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Studies: Iraq Costs US $12 Billion per Month
The Associated Press
Monday 10 March 2008
The flow of blood may be ebbing, but the flood of money into the Iraq war is
steadily rising, new analyses show. In 2008, its sixth year, the war will cost
approximately $12 billion a month, triple the "burn" rate of its earliest
years, Nobel Prize-winning economist Joseph E. Stiglitz and co-author Linda
J. Bilmes report in a new book.
Beyond 2008, working with "best-case" and "realistic-moderate" scenarios,
they project the Iraq and Afghan wars, including long-term U.S. military occupations
of those countries, will cost the U.S. budget between $1.7 trillion and $2.7
trillion - or more - by 2017.
Interest on money borrowed to pay those costs could alone add $816 billion
to that bottom line, they say.
The nonpartisan Congressional Budget Office (CBO) has done its own projections
and comes in lower, forecasting a cumulative cost by 2017 of $1.2 trillion to
$1.7 trillion for the two wars, with Iraq generally accounting for three-quarters
of the costs.
Variations in such estimates stem from the sliding scales of assumptions, scenarios
and budget items that are counted. But whatever the estimate, the cost will
be huge, the auditors of the Government Accountability Office say.
In a Jan. 30 report to Congress, the GAO observed that the U.S. will be committing
"significant" future resources to the wars, "requiring decision makers to
consider difficult trade-offs as the nation faces an increasing long-range fiscal
challenge."
These numbers don't include the war's cost to the rest of the world. In Iraq
itself, the 2003 U.S.-led invasion - with its devastating air bombardments
- and the looting and arson that followed, severely damaged electricity and
other utilities, the oil industry, countless factories, hospitals, schools and
other underpinnings of an economy.
No one has tried to calculate the economic damage done to Iraq, said spokesman
Niels Buenemann of the International Monetary Fund, which closely tracks national
economies. But millions of Iraqis have been left without jobs, and hundreds
of thousands of professionals, managers and other middle-class citizens have
fled the country.
In their book, "The Three Trillion Dollar War," Stiglitz, of Columbia University,
and Bilmes, of Harvard, report the two wars will have cost the U.S. budget $845
billion in 2007 dollars by next Sept. 30, end of fiscal year 2008, assuming
Congress fully funds Bush administration requests. That counts not just military
operations, but embassy costs, reconstruction and other war-related expenses.
That total far surpasses the $670 billion in 2007 dollars the Congressional
Research Service says was the U.S. price tag for the 12-year Vietnam War.
Although American military and Iraqi civilian casualties have declined in recent
months, the rate of spending has shot up. A fully funded 2008 war budget will
be 155 percent higher than 2004's, the CBO reports.
The reasons are numerous: the "surge" of additional U.S. units into Iraq;
rising fuel costs; fattened bonuses to attract re-enlistments; and particularly
the need to "reset," that is, repair or replace worn-out, destroyed or damaged
military equipment. Almost $17 billion is appropriated this year for advanced
armored vehicles to protect troops against roadside bombs.
Looking ahead, both the CBO and Stiglitz-Bilmes construct two scenarios, one
in which U.S. troop levels in Iraq and Afghanistan drop sharply and early -
to 30,000 by late 2009 for the CBO, and to 55,000 by 2012 for Stiglitz-Bilmes
- and a second in which the drawdown is more gradual.
Significantly, the two studies view different time frames, the CBO calculating
possible costs met in the next 10 years, while Stiglitz and Bilmes also include
costs incurred during that period but paid for later, such as equipment replaced
in post-2017 budgets.
This factor figures most in the category of veterans' medical care and disability
payments, where the CBO foresees $9 billion to $13 billion in costs by 2017.
Stiglitz and Bilmes, meanwhile, project $422 billion to $717 billion in costs
over the lifetime of soldiers who by 2017 are wounded or otherwise mentally
or physically disabled by the wars.
"The CBO is only looking 10 years out on everything," Bilmes noted in an
interview.
For its part, a CBO critique suggested that Bilmes and Stiglitz might be overstating
the expense of treating veterans' brain injuries, a costly category.
The two economists say their calculations are conservative, because they don't
encompass many "hidden" items in the U.S. budget. Their basic projections
also exclude the potentially huge debt-service cost - on which CBO approximately
agrees - and the cost to the U.S. economy of global oil prices that have quadrupled
since 2003, an increase analysts blame partly on the Iraq upheaval.
Estimating all economic and social costs might push the U.S. war bill up toward
$5 trillion by 2017, they say.
Their book already figures in the stay-or-leave debate over Iraq.
When Stiglitz testified on Feb. 28 before the congressional Joint Economic
Committee, the ranking Republican, New Jersey's Rep. Jim Saxton, complained
that such projections are too imprecise to help determine relative costs and
benefits of the Iraq war.
Saxton said a rapid U.S. pullout could lead to full-scale civil war and Iranian
domination of Iraq, "enormous costs" that he said should be weighed in any
calculation.
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