You have commented 339 times on Rantburg.

Your Name
Your e-mail (optional)
Website (optional)
My Original Nic        Pic-a-Nic        Sorry. Comments have been closed on this article.
Bold Italic Underline Strike Bullet Blockquote Small Big Link Squish Foto Photo
Submit your comments on this article
Iraq
Iraq war could cost US up to two trillion, study says
2006-01-11
Worth every penny.
WASHINGTON -The Iraq war will likely cost the United States anywhere between one and two trillion dollars, despite earlier assurances by the White House that these expenses would be manageable, according to a new study co-authored by a Nobel Prize winning economist.

The research made public Monday by Joseph Stiglitz of Columbia University, a 2001 Nobel Prize laureate and former chief economist at the World Bank, and economy professor Linda Bilmes of Harvard University, argues current official assessments of the war cost fail to consider key expenses likely to dog the US budget for years to come.

They include rising medical expenses to treat more than 16,000 wounded soldiers, accelerated depreciation of military hardware on the battlefield and the ripple effect on higher oil prices on the US economy, which in part can be blamed on the military venture. “Even taking a conservative approach, we have been surprised at how large they are,” Stiglitz and Bilmes wrote of the costs of the war. “We can state, with some degree of confidence, that they exceed a trillion dollars.”

Throughout the study, the authors provide “conservative” and ”moderate” estimates of expenses incurred by American society since the start of the war in March 2003.

According to a “conservative” assessment, the war will cost Americans at least 1.026 trillion dollars. Under a “moderate” assessment, the expenses will top 1.854 trillion. The United States has already spent 251 billion dollars in cash on combat operations in Iraq since the invasion was launched, and continues to fund operations there at about six billion dollars a month, according to congressional officials.

However, argue the economists, these figures fail to take into consideration disability payments to veterans over the course of their lifetime, the cost of replacing military equipment and munitions.
These are the direct costs and will be spread over time in a $2.6 trillion a year budget.
In addition, the cost of recruiting new soldiers has gone up dramatically, with the Pentagon paying recruitment bonuses of up to 40,000 dollars for new enlistees and special bonuses and other benefits of up to 150,000 dollars for current troops that re-enlist. “Another cost to the government is the interest on the money that it has borrowed to finance the war,” the authors point out.

They estimate that direct budgetary costs of the Iraq war to the US taxpayer will be in the range of 750 billion dollars to 1.1 trillion dollars, assuming that the administration of President George W. Bush begins to withdraw troops in 2006 and maintains a diminishing presence in Iraq for the next five years.
If we've spent $251 billion in the two years of most intense combat to date, how're we getting to 1.1 trillion in the next five? Numbers must include a lot of 'replacement' costs.
But there are also economic costs likely to stretch out for years, the study warns. For example, to date, more than 3,200 US soldiers have suffered head or brain injuries that require lifetime care at a cost range of 600,000 to five million dollars per person. The economists calculate that over a 20 year-period this group alone will cost the United States 14 billion dollars in healthcare expenses and lost productivity.
That's 700 million a year, and that's if you include the lost productivity, a soft number.
The study points to the hidden costs of plucking reservists from their jobs and sending them overseas, rising costs of homeland security spurred by fears of new terrorist attacks, and multiple other factors.
We had fears of new attacks and increased costs for homeland security before we went to Iraq.
And they insist that higher oil prices, that went from 25 dollars a barrel before the conflict to around 50 dollars a barrel today and are affecting every facet of American life, can be partly blamed on the war. A “conservative” calculation provided by the study says 20 percent of the increase was due to the Iraq war. The “moderate” puts it at 25 percent.
And of course the resuscitating world economy didn't have anything to do with rising oil prices. And of course, rampant, uncountered terrorism would have driven oil prices higher than the current price. Any accounting for that? No? Didn't think so.
Posted by:Steve White

#2  The prices prove this was not a "War for Oil".
Posted by: Ptah   2006-01-11 11:15  

#1  Pay $ 2,000,000,000,000. ( X )

See the end of western
civilization as we know it: (___)
Posted by: Besoeker   2006-01-11 09:39  

00:00