Calculating the Cost of the Iraq War

Nick Gillespie | January 18, 2006

The Kansas City Star reports on two recent guesstimates about the true cost of the Iraq war and occupation:

Congress appropriated $357 billion from 2002 through the end of 2005 for the wars in Afghanistan and Iraq and related security issues, according to the nonpartisan Congressional Research Service.

But two research papers suggest that those numbers don't tell the whole story. When nonbudget economic factors are added, the true cost to the U.S. economy over the next decade could be anywhere from $657 billion to $2 trillion for the Iraq war alone, they estimate.

The researchers include what they estimate continued military operations in Iraq will cost over the next decade--as much as $266 billion, according to the nonpartisan Congressional Budget Office.

Whole thing here.

Both of the estimates--one coauthored by Nobel laureate and Bush critic Joseph Stiglitz and one coauthored by American Enterprise Institute researcher Scott Wallsten--affix dollar amounts to the lives of U.S. soldiers killed and injured in action.

In a column for Bloomberg, another AEI hand, Kevin Hassett notes that Larry Lindsey was sacked by President Bush for suggesting the war could cost as much as $200 billion. Hassett also does a quick back of the envelope calculation for World War II and concludes that the Good War cost about $350 trillion in today's dollars. He further notes that the cost doesn't necessarily invalidate the effort and writes that the estimates aren't higher because of the insurgency. Rather, "they're higher because an incomplete picture of the true economic costs was presented to the public at the start of the war. Economists as a whole did a poor job of wiring the true figures into the discussion."

His col is here.

Comments

|1.18.06 @ 7:11PM|#

The cost of the war isn't as infuriating as the fact that neither we nor the Iraqis have gained a damned thing from it. Just seconds before coming on to this page I read a story in the Guardian (link below) about a new USAid report that things in Iraq are basically going to hell in a handbasket. Two paragraphs:

"In the social breakdown that has accompanied the defeat of Saddam Hussein's regime criminal elements within Iraqi society have had almost free rein," the document says. "In the absence of an effective police force capable of ensuring public safety, criminal elements flourish ... Baghdad is reportedly divided into zones controlled by organised criminal groups-clans."

The lawlessness has had an impact on basic freedoms, USAid argues, particularly in the south, where "social liberties have been curtailed dramatically by roving bands of self-appointed religious-moral police". USAid officials did not respond to calls seeking comment yesterday.

The White House, of course, insists that this is overly pessimistic and everything there is just fine.


http://www.guardian.co.uk/international/story/0,,1688677,00.html

|1.18.06 @ 7:11PM|#

I couldn't resist.

Check out the newest Get Your War On.

http://www.mnftiu.cc/mnftiu.cc/war52.html

Towards the bottom is the best Ayn Rand joke so far this year (low bar I know).

On topic too.

|1.18.06 @ 7:27PM|#

Say, how much were we spending keeping troops in Saudi Arabia and bombing Iraq sporadically in the ten years beforehand? That should be factored in, too.

|1.18.06 @ 7:35PM|#

How do you compare a world war, taking place in two theaters that together comprise half the world and laying waste to the better part of two continents with the war of attrition in Iraq and Afghanistan? Seems more than a little disingenuous to me.

|1.18.06 @ 7:36PM|#

Say, how much were we spending keeping troops in Saudi Arabia and bombing Iraq sporadically in the ten years beforehand? That should be factored in, too.

You're right, of course--the cost of insurance should be deducted from whatever payout you get when you total your car. It's the same principle, isn't it?

...Of course, just because you'd have to pay insurance anyway, doesn't mean it's a good idea to total your car. ...but you weren't suggesting it was, were you?

|1.18.06 @ 7:43PM|#

Wow! A Guardian story showing a pessimistic view of Iraq. Who'd of thought?

Just curious, what is the cost estimate of all of the million different possible outcomes of not going to war in Iraq? Really. There's a cost associated with inaction as well as action. So what's the cost estimate of inaction? Can't say? Exactly. That's why these exercises in applying costs to the war are such a rubes game.

|1.18.06 @ 7:48PM|#

Wow! A Guardian story showing a pessimistic view of Iraq. Who'd of thought?

Wow! Someone dismissing a news story because it came from the Guardian! Who'd have thought?

|1.18.06 @ 7:50PM|#

By the way, weren't we originally told that this would only last a few months? And that it wouldn't cost us anything because the Iraqis themselves would pay for it with oil sales?

|1.18.06 @ 7:50PM|#

You'd have done better to quote a story saying that things are all peachy, Tom.

