Reports Say Wars' Costs Are Climbing

March 10th, 2008  
Team Infidel

Topic: Reports Say Wars' Costs Are Climbing

Philadelphia Inquirer
March 10, 2008
Pg. 1
By Charles J. Hanley, Associated Press
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 coauthor Linda J. Bilmes write in a new book.
Beyond 2008, working with "best-case" and "realistic-moderate" scenarios, they project that 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 add $816 billion to that bottom line, they say.
The nonpartisan Congressional Budget Office 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 said the United States would commit "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 do not include the war's cost to the rest of the world. In Iraq, 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 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, write that the two wars will have cost the U.S. budget $845 billion in 2007 dollars by next Sept. 30, the 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, 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 and Bilmes propose 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 over 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 said 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.
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 were 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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