[cellscape]

Trillion Dollar War
"The War Is Bad for the Economy"

Nobel Prize winning economist Joseph Stiglitz, 63, discusses the true $1 trillion cost of the Iraq conflict, its impact on the oil market and the questions of whether the West can afford to impose sanctions on Iran.

By Frank Hornig and Georg Mascolo

04/06/06 "Spiegel" -- -- Professor Stiglitz, at the beginning of the Iraq war, the United States administration was hoping to almost break even in terms of the costs ...

Stiglitz: ... they truly believed the Iraqi people could use their oil revenues to pay for reconstruction.

SPIEGEL: And now you are estimating the cost of war at levels between $1 trillion and $2 trillion. How do you explain this difference?

Stiglitz: First, the war was much more difficult than President Bush and his government expected. They thought they were going to walk in, everybody would say thank you, and they would set up a democratic government and leave. Now that this war is lasting so much longer, they constantly have to adapt their budget. It rose from $50 billion to $250 billion. Today, the Congressional Budget Office talks about $500 billion or more for this adventure.

SPIEGEL: That's still by far lower than your own calculations.

Stiglitz: The reported numbers do not even include the full budgetary costs to the government. And the budgetary costs are but a fraction of the costs to the economy as a whole. And compare this to Gulf War number one, where America almost made a profit!

SPIEGEL: Because Germany paid for it?

Stiglitz: Because Germans paid, because everybody paid. We got our allies to pay full price for used equipment, and we got to refurbish our military. This time, most of the other countries were not willing to do so again.

SPIEGEL: Did Bush just miscalculate, or was he misleading the public about the true costs of war?

Stiglitz: I think it was both. He wanted to believe it was not going to be expensive, he wanted to believe it would be easy. But there's also enormous evidence now that information channels into the White House were distorted. Bush wanted only certain information, and that's mostly what they supplied him with. Larry Lindsey ...

SPIEGEL: ... the White House's former top economic adviser ...

Stiglitz: ... gave -- back in 2002 -- a number of up to $200 billion. I think that was the most accurate inside information at the time. He was dismissed. They didn't want to hear it.

SPIEGEL: In the US, the financial costs of war are seldom discussed. It used to be considered a sacrifice to achieve common goals. Why is it different today?

Stiglitz: This is not like a world war where you're attacked. We were attacked in Pearl Harbor, we had to respond. This time, we had a choice, we had to decide how and who we are going to attack ...

SPIEGEL: ... and if you can afford it.

Stiglitz: Well, we can afford it, that's not the issue. The issue is: $1 trillion or $2 trillion is a lot of money. If our objective is to have stability in the Middle East, secure oil, or extend democracy, you can do a lot of democracy buying for this sum. To put it in context: The whole world spends $50 billion a year on foreign aid. So what we're talking about is multiplying the foreign aid budget 20-fold. Wouldn't you say this could do more for peace and stability and security?

SPIEGEL: Bush would argue it's worth spending that much to decrease the probability of a major terrorist attack on the US.

Stiglitz: Nobody takes that seriously. Instead, most people think the Iraq war has increased the probability of an attack. However, it's difficult to put this aspect into financial terms.

SPIEGEL: How did you calculate the costs of the war?

Stiglitz: The official figures are only the tip of an enormous iceberg. For instance, one of the costs of the war is that soldiers today get very seriously injured but stay alive, and we can keep them alive but at an enormous price.

SPIEGEL: Is this the biggest item in your calculations?

Stiglitz: It's very important. The Bush administration has been doing everything it can to hide the huge number of returning veterans who are severely wounded -- 17,000 so far including roughly 20 percent with serious brain and head injuries. Even the estimate of $500 billion ignores the lifetime disability and healthcare costs that taxpayers will have to spend for years to come. And the administration isn't even generous with veterans, widows and their kids.

SPIEGEL: What does that mean?

Stiglitz: If you're injured in an automobile accident, and you sue the driver, you get much more for your injury than if you're fighting for your country. There's a double standard here. If you happen to put your life at risk fighting for your country, you get a little. If you walk across the street and get injured, you get a lot more. Similarly, payments for a dead soldier amount to only $500,000, which is far less than standard estimates of the lifetime economic cost of a death. This statistical value of a life in the US amounts to circa $6.5 million.

SPIEGEL: How much will a severely brain-damaged soldier cost the US government?

Stiglitz: My moderate estimate is about $4 million. For this group alone there will be a total cost of $35 billion that nobody is talking about. But look at the broader picture: The Veterans Administration originally projected that roughly 23,000 veterans returning from Iraq would seek medical care last year. But in June 2005, it revised this number to an estimated 103,000. No wonder the Veterans Administration had to appeal Congress for emergency funding of $1.5 billion last year.

SPIEGEL: If this is a $1 trillion war, why couldn't the US provide its soldiers with safer body armor and better protected vehicles?

