When that loveable TV fuzzball ALF was trying to describe the impact of his spaceship's crash landing on Earth, he explained, "Just imagine Mach five - then double it!" If you understand that calculation, you might fathom exactly how much we are spending on our involvement in Iraq.
The numbers are incomprehensible. Who among us can conceive of a trillion anything? 1,000,000,000,000. Let ALF make it easy for you. Just imagine something simple, like a billion, and multiply it by a thousand. Then all you have to do is double that. Over $2 trillion, the sum of the current and future military costs, along with the economic impact of (just American) lives lost, jobs interrupted, and inflated oil prices.
That doesn't come from me. Or the huge anti-war movement. Certainly not from the Bush administration, which continues to live in a fantasy world about both the need, and cost, of our continued deployment. It is the conclusion of a detailed study by Linda Bilmes, a professor of public finance at Harvard, and Joseph Stiglitz, a former chairman of the Council of Economic Advisors and chief economist at the World Bank. Oh yeah, he also won the Nobel Prize for economics in 2001.
As they point out, the biggest problem in assessing the true cost of this war is the way our government keeps its books. The U.S. budget uses "cash accounting". Expenses are recorded - and reported to you - when payments are actually made. There is no mention of anything due in the future, even if the amount is set in stone. In the business world, corporate stockholders would never accept straight cash accounting because it gives a very distorted picture. So when George sanctimoniously smiles at the camera, and talks only about "billions", his math is as fuzzy as ol' ALF.
The more accurate system, "accrual accounting," recognizes future expenses when the commitment is made. The real costs of the Iraq war go far, far beyond the current cash required to maintain our troops, repair and replace equipment, pay for reconstruction, and train Iraqi forces. Spending for additional unbudgeted war-related needs is in the hundreds of billions.
Everyone can relate to the skyrocketing costs of medical care. That is just one of a long list of benefits that each of the one-million-plus Americans who serve in the war is entitled to for the remainder of his/her life. Consider that 40 percent of the personnel who served during the 1991 Gulf War are currently receiving disability pay. They were there for four weeks. But more than half of the troops in Iraq serve two or three tours of duty. Plus, improvements in body armor allow more soldiers to survive major injuries, but end up disabled. Veterans' health and disability payments rose by $228 billion in 2006. None of this is reflected in the administration's cost estimates.
The 400,000 reservists called up receive full-time salaries instead of their prior pay for one weekend a month. If they are killed or disabled, their dependents are entitled to benefits like housing, education loans and job training. And there is further loss to the community, because many of these reservists are highly trained emergency personnel like police, firefighters, and first-responders. Nearly half the police forces in the U.S. now have members deployed in Iraq.
Recruiting bonuses can be $40,000 for new enlistees, up to $150,000 for re-enlisting Special Forces. Private contractors are being used to keep the troop count down, but protecting them represents 25 to 30 percent of the total contract. Then there is the unbudgeted cost to eventually restore U.S. forces to their strength and preparedness prior to Iraq, replacing vehicles, equipment, ammunition, and spare parts. These bills will come due at the same time that retiring baby boomers will be making record demands on the medical and social security systems.
The federal accounting does not include the impact on county, state, or private agencies that will have to deal with post-Iraq issues. And, worst of all, there are the costs that fall directly on the soldiers and their families: loss of productive capacity of the young Americans killed or seriously wounded, and loss of civilian wages for those reservists called to active duty.
Americans are also feeling an unbudgeted cost of the war every day. Oil prices, which fluctuated between $20-$30 per barrel before our incursion, are now near $60. About $10 per barrel of that is war-related. With roughly five billion barrels imported annually, American petroleum consumers are spending an extra $50 billion per year, or more, to support George's war. Can you think of at least one better use for that astounding sum?
Finally, Washington's economic assessments do not include interest payments. The Bush administration has chosen the politically-expedient, but financially illogical course of cutting taxes while committing this country to record debt (an ALF-like $8.7 trillion!! ), mostly to foreign nations. Annual interest expense (over $400 billion) on our national debt is almost double the 2007 budgets for education, transportation, homeland security, and environmental protection combined! Our future generations can expect higher taxes, higher prices, higher interest rates, inflation, and devaluation of the dollar.
But should we be assessing the value of a war based on the cost? FDR didn't crunch the numbers before responding to Pearl Harbor. The conclusion drawn by Bilmes and Stiglitz is superb: "With Iraq, America had a choice of whether and when to attack. If there ever was a 'project' that should have been subject to careful scrutiny from all perspectives - including the economics - this was it.
Just as going to war was a matter of choice, staying in Iraq is also a matter of choice...Every day we accrue costs that will be reflected in budget outlays, lost productivity, and individual pain and suffering for decades to come. We need to ask: are they outweighed by the benefits?"