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By Joseph Stiglitz, Nobel Prize Winner for Economics in 2001
LONDON (The Times) Feb. 23, 2008 – 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.
Most Americans have yet to feel these costs. The price in blood has been paid by our voluntary military and by hired contractors. 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 Deficit spending gives the illusion that the laws of economics can be repealed, that we can have both guns and butter. But of course the laws are not repealed.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.
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 other departments.
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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.
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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.
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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.
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.
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 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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War profitering! Besides Blackwater and Halliburton, there are many others like the Exxon, Shell and BP. Let us not forget Rumsfeld’s protegé’s Paul Wolfowitz and Douglas J. Feith, also here. It would be similar to hiring Hitler’s generals and adjudants post WWII to help rebuild Europe.
We don’t raise taxes, however fuel and food prices are rising proportionately to Bush’s foreign policy and the everlasting WOT rethoric.
The Cheney-Rumsfeld Cabal Deception
"But I will not let myself be reduced to silence."Booman can we add the “The Three Trillion Dollar War” to the sidebar? This seems a good pick. It comes out in March. Thanks Oui!
Maybe Krugmans book “The Conscience of a Liberal” I know the name is the same as the Wellstone book but…I have just started it and its a good read so far. Debunking conservative myths on whats good for an economy. Taxcut crap and the rest.
I remember Rumsfeld saying the war would take “six days, six weeks, I don’t think six months”. Man what a bunch of idiots in this administration.
What has always, always bothered me is how so many people feign innocence about this Cheney-driven Iraq/Afghanistan/Iran/military-bases-in-the-middle-of-the-Middle-East war and occupation: Ohhhh, I couldn’t possibly have said “no” to the US’s collective anger impulses after “9/11.” Ooooooo, nooooooo. I was in Brooklyn, underneath the cloud of smoking embers of the WTC, screaming at the teevee, not because of the deaths or destruction of the towers, but because this was going to lead to a mad unleashing of American military might, I was screaming out loud for the people of the world who would be domineered and destroyed by the American military machine, and clouded by the American diplomatic/media corps spreading their lies and agenda of dominance and imperialism.
I can’t believe someone who’s and “expert” in global affairs like Stiglitz didn’t foresee that a Cheney/neocon administration would be pushing an agenda of aggression and dominance from January 20th, 2001. How can “experts” not have foreseen the aggression that would have come out of the 9/11 response from an administration that LOST THE ELECTION, and had itself bloodlessly installed by a weak (non) opposition party (the Democratic Party, that is) in compliance to a corrupted interpretation of the Constitution by the powers that be, allowing the Supreme Court to adjudicate where they do not belong? How could the pundits, the brainiacs, the experienced among us not understand that every word out of the Cheney Administration was dripping with lies and propaganda, that up is down, and left is right with these spinmeisters?
I am sick, SICK of these people in such high public positions, who are influential in the press, that got and get press coverage (and book deals) who feel so surprised by the backhanded ways of neocons, who’s favorite premise from Leon Strauss is to LIE to the underlings. No excuses, Stiglitz, you had the chance to speak out against aggression, imperialism, the American Empire, and occupation, and now, five years later, a million? lives gone, Middle East instability, and 3 trillion dollars, you decide to speak up? I guess it’s all about the 3 trillion $$$, not the dead, the livelihoods, the hearts and souls, the structure of towns and cities, the civilization and it’s disruption that pisses you off, it’s the wasting of 3 trillion of our tax dollars.
What hooey!