Soon it’ll cost real money
THE THREE TRILLION DOLLAR WAR:
The True Cost of the Iraq Conflict
By Joseph E. Stiglitz and Linda J. Bilmes
192 pp. Norton $22.95
Reviewed by Carter Jefferson
Wars cost lives—and money. World War II cost five trillion dollars, adjusted for inflation. Most Americans thought then, and probably most think now, that it was worth that huge sum. These authors quite effectively show that the current fighting in Iraq will cost the US three trillion, at least. Whether it’s worth that much is a matter of opinion.
The cost of direct military operations—not even including long-term costs such as taking care of wounded veterans—already exceeds the cost of the twelve-year war in Vietnam and is more than double the cost of the Korean War. And, even in the best case scenario, those costs are projected to be almost ten times the cost of the first Gulf War, almost a third more than the Vietnam War, and twice that of World War I.
Stiglitz and Bilmes think the price is far too high. Probably more important, however, is the fact that the current administration has effectively hidden most of those expenditures. The authors put it this way:
Most Americans have yet to feel those costs. The price in blood has been paid by our voluntary military and by hired contractors. The cost in treasure has, in a sense, been financed entirely by borrowing. Taxes have not been raised to pay for it—in fact, taxes on the rich have actually fallen. Deficit spending gives the illusion that the laws of economics can be repealed, that we can have both guns and butter. But of course those laws have not been repealed. The costs of the war are real even if they have been deferred, possibly to another generation.
This book will serve the authors’ intentions best if bookstores simply make it highly visible in their displays. Most browsers won’t buy it; most buyers won’t read it all the way through; most readers won’t understand much of it. Figuring out what it says is no cinch. But those bookstore displays just may have an impact, conscious or unconscious. Three trillion dollars has a certain ring. For that sum we could pay US Medicare costs for six years, or pay off all we owe to Chinese bankers twice over. Or, probably, buy every condo in Manhattan—twice.
Joseph Stiglitz is a Nobel prize-winning economist. Linda Bilmes, who teaches at Harvard’s Kennedy School of Government, has served as chief financial officer in the US Department of Commerce. From before it started, both opposed what President Bush likes to call the “War on Terror.” They make no bones about their biases, and claim, justly I believe, that the figures they produce are conservative—in other words, $3 trillion is a low estimate of the costs involved. By writing this book, they hope to persuade voters to end this disastrous adventure and to make it far more difficult for the government to hide the price we pay for military efforts.
In their ten-page preface, the authors make their intentions clear:
Our intent is to focus on costs . . . because they can be measured with some accuracy. Of course, there are many important costs that cannot be accurately measured, and while those costs may be large, we do not include them in our $3 trillion tally. The benefits are more elusive, but it seems highly unlikely that they will be significant. . . . What is so sad about the failures of the Iraq debacle is that almost all the problems were predictable—and predicted.
But those predictions got lost in the patriotic fervor whipped up after 9/11 by irresponsible newspapers and TV news shows.
Stiglitz and Bilmes begin by recounting the ridiculously low estimates made by the Bush administration. They explain that the relevant appropriations for military expenditures do not include expenditures hidden in the defense budget, and then they add future operational expenditures, costs of health care for returning veterans, the cost of bringing the military up to its pre-war strength, budgetary costs to other departments of the government, and interest on borrowed money—that spent to date and whatever will be spent in the future. These expenditures amount to between 1.7 and 2.7 trillion dollars. They add an estimate of the costs to the US economy and the “macroeconomic” costs—that is, the ways in which all these uncounted expenses have damaged that economy.
. . . money spent on armaments is money poured down the drain: had it been spent on investment—whether on plants and equipment, infrastructure, research, health, or education—the economy’s productivity would have been increased and future output would have been greater.
But what of the costs not in the federal budget, the “social costs” incurred? Soldiers who would have led productive lives get killed or disabled. Even if the government provides medical care, families of badly wounded veterans must spend time caring for them—time they might have spent in economically productive activities. The authors estimate those costs at $300-400 billion.
In the authors’ view, that adds up to more than a trillion dollars, not counting losses related to inflation and the increased cost of oil, which are partly a result of Bush’s invasion. These last figures are “ballpark” estimates, unlike the costs documented in actual government expenditures, but Stiglitz and Bilmes are probably better qualified than most to make a guess.
The penultimate chapter is about the cost of getting out of Iraq, which, of course, will depend on when and how. The authors close by suggesting reforms in the ways military activities are funded, including auditable, and reasonable, estimates of costs to be incurred in future operations, wherever they may be. Laudable as these reforms would be—and they are simple, straightforward, and to the point—they won’t be implemented unless highly unlikely changes in the way the US government is run take place.
Needless to say, supporters of current administration policies and believers in Woodrow Wilson’s claim that we can “make the world safe for democracy” will try to refute the figures supplied by Stiglitz and Bilmes and claim they are just more liberal political rhetoric. The authors do tend to blame the Bush administration for everything, when in fact Congress continues to along and make little real effort to change the Bush policies.
Stiglitz and Bilmes seem to be pretty close to right in their cost assessments of things that can be measured by anyone with the patience to fight a way through government thickets established precisely to prevent any such probes. The softer matters, like the costs to families of wounded veterans and the part this enormous expenditure has played in damaging our economy are just what they have to be—good estimates.
What economists can’t measure are the moral and intellectual costs incurred when the public is fed lies about the costs of this fiasco, and many people are made to believe stories that have no foundation in fact. Those can’t be measured in dollars. They will show up in future pain and suffering we can’t even imagine right now.
Despite its drawbacks, what this book does is eminently worthwhile. Just looking at that black cover with the big sans-serif title—THE THREE TRILLION DOLLAR WAR—may cause some people to stop and think about the national welfare. That might even become fashionable again.
Carter Jefferson, editor of The Internet Review of Books, has a B.A. in economics and a Ph.D. in European history.
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