Nocturnal
03-04-2008, 05:51 PM
Good times, the cost keeps on rising.
March 4, 2008 | Every nation that goes to war makes that war its religion. Wars are always holy, necessary and sacrosanct. That's why asking how much a war costs is blasphemous. It's like asking how much God is worth.
Hence the Bush administration's predictably apoplectic reaction to Joseph Stiglitz and Linda J. Bilmes' new book, "The Three Trillion Dollar War: The True Cost of the Iraq Conflict." "People like Joe Stiglitz lack the courage to consider the cost of doing nothing and the cost of failure," White House spokesman Tony Fratto declaimed. "One can't even begin to put a price tag on the cost to this nation of the attacks of 9/11. It is also an investment in the future safety and security of Americans and our vital national interests. $3 trillion? What price does Joe Stiglitz put on attacks on the homeland that have already been prevented? Or doesn't his slide rule work that way?"
Since the Iraq war hasn't done anything except endanger the future security of Americans and jeopardize our vital national interests, it's tempting to reply that Fratto's slide rule is the one that's busted. But his overblown rhetoric refutes itself. When official spokesmen accuse a Nobel Prize-winning economist of cowardice, you know that a direct hit has been scored.
As far as I know, Stiglitz and Bilmes' landmark book is the first to break the taboo against counting up the costs of an ongoing war. Not only does it reveal the staggering actual cost of Bush's war of choice -- at least $3 trillion -- it details what we could have done with that money if we had spent it more wisely. The book also argues that Iraq is partly responsible for the nation's current economic crisis: The Federal Reserve Bank under Alan Greenspan tried to offset the adverse effects of the war by lowering interest rates, which helped cause the subprime debacle when interest rates inevitably rose.
The import of their insistence on looking at the war's cost now, while it's still in progress, can't be underestimated. By forthrightly acknowledging that armed conflict should be subject to a cost-benefit analysis, they implicitly puncture the sacrosanct aura of patriotism surrounding war -- and make it harder for governments to launch future wars as ill-considered as the present one we find ourselves in.
To put Stiglitz and Bilmes' $3 trillion in perspective, it's worth comparing it to the cost estimates Bush officials bandied about before the war began. The authors present a damning "Nightline" transcript in which one official, Andrew Natsios, blandly told Ted Koppel that Iraq could be completely reconstructed for only $1.7 billion. (With the war now costing $12.5 billion a month, Natsios' estimate would have been accurate if he had stipulated that it would pay for four days' worth of reconstruction. Which, considering the delusional nature of most of the Bush administration's pre-invasion estimates, may have been how long it thought it would take to rebuild the country.) Other officials settled on a figure of $50 billion to $60 billion. Larry Lindsey, Bush's economic advisor, went way out on a limb, suggesting that the war might cost $200 billion -- a figure derided by then-Secretary of Defense Donald Rumsfeld as "baloney." Rumsfeld refused even to offer a range of estimates, saying, "I've already decided that. It's not useful." He was right: It would not have been useful for those ginning up support for a war to predict that it might cost $3 trillion.
In 2005, the Congressional Budget Office estimated that the war had so far cost about $500 billion. That figure was obviously far higher than initial Bush administration estimates, but Stiglitz and Bilmes suspected it was still much too low. After researching the issue, they published a paper in January 2006 that conservatively estimated that the true cost of the war would be between $1 trillion and $2 trillion. Even at the time, they regarded that estimate as excessively conservative, but didn't want to appear extreme. Stiglitz and Bilmes' book, which is based on that paper, doubles their earlier estimates to $3 trillion, making Iraq the second most expensive war in U.S. history, trailing only World War II, which cost an adjusted $5 trillion (and in which 16.3 million Americans served in the armed forces, with 400,000 dying). But the authors regard even their new figure as conservative: Their estimates range from $2 trillion, in the best-case scenario in which the U.S. withdraws all combat troops by 2012 and fewer veterans need medical and disability pay, to more than $5 trillion. Add in the cost to the rest of the world, and the price tag could exceed $6 trillion.
(continues)
This is a useful exercise, since for anyone who isn't an original employee of Google, any figure above $10 million is almost incomprehensible. Reading this book, I had to keep repeating to myself: A billion is a thousand million dollars, and a trillion is a thousand billion dollars. But even that didn't really help me visualize the numbers, so I turned to specific issues. For example, the state I live in, California, is suffering a serious budget crisis that has resulted in major cuts in education and other areas. California has a vast economy, and the shortfall is massive: $3.3 billion. That's a lot of money -- but just reallocating about one week's worth of Iraq funding would wipe it out.
Domestically, the authors note that a trillion dollars could have fixed the Social Security crisis for 50 years, built 8 million housing units, or hired 15 million public schoolteachers for a year.
