wallyburger

Published on Tuesday, January 17, 2006 by the Los Angeles Times


War's Stunning Price Tag
by Linda Bilmes and Joseph Stiglitz


Last week, at the annual meeting of the American Economic Assn., we presented a new estimate for the likely cost of the war in Iraq. We suggested that the final bill will be much higher than previously reckoned — between $1 trillion and $2 trillion, depending primarily on how much longer our troops stay. Putting that into perspective, the highest-grossing movie of all time, "Titanic," earned $1.8 billion worldwide — about half the cost the U.S. incurs in Iraq every week.

Like the iceberg that hit the Titanic, the full costs of the war are still largely hidden below the surface. Our calculations include not just the money for combat operations but also the costs the government will have to pay for years to come. These include lifetime healthcare and disability benefits for returning veterans and special round-the-clock medical attention for many of the 16,300 Americans who already have been seriously wounded. We also count the increased cost of replacing military hardware because the war is using up equipment at three to five times the peacetime rate. In addition, the military must pay large reenlistment bonuses and offer higher benefits to reenlist reluctant soldiers. On top of this, because we finance the war by borrowing more money (mostly from abroad), there is a rising interest cost on the extra debt.

Our study also goes beyond the budget of the federal government to estimate the war's cost to the economy and our society. It includes, for instance, the true economic costs of injury and death. For example, if an individual is killed in an auto or work-related accident, his family will typically receive compensation for lost earnings. Standard government estimates of the lifetime economic cost of a death are about $6 million. But the military pays out far less — about $500,000. Another cost to the economy comes from the fact that 40% of our troops are taken from the National Guard and Reserve units. These troops often earn lower wages than in their civilian jobs. Finally, there are macro-economic costs such as the effect of higher oil prices — partly a result of the instability in Iraq.

We conclude that the economy would have been much stronger if we had invested the money in the United States instead of in Iraq.

Spending up to $2 trillion should make us ask some questions. First, these figures are far higher than what the administration predicted before the war. At that time, White House economic advisor Lawrence Lindsey was effectively fired for suggesting that the war might cost up to $200 billion, rather than the $60 billion claimed by the president's budget office. Why were the costs so vastly underestimated? Elsewhere in the government, it is standard practice to engage in an elaborate cost-benefit analysis for major projects. The war in Iraq was a war of choice, an immense "project," and yet it now appears that there was virtually no analysis of the likely costs of a prolonged occupation.

Could we have fought the war in ways that would have protected our troops better and cost the country less? A Pentagon study apparently concludes that better body armor would have prevented many deaths and injuries. Penny-pinching in such matters during the rush to war has led to steep long-run costs for the nation and, tragically, for the individuals involved.

Even more fundamentally, there is the question of whether we needed to spend the money at all. Thinking back to the months before the war, there were few reasons to invade quickly, and many to go slow. The Bush policy of threatened force had pressured Iraq into allowing the U.N. inspectors back into the country. The inspectors said they required a few months to complete their work. Several of our closest allies, including France and Germany, were urging the U.S. to await the outcome of the inspections. There were, as we now know, conflicting intelligence reports.

Had we waited, the value of the information we would have learned from the inspectors would arguably have saved the nation at least $1 trillion — enough money to fix Social Security for the next 75 years twice over.

Linda Bilmes, a former assistant secretary of Commerce, teaches public finance at the Kennedy School of Government at Harvard. Joseph Stiglitz is a professor at Columbia University. He won the Nobel Prize in economics in 2001.

© 2006 Los Angeles Time

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swd1974

If we were allowed to actually fight a war it wouldnt cost a hundredth of that. Of course its a catch 22 Wally. If we fought the war right your party would be going insane right now. Because unfortunately you have to kill large amounts of people in war and thats not really allowed anymore.

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Dback Jon

swd - even fighting a war your way would cost trillions.

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R.I.P Tim Minnick

The KING of Cards

wallyburger

Just astounding. Trillions of dollars. It would be cheaper to just pay the oil barons their tribute not to steal mid east oil. Would reduce the waste of human lives to nothing.

Trillions of dollars for a bunch of lies. J F A.

16,000 wounded and dead soldiers ............ so far.

Ive never seen so many zeroes to the left. A romp in the park will cost ghastly numbers of lives, yet nothing seems to put a dent in the hawkish mentality.

__________________
In politics, nothing happens by accident. If it happens, you can bet it was planned that way.

Franklin D. Roosevelt

"Those who can make you believe absurdities can make you commit atrocities."
--Voltaire

swd1974

Its not even possible to spend that in a war if it lasts 10 days. Unless we pay the soldiers what they are worth but even then I dont think youd hit a trillion.

Listening to some tunes Wally and I thought of you.

