[OPE-L] What is th cost of the war against Iraq?

From: glevy@PRATT.EDU
Date: Mon Jan 09 2006 - 12:19:48 EST

Iraq war could cost US over $2 trillion, says Nobel
prize-winning economist

 Economists say official estimates are far too low
 New calculation takes in dead and injured soldiers

Jamie Wilson in Washington
Saturday January 7, 2006
The Guardian (UK)

The real cost to the US of the Iraq war is likely to be
between $1 trillion and $2 trillion (1.1 trillion), up
to 10 times more than previously thought, according to
a report written by a Nobel prize-winning economist and
a Harvard budget expert.

The study, which expanded on traditional estimates by
including such costs as lifetime disability and
healthcare for troops injured in the conflict as well
as the impact on the American economy, concluded that
the US government is continuing to underestimate the
cost of the war.

The report came during one of the most deadly periods
in Iraq since the invasion, with the US military
yesterday revising upwards to 11 the number of its
troops killed during a wave of insurgent attacks on
Thursday. More than 130 civilians were also killed when
suicide bombers struck Shia pilgrims in Karbala and a
police recruiting station in Ramadi.

The paper on the real cost of the war, written by
Joseph Stiglitz, a Columbia University professor who
won the Nobel prize for economics in 2001, and Linda
Bilmes, a Harvard budget expert, is likely to add to
the pressure on the White House on the war. It also
followed the revelation this week that the White House
had scaled back ambitions to rebuild Iraq and did not
intend to seek funds for reconstruction.

Mr Stiglitz told the Guardian that despite the
staggering costs laid out in their paper the economists
had erred on the side of caution. "Our estimates are
very conservative, and it could be that the final costs
will be much higher. And it should be noted they do not
include the costs of the conflict to either Iraq or the
UK." In 2003, as US and British troops were massing on
the Iraq border, Larry Lindsey, George Bush's economic
adviser, suggested the costs might reach $200bn. The
White House said the figure was far too high, and the
deputy defence secretary, Paul Wolfowitz, said Iraq
could finance its own reconstruction.

Three years later, with more than 140,000 US soldiers
on the ground in Iraq, even the $200bn figure was very
low, according to the two economists.

Congress has appropriated $251bn for military
operations, and the Congressional budget office has now
estimated that under one plausible scenario the Iraq
war will cost over $230bn more in the next 10 years.
According to Mr Stiglitz and Ms Bilmes, whose paper is
due to be presented to the Allied Social Sciences
Association in Boston tomorrow, there are substantial
future costs not included in the Congressional

For instance, the latest Pentagon figures show that
more than 16,000 military personnel have been wounded
in Iraq. Due to improvements in body armour, there has
been an unusually high number of soldiers who have
survived major wounds such as brain damage, spinal
injuries and amputations. The economists predict the
cost of lifetime care for the thousands of troops who
have suffered brain injuries alone could run to $35bn.
Taking in increased defence spending as a result of the
war, veterans' disability payments and demobilisation
costs, the economists predict the budgetary costs of
the war alone could approach $1 trillion.

The paper also came amid the first indications from the
Pentagon that it intended to scale down its costly
presence in Iraq this year.

Last night, Ayman al-Zawahiri, al-Qaida's number two,
said in a video that hints of the American withdrawal
amounted to a "victory for Islam".

The unforeseen costs of the war have been blamed on
poor planning and vision by the architects of the
invasion. In a frank admission yesterday, Paul Bremer,
the first US administrator of postwar Iraq, said the
Americans did not anticipate the uprising that has
persisted since flaring in 2004. "We really didn't see
the insurgency coming," he told NBC television.

But the economists' costings went much further than the
economic value of lives lost. They factored in items
such as the higher oil prices which could partly be
attributed to the war. They also calculated the effect
if a proportion of the money spent on the Iraq war was
allocated to other causes. These factors could add tens
of billions of dollars.

Mr Stiglitz, a former World Bank chief economist, said
the paper, which will be available on
josephstiglitz.com, did not attempt to explain whether
Americans were deliberately misled or whether the
underestimate was due to incompetence.

But in terms of the total cost of the war "there may
have been alternative ways of spending a fraction of
that amount that would have enhanced America's security
more, and done a better job in winning the hearts and
minds of those in the Middle East and promoting


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