March 9, 2008
Study: Financial Cost Of War Skyrocketing
Economists' Book Estimates Iraq War Costing About $12 Billion Per Month This Year
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Cpt. Jim Hathaway from Columbus, GA, of 3rd Brigade Combat team, 3rd Infantry Division plays soccer with Iraqi children during a joint U.S.-Republic of Georgia army patrol in the Al-leg area of Iraq, about 40 miles south of Baghdad, on March 9, 2008. (AP Photo/Petros Giannakouris)
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Interactive Battle For Iraq The government, the insurgency, key players, background and photos.
In 2008, its sixth year, the war will cost approximately $12 billion a month, triple the "burn" rate of its earliest years, Nobel Prize-winning economist Joseph E. Stiglitz and co-author Linda J. Bilmes report in a new book.
Beyond 2008, working with "best-case" and "realistic-moderate" scenarios, they project the Iraq and Afghan wars, including long-term U.S. military occupations of those countries, will cost the U.S. budget between $1.7 trillion and $2.7 trillion - or more - by 2017.
Interest on money borrowed to pay those costs could alone add $816 billion to that bottom line, they say.
The nonpartisan Congressional Budget Office (CBO) has done its own projections and comes in lower, forecasting a cumulative cost by 2017 of $1.2 trillion to $1.7 trillion for the two wars, with Iraq generally accounting for three-quarters of the costs.
Variations in such estimates stem from the sliding scales of assumptions, scenarios and budget items that are counted. But whatever the estimate, the cost will be huge, the auditors of the Government Accountability Office say.
In a Jan. 30 report to Congress, the GAO observed that the U.S. will be committing "significant" future resources to the wars, "requiring decision makers to consider difficult trade-offs as the nation faces an increasing long-range fiscal challenge."
These numbers don't include the war's cost to the rest of the world. In Iraq itself, the 2003 U.S.-led invasion - with its devastating air bombardments - and the looting and arson that followed, severely damaged electricity and other utilities, the oil industry, countless factories, hospitals, schools and other underpinnings of an economy.
No one has tried to calculate the economic damage done to Iraq, said spokesman Niels Buenemann of the International Monetary Fund, which closely tracks national economies. But millions of Iraqis have been left without jobs, and hundreds of thousands of professionals, managers and other middle-class citizens have fled the country.
In their book, "The Three Trillion Dollar War," Stiglitz, of Columbia University, and Bilmes, of Harvard, report the two wars will have cost the U.S. budget $845 billion in 2007 dollars by next Sept. 30, end of fiscal year 2008, assuming Congress fully funds Bush administration requests. That counts not just military operations, but embassy costs, reconstruction and other war-related expenses.
That total far surpasses the $670 billion in 2007 dollars the Congressional Research Service says was the U.S. price tag for the 12-year Vietnam War.
In other developments:
Although American military and Iraqi civilian casualties have declined in recent months, the rate of spending has shot up. A fully funded 2008 war budget will be 155 percent higher than 2004's, the CBO reports.
Fast Fact
The reasons are numerous: the "surge" of additional U.S. units into Iraq; rising fuel costs; fattened bonuses to attract re-enlistments; and particularly the need to "reset," that is, repair or replace worn-out, destroyed or damaged military equipment. Almost $17 billion is appropriated this year for advanced armored vehicles to protect troops against roadside bombs.The authors of "The Three Trillon Dollar War" estimate that tallying all economic and social costs might push the U.S. war bill up toward $5 trillion by 2017.
Looking ahead, both the CBO and Stiglitz-Bilmes construct two scenarios, one in which U.S. troop levels in Iraq and Afghanistan drop sharply and early - to 30,000 by late 2009 for the CBO, and to 55,000 by 2012 for Stiglitz-Bilmes - and a second in which the drawdown is more gradual.
Significantly, the two studies view different time frames, the CBO calculating possible costs met in the next 10 years, while Stiglitz and Bilmes also include costs incurred during that period but paid for later, such as equipment replaced in post-2017 budgets.
This factor figures most in the category of veterans' medical care and disability payments, where the CBO foresees $9 billion to $13 billion in costs by 2017. Stiglitz and Bilmes, meanwhile, project $422 billion to $717 billion in costs over the lifetime of soldiers who by 2017 are wounded or otherwise mentally or physically disabled by the wars.