STIGLITZ: Obviously, the US can afford to pay for body armor. Rumsfeld, our Secretary of Defense, said you have to fight with the armor you have, but that's unconscionable. The military is focusing only on the short run costs. If they don't provide appropriate body armor, they save some money today, but the healthcare cost is going to be the future for some other president down the line. I view that as both fiscally and morally irresponsible.

SPIEGEL: This war could have been both safer for the troops and cheaper for the country?

Stiglitz: Exactly.

SPIEGEL: Is war no longer affordable even for countries as rich as the United States?

Stiglitz: You have to remember we are an economy of $13 trillion a year. The issue is not whether you can afford it but whether this is the way you want to spend your money. In using the limited resources that we have for fighting this war, we have less resources to do other things. You saw on your TV what happened in New Orleans after Hurricane Katrina. The Reserves or National Guard are usually the people we use for those national emergencies. They weren't here, they were over in Iraq, and so we were less protected.

rest of article:

http://www.informationclearinghouse....ticle12634.htm

[atari 2600]

good article, cellscape

yeah, it doesn't help matters when military contracts & sub-contracts both are filled with fraud & pork-barrel spending

under Reagan the gov't had the whole arms race thing to steal money from, Bush, Sr. the whole illegal arms/coke trading & the nat'l debt rose to an unprecedented 3 trillion. Avoiding a meltdown, Clinton more-or-less balanced the budget by not stealing from contracts & with the help of an inflated IT market on his side for a few years, but things were still looking up for the new century & millenium. Now with dubya, the debt is back into the many trillions of dollars. (a little over 8 trillion at last check). It's thievery...pure & simple. These situations are invented so that they can steal. There's not so much that's Made in USA anymore, but our highest ranking politicians are quite adept at manufacturing ways that they can steal. Seth Green remarked on Real Time with Bill Maher that the national debt ticker near Times Square has already been replaced, but he is wrong about that. It won't be too long from now, however, before our debt will hit 10 trillion necessitating the need for a new readout that will accommodate more digits.

[FruitLoop]

that is a kick-ass analysis, atari. you've just resumed 20 years of governance in a single paragraph. Beats any abstract I've ever read.

[atari 2600]

Thanks FruitLoop

so one may ask just how the crony capitalism (among both Democrats & Republicans) has been able to continue for so long. It started with the anti-abortion movement & the war on drugs of the far right during the Reagan years. The Republicans have relied on the votes of church groups & also those that they have managed to scare aboard & manipulate onto their bandwagon via demagoguery. Since most people who would vote Democrat (still a better option even to this day) are too apathetic to even register & vote, the right has been able to operate almost unchecked for over a generation. I personally believe that Clinton was bought & paid for & that he was only allowed to do certain good things but otherwise had to go along with whatever black budget ops that were already in place & that were largely put into place by Nixon & then Bush, Sr. Clinto nwas sold to America as "the candidate of change" & we lapped it up. Anyway, he & Gore, Kerry etc. are still much more apt to tell Americans at least somewhat more of the truth & for that I applaud them.
In light of many criticisms of Bush coming to light in to the mainstream public, the administration has started to finally pay dividends to the rabble with the South Dakota law that will eventually push abortion to be a state's right issue. & maybe it should be a state right's issue, but I don't appreciate all the mixing of politics & religion one bit. It all stinks.

[noumenal]

Originally Posted by atari 2600

It started with the anti-abortion movement of the far right during the Reagan years.

Yeah, and the list of concocted issues just keeps growing. I think (I hope?) at some point the ease of this tactic will increase the amount of people coming up with these ready-made issues and that people will get wise to it, but it hasn't happened yet. At some point people may realize that the issues that are most important to them when they vote have been made up and slipped into their heads while they were watching tv, listening to the radio, or reading the paper, or whatever.

My parents have voted Republican in the past - they voted for Bush in 2004 and at least my dad now regrets it. And he admits that it was issues like abortion that made him vote for Bush even though he knew it wasn't in his best interest.

[FruitLoop]

hey, thanks to reagan we've got Daydream Nation! at least that's something positive....

[atari 2600]

It started with the anti-abortion movement & the war on drugs of the far right during the Reagan years (i edited)

well, there was Sen. Joe McCarthy & his aide who later became President, Richard Milhous Nixon & J Edgar Hoover too actually...all of which assualted human & civil rights in this country before Reagan/Bush.

the question of terrorism & now the illegal immigration wedge issue is all leading up to a national identity card for which we may have to be hair-tested. which means than anyone the government deems as a threat to their corrupt political power goes to prison or gets caught up in the penal system in some way or another.

So for God's sake, do not vote for Hillary Clinton in the Democratic primaries & play into the plan. Do not vote for a Republican for anything.

[dietzer123]

that's a really interesting article and good points atari but i think fruitloop makes a terrific point as well. look at all the great music that reagan at least helped give birth to?!

[finding nobody]

http://costofwar.com/index-world-hunger.html
this is an interesting, thread related website