The 3 Trillion Dollar War

Nobel laureate and former chief World Bank economist, Joseph Stiglitz, and co-author Linda Bilmes of Harvard University have written a new book which argues that the true budgeted cost of the war in Iraq by the government to date is approximately 1.5 trillion dollars. In addition, they attribute 1.5 trillion dollars in extra expenses to Americans for goods such as gasoline and food as a direct consequence of the war. Combined, the total economic burden for all Americans is approximately 3 trillion dollars, a figure that they say is conservative. That figure contrasts sharply with the original cost estimate of the war by Donald Rumsfeld and others within the administration who assured Americans that the war would cost approximately 50 billion dollars and would later pay for itself in Iraqi oil revenues.

The authors of The Three Trillion Dollar War: The True Cost of the Iraq Conflict, recently did an interview with Amy Goodman of Democracy Now. Below is a portion of the transcript from the interview which discusses how the 3 trillion dollar figure was arrived at.

"The way you approach this problem is basically adding. You begin with the budgetary numbers. But what they claim as the cost of the Iraq war in the budget is not the full cost. There are the operational costs that everybody understands, but then there are costs hidden elsewhere in the defense budget. But then there are really some very big costs hidden elsewhere, like contractors that have been the subject of such concern. We pay their insurance through the Labor Department.

But the most important cost, budgetary cost, that we haven’t talked about publicly, that haven’t been talked about, are the costs of veterans—their disability, veterans’ health care—that will total hundreds of billions of dollars over the next decades. This war has had a huge number of injuries, and that will mount, the cost of caring for them, disability. 39 percent of the people fighting, the 1.6 million who have already fought, and if we continue, it will of course be more than that, are estimated will be—wind up with some form of disability.

Then you go beyond that budgetary cost to the cost of the economy. For instance, when somebody gets disabled, the disability pay is just a fraction of what the loss to their family, to the income that they could have otherwise earned. And then you go beyond that to the macroeconomic cost—the fact that the war has been associated with an increasing price of oil. We’re spending money on oil exports, Saudi Arabia, other oil-exporting countries. It’s money that’s not being spent here at home. There are a whole set of macroeconomic costs, which have depressed the economy. What’s happened is, to offset those costs, the Federal Reserve has flooded the economy with liquidity, looked the other way when you needed tighter regulation, and that’s what led to the housing bubble, the consumption boom. And we were living off of borrowed money. The war was totally financed by deficits. And eventually, a day of reckoning had to come, and now it’s come. "

Author Joseph Stiglitz recently sat down with the BBC for a short interview pertaining to the book. The video below shows that interview in full and provides more details about how cost estimates were arrived at in their 3 trillion dollar figure.



As a taxpayer and citizen of this country, this information is both depressing and disturbing. This administration has not been honest with the American people since the day they took office in January of 2001. It is to little surprise that they have been dishonest about the true cost of the war. While their tenure is coming to a close - the impact of their policies will linger for generations to come.

Our tax dollars will not be spent on the communities we live in, but will instead be spent on the interest of the debt that we've used to finance this war. In short, many of the beneficial possibilities to us as a nation have been stolen away from our future. Unborn babies who could be educated in an excellent public school system will have to forgo that possibility so that Japan, China and the oil exporters can have their debt repaid. Those who cannot afford health care and will die because of that reality will do so knowing that their government chose war over investing in their health. When the next bridge crumbles or the next mine implodes, the war and its economic consequences will be in large part responsible.

It is urgent that we withdraw from Iraq. Our presence is not welcome. Innocent people are dying daily because of our involvement in the region. And for what? The enrichment of private military contractors and oil exporters? What about the rest of us? Please write your elected officials. Tell them we want out, now.