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March 9th,
2008 - Studies: Iraq Costs US $12B Per Month |
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Studies: Iraq
Costs US $12B Per Month By Charles J. Hanley Associated Press March 9, 2008 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 co-author Linda J.
Bilmes report in a new book. Beyond 2008, working with
"best-case" and "realistic-moderate" scenarios, they
project 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 alone add $816 billion to that bottom line, they
say. The nonpartisan
Congressional Budget Office (CBO) 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 observed that the U.S. will be committing
"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 don't include
the war's cost to the rest of the world. In Iraq itself, 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 done 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, report the two wars will have cost the U.S. budget $845 billion
in 2007 dollars by next Sept. 30, 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, the rate of
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-Bilmes construct 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 met in
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 noted 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. The two economists say their
calculations are conservative, because they don't encompass many
"hidden" items in the U.S. budget. Their basic projections also
exclude the potentially huge debt-service cost - on which CBO approximately
agrees - and the cost to the U.S. economy of global oil prices that have
quadrupled since 2003, an increase analysts blame partly on the Iraq upheaval. Estimating all economic and
social costs might push the U.S. war bill up toward $5 trillion by 2017, they
say. 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
are 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. Copyright © 2008 The
Associated Press. External link: http://ap.google.com/article/ALeqM5jtoK2qqKcKhyQWwLWUjATWbe_b-gD8VA528G1 |