Abroad, "[t]wo trillion dollars would enable us to meet our commitments to the poorest countries for the next third of a century." For a "mere" $8 billion, the cost of two weeks of the war, we could have fully funded the world campaign to eradicate illiteracy. And imagine the benefits if we had used some of that money for a Marshall Plan for the Middle East that "might actually have succeeded in winning the hearts and minds of the people there."
It is too late to do any of that now, and too late to bring back the more than 4,300 Americans killed in Iraq and Afghanistan, or the hundreds of thousands of Iraqis who have died. But the authors want to make sure that future wars come with a full disclosure statement. Their aim is to restore financial responsibility. But they also have a deeper purpose: to prevent America from cavalierly rushing into war. To that end, they propose a number of reforms.
* Wars should not be funded by "emergency" supplemental spending bills, as Iraq has been for five years in a row, because such funds are not subject to the same oversight as regular appropriations.
* War funding should be linked to strategy reviews. If a war is going badly, the administration should be required to explain why and present strategies for improving it.
* The full costs of war -- present and future -- should be clearly presented. The Department of Defense should be required to present auditable books to Congress. As the authors note, "the accounting practices used by the government are so shoddy that they would land any public firm before the Securities and Exchange Commission for engaging in deceptive practices."
* Congress should cut back on the excessive use of contractors in wartime. The heavy outsourcing of military tasks to the private sector has driven up costs astronomically, led to massive corruption and incompetence, and "limited the extent to which America has felt the human toll of the war ... the percentage of the U.S. population bearing the cost of a conflict is the lowest ever."
* Finally, the authors call for current taxpayers to be required to pay for any war lasting more than one year, by levying a war surtax. As they point out, "[w]ar has become too easy for America ... The war has been financed by debt." This not only burdens future generations with debts they did not incur, but it makes it all too easy for Americans, especially in the absence of a draft, to sign off on wars. "As the United States has emerged as the sole superpower ... spending 47 percent of the total for the entire world on armaments, there is no last line of checks against its abuse of military power -- other than the active involvement of its citizens."
There is no free lunch, and there are no free wars. Wars do not stimulate the economy: They drag it down. We will all be paying for this disastrous war for decades. With Americans disillusioned about the Iraq war, and the economy tanking in part because of it, the cold, undeniable economic message of "The Three Trillion Dollar War" may finally sink in. Perhaps it will make it harder for governments to wage future frivolous wars. But even if it only succeeds in forcing our society to honor our commitment to take care of our veterans, this book will have succeeded.
http://www.salon.com/opinion/kamiya/2008/03/04/trillion_dollar_war/index.html
I'd like to add that even a fraction of this money might have been enough to break our dependence on oil for good.
March 4, 2008 | Every nation that goes to war makes that war its religion. Wars are always holy, necessary and sacrosanct. That's why asking how much a war costs is blasphemous. It's like asking how much God is worth.
Hence the Bush administration's predictably apoplectic reaction to Joseph Stiglitz and Linda J. Bilmes' new book, "The Three Trillion Dollar War: The True Cost of the Iraq Conflict." "People like Joe Stiglitz lack the courage to consider the cost of doing nothing and the cost of failure," White House spokesman Tony Fratto declaimed. "One can't even begin to put a price tag on the cost to this nation of the attacks of 9/11. It is also an investment in the future safety and security of Americans and our vital national interests. $3 trillion? What price does Joe Stiglitz put on attacks on the homeland that have already been prevented? Or doesn't his slide rule work that way?"
Since the Iraq war hasn't done anything except endanger the future security of Americans and jeopardize our vital national interests, it's tempting to reply that Fratto's slide rule is the one that's busted. But his overblown rhetoric refutes itself. When official spokesmen accuse a Nobel Prize-winning economist of cowardice, you know that a direct hit has been scored.
As far as I know, Stiglitz and Bilmes' landmark book is the first to break the taboo against counting up the costs of an ongoing war. Not only does it reveal the staggering actual cost of Bush's war of choice -- at least $3 trillion -- it details what we could have done with that money if we had spent it more wisely. The book also argues that Iraq is partly responsible for the nation's current economic crisis: The Federal Reserve Bank under Alan Greenspan tried to offset the adverse effects of the war by lowering interest rates, which helped cause the subprime debacle when interest rates inevitably rose.
The import of their insistence on looking at the war's cost now, while it's still in progress, can't be underestimated. By forthrightly acknowledging that armed conflict should be subject to a cost-benefit analysis, they implicitly puncture the sacrosanct aura of patriotism surrounding war -- and make it harder for governments to launch future wars as ill-considered as the present one we find ourselves in.
