Interview with Linda Bilmes on opportunity costs of Iraq War

Stiglitz and Bilmes comments on President Obama\’s Iraq speech

Overlooked Cost of the War: Veterans’ Benefits
by Jackie Speier

Two years after an Army specialist saw half his platoon torn apart in Iraq, he hanged himself in a California backyard. In June, the Army and National Guard recorded 32 suicides, the highest number ever in one month. But his death isn’t in any military report, because the specialist was a veteran when he took his life.

Iraq War Winds Down, but Costs Soar
by Linda J. Bilmes

President Obama announced recently with much fanfare that the number of U.S. troops in Iraq will be down to 50,000 by the end of August. All troops will withdraw by December next year. Clearly it is good news that the United States is finally extricating itself from what has been a long, bloody and unnecessary conflict. But drawing down the number of troops doesn’t mean the end of spending money. Many of the biggest costs are still to be paid.

The US is on schedule to draw down US troops in Iraq to 50,000 by the end of August and the remainder within 18 months (by the end of December 2011). This is in accordance with the agreement negotiated at the end of the Bush administration.

But drawing down the number of troops doesn’t mean the end of spending money. Many of the biggest costs are still ahead. These include:

1) The ongoing cost of caring for our veterans. Two million US troops have been deployed to Iraq and Afghanistan over the past 9 years. Already 450,000 have filed for disability compensation. Benefit payments will continue for decades.
2) Veterans medical care: More than 500,000 returning troops have already been treated by the VA and some will require care for the rest of their lives.
3) Veterans Social Security disability stipends: veterans who can no longer work are eligible to receive Social Security compensation.
4) Veterans education, housing and other benefits.
5) The US still has thousands of troops stationed in Kuwait, Bahrain, Qatar and on navy ships in the region who are not being withdrawn.
6) The number of contractors may increase. The State Department will hire another 4000-5000 private security contractors once the military pullout is complete. Other contractors will be hired to do medical evacuations, fly aircraft, drive armored vehicles, and perform other functions that the being transferred to the State Department.
7) Thecost of replacing billions of dollars worth of vehicles, weapons and equipment that is no longer usable and to transport whatever is salvageable out of the country for repair.
8) Interest we must pay on the $800 billion we have already spent — all of which was borrowed.

Total cost of caring for veterans, continued Iraqi operations, replenishing and transporting equipment, and additional costs to the Defense Department bring the total to more than $2 trillion. Including the economic costs – both to individuals and to the economy as whole – the bill tops $3 trillion dollars. Including interest on the debt would make the total much higher.

DOD has reported that the Fully Burdened Cost of Fuel (FBCF) — the average cost of importing fuel into Afghanistan — is about $400. This confirms the findings of the Defense Science Board in 2008, which estimated the FBCF as “several hundred dollars per gallon”.

Fuel and water are currently transported on a dangerous route, requiring that US troops and local troops provide protection. A high number of US casualties in Afghanistan result from efforts to protect these convoys. The Army calculated in a 2009 study that 1 troop fatality occurs for every 24 fuel resupply convoys. In FY 2007, the military required 897 fuel convoys (with an average of 16 supply trucks) to deliver 2.1 million barrels of fuel. (In Iraq, during 2007, the US required 5133 fuel convoys to deliver about 12 million barrels). In the current year, the number and expense of convoys in Afghanistan has risen.

Next Page →

Image1