Three Trillion and Counting ! The cost, so far, of the War on IRAQ! BY JOE STIGLITZ, WRITTEN IN 2007 ---And they told us not to worry that all that Iraqi oil was going to pay for the expenses of this war!!!!! As if it were cool and moral to steal the poor family's silver to pay for the burglary and the burning down of the house. The cost of the Iraq and Afghanistan conflicts have grown to staggering proportions - The THING ABOUT EVIL is ....it's so BANAL. Meaning about simple things like RACISM AND GREED. NOTED by philosopher /writer Hannah Arendt on the Nazis who did the Genocide after seeing their faces at Nuremburg trials.
Joseph Stiglitz and Linda Bilmes
The Bush Administration was wrong about the benefits of the war and it was wrong about the costs of the war. The president and his advisers expected a quick, inexpensive conflict. Instead, we have a war that is costing more than anyone could have imagined. The cost of direct US military operations - not even including long-term
costs such as taking care of wounded veterans - already exceeds the cost of the 12-year war in Vietnam and is more than double the cost of the Korean War.
And, even in the best case scenario, these costs are projected to be almost ten times the cost of the first Gulf War, almost a third more than the cost of the Vietnam War, and twice that of the First World War. The only war in our history which cost more was the Second World War, when 16.3 million U.S. troops fought in a campaign lasting four years, at a total cost (in 2007 dollars, after adjusting for inflation) of about $5 trillion (that's $5 million million, or £2.5 million million). With virtually the entire armed forces committed to fighting the Germans and Japanese, the cost per troop (in today's dollars) was less than $100,000 in 2007 dollars. By contrast, the Iraq war is costing upward of $400,000 per troop.
THE DEAD BABY ISSUE! Most Americans have yet to feel these costs. The price in blood has been paid by our voluntary military and by hired contractors. AND THE THOUSANDS of Iraqui BABIES MURDERED. The price in treasure has, in a sense, been financed entirely by borrowing. Taxes have not been raised to pay for it - in fact, taxes on the rich have actually fallen. Deficit spending gives the illusion that the laws of economics can be repealed, that we can have both guns and butter. But of course the laws are not repealed. The costs of the war are real even if they have been deferred, possibly to another generation.
On the eve of war, there were discussions of the likely costs. Larry
Lindsey, President Bush's economic adviser and head of the National
Economic Council, suggested that they might reach $200 billion. But this
estimate was dismissed as “baloney” by the Defence Secretary, Donald
Rumsfeld. His deputy, Paul Wolfowitz, suggested that postwar
reconstruction could pay for itself through increased oil revenues.
Mitch Daniels, the Office of Management and Budget director, and
Secretary Rumsfeld estimated the costs in the range of $50 to $60
billion, a portion of which they believed would be financed by other
countries. (Adjusting for inflation, in 2007 dollars, they were
projecting costs of between $57 and $69 billion.) The tone of the entire
administration was cavalier, as if the sums involved were minimal.
Even Lindsey, after noting that the war could cost $200 billion, went on
to say: “The successful prosecution of the war would be good for the
economy.” In retrospect, Lindsey grossly underestimated both the costs
of the war itself and the costs to the economy. Assuming that Congress
approves the rest of the $200 billion war supplemental requested for
fiscal year 2008, as this book goes to press Congress will have
appropriated a total of over $845 billion for military operations,
reconstruction, embassy costs, enhanced security at US bases, and
foreign aid programmes in Iraq and Afghanistan.
As the fifth year of the war draws to a close, operating costs (spending
on the war itself, what you might call “running expenses”) for 2008 are
projected to exceed $12.5 billion a month for Iraq alone, up from $4.4
billion in 2003, and with Afghanistan the total is $16 billion a month.
Sixteen billion dollars is equal to the annual budget of the United
Nations, or of all but 13 of the US states. Even so, it does not include
the $500 billion we already spend per year on the regular expenses of
the Defence Department. Nor does it include other hidden expenditures,
such as intelligence gathering, or funds mixed in with the budgets of
Because there are so many costs that the Administration does not count,
the total cost of the war is higher than the official number. For
example, government officials frequently talk about the lives of our
soldiers as priceless. But from a cost perspective, these “priceless”
lives show up on the Pentagon ledger simply as $500,000 - the amount
paid out to survivors in death benefits and life insurance. After the
war began, these were increased from $12,240 to $100,000 (death benefit)
and from $250,000 to $400,000 (life insurance). Even these increased
amounts are a fraction of what the survivors might have received had
these individuals lost their lives in a senseless automobile accident.
