Joseph Stiglitz and Linda Bilmes: $3 Trillion May Be Too Low

[babylonsister]

$3 Trillion May Be Too Low
Our original estimate of the cost of the Iraq war was too conservative: in reality the cost for the US will be much higher
by Joseph Stiglitz and Linda Bilmes


President Bush has tried to give the impression that the $3 trillion dollar estimate of the total cost of the war that we provide in our new book may be exaggerated.

We believe that it is in fact conservative. Even the president would have to admit that the $50 to $60 billion estimate given by the administration before the war was wildly off the mark; there is little reason to have confidence in their arithmetic. They admit to a cost so far of $600 billion.

Our numbers differ from theirs for three reasons: first, we are estimating the total cost of the war, under alternative conservative scenarios, derived from the defence department and congressional budget office. We are not looking at McCain’s 100-year scenario - we assume that we are there, in diminished strength, only through to 2017. But neither are we looking at a scenario that sees our troops pulled out within six months. With operational spending going on at $12 billion a month, and with every year costing more than the last, it is easy to come to a total operational cost that is double the $600 billon already spent.

Second, we include war expenditures hidden elsewhere in the budget, and budgetary expenditures that we would have to incur in the future even if we left tomorrow. Most important of these are future costs of caring for the 40% of returning veterans that are likely to suffer from disabilities (in excess of $600 billion; second world war veterans’ costs didn’t peak until 1993), and restoring the military to its prewar strength. If you include interest, and interest on the interest - with all of the war debt financed - the budgetary costs quickly mount.

Finally, our $3 trillion dollars estimate also includes costs to the economy that go beyond the budget, for instance the cost of caring for the huge number of returning disabled veterans that go beyond the costs borne by the federal government - in one out of five families with a serious disability, someone has to give up a job. The macro-economic costs are even larger. Almost every expert we have talked to agrees that the war has had something to do with the rise in the price of oil; it was not just an accident that oil prices began to soar at the same time as the war began.

more...

http://www.commondreams.org/archive/2008/04/06/8116/

[babylonsister]

1. McClatchy has a Q&A with Stiglitz here:

Ask a question
The Three Trillion Dollar War
Joseph Stiglitz and Linda Bilmes

When the United States invaded Iraq in March 2003, Americans were told Iraqi oil would cover the costs of the war and rebuilding. Defense Secretary Donald Rumsfeld scoffed at estimates of $100 billion.

Nobel Prize-winning economist Joseph Stiglitz of Columbia University and Harvard University professor Linda Bilmes raised a stir in 2006 by estimating the real cost of the war to be $1 trillion. That estimate has been tripled and the title of their new book is "The Three Trillion Dollar War."

Write Stiglitz and Bilmes a question now. They will answer questions for McClatchy readers between April 1 and April 15.

Most Recently Answered Questions
Questions 1 - 15 of 30 (Page 1 of 2)

Q: How many years will it take for the US to pay down the cost of the war?
Submitted by Mark from Boston, MA

A: (See answer to similar question earlier) We will be passing on this debt to the next generation. At this point, there is no foreseeable date at which we will even begin to repay the debt.
Answered 04/06/08 10:23:50 by Joseph Stiglitz

more...

http://www.mcclatchydc.com/qna/forum/three_trillion_dollar_war/index.html

[SpiralHawk]

2. This is a Big Factor in how the republicons have tossed the US economy in the crapper

So much of this money has been paid out to republicon cronies in the form of massive profits...