> the availability of outside goods does not increase unemployment levels,
> actually, new jobs are created because people have more cash to spend

Let's say Iraqis used to spend $10m a year on shoes made in Iraq. Now they only spend $5m on imported shoes, so they have $5m extra to spend. Except the Iraqi shoemakers are no longer earning anything, so they have $10m less to spend. Overall, Iraqi people have $5m less cash to spend. Rather than creating new jobs, more jobs will be lost in other industries - leaving the shoemakers with rather limited opportunities to find new employment.