In areas such as health and safety regulation, the US Government values
a life of a young man at the peak of his future earnings capacity in
$7 million - far greater than the amount that the military pays in death
benefits. Using this figure, the cost of the nearly 4,000 American
troops killed in Iraq adds up to some $28 billion.
The costs to society are obviously far larger than the numbers that show
up on the government's budget. Another example of hidden costs is the
understating of US military casualties. The Defence Department's
casualty statistics focus on casualties that result from hostile
(combat) action - as determined by the military. Yet if a soldier is
injured or dies in a night-time vehicle accident, this is officially
dubbed “non combat related” - even though it may be too unsafe for
soldiers to travel during daytime.
In fact, the Pentagon keeps two sets of books. The first is the official
casualty list posted on the DOD website. The second, hard-to-find, set
of data is available only on a different website and can be obtained
under the Freedom of Information Act. This data shows that the total
number of soldiers who have been wounded, injured, or suffered from
disease is double the number wounded in combat. Some will argue that a
percentage of these non-combat injuries might have happened even if the
soldiers were not in Iraq. Our new research shows that the majority of
these injuries and illnesses can be tied directly to service in the war.
>From the unhealthy brew of emergency funding, multiple sets of books,
and chronic underestimates of the resources required to prosecute the
war, we have attempted to identify how much we have been spending - and
how much we will, in the end, likely have to spend. The figure we arrive
at is more than $3 trillion. Our calculations are based on conservative
assumptions. They are conceptually simple, even if occasionally
technically complicated. A $3 trillion figure for the total cost strikes
us as judicious, and probably errs on the low side. Needless to say,
this number represents the cost only to the United States. It does not
reflect the enormous cost to the rest of the world, or to Iraq.
>From the beginning, the United Kingdom has played a pivotal role -
strategic, military, and political - in the Iraq conflict. Militarily,
the UK contributed 46,000 troops, 10 per cent of the total.
Unsurprisingly, then, the British experience in Iraq has paralleled that
of America: rising casualties, increasing operating costs, poor
transparency over where the money is going, overstretched military
resources, and scandals over the squalid conditions and inadequate
medical care for some severely wounded veterans.
Before the war, Gordon Brown set aside £1 billion for war spending. As
of late 2007, the UK had spent an estimated £7 billion in direct
operating expenditures in Iraq and Afghanistan (76 per cent of it in
Iraq). This includes money from a supplemental “special reserve”, plus
additional spending from the Ministry of Defence.
The special reserve comes on top of the UK's regular defence budget. The
British system is particularly opaque: funds from the special reserve
are “drawn down” by the Ministry of Defence when required, without
specific approval by Parliament. As a result, British citizens have
little clarity about how much is actually being spent.
In addition, the social costs in the UK are similar to those in the US -
families who leave jobs to care for wounded soldiers, and diminished
quality of life for those thousands left with disabilities.
By the same token, there are macroeconomic costs to the UK as there have
been to America, though the long-term costs may be less, for two
reasons. First, Britain did not have the same policy of fiscal
profligacy; and second, until 2005, the United Kingdom was a net oil
We have assumed that British forces in Iraq are reduced to 2,500 this
year and remain at that level until 2010. We expect that British forces
in Afghanistan will increase slightly, from 7,000 to 8,000 in 2008, and
remain stable for three years. The House of Commons Defence Committee
has recently found that despite the cut in troop levels, Iraq war costs
will increase by 2 per cent this year and personnel costs will decrease
by only 5 per cent. Meanwhile, the cost of military operations in
Afghanistan is due to rise by 39 per cent. The estimates in our model
may be significantly too low if these patterns continue.
Based on assumptions set out in our book, the budgetary cost to the UK
of the wars in Iraq and Afghanistan through 2010 will total more than
£18 billion. If we include the social costs, the total impact on the UK
will exceed £20 billion.
© Joseph Stiglitz and Linda Bilmes, 2008. Extracted from The Three
Trillion Dollar War, to be published by Allen Lane
Joseph Stiglitz was chief economist at the World Bank and won the Nobel
Memorial Prize for Economics in 2001. Linda
Bilmes is a lecturer in public policy at the Kennedy School of Government
at Harvard University
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