"The CBO is only looking 10 years out on everything," Bilmes noted in an interview.
For its part, a CBO critique suggested that Bilmes and Stiglitz might be overstating the expense of treating veterans' brain injuries, a costly category.
The two economists say their calculations are conservative, because they don't encompass many "hidden" items in the U.S. budget. Their basic projections also exclude the potentially huge debt-service cost - on which CBO approximately agrees - and the cost to the U.S. economy of global oil prices that have quadrupled since 2003, an increase analysts blame partly on the Iraq upheaval.
Estimating all economic and social costs might push the U.S. war bill up toward $5 trillion by 2017, they say.
Their book already figures in the stay-or-leave debate over Iraq.
When Stiglitz testified on Feb. 28 before the congressional Joint Economic Committee, the ranking Republican, New Jersey's Rep. Jim Saxton, complained that such projections are too imprecise to help determine relative costs and benefits of the Iraq war.
Saxton said a rapid U.S. pullout could lead to full-scale civil war and Iranian domination of Iraq, "enormous costs" that he said should be weighed in any calculation.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
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- $12 billion a month and our economy continues to crumble. Blue collar man out of work, mass layoffs, companies closing cause work is being shipped overseas. Hey its a good thing Haliburton Mr. cheney''s company got all those no bid contracts on oil making him rich, and our gas prices continue to rise,wow what a coincidence . Thanks guys really looking out for the people you supposedly represent!
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- Who said Americans are financing this war? I thought, we were borrowing money for this war.
Welcome the new China Empire. Idiot Americans are under your mercy. - Reply to this comment
- But we can''t afford health care, education or to repair our infrastructure. And tens of billions in Iraq oil money disappears.
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In the long run, even the high estimate of $7 trillion will probably end up being on the conservative side.
Even this $7 trillion figure though, would represent some $28,000 in long term costs, for each and every U.S. man, woman, and child.- Reply to this comment
- George Bush thought financing this "6 Week War" would be like buying a sports car with his daddy''s credit card. His lack of forethought overwhelmed by the idea that he had our deep pockets to finance such a folly. Now, when faced with the end of the term bills, he has decided to borrow more from the Chinese, our "international predatory lender," who is more than willing to own us. The "financing" will multiply even more rapidly when we are faced with the massive medical and societal expenses of returning, damaged veterans bring home their acquired dysfunctions. And, as his liar''s legacy grows daily, he continues to operate in his own world of denial. To those of us familiar with the way an alcoholic''s "fantasy thinking" occurs, this is not only understandable, it was predictable. Shame on you who did not listen.
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- Vote for McCain if you want the Iraq to continue indefinitely (and new ones started).
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- ..nice ''''spinny'''' distortion! McCain will FINISH the war in less than 4(FOUR) Years.... Just you watch!" Posted by dumbshun
The war will end itself in two years or less, when the US dollar collapses. You can''t pay for a war with worthless currency, and our current policies are causing the dollar to fall ever faster, until the Chinese dump their debt on the open market to cut their loss, triggering OPEC countries to switch to the Euro, which will collapse the dollar altogether. McCain''s wish to bomb Iran will collapse the dollar within one week.
Quit thinking with your bullets, and start using your brain. - Reply to this comment
- I Love spending All My money on gas & the needs of living,..So That Greedy Corporations can reap record Profits !YES ~ It`s Wonderful Life!
No~We Should Not complain,..We should Be Brainwashed
like some of the Insane people on here,..
Bush IS THE GREATEST EVER !
Posted by laborsvoice at 09:19 AM : Mar 10, 2008
You ARE brainwashed or you''d realize that paying for high priced gas is the LEAST of what you have lost. Americans lost their humanity. The minute they could cavalierly send others to die for oil and dismiss all the death of the Iraqis who had no choice in our invasion--and the minute the bottom line for them is not the death or torture but their wallets--we cease to be worthy to even complain.
We meddled. We had no right. We did not just destroy buildings, we destroyed hopes, dreams and many humans whose only "crime" was being ruled by a mad man at the same time we were ruled by a mad man. We will never know the cost Iraqis have borne--until someone invades us, occupies us and shoots, and imprisons and tortures us for our own good too. The price of freedom? We don''t have a clue. Reading about wars is not the same as living through them. Many people are so self centered...I don''t care about the high gas prices I pay--I care about the fact that my country is a bully and is perverted enough to try to pretend to be good guys for starting a war in a country that did nothing to us. the cost for us--is cheap. Compared to the cost to Iraqis. - Reply to this comment
- The LEAST we can do is pay trillions and be blessed with only 4 to 5K in lost lives. The Iraqis have lost soo much more--and the war was not a CHOICE for them like the invasion and killing and occupying was and is for us.
