In recent weeks there has been more attention to the cost of the war in Iraq. Bob Herbert's column of 3/4/08, entitled The $2 Trillion Nightmare, described the hearings of the Joint Economic Committee.
The witnesses included the Nobel Prize-winning economist, Joseph Stiglitz (who believes the overall costs of the war — not just the cost to taxpayers — will reach $3 trillion), and Robert Hormats, vice chairman of Goldman Sachs International.
Both men talked about large opportunities lost because of the money poured into the war. “For a fraction of the cost of this war,” said Mr. Stiglitz, “we could have put Social Security on a sound footing for the next half-century or more.”
Mr. Hormats mentioned Social Security and Medicare, saying that both could have been put “on a more sustainable basis.” And he cited the committee’s own calculations from last fall that showed that the money spent on the war each day is enough to enroll an additional 58,000 children in Head Start for a year, or make a year of college affordable for 160,000 low-income students through Pell Grants, or pay the annual salaries of nearly 11,000 additional border patrol agents or 14,000 more police officers.
Herbert's article goes on to describe the additional costs documented by Joseph Stiglitz and Linda Bilmes:
These include the obligation to provide health care and disability benefits for returning veterans. Those costs will be with us for decades.
Mr. Stiglitz noted that nearly 40 percent of the 700,000 troops from the first gulf war, which lasted just a month, have become eligible for disability benefits. The current war is approaching five years in duration.
“Imagine then,” said Mr. Stiglitz, “what a war — that will almost surely involve more than 2 million troops and will almost surely last more than six or seven years — will cost. Already we are seeing large numbers of returning veterans showing up at V.A. hospitals for treatment, large numbers applying for disability and large numbers with severe psychological problems.”
We are spending an amazing amount of money, and an amazing amount of current American blood and sweat, and many future decades of tears, which we have enough experience to know will follow the individual -- and familial -- physical and psychic traumas associated with taking part in a war. We are not paying for this on a current basis, but deferring the cost for our children and grandchildren.
I see occasional measures of how electricity is flowing in Iraq now compared to before we began this war, and it does not appear that, at least for this measure of "rebuilding infrastructure," we have moved them to a better position than they were in before we arrived. I hear little these days about where the oil revenues are going, and can only assume that they are, as in America, lining the pockets of a relative few, rather than being treated as the primary revenue source for common spending.
But more powerful than Herbert's column was one of the responses published on 3/7:
Bob Herbert shines a spotlight on a hidden extreme-right agenda behind this criminally costly war: the “starve the beast” strategy of Grover Norquist and other conservatives.
This war will leave the federal government so bogged down in debt and interest payments as to render social agendas, like fixing Medicare and Social Security or adding to Head Start or Pell grants, quite impossible.
In an OpEd piece in the Washington Post last Sunday, Bilmes and Stiglitz point out that the bill will likely total $3 trillion (I assume that's the present value of a flow of dollar expenses that will occur over the course of the next 50 or more years, accounting for care to those who fought in this war, but not for all the non-monetary costs borne by them and their families.) They point out that the costs are running $12 billion a month, $16 billion including Afghanistan.
Bilmes and Stiglitz list some of the other ways we could have spent $3 trillion:
The United States is a rich and strong country, but even rich and strong countries squander trillions of dollars at their peril. Think what a difference $3 trillion could make for so many of the United States' -- or the world's -- problems.
- We could have had a Marshall Plan to help desperately poor countries, winning the hearts and maybe the minds of Muslim nations now gripped by anti-Americanism.
- In a world with millions of illiterate children, we could have achieved literacy for all -- for less than the price of a month's combat in Iraq.
- We worry about China's growing influence in Africa, but the upfront cost of a month of fighting in Iraq would pay for more than doubling our annual current aid spending on Africa.
- Closer to home, we could have funded countless schools to give children locked in the underclass a shot at decent lives.
- Or we could have tackled the massive problem of Social Security, which Bush began his second term hoping to address;
- for far, far less than the cost of the war,we could have ensured the solvency of Social Security for the next half a century or more.
They go on to write of the effects of this war on oil prices, on savings here and in oil-rich countries, on our banking system. They conclude,
It's a bleak picture. The total loss from this economic downturn -- measured by the disparity between the economy's actual output and its potential output -- is likely to be the greatest since the Great Depression. That total, itself well in excess of $1 trillion, is not included in our estimated $3 trillion cost of the war.
Others will have to work out the geopolitics, but the economics here are clear. Ending the war, or at least moving rapidly to wind it down, would yield major economic dividends.
As we head toward November, opinion polls say that voters' main worry is now the economy, not the war. But there's no way to disentangle the two. The United States will be paying the price of Iraq for decades to come. The price tag will be all the greater because we tried to ignore the laws of economics -- and the cost will grow the longer we remain.
When we first went into Iraq, I heard a lot about our intention to build schools, provide electricity and water systems and sanitary sewers and infrastructure, and it occurred to me to wonder who owned the land in Iraq's cities -- that is, who would be the major beneficiaries of the major increases in economic rent that would be created by our investment. I still don't know anything about land tenure in Iraq, urban or rural, but it seems to be a moot point because in 5 years, we don't seem to have been successful in providing them a 24/7 reliable source of electricity, much less the other things we'd said would benefit them.
I wonder how our troops and our (American) civilian employees in Iraq see the results of our efforts there, and how they envision what they could have been doing were we to spend even a small fraction of what we've spent there -- in dollars and in manpower -- here in the US, on infrastructure, schools, rebuilding New Orleans, meeting the needs of our own citizenry.
Think of the American jobs we could have created, and the community improvements -- and therefore increases in rent flows -- we could have created here at home with even a fraction of the dollars we continue to spend in Iraq. And when we come around to acknowledging that that rent belongs to all of us, not just a few of us, we will be on our way to being a beacon of freedom in the world. And not a moment before.
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