To put Stiglitz and Bilmes' $3 trillion in perspective, it's worth comparing it to the cost estimates Bush officials bandied about before the war began. The authors present a damning "Nightline" transcript in which one official, Andrew Natsios, blandly told Ted Koppel that Iraq could be completely reconstructed for only $1.7 billion. (With the war now costing $12.5 billion a month, Natsios' estimate would have been accurate if he had stipulated that it would pay for four days' worth of reconstruction. Which, considering the delusional nature of most of the Bush administration's pre-invasion estimates, may have been how long it thought it would take to rebuild the country.) Other officials settled on a figure of $50 billion to $60 billion. Larry Lindsey, Bush's economic advisor, went way out on a limb, suggesting that the war might cost $200 billion -- a figure derided by then-Secretary of Defense Donald Rumsfeld as "baloney." Rumsfeld refused even to offer a range of estimates, saying, "I've already decided that. It's not useful." He was right: It would not have been useful for those ginning up support for a war to predict that it might cost $3 trillion.
In 2005, the Congressional Budget Office estimated that the war had so far cost about $500 billion. That figure was obviously far higher than initial Bush administration estimates, but Stiglitz and Bilmes suspected it was still much too low. After researching the issue, they published a paper in January 2006 that conservatively estimated that the true cost of the war would be between $1 trillion and $2 trillion. Even at the time, they regarded that estimate as excessively conservative, but didn't want to appear extreme. Stiglitz and Bilmes' book, which is based on that paper, doubles their earlier estimates to $3 trillion, making Iraq the second most expensive war in U.S. history, trailing only World War II, which cost an adjusted $5 trillion (and in which 16.3 million Americans served in the armed forces, with 400,000 dying). But the authors regard even their new figure as conservative: Their estimates range from $2 trillion, in the best-case scenario in which the U.S. withdraws all combat troops by 2012 and fewer veterans need medical and disability pay, to more than $5 trillion. Add in the cost to the rest of the world, and the price tag could exceed $6 trillion.
(continues)
This is a useful exercise, since for anyone who isn't an original employee of Google, any figure above $10 million is almost incomprehensible. Reading this book, I had to keep repeating to myself: A billion is a thousand million dollars, and a trillion is a thousand billion dollars. But even that didn't really help me visualize the numbers, so I turned to specific issues. For example, the state I live in, California, is suffering a serious budget crisis that has resulted in major cuts in education and other areas. California has a vast economy, and the shortfall is massive: $3.3 billion. That's a lot of money -- but just reallocating about one week's worth of Iraq funding would wipe it out.
Domestically, the authors note that a trillion dollars could have fixed the Social Security crisis for 50 years, built 8 million housing units, or hired 15 million public schoolteachers for a year.
Abroad, "[t]wo trillion dollars would enable us to meet our commitments to the poorest countries for the next third of a century." For a "mere" $8 billion, the cost of two weeks of the war, we could have fully funded the world campaign to eradicate illiteracy. And imagine the benefits if we had used some of that money for a Marshall Plan for the Middle East that "might actually have succeeded in winning the hearts and minds of the people there."
It is too late to do any of that now, and too late to bring back the more than 4,300 Americans killed in Iraq and Afghanistan, or the hundreds of thousands of Iraqis who have died. But the authors want to make sure that future wars come with a full disclosure statement. Their aim is to restore financial responsibility. But they also have a deeper purpose: to prevent America from cavalierly rushing into war. To that end, they propose a number of reforms.
* Wars should not be funded by "emergency" supplemental spending bills, as Iraq has been for five years in a row, because such funds are not subject to the same oversight as regular appropriations.
* War funding should be linked to strategy reviews. If a war is going badly, the administration should be required to explain why and present strategies for improving it.
* The full costs of war -- present and future -- should be clearly presented. The Department of Defense should be required to present auditable books to Congress. As the authors note, "the accounting practices used by the government are so shoddy that they would land any public firm before the Securities and Exchange Commission for engaging in deceptive practices."
* Congress should cut back on the excessive use of contractors in wartime. The heavy outsourcing of military tasks to the private sector has driven up costs astronomically, led to massive corruption and incompetence, and "limited the extent to which America has felt the human toll of the war ... the percentage of the U.S. population bearing the cost of a conflict is the lowest ever."
* Finally, the authors call for current taxpayers to be required to pay for any war lasting more than one year, by levying a war surtax. As they point out, "[w]ar has become too easy for America ... The war has been financed by debt." This not only burdens future generations with debts they did not incur, but it makes it all too easy for Americans, especially in the absence of a draft, to sign off on wars. "As the United States has emerged as the sole superpower ... spending 47 percent of the total for the entire world on armaments, there is no last line of checks against its abuse of military power -- other than the active involvement of its citizens."
There is no free lunch, and there are no free wars. Wars do not stimulate the economy: They drag it down. We will all be paying for this disastrous war for decades. With Americans disillusioned about the Iraq war, and the economy tanking in part because of it, the cold, undeniable economic message of "The Three Trillion Dollar War" may finally sink in. Perhaps it will make it harder for governments to wage future frivolous wars. But even if it only succeeds in forcing our society to honor our commitment to take care of our veterans, this book will have succeeded.
http://www.salon.com/opinion/kamiya/2008/03/04/trillion_dollar_war/index.html
I'd like to add that even a fraction of this money might have been enough to break our dependence on oil for good.