The eastern world, it is explodin’.
Violence flarin’, bullets loadin’
You’re old enough to kill, but not for votin’
You don’t believe in war, but what’s that gun you’re totin’
And even the Jordan River has bodies floatin’

But you tell me
Over and over and over again, my friend
Ah, you don’t believe
We’re on the eve
of destruction.

Don’t you understand what I’m tryin’ to say
Can’t you feel the fears I’m feelin’ today?
If the button is pushed, there’s no runnin’ away
There’ll be no one to save, with the world in a grave
[Take a look around ya boy, it's bound to scare ya boy]

And you tell me
Over and over and over again, my friend
Ah, you don’t believe
We’re on the eve
of destruction.

Yeah, my blood’s so mad feels like coagulatin’
I’m sitting here just contemplatin’
I can’t twist the truth, it knows no regulation.
Handful of senators don’t pass legislation
And marches alone can’t bring integration
When human respect is disintegratin’
This whole crazy world is just too frustratin’

And you tell me
Over and over and over again, my friend
Ah, you don’t believe
We’re on the eve
of destruction.

Think of all the hate there is in Red China
Then take a look around to Selma, Alabama
You may leave here for 4 days in space
But when you return, it’s the same old place
The poundin’ of the drums, the pride and disgrace
You can bury your dead, but don’t leave a trace
Hate your next-door neighbor, but don’t forget to say grace
And… tell me over and over and over and over again, my friend
You don’t believe
We’re on the eve
Of destruction
Mm, no no, you don’t believe
We’re on the eve
of destruction.

__________________
Goal for 2008: Half as many penalties.

Dback Jon

If we did it like that - destroy Iraq completely, yes, the long term war that would spark would cost trillions.

__________________



R.I.P Tim Minnick

The KING of Cards

PortlandCardFan

It wouldn't cost trilions... because at the end of that day. Money would be worthless.....

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SirChaz

$2,000,000,000,000.00


Oh, well, it's not like it's real money or anything.

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SirStefan32

I'll bet you anything SWD could win this war for 1% of that price.

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swd1974

What do you mean by destroy completely? Did we destroy Germany completely? No? Jpan? No. Let the soldiers fight and you will find a tremendously inexpensive war compared to what it costs now.

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devilalum

I would love to hear what "actually fight" the war would look like?

Fire bomb women and children? Atomic Bombs?

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swd1974

See this drives me nuts. This is all I hear from people that have not been in the military in the last 20 years or have not been in a "war" zone in the last 20 years.

Here are 2 examples of hundreds.

#1 Gunners (ie people that can be killed any second by being in an exposed turret) manning 50 caliber machine guns or MK-19's (you see them on tv on patrol alot) actually are manning guns with NO AMMUNITION! The ammunition is in the vehicle. So when they are shot at (and they survive the 80% death rate) they are required first to identify who shot at them and make certain that the person shooting is an enemy combatant trying to kill them. Then and only then they are allowed to attempt to load the weopon (both Mk-19's and 50 cals requred at least 60 seconds to load) and then are allowed to return fire. Want that job?

#2 As we have talked about on here. If you shot an enemy combatant and you are not sure if he is dead you are not allowed to shot again. Your only option is to lead your patrol to the wounded or dead man to check to see his status before treating him or finding him dead. Against terrorists this is a great way to die from a handgrenade.

Neither tactic was one used in ww1, ww2, Vietnam, Korea or any other war that we fought to win (Ill grant you we didnt try to win in vietnam but at least we gave the soldiers a fighting chance 1 on 1).

Again, I dont have time to list a million other ways we set our soldiers up to fail for the sake of the almighty media camera and so people at home can feel morally superior. But here are 2 good examples.

In wars past if you got shot at you killed the people around you to stay alive there was no outcry. There was no talk of "Oh my god your alienating the entire civilian population and they will rise up and kill us all" but now thats the argument thrown around like crazy. Why is it that the germans and the japanesse and the koreans and the vietnamesse understood perfectly that civilians die in war. But the arabs need to be treated with gloves and love and care? Its war. War is HELL.

So to respiond to what "really fighting" is. Let them fight as if they are trying to protect themselves, let them fight as if they are soldiers. Then our "gentleness" or catering to the camera and our false sense of, I dont know, fighting a "clean" war(?) will not be taken as weakness or doubt.

__________________
Goal for 2008: Half as many penalties.

40yearfan

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CardLogic

I am anti-war. But I totally agree with swd and his take on the methods to conduct war. It's nuts to conduct war with your hands tied!

I think it's best to not war. However, once at war it ought to be fought to win.

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krepitch

$2,000,000,000,000

Try it without the cents. It doesn't look as bad.