...but your comment about how calculating the cost of things is a rube's game because the cost of inaction is hard to calculate, that one's ingenious!

|1.18.06 @ 7:56PM|#

And that it wouldn't cost us anything because the Iraqis themselves would pay for it with oil sales?

I think the guy responsible for saying that is now at the World Bank, where that sort of thinking is commonplace.

|1.18.06 @ 8:06PM|#

In fact, other than the fact that Saddam is out, have any of the adminstration's prewar predictions come true? It hasn't been a quick war. It hasn't paid for itself. No flowers were thrown at our troops. We were not hailed as liberators. The only Iraqis currently enjoying more freedom than before are the criminals, or the Islamic fanatics who enjoy their newfound freedom to throw acid in the faces of women of whom they disapprove, and roam the streets forcing their Islamic morality on all they see.

By the way, when mentioning the cost of this war, don't forget the opportunity costs--like, the fact that we can't do jack-shit about any Iranian threat since our troops are bogged down elsewhere.

Haven't caught Osama, either. Remember back when Bush said catching him would be our major priority?

|1.18.06 @ 8:31PM|#

What a gay-ass President. There's no way it could've costed more than $50 Billion to organize a successful coup to put in a pro-American strongman who would bring about elections in a couple years. Why the hell didn't we do that? I hope Rumsfeld gets AIDS.

|1.18.06 @ 8:37PM|#

When nonbudget economic factors are added, the true cost to the U.S. economy over the next decade could be anywhere from $657 billion to $2 trillion for the Iraq war alone, they estimate.

hmm I wonder how much social security, medicare, and public schools would cost of those same nonbudget economic factors were added.

Somehow I think those advicating using this type of analysis for the Iraq war would not be so keen on using it on other government spending.

But then again there must be others like me who think this is a good start. :)

|1.18.06 @ 8:43PM|#

"In fact, other than the fact that Saddam is out, have any of the adminstration's prewar predictions come true?"

No. Sean Hannity is still convinced WMDs are somewhere buried in a field of weeds. The constitution is a democratic disgrace. Our fine young men and women are being murdered at an increasing rate. The Iraqi infrastructure is still shit.

"By the way, when mentioning the cost of this war, don't forget the opportunity costs--like, the fact that we can't do jack-shit about any Iranian threat since our troops are bogged down elsewhere."
Here's where I disagree, Jennifer. We don't need troops to deal with that threat.

Mike Laursen|1.18.06 @ 8:49PM|#

No, no, no, Tom. I'm not going to let you get away with shutting down all reasoning about whether the war was worth it or not. Anyone who advocated for invading Iraq must have in mind some likely bad outcome from not doing so. Describe what you think would have been the probable outcome of not invading Iraq and someone can estimate the costs.

|1.18.06 @ 9:14PM|#

I'm sorry, does that say $350 trillion for WWII? Holy Schnikeys.

Windypundit|1.18.06 @ 9:38PM|#

$350 trillion for WWII? I think combined GDP for the world (is that just GP?) is about $50 trillion. So WWII cost the world seven solid years of production. That would include actual war goods produced instead of normal consumption goods, the massive destruction of existing capital such as buildings and national infrastructure, and a figure for the loss of future useful production of all 60 million war dead. $350 trillion sounds reasonable.

|1.18.06 @ 9:57PM|#

"...don't forget the opportunity costs--like, the fact that we can't do jack-shit about any Iranian threat since our troops are bogged down elsewhere."

Actually, I regard this as a benefit of the Iraqi war. I think the experience there may convince at least the next few power-drunk chimps with presidential power that America's Army is not for invading other countries on a pretext. Sure, Bush may have seemed to 'get away with it' by getting re-elected, but those in the business of political calculation know that the war was a drag, not a boost, to his popularity.

|1.18.06 @ 11:01PM|#

In fact, other than the fact that Saddam is out, have any of the adminstration's prewar predictions come true?

Events may still prove me wrong; Reverse Domino Theory may triumph still. (I can only hope.) ...but I don't think Mahmoud Ahmadinejad was what so much of the pro-Iraq War lobby had in mind when it, retroactively, harped on spreading Democracy as a benefit of the war. Yes, Ahmadinejad was democratically elected, something the pro-Iraq War people seem to want to ignore. I suppose he might have been elected because of the occupation, as part of a backlash, that is, but who here thinks that's a good thing?

People don't always want what we want them to want.

The only Iraqis currently enjoying more freedom than before are the criminals, or the Islamic fanatics who enjoy their newfound freedom to throw acid in the faces of women of whom they disapprove, and roam the streets forcing their Islamic morality on all they see.

One of themes I'm getting from the recent election results, and my information on this is admittedly filtered, is that the secular parties, to use the Queen's English, done got thumped. If we spent all that money (and sacrificed all those lives) just to set up a new fundamentalist state, or states, one of which, God forbid, has close cultural and political ties to a state sponsor of terror, well, that would be freakin' tragic. Let's hope it ain't so.

|1.18.06 @ 11:45PM|#

For me, trying to value this war based any supposed future outcomes, including a "democratic Iraq," is too speculative for serious conversation. For those of us with some familiarity with the Arab world, the part of the sales pitch for this war that mentioned a happy Arab republic was so delusional, so flamboyant, that it had to be invented by Republican operatives consciously trying to come up with something they could simultaneously sell to Ma and Pa Kettle in the Midwest while at the same time infuriating the more worldly 'intellectuals' on both coasts, just for sport. No other explanation seems rational.

amazingdrx|1.19.06 @ 12:15AM|#

"what's the cost estimate of inaction? Can't say? Exactly. That's why these exercises in applying costs to the war are such a rubes game."

Wow one of them bushie libertarians? Hehey. Thought you all claimed that they don't exist here?

What's the cost of fossil and nuclear power instead of a green enerfy revolution?

Global climate disaster, national bankruptcy, loss of US superpowerdome, national depression... mighty costly.. katrina is 2 trillion also. how about a few hundred katrinas over the next few decades? 100s of trillions?

amazingdrx|1.19.06 @ 12:20AM|#

well jen, when duuuuhboy held hands with his saudi uncles, that bartop stripping for his frat brothers, and draft dodging, cheerleading... it all fits.

Guckert, Rove, Jack off... these young republican leaders stick together.

Condi...get the crowbar!

amazingdrx|1.19.06 @ 12:23AM|#

"Haven't caught Osama, either. Remember back when Bush said catching him would be our major priority?"

Duuuuuhboy called for osama's head on the offal orifice desk.

|1.19.06 @ 1:45AM|#

"In the social breakdown that has accompanied the defeat of Saddam Hussein's regime criminal elements within Iraqi society have had almost free rein," the document says. "In the absence of an effective police force capable of ensuring public safety, criminal elements flourish ... Baghdad is reportedly divided into zones controlled by organised criminal groups-clans."

If we call the organized criminal groups-clans 'private security forces', does this make Baghdad an anarchistic utopia?

|1.19.06 @ 1:45AM|#

It hasn't been a quick war.

Hussein was eliminated quickly and easily, at low cost. What has been expensive has been the building of a stable democracy to replace the Hussein regime with. But if you want to include those expenses in the cost of the war, you have to admit that establishing a democracy in Iraq was one of the goals of the war. Most war opponents aren't willing to do that; they like to pretend that the democracy goal was invented after the fact.

Also, it is a bit silly to claim that Iraqis are less free now than they were before. They're less *safe* -- they're considerably more *free*.

|1.19.06 @ 2:54AM|#

"They're less *safe* -- they're considerably more *free*."

Where do I start with this statement? Sucks for them, huh? I'm sure the Iraqis see it your way. "Sure, my family's all been killed and I can't go to the grocery store without roundin' up a posse, but look at my blue thumb!"

|1.19.06 @ 3:58AM|#

Also, it is a bit silly to claim that Iraqis are less free now than they were before. They're less *safe* -- they're considerably more *free*.

Are they? Or is it just that they're being oppressed by non-state actors now? Seems to me the guy who can't leave his house for fear of being killed by roving gangs of fundamentalists isn't much more free than the guy who can't leave his house for fear that the secret police will pick him up off the street. It's a different kind of oppressed, sure, but I'd be hard-pressed to say one is better than the other.

I guess one could say they're being oppressed the Anarcho-Capitalist way?

|1.19.06 @ 4:06AM|#

Hey, I was being serious! Tons of talking heads seem to have been, if not happy, then at least OK with the pre-2003 status quo. (Personal aside, I would have preferred the pre-1991 status quo). Maintaining that for eleven years had some cost, and we can easily figure a ballpark figure for the cost of not invading by dividing by eleven and multiplying by Saddam's life expectancy.

So I'll ask again: are there any sources for what that cost might be? If you think our foreign policy shouldn't be determined by mere monetary concerns, please don't hesitate to not chime in.

|1.19.06 @ 4:09AM|#

Ah, crap. Let me amend the last sentence: If you think our foreign policy shouldn't consider dollar cost as a factor, please don't hesitate to not etc.

Ron Hardin|1.19.06 @ 4:57AM|#

There's no more peristent fallacy than that money is wealth, and it matters with huge numbers.

Money is a ticket in line to say what the ($ US) economy does next. The number of tickets is limited to what the economy can do at once by the Fed, which issues and soaks up tickets to keep it that way. The Fed is not creating and destroying wealth when it does this. It's just keeping the economy busy, but not so busy that people don't look for new business.

End of story.

If you want to compute the cost of the war, you have to do it in some other terms than money. Money is in the wrong units.

|1.19.06 @ 5:15AM|#

Yes, you're a good example of the sort of person I don't want to chime in. Ron, if money isn't wealth, I'll have yours. I'll be needing it to pay my taxes because right now, my government spends too much money and they throw me in jail if I try to pay with my health.

|1.19.06 @ 6:22AM|#

Great. Pro-war stoners.

"Yeah, well, *hhfffp*, you can't say the war cost too much because, you know, money's just an illusion, man, I mean, it's all just tickets in line, just pieces of paper that the Fed produces, it's *hhfffp* not real, it's not wealth... hey, you want some of this?"

|1.19.06 @ 7:28AM|#

Jennifer gives me a ray of hope for lefties somedays, and the amazingdrx comes along and destroys all my hopes and dreams.

I think it's funny that I have become so tired of talking about Iraq that my first thought too was "350 trillion! Good God Y'all".

R C Dean|1.19.06 @ 8:15AM|#

It hasn't been a quick war.

The war itself, against the Iraqi state, was damn quick, and that's what the optimism was about. I don't recall anyone saying that establishing a new Iraqi state, free of all interference from its neighbors and various bad actors, would be quick. I think its been bloodier than the Bushies expected, but if you trouble yourself to look at what the plan has been, we are pretty much on schedule.

No flowers were thrown at our troops. We were not hailed as liberators.

Actually, in a lot of places we were. In the pro-Saddam Sunni districts convenient to the media, we weren't.

The only Iraqis currently enjoying more freedom than before are the criminals, or the Islamic fanatics who enjoy their newfound freedom to throw acid in the faces of women of whom they disapprove, and roam the streets forcing their Islamic morality on all they see.

Again, a very blinkered view that completely ignores the recent and repeated exercise of the newfound freedom to vote, and completely ignores the totalitarian repression exercised by the Hussein regime. Big swathes of Iraq are more free in many ways than they were before. Others continue to be under the thumb of the Baathists and their allies. Most Iraqis are quite optimistic about the future, which doesn't seem to square with the vision of a formerly functional Iraq that was ruined by the invasion.

R C Dean|1.19.06 @ 8:21AM|#

don't forget the opportunity costs--like, the fact that we can't do jack-shit about any Iranian threat since our troops are bogged down elsewhere

We couldn't do jack shit about Iran before - look at a map. Now at least we have a nice long border to push troops across should the need arise.

The only thing keeping the mullahs in power (for now) is lack of political will in the West. Soon, of course, it will be their nukes, and those who oppose overthrowing the mullahs can breathe easy, for they will be quite safe from Western influence. But, if we had the will, we are in a much better position now than we were pre-war to exercise military options against Iran.

|1.19.06 @ 9:52AM|#

We couldn't do jack shit about Iran before - look at a map. Now at least we have a nice long border to push troops across should the need arise.

We don't even have enough troops to maintain control in Iraq, and Iran is approximately three times the size. Having a border to cross is useless if you haven't the troops to put across it. Already the Army is lowering its standards, accepting soldiers who before the war would have been considered too unintelligent to sign up, and STILL we don't have enough.

but if you trouble yourself to look at what the plan has been, we are pretty much on schedule.

Having Iraq run by Islamic fundies was part of the scheduled plan?

Again, a very blinkered view that completely ignores the recent and repeated exercise of the newfound freedom to vote, and completely ignores the totalitarian repression exercised by the Hussein regime.

Have you read any