Stiglitz on “How to budget for a War”

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Human and Economic toll of Iraq War on 8th anniversary

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Today, March 19th 2011 is the eighth anniversary of the US invasion of Iraq.  As we enter the 9th year of US military activity in the country, what are the costs?

The human toll for the US includes more than 4400 deaths among US servicemen and women,  and more than 70,000 of our troops who were wounded or injured seriously enough to require medical evacuation.  Beyond that, more than half a million US troops who have returned from Iraq have been treated for a variety of ailments in veterans hospitals and clinics – including what medical practitioners call an “epidemic” of post-traumatic stress disorder and traumatic brain injury.

In Iraq, there have been different estimates of the number of Iraqis who have died as a result of the conflict; there are at least 100,000 direct casualties and hundreds of thousands more if one includes those who died for lack of medical care, due to illnesses, shortages of medicines and medical treatments.  One of the enduring legacies of the conflict is that a majority of physicians in the country fled to Syria, Jordan and elsewhere — leaving Iraq with approximately half the number of doctors as it had before the war.   In total, some 4 million Iraqis were displaced by the war – about half inside Iraq and the other half becoming  refugees outside of the country.  There are still close to 2 million Iraqi refugees who are living outside of Iraq, and despite substantial government incentives, only a small number have chosen to return.

The financial cost of the conflict for the US has grown larger than we had imagined possible.  In 2008; we estimated the budgetary and economic costs of the war at $3 trillion.  That number included the long-term costs of providing medical care and disability compensation for war veterans, the cost of replacing military equipment used up in the conflict, the economic cost of lives lost and disrupted, and an estimate of the impact on the economy from rising oil prices.   In September 2010; we estimated that the final cost will rise to between $4-$6 trillion; this is still a conservative estimate.  Veterans costs have risen between 25-40% higher than we predicted; military costs at the Defense Department (including military health care, cost of contractors, fuel costs, and war-related indirect costs) have risen at least 50% more than we projected; and the economic impact of the war has continued to escalate, as it played a role in precipitating events that led to the US financial crisis and contributed directly to the rising US debt.

The war also proved to be a major distraction from the conflict in Afghanistan .  During the years 2003-2006; while the US was bogged down in Iraq,  the Taliban was able to take advantage of the US relative absence in order to strengthen and regroup. ( During these years, the US spent 4x as much in Iraq, and deployed 5x as many troops  in Iraq as it did in Afghanistan).  The deterioration in Afghanistan can thus be viewed as a consequence of the US distraction in Iraq.

The question – after 8 years of war, with 50,000 Americans still based in Iraq and trillions of dollars spent, is: was it worth it?  The benefits are hard to discern, and may appear different over time.   The  costs, however,  are clear.  The situation in Iraq itself is mixed; the country is happily rid of Saddam Hussein but the national situation is  grim, with near-daily bombings and widespread shortages of electricity, drinking water and sanitation.   In the US; there is no question that our economy would have been much better off  today if we had invested those trillions in education, infrastructure and technology that would have created jobs  and laid a foundation for the future.

Wartime Contracting Commission reports $12 billion lost to fraud

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The Commission on Wartime Contracting in Iraq and Afghanistan issued a long-awaited report that sharply criticized the oversight of contractors in the region.  The Commission makes a “conservative” estimate that $177 billion has been spent to date on contingency contracts to support US operations in Iraq and Afghanistan.  It estimates that $12 billion of this amount has been lost to fraud,  not counting billions more lost to contract waste. Read the full report:

You may wish to also read a TPM investigation into the alleged theft of fuel in Afghanistan (US fuel supplies being robbed) which has become an endemic problem.   With world fuel prices climbing, and the cost of fuel already comprising some 25% of the cost of Afghanistan operations, this troubling report suggests that  US tax dollars are being diverted to the Taliban.