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- b-easy63 - are you advocating complacancy in loosing good men and women and spending 12 B a month? You must be out of mind. Seems to me that more people should be upset with this behavior from our Government. There is no gain for the US in middle-east. 12 B a month should be spent to create new energy sources. Leave the middle-east to those that live there.
Posted by degress12 at 09:18 AM : Mar 10, 2008
When you see my name you should just skip my posts. They are never written for those who have low reading comprehension skills, little to no appreciation of nuance or innuendo and cannot recognize facetiousness if it bit them on the azz. Just skip it--it would be easier for both of us. LOL - Reply to this comment
- At this point, 13 pages worth of posts, with every post hostile to the Bush administration.
Not one defense of him.
No other American President could have united the American people this completely and unanimously. - Reply to this comment
- $12 billion a month? Money well spent. Worth every penny if you ask me. Sincerely, Dubya.
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- Originally, Bush said this war would pay for itself. -No problem. Uh-huh-
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- Of course it is - Republican rule is about to come to an end so they''re trying to get all the money the can NOW before Bush/Cheney leave office and move to Dubai.
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- Something I wrote in 2004:
"When the history books are written for the past year, it will be the story of how the world%u2019s richest 5% convinced the American patriotic poor to vote for the largest tax giveaway in history. This required an extreme play on patriotism; this required a war. So, being patriotic, we voted for those who advocated war, not knowing or caring that they also, not coincidentally, advocate for the rich. Now, the money to pay for our potholes, our schools, our electric power, our poor, is on its way to an offshore account. Here''s the irony: many of these movers and shakers in American politics aren''t even American. Their money buys them political access the patriotic poor will never own. There is just too much money to be made to remain uninvolved in our politics. Like many Americans, I''m proud of our troops and the job they''ve done in Iraq. With victory, patriots may think a lesson has been sent to those corrupt Saudi oil sheiks, with their backward ethics. But, lost amid all of the ''shock and awe'', the sheiks have been spotted with their new dividend revenues, laughing all the way to the bank."
I had no idea how close I''d come to the reality! - Reply to this comment
- April 15 right around the corner folks.
Time to pony up for Bush''s expensive hobby of invading other countries.
How much is $12 Billion?
Ask Schwarzenegger. CA has a deficit of ONLY $15 Billion and they''re already screaming murder.
Heck, what''s $15 Billion!
We spend that in less than 2 months in Iraq. - Reply to this comment
- GENTLEMEN ALL : AFTER THIS NUMBERS, WOULD YOU VOTE FOR A REPUBLICAN WHO STATES " I DON,T MIND BEING 100 YEARS MORE IN IRAQ " THE HELL NO ! WHY WE DON,T IMPEACH THE BIG LIAR ?
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- Remember why the donkey''''s were tossed out in the 90''''s? We need to clean house again. Vote out ALL incumbents in November. I''''d rather have rookies than practiced thieves. Every time they start to become comfortable (with stealing) they need to be changed!!!
HEY YOU, BM Our elections have been compromised since 2000. REPORT: "Wait a minuet, FLA has changed it''s mind. Maybe Gore didn''t win after all" This could take a couple of hours-no days-no weeks to decide. This may have to go to the Supreme Court . Wake up and smell the coffee. Us as voter have lost our power. (ref; HBO "Hacking Democracy") Google that and say, "ohh wow".
We need another way to elect our officials and clean house other than electronic voting. With no documented path to confirm our tally, its just for show. - Reply to this comment
- PAUL WOLFOWITZ :
"THE WAR IN IRAQ WILL PAY FOR ITSELF"......
typical for a guy thinks of israel first, America second.
Posted by neoconRcrazy at 05:11 AM : Mar 10, 2008
In some circles putting another country of your own country can be defined as TREASON! - Reply to this comment
- I can''''t wait to see what this does to our Social Security benefits.
Posted by Donevis
At that point we''ll select a group of gentlemen to go collect what CONgress and the admin have stolen from us. Maybe guys with names like Guido!! - Reply to this comment
