Congress considers legislation that would require estimates of the true cost of war

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Stiglitz Bilmes new book chapter in the Oxford Handbook of the Economics of Peace and Conflict

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Read our latest book chapter, Chapter 13: in the Oxford Handbook of the Economics of Peace and Conflict:

Link to Book: http://www.socsci.uci.edu/~mrgarfin/OUP/

Link to Chapter 13: “Estimating the costs of war: Methodological issues, with applications to Iraq and Afghanistan.” http://www.socsci.uci.edu/~mrgarfin/OUP/papers/Bilmes.pdf

Wars are one of the main reasons why the US debt is so high

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Reprint: Washington Post article on the true cost of war

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We published this in the Washington Post on September 3, 2010, but it seems equally relevant now:

The true cost of the Iraq war: $3 trillion and beyond

By Joseph E. Stiglitz and Linda J. Bilmes
Sunday, September 5, 2010; B04

Writing in these pages in early 2008, we put the total cost to the United States of the Iraq war at $3 trillion. This price tag dwarfed previous estimates, including the Bush administration’s 2003 projections of a $50 billion to $60 billion war.

But today, as the United States ends combat in Iraq, it appears that our $3 trillion estimate (which accounted for both government expenses and the war’s broader impact on the U.S. economy) was, if anything, too low. For example, the cost of diagnosing, treating and compensating disabled veterans has proved higher than we expected.

Moreover, two years on, it has become clear to us that our estimate did not capture what may have been the conflict’s most sobering expenses: those in the category of “might have beens,” or what economists call opportunity costs. For instance, many have wondered aloud whether, absent the Iraq invasion, we would still be stuck in Afghanistan. And this is not the only “what if” worth contemplating. We might also ask: If not for the war in Iraq, would oil prices have risen so rapidly? Would the federal debt be so high? Would the economic crisis have been so severe?

The answer to all four of these questions is probably no. The central lesson of economics is that resources — including both money and attention — are scarce. What was devoted to one theater, Iraq, was not available elsewhere.

Read full article:

http://www.washingtonpost.com/wp-dyn/content/article/2010/09/03/AR2010090302200.html

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