The report released today includes costs that have long been hidden by the Bush administration, as I discussed in previous articles here. A summary of costs to date amounts to more than $20,000 for every American family, and this could exceed $40,000 per family if we "stay the course", for a total of more than US 3.5 TRILLION Dollars.
According to the report that was released this morning:
Through 2008, the True Cost of the War has been Double the
Administration’s Budgeted Cost
To date, the President has requested a total of $607 billion for the Iraq war alone since 2003. This
is over ten times higher than the $50 to $60 billion cost estimated by the Administration prior to
the start of the war. Costs have increased every year since the start of the war in 2003. The Administration
has requested $804 billion for the Iraq and Afghanistan wars combined (CRS 2007,
Bumiller 2003)
To provide some perspective on these figures, just the funds requested for the Iraq war through
2008 would have been sufficient to provide health insurance coverage to all of America’s uninsured
for the 2003-2008 period. (There were approximately 45 million uninsured Americans at
the start of the war in 2003 and this number rose to 47 million by 2006, which is the latest figure
available from the U.S. Census Bureau).
But even beyond these direct fiscal impacts, there are a large number of costs that do not appear
directly in Administration funding requests for the Iraq war. The most important of these include
the following:
Borrowed money to finance the Iraq War has displaced productive
investment. Since taxes have been cut and other spending has increased since the beginning
of the Iraq war, it seems clear that the war has been and continues to be funded using
borrowed money. The increase in government borrowing displaces substantial amounts of
productive investment by U.S. businesses, thus reducing productivity in the economy over
many future years. Interest costs paid by taxpayers are only a subset of these costs.
Substantial Iraq-related costs have been borrowed from foreigners. The
interest payments on this debt constitute a flow of funds from Americans to those foreigners
who have bought our debt.
If We Don’t Change Course, the Cost of the War will Balloon to $3.5 Trillion
The costs described above represent only the impacts of the Iraq war through the close of FY
2008 (if the President’s current budget requests are approved in full). Yet at least some spending
on the war will continue beyond FY 2008. Assumptions about the future course of the war are
necessary to forecast the full eventual fiscal and economic impacts. Because the Administration
has not been clear about future plans for U.S. forces in Iraq, these assumptions must be hypothetical.
This study mainly examines potential future costs over a ten year window, up to the year 2017,
similar to the budget spending window that the CBO used. The paper focuses on a scenario corresponding
to the recent statement by Secretary of Defense Robert Gates that a protracted “Korealike”
presence would be required in Iraq. This scenario involves a drawdown in Iraq troop levels
of 66 percent by the year 2013, and a smaller drawdown of 33 percent in Afghanistan forces. The
scenario also assumes that some active conflict with insurgents continues over the period (CBO
2007a).
In recent testimony, the nonpartisan CBO detailed Federal direct appropriations and interest costs
for this scenario (CBO 2007b). These CBO estimates are used as a base for the analysis in this
report. Once the full economic costs of the war are added to the approximately $2.4 trillion in
Federal spending forecast under the CBO scenario, the total economic cost of the wars in Iraq and
Afghanistan rise by over $1 trillion to $3.5 trillion.
Costs could far exceed these projections if the significant drawdown assumed in this scenario
does not materialize. This CBO budgetary scenario projects that appropriations for the Iraq war
will begin to drop significantly in 2009. But historically appropriations for the Iraq war have increased
every year since the invasion, by between 12 and 40 percent annually (CRS 2007).
This report also presents costs for several alternative budgetary scenarios (Appendix A). These include
costs for a rapid withdrawal from Iraq while maintaining troops in Afghanistan, and the costs
to maintain current (post-surge) troop levels in Iraq for the next decade. These scenarios generate
very different economic costs over the next decade. For example, maintaining post-surge troop levels
in Iraq over the next ten years would result in costs of $4.5 trillion.
I'll shortly upload text versions of the press release and the full report, but meanwhile the original pdfs linked below are not very
burdensome to download: the full report includes graphs and charts suitable for printing, I've uploaded the chart that shows the growing cost of this war to US families.
Here is the press release from the Joint Economic Committee:
http://jec.senate.gov/Documents/Releases/11.13.07IraqReportRelease.pdf
and the full report is here:
http://jec.senate.gov/Documents/Releases/11.13.07IraqReportRelease.pdf
More details are available at the senate website:
http://jec.senate.gov/
David Roknich,
DOGSPOT
