What Will the Iraq War Ultimately Cost?

      With the recent news that America’s casualties in Iraq have reached 4,000 dead soldiers, we should be asking ourselves, “What is this war costing us, not only in the tragic deaths of our brave soldiers, but in (borrowed) dollars and cents?”

     The April, 2008, issue of Vanity Fair (“The $3 Trillion War” by Joseph E. Stiglitz and Linda J. Bilmes, p. 147) lays it out for us. Before the war, President Bush’s economic adviser suggested that the war might cost $200 billion. Then Secretary of Defense Donald Rumsfeld called that “baloney.” Deputy Defense Secretary Paul Wolfowitz suggested that increased oil revenues would allow Iraq to pay for its own post-war reconstruction (also “baloney”). The team of Rumsfeld and Office of Management and Budget Director Mitch Douglas pegged the war in the $50 to $60 billion range back then, back five full years as of March 19, 2008.

    So, how much is this war really costing American taxpayers?

    A lot.  At least close to $800 billion and rising. The Administration has already asked for $200 billion to pay for wars in Iraq and Afghanistan in fiscal year 2008. And it’s not going to get better, Folks; it’s going to get worse: much, much worse.

     According to the Vanity Fair article (p. 148), “But even the $600 billion number is disingenuous, which is to say false.  The true cost of the war in Iraq, according to our calculations, will, by the time America has extricated itself, exceed $3 trillion.”

     First, there are issues with the “accrual” versus “cash” accounting system used to explain costs. Another relevant quote: “In the case of the Iraq war, the future obligations are huge. They include the cost of replacing military equipment, which is being used up at 6 to 10 times the peacetime rate.  They also include the cost of providing health care and disability payments for our returning troops.”

     Almost every Democratic candidate campaigning in Iowa before the Iowa caucuses in January  (especially Senator Joe Biden) pointed out the huge cost of caring for our wounded young men and women, who are being saved, because of advancements in medicine, at rates that far outstrip anything seen in any previous war. If you look back at my previous Joe Biden article, there are some specifics there.

     The problem is, these brave soldiers’ lives are being saved, but many are horribly wounded and many that are “whole” will suffer from Post Traumatic Stress Disorder. The already over-burdened Veterans’ Administration system is just not equipped to handle the wave of returning soldiers with major problems, both physical and psychological. Problems with V.A. coverage have forced many soldiers to purchase their own health insurance. In 2000, the Veterans’ Administration had a backlog of 228,000 pending compensation claims; today, the number is over 400,000. It takes an average of six months to process an initial claim and, if a veteran appeals, as 14% do, it takes another 2 years to process the appeals, while the veteran waits in limbo for needed health care. The V.A. has run out of money and it takes more than 30 days for a seriously wounded veteran even to be seen by a doctor. (Figures from Vanity Fair, April, 2008,  p. 148).

     We have relied on the National Guard in this war, and that has taken workers from the civilian labor force and imposed burdens on many families whose loved ones have been called to serve. This is a hidden cost of the war. Another “hidden” cost of the war comes about because the Administration has requested nearly all the money to fight the war in the form of “emergency” funding, which then makes the money given free from standard budgetary caps or vigorous scrutiny. When we read stories of pallets of cash being flown to Iraq and then disappearing (and we have), we have the “emergency” nature of the funding to thank…or blame…for that. The Vanity Fair piece (“The $3 Trillion War”) calls this entire method of paying for the war “budgetary sleight of hand that makes a mockery of the democratic budget process.” (p. 148).

     Casualties:  The Pentagon has its own peculiar method of counting casualties. It classified more than half of those who had to be evacuated from Iraq as non-combat casualties (p. 150), because the Pentagon splits hairs when deciding who was killed in the war and who was merely killed in a tank accident on their way to the war, for example.

At least 2.1 million individuals will have been sent to Iraq before the war ends. When we consider that 44% of the Gulf War Veterans (a war that only lasted a few weeks) have applied for disability compensation and almost 90% of their claims were approved, we can see that this is going to be an expensive post-war. (Today, we spend $4.3 billion per year paying disability compensations for Gulf War Veterans, Vanity Fair, page 150, as are the figures in the previous two sentences).

     The Vietnam War cost the United States an estimated $560 to $805 billion (in 2006 dollars) and 58,000 Americans died there, as did one million Vietnamese. (Mother Jones, “Apocalypse Then, November/December 2007, p. 47). Twenty years after Vietnam, 15% of Vietnam veterans still suffer from Post Traumatic Stress Disorder. (Mother Jones, “Apocalypse Then,” November/December 2007, page 47).

     Here’s another Big Eye-Opener: we have borrowed the money to finance this war, primarily from countries like China, and we will have to pay the money back with interest. The interest, over only 10 years, will add $615 billion to the cost of the war, pushing the cost into the $2.8 trillion ballpark. (Vanity Fair, p. 150). As the authors of the Vanity Fair piece (Joseph E. Stiglitz and Linda J. Bilmes) conclude (p. 153), “The price in blood has been paid by members of the volunteer military. The price in treasure has been financed entirely by borrowing…Deficit spending gives the illusion that the laws of economics can be repealed. They cannot.”

     Another Big News Flash, for me, regarded how much “the surge” has cost. McCain is very “high” on the surge while on the campaign trail, telling us how well he says it has worked, but he fails to mention that the cost quoted to the American taxpayer footing the bill was for only four months of expenses, while the surge has and will go on for far longer than that. The surge was supposed to cost $5.6 billion in January of 2007 when we deployed another 21,500 troops. (Vanity Fair, April 2008, “The $3 Trillion War”) However, that cost was for deploying combat troops alone. The cost will be closer to $11 billion (also for four months) when the other 15,000 combat-support troops are factored in, with the surge continuing for 12 to 24 months. (p. 153, Vanity Fair article). Since we are now entering April, obviously the price tag we were given for only four months of “the surge” is going to be much higher.

     When you consider how many bridges won’t get repaired in this country and how many roads and schools and other infra-structure improvements will not be able to be made in this country because of the cost of this war, you have to factor in a figure that is a “realistic but conservative estimate (for the war’s macro-economic impact) of roughly $1.9 trillion.” (Vanity Fair, p. 153).

     To sum up, using the words of Joseph E. Stiglitz and Linda J. Bilmes who did such a good job of laying it all out for us this month:”Thus, the total cost of the war ranged from $2.8 trillion in strictly budgetary costs, to $4.5 trillion if one adds in the economic costs…The President and his advisers wanted a quick and inexpensive conflict. Instead, the Iraq War is costing more than anyone could have imagined.”  The article goes on to say that these costs will most likely end up being half again as much as Vietnam, two times that of Korea, and four times the cost of World War I.