Fed and a financial package from the President that will see checks delivered to taxpayers, and others on low incomes, by June.

We shall see.

If you have lost your credit card or fear it may have been stolen, notify the issuer of the card as soon as possible. Under US law, once you have notified the credit card company that your card is lost or stolen, you are not responsible for unauthorized charges. Your liability for charges on a lost or stolen card is limited by law to $50.

Although many people are aware of this, still unscrupulous scamsters may try to sell you credit card loss insurance protection. Using telemarketing schemes to sell worthless insurance, these scamsters can cost consumers dollars to protect what is already protected by law. Often they will tell people that the law has changed, and they are now responsible for all unauthorized charges.

The best defense you have against scam artists is knowledge. When you hear someone telling you something that doesn’t agree with what you know, be on your guard. Read your credit card agreement and know the terms of your account and procedures for dealing disputed charges. List your phone number on the National Do-Not-Call Registry. Remember, never give out your account number, social security number or any other personal information over the phone unless you are sure of the business that you are dealing with.

According to the results of a survey by Runzheimer International, Detroit is the most expensive city in which to own a car. Insurance costs were the main reason for the high cost of car ownership in Detroit.

The survey took into account differences in insurance and maintenance costs to compare costs of owning a vehicle in different US cities.

See the list at Costliest Car Ownership Cities.

Is there a problem with Social Security in the USA? Here’s a little bit of advice :

By now you’ve probably already heard that Social Security is in a little bit of trouble. There’s probably no need to panic, but you should understand that the younger you are, the more different it will probably be. Who knows exactly what will happen?

Hopefully, you’ve also taken the time to figure out what you’ll do to pay for things in retirement. Because Social Security may not be there, here are a few alternatives:

1. Win the lottery
2. Inherit from your rich aunt who only loves you
3. Marry rich
4. Save a little money for yourself

Of all these options, marrying rich is probably the best choice. However, if you want to play the odds (and stay on your current spouse’s good side), you should probably start saving money.

Nobody is going to do it for you. All it takes is for you to make the decision to start saving and investing. This is not rocket science, so keep it simple. Here’s the secret formula:

1. Figure out how much you’ll need to save
2. Save that much
3. Invest it adequately — you don’t have to knock the cover off the ball
4. Enjoy the present — don’t stress to much about the future

Now, you have to do it yourself, but you don’t have to do it by yourself. What’s the difference? You have to actually decide to take action, and take the money out of your budget each month. However, you can get help on steps 1, 3, and 4 (you might even get help on step 2 from your employer!). The Web is full of financial calculators and financial advice — some of it is even good advice. You can also get help from financial advisors and folks who’ve been down the road before you.

You should be careful about who you listen to, because there is some bad advice out there. I heard a great way to help weed out bad economists (but I can’t remember who said it), and I think it’s relevant to financial advice as well. She said something along the lines of: The more famous a person is, and the more certain they seem to be, the more likely it is that they’re wrong. Avoid anybody who makes broad general statements on what you always or never need, and watch out for financial hype.