March 12, 2008 – As the war in Iraq slides into its sixth year, a cottage industry has grown up to determine how much the conflict has actually cost. Senate Democrats just carried out a feckless debate over still-another bill to bring the troops home. This time, they said the nation’s troubled economy left President Bush no choice but to stop spending billions in Iraq. The proposal died quickly under the threat of another veto.
Now two economists, from Harvard and Columbia, are publishing a book titled “The Three-Trillion Dollar War.” That is near the upper end of the estimations of the war’s cost. The Congressional Budget Office says that number is bloated.
At the low end of the scale, the Department of Defense says it has spent $396 billion as of November 2007. In February, the Congressional Research Service noted that the Pentagon hadn’t counted more than $200 billion in approved but unspent funds, or money spent by other agencies.
How much has the Bush administration spent on the war? What will it cost in total if the next president begins bringing the troops home shortly after taking office next year? It all depends on what you count. The two authors blame the war, in part, for the rise in oil prices and add that to the cost. Some analysts add the lost dollars that might have flowed into the economy, had all of that money been spent in the United States. (In truth, much of the money spent for equipment is spent in the United States.)
Without larding on rank speculation, here are numbers that seem undebatable. Nonpartisan congressional analysts estimate that Iraq war’s direct cost will reach $1.2 trillion if the next president begins rapidly withdrawing troops, leaving only 30,000 in Iraq two years from now. Here’s what needs to be added:
Almost every dollar spent on the war is borrowed. The Congressional Budget office says, under the quick withdrawal scenario, interest payments through 2017 will total $590 billion.
“Reseting” the military — replacing worn and damaged equipment and rebuilding the force — is an unavoidable expense. In 2007, the Pentagon asked for $46 billion in “reset” funds. Most analysts believe the costs will reach at least $100 billion more.
Finally, comes the cost of veterans’ health care in the months and years ahead. So far at least 60,000 Iraq-war veterans have been wounded or received mental health care. Each totally disabled veteran is eligible to receive $1.4 million in lifetime disability payments if he lives an additional 50 years. Estimates of the total cost range from $200 billion to $650 billion, a number put out by a group of physicians a few weeks ago. Let’s go with the low number.
With all of that, the Iraq war will cost at least $2.1 trillion — and probably much more.
Billion, trillion … zillion. At these levels, a fictitious number seems to hold almost as much meaning as a real one. So writers and analysts try to make sense of the sums by showing what all that money could buy. One blogger noted that “you could buy 480 million Ferrari 612s,” at $268,000 a copy. That was a year ago, when the war-cost estimates costs totaled only about $1.2 trillion.
The two authors, Joseph Stiglitz of Columbia and Linda Bilmes of Harvard, note that, for less than the cost of the war, the nation could balance the Social Security system for at least 75 years.
Here’s another way to spend $2.1 trillion over 10 years: Eliminate the Alternative Minimum Tax. Provide preschool for every child in the United States. Give every schoolteacher in the nation a $20,000 raise. Double the research budgets for cancer, heart disease and stroke.
In the end, however, all of this number gaming is meaningless. To fight the war, Bush has not taken money intended for other purposes. He is spending money the nation doesn’t have. Almost every dollar spent on the war is another dollar added to the national debt.
Some in the Bush administration argue that war spending stimulates the economy, giving some balance to the equation. But if that were so, why did administration find it necessary to enact a $168 billion stimulus plan a few weeks ago — even as it spends $15 billion a month on the war?
As Lawrence Lindsey, Bush’s former chief economic adviser, puts it: “Taking resources that could be used to build homes, manufacture appliances, or invent and develop new technologies and using them instead to make things that get blown up is not good for an economy.”