Saturday, January 07, 2006

Financial Costs of the War - New Estimate

In a new report published by Nobel Prize winning economist Joseph Stiglitz (Columbia University) and Harvard budget expert Linda Bilmes, the budgetary costs of the war in Iraq should ultimately top the $1 TRILLION mark over the next decade.

Try to think back to the administration's hype for the war. In 2003, Larry Lindsey, the White House economic advisor, said the costs of the war might hit $200 billion. We are nearing $300 billion already. This figure is what has been spent in day to day operations. But what the administration has not talked about are the long-term costs, which Stiglitz and Bilmes are now considering. We will need to include long-term health and disability costs for at least 20,000 veterans of the war who have been or will be injured from the war. The economists predict, for example, that for brain damaged veterans alone the long-term cost will be some $35-$40 billion (I am sure assumptions have to be made for how long they will live). In addition to long term care payments for veterans, future reconstruction costs in Iraq, increased defense spending because of the war, demobilization costs, and a variety of disability costs quickly and easily reach the $1 trillion figure.

Why do we not hear the White House or GOP controlled Congress talking about the long-term costs? Very simply, because the war is already unpopular and this sort of news just before the GOP tries to pass an additional $70 billion in tax cuts for the well-to-do will not be welcomed by many voters in an election year. It appears the White House must be aware of the unbelievable costs, which will be at least 5 times what they sold the public on when they hyped the war, because they have again notified Congress that the debt ceiling needs to be raised by February, when the national debt will surpass the current ceiling of over $8 trillion. The ceiling will soon be closer to $9 trillion. How much more irresponsible can our supposed leaders be? How outrageous are their claims of being "fiscally responsible" and "compassionate conservatives" after making such disastrous choices? This is all absolutely insane, and we cannot sit back and continue to take it.

We are stuck with Bush for two more years, but we can make a difference with the Congress. It is time to act this year and remove the House leadership. In my opinion, the best thing that can happen for the country is for the Democrats to take back the House, and force the agenda back to the middle, just like what happened in 1994 when the Republican shift occured. It was the GOP takeover of Congress that helped Pres. Clinton be more moderate compared to the far left that had strong influence during his first two years in office, and the country was ultimately better off because of it. Having the same party in control of both the executive and legislative branches typically moves the agenda from the middle, which is where most would agree we should be. Certainly in terms of our current economic status (i.e. a mess), we need the Dems to come in and be the fiscally responsible leaders.

1 comment:

mark said...

"This figure is what has been spent in day to day operations. But what the administration has not talked about are the long-term costs, which Stiglitz and Bilmes are now considering."

I find their argument exceptionally problematic and partisan in the sense of blanking out on context. For example:

What are the out-year costs then of, say, WWII ?

We're still paying that, have been since 1945, and will be for several more decades. Hell, there are still 30 WWI veterans alive !

The war is more expensive than the Bush administration forecasted - and waste has been a good part of it in Iraq - but that is nearly always the case in war. The only exception in American history is the Gulf War where we exacted postwar tribute from Japan and the Gulf states.