The Three Trillion Dollar War

I heard an interview recently about a new book on the cost of our war in Iraq and Afghanistan, The Three Trillion Dollar War, by Joseph Stiglitz and Linda Bilmes. 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. They put the likely total cost of this war at $ 3 trillion dollars. The only war in our history that cost more was the Second World War when 16.3 million U.S. troops fought a four-year campaign at a cost of $ 5 trillion (in 2007 dollars, after adjusting for inflation). The cost per troop in today’s dollars was less than $100,000. Compare that cost per troop in Iraq at upward of $400,000.

On the eve of our war with Iraq, President Bush’s economic adviser and head of the National Economic Council, Larry Lindsey, suggested the cost might reach $200 billion. Secretary of Defense, Donald Rumsfeld and OMB director, Mitch Daniels, projected a much lower cost in a range of $50 to $60 billion. They assumed that much of the cost would be shared by other countries and that increased oil revenue would pay for the cost of postwar reconstruction. Larry Lindsey went on to say that, “the successful prosecution of the war would be good for the (U.S.) economy.”

Unlike our other wars, most Americans have yet to feel the real costs of this conflict. As far as the cost of lives, this war is being fought by a voluntary military and by hired contractors. It has been financed entirely by borrowing. Unlike other wars, taxes have not been raised to pay for it, in fact this administration cut taxes on the wealthiest Americans thereby increasing the amount we need to borrow. Some 40% of the money we borrow comes from outside this country, with China being one of our biggest lenders. The cost of all this borrowing will be born by future generations of Americans, our grandchildren and likely their children.

The book points out that there are hidden costs not reflected in the official total. Each soldier that dies in the war represents a $500,000 cost to the Pentagon ($100,000 death benefit and $400,000 life insurance), but the U.S. Government values the life of a young man at the peak of his future earning capacity at $7 million when it comes to health and safety regulations. Using the government’s own regulation guidelines, the unrealized cost of 4,000 American troops killed in Iraq comes to $28 billion rather than $20 million in benefits paid to families of soldiers. In fact, the official number of American deaths reported are underestimated when you consider that the Defense Department’s casualty statistics focus on deaths from hostile (combat) action rather than “non-combat related” deaths that happen all the time in a dangerous war zone.

Another big hidden cost to this war is the soldiers who have been wounded, injured or suffered from disease. While the official casualty list is posted on the DOD website, to get information on the nonfatal casualties of this war you will need to request it under the Freedom of Information Act. The Pentagon keeps two sets of books. The data shows that there are twice as many wounded and injured as killed in this war. Thanks to modern medicine, many more soldiers that would have been casualties in other wars are now saved. These wounded and injured soldiers now come home to long, expensive rehabilitation and care. Many will never be productive citizens again. We are only beginning to realize how many soldiers are also returning with not only physical injuries, but devastating mental injuries and trauma, like post traumatic stress syndrome. Many of these soldiers will become homeless with alcohol and drug addictions based on our experience after Vietnam. Their long-term care and cost to our society cannot be ignored. It is part of the hidden cost of this war.

The authors of this book looked at many things in calculating the real cost of the war in Iraq and Afghanistan. They looked at the cost of continuing to use emergency funding requests and borrowing, multiple sets of books on costs and continued underestimation of resources required to fight this war and made some very conservative assumptions and calculations. Their figure based on current spending (reported and hidden) and amounts likely to be spent to conclude this war arrives at more than $3 trillion for the Iraq and Afghanistan War. They also point out that figure ONLY represents the cost to the United States. It does not reflect the huge cost to the rest of the world or to Iraq and Afghanistan itself.

I don’t know about you, but I have a hard time getting my mind around a million of anything, let alone a billion... or my God... a trillion.

FOOD for THOUGHT...