Lead story on CNN Business:

Key Points:

The real cost of additional warfare will be the loss of any kind of peace dividend or chance  to streamline Pentagon operations.

And this will happen at a time when the US economy is still fragile.

We should pay upfront for any more fighting – not just add to the debt.





The latest reports from those studying ongoing US operations in Iraq and Afghanistan are gloomy in every respect.

Stuart Bowen, Special Inspector General for Iraq,  characterizes Iraq as “less safe than one year ago”. As Mr. Bowen points out,  June was the deadliest month for U.S. troops in more than two years.  Attacks on civilians and government military and police installations have also increased, including a number of deadly suicide attacks. Read Mr. Bowen’s comments: http://www.cnn.com/2011/WORLD/meast/07/30/iraq.us.report/index.html#

Meanwhile, the Pentagon confirms that that much of the money from the $2 billion US contract for transportation is being diverted to the Taliban.  Afghanistan trucking contractors are paying tens of millions of dollars annually to local warlords across Afghanistan in exchange for guarding their supply convoys.  Read more:  http://newsfeedresearcher.com/data/articles_n31/military-contracts-afghanistan.html

Also this week, the Special Inspector General for Afghanistan Reconstruction, issued an audit showing that an insurance program for injured contract workers in Afghanistan potentially lost tens of millions of US taxpayer dollars due to faulty billing methods.  The audit blames the U.S. Army Corps of Engineers for failing to exercise strong oversight of its Defense Base Act workers compensation insurance program in Afghanistan, which led to higher insurance costs than necessary.  See: http://www.sigar.mil/pdf/PressRelease/PressRelease_20July2011_Audit11-15.pdf

FINALLY,  A bipartisan Congressional panel is expected to report that the U.S. has wasted or misspent $34 billion contracting for services in Iraq and Afghanistan, according to a draft report by the Commission on Wartime Contracting in Iraq, which was established in 2008 to investigate the overall cost of a decade of battlefield contracting in America’s two big wars.  The report will be issued in the next few weeks. See: http://www.wartimecontracting.gov/

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:


The Department of Veterans Affairs has finally made the sensible decision to simplify the eligibility for veterans to obtain disability compensation benefits for post-traumatic stress disorder (PTSD).  This is a move that we have championed for the past three years, since the medical community has confirmed that returning veterans are suffering from an “epidemic” of PTSD.  We applaud the VA for making this change.

The previous VA system had forced veterans to prove that their PTSD was triggered by  a specific traumatic incident during service, which was often difficult or impossible given the chaos that typically surrounds an IED explosion or other traumatic episode.  Additionally, one-third of Iraq and Afghanistan veterans have served multiple deployments and their PTSD is cumulative and cannot be easily traced to a specific incident.  The immediate effect of this change will enable veterans to claim benefits more quickly and easily and with less delay.

The change will accelerate the payment of benefits to hundreds of thousands of veterans from Iraq and Afghanistan, and it will enable tens of thousands more, who were previously ineligible to receive benefits (because they couldn’t pinpoint the source of their PTSD)  to receive benefits.  The medical community estimates that 15-20% of veterans are suffering from PTSD; therefore this cohort will now receive a monthly cash benefit.   The long-term cost of this was already anticipated in our cost estimates, as we had expected that all veterans with PTSD would eventually receive compensation.  However, this change will accelerate the uptake of benefits and should therefore add at least $10 billion to the long-term cost of veterans disability compensation.

See Q&A on this issue here.

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