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   From: oO@oO.com   
      
         "The highest-grossing movie ever, Titanic, took in $1.8 billion. We   
   spend that in Iraq in one week."   
      
         The $2-Trillion War   
      
   War is messy, and putting a price tag on a war that stretches over years,   
   with consequences lasting decades longer, is a staggering task. Yet in a   
   democratic society whose citizens expect to know what they are paying for,   
   someone has to do it. Linda Bilmes, lecturer in public policy, began the   
   task of toting up the fiscal outlay on the Iraq war when students in her   
   class at the Kennedy School of Government asked about its cost and Bilmes   
   could not find any meaningful data. "I did this because I just wanted to   
   know," says Bilmes, a public-finance specialist who served as assistant   
   secretary of commerce under President Clinton. "It is very distressing that   
   nobody came up with a good estimate. How can you weigh the benefits against   
   costs if you don't know what the costs are?"   
      
   Bilmes published what she found on the op-ed page of the New York Times on   
   August 20, 2005; her article moved Joseph E. Stiglitz, University Professor   
   at Columbia University and a 2001 Nobel laureate in economics, to ask her   
   about expanding the analysis to include the economic effect of the war on   
   society. Their recent paper, "The Economic Costs of the Iraq War," presented   
   this year at the Allied Social Science Associations meetings, concludes that   
   projections to date vastly underestimate the extent to which the war will   
   drain this country financially.   
      
   Before the United States invaded Iraq in 2003, Secretary of Defense Donald   
   Rumsfeld and then-director of the Office of Management and Budget Mitchell   
   Daniels (now governor of Indiana) put the likely costs at between $50   
   billion and $60 billion. Former undersecretary of defense Paul Wolfowitz   
   (now president of the World Bank Group) claimed that increased Iraqi oil   
   revenues would pay for the war. When President Bush's economic adviser   
   Lawrence Lindsey suggested that the actual costs might be closer to $100   
   billion or even $200 billion, the White House called those figures grossly   
   exaggerated and swiftly fired him.   
      
   Those estimates now look Lilliputian. The Congressional Budget Office (CBO)   
   currently projects past and future Iraq-related expenditures to surpass $500   
   billion, and even that figure severely underestimates the full outlay,   
   according to Bilmes and Stiglitz, whose paper indicates that the war will   
   eventually cost Americans in excess of $2 trillion. (A trillion is a   
   thousand billions.) Speaking of those in Congress who agreed early on to   
   appropriate $87 billion to finance the war, Bilmes says, "Every time someone   
   casts a vote, they implicitly make a cost-benefit analysis. Would they have   
   voted the same way if they knew the costs were 10 times as much as   
   advertised?"   
      
   The researchers examine budgetary costs and economic costs. The former   
   reflect outlays from the federal treasury; the latter include the effects of   
   the war on the U.S. economy. In compiling their estimate, Bilmes notes,   
   "Everything we used, except for data on the costs of caring for a   
   brain-injured person, was from government sources."   
      
   The true costs of war include items rarely mentioned before the bullets and   
   missiles fly. The CBO figures, for example, include the costs of munitions   
   and of transporting troops to Iraq, feeding and clothing them, and paying   
   private contractors. But there are also the costs of caring for more than   
   17,000 wounded soldiers (to date)-25 percent of whom have crippling   
   conditions such as brain injuries and multiple amputations and will need   
   lifelong medical attention. Another 25 percent have suffered major injuries,   
   including severe burns, deafness, and total or partial blindness. Then there   
   are the medical expenditures for all veterans, borne by the Veterans   
   Administration: one-third of those back from Iraq, for example, have   
   required some mental-health counseling.   
      
   There are also disability payments. In the first Gulf War, 550,000 soldiers   
   fought and 400 were wounded in a conflict that lasted only one month. Even   
   so, 169,000 of those veterans, or about 30 percent, are still claiming   
   veterans' disability for various ailments, costing $2 billion annually. The   
   researchers used an "extremely conservative" disability estimate of   
   one-third of veterans to calculate their Iraq projections, though, as Bilmes   
   notes, "it could become two-thirds or even all veterans. And all of these   
   costs are there even if we pull out tomorrow. We haven't paid it yet, but we   
   already owe it."   
      
   Weapons replenishment will absorb $100 billion, according to the CBO. "We   
   are going through weapons at six times the peacetime rate," says Bilmes,   
   "using them faster than we make them." Reenlistment bonuses have risen from   
   $25,000 to as high as $150,000. "Those costs will be carried forward," she   
   says. "Anything like that which you put into the military-it will be hard to   
   claw them back [down] again." Death gratuities, paid to families of fallen   
   soldiers, have also risen, from $12,240 to $100,000. Life-insurance   
   settlements have jumped from $250,000 to $400,000.   
      
   Bilmes and Stiglitz used two scenarios to tote up interest on the national   
   debt. (The government has not raised taxes to pay for war, but has borrowed   
   instead.) One would have all U.S troops out of Iraq by 2010 ($98 billion in   
   interest); the other projects a small force there until 2015 ($386 billion   
   in interest). In sum, the long-term budgetary outlay for Iraq comes to about   
   $1 trillion, even after subtracting war-related savings, such as the   
   cessation of $12-billion worth of annual air patrols in the former no-fly   
   zone. "Nobody seriously disputes that," Bilmes says. "The American Legion   
   has cited this figure in testimony before Congress."   
      
   The economic costs of the war are more difficult to pin down, but no less   
   dramatic. Mobilizing the National Guard and reserves, for example, means   
   that many soldiers move from a civilian to a (lesser) military wage, and   
   this shrinks the GNP. Currently, for example, 44 percent of America's local   
   police forces are missing one or more officers to Iraq. The researchers   
   added in the "value of a statistical life" for those killed, using a   
   standard figure of $6 million per death.   
      
   Homeland-security preparedness also suffers from tying up 600,000 troops in   
   the Iraq effort at one time or another; 40 percent of these are National   
   Guard and reserves-"first-responder types," Bilmes says. During Hurricane   
   Katrina, 7,000 Louisiana and Mississippi National Guard members were   
   unavailable to help because they were in Iraq. "If there were a major   
   national disaster or terrorist attack tomorrow," Bilmes says, "we would all   
   bear the cost."   
      
   Oil prices have increased from $29 to $60 per barrel since the war began,   
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)