Those who say “it is the economy” and “not the war” forget that the war has had a negative impact on the economy. When the US went to war in Iraq in March of 2003, the American people were told it was going to cost $50 billion. Just recently, the Bush administration has asked for a defense budget of 515.4 billion, a 7.5 increase, while calling for major cuts (200 billion) from Medicare and Medicaid programs. This is in addition to a request for an additional supplemental 70 billion for the wars in Afghanistan and Iraq. The next American President will inherit a deficit of 400 billion dollars.While President Bush says the war has not hurt the US economy, and he has never lied to us before, a new book puts a “conservative estimate” of the war’s cost at $3 trillion. It could easily be as high as five trillion.
Nobel laureate and former chief World Bank economist, Joseph Stiglitz, and co-author Linda Bilmes of Harvard University, argue in The Three Trillion Dollar War that the Bush administration has mislead the American people by repeatedly underestimating the long term costs of the war. Currently, it’s costing $25 billion a month. Two more years of staying in Iraq will cost another $600 billion. Three more years and it’s close to a trillion dollars more.
Stiglitz and Bilmes argue that the Iraq War has become the second-most expensive war in US history, after World War II. They argue that costs of the war outlined in the budget are not the full cost because there are other costs hidden elsewhere in the defense budget.
The White House has responded negatively to the book. White House spokesperson Tony Fratto stated, “People like Joe Stiglitz lack the courage to consider the cost of doing nothing and the cost of failure. One can’t even begin to put a price tag on the cost to this nation of the attacks of 9/11.” This is a strange comment when you realize that Iraq had nothing to do with 9/11!
According to the authors, the most important budgetary costs are the long-term costs of taking care of veterans-their disability and veterans’ healthcare benefits. This cost will total hundreds of billions of dollars over the next few decades. This war has had a huge number of injuries. Of the 1.6 million who have fought, an estimated 39 percent will wind up with some form of disability. The longer the war lasts the greater the number of injuries and greater costs of disability benefits into the future. The official DOD website, gives a number around 30,000 wounded, but that is only the wounded in combat. There are also non-combat injuries that double the DOD figure which are also costly. The number of American fatalities reached 4,000 by Easter Sunday 2008. Their families must also be compensated. It is impossible to imagine what Mc Cain’s “hundred year war” would cost!
The war has also been associated with an increasing price of oil. We’re spending money on oil exports from Saudi Arabia and other oil-exporting countries. Since the beginning of the war, the price of oil has skyrocketed from about $25 a barrel to $100 a barrel since the war began. This has had a ramifying effect on the economy.
The authors note that the Iraq war has been the most expensive war since World War II. In this war, the US spent three times per Iraqi than what was spent per European in the Marshall Plan. The very high casualty rate in Iraq has exponentially boosted the costs. In World War II, Vietnam, and Korea, the number of wounded troops per fatality was about two-to-one or three-to-one. Today the number of wounded troops per fatality is seven-to-one in combat. If you include all of those wounded in non-combat and those sick with disease that had to be medevaced home, it’s fifteen-to-one. Higher casualties mean that the United States has a long-term cost of taking care of thousands of disabled veterans for the rest of their lives.
The authors also note that the cost of the private contractors such as those that work for Blackwater are expensive compared to what the government pays per year for American soldiers. Security contractors cost as much as $400,000 a year, compared to soldiers costing the government $40,000. The privatization of so much of the actual war and occupation also contributes to the explosive inflation of costs.
The authors claim that this the first time the US went into war by cutting rather than raising taxes. The war has been financed by deficit spending. The Bush administration has fooled people into thinking that they could wage a war for free. Since 40% percent of the financing has come from abroad, it means that Americans will be paying interest on the borrowed money for years to come.
The Bush administration has successfully transferred hundreds of billions of dollars from American consumers and businesses to the oil exporters. The two big winners in this war are the oil companies and the defense contractors. The losers are the American and Iraqi people. The money spent on the war is money that’s not being spent here at home on the American infrastructure and for the benefit of the American people.
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The economic cost of this war is one of the most important facts to drive home to Americans. If liberal Democrats had proposed a “welfare plan” that cost the country three trillion dollars, killed four thousand Americans, wounded tens of thousands more, and helped push the economy into recession, the OReilly’s and Limbaugh’s would be demanding their execution. But the cost is more than just monetary. Economists talk about “opportunity costs” when money put into one project is unavailable for another. There is an opportunity cost in healthcare that takes lives. For the first time in recorded history, the infant mortality rate in the U.S. went up last year. This was a direct result of the lack of access to healthcare for poor inner city Americans. Every dollar that goes into the sands of Iraq, is one less dollar for healthcare in this country. It is our children who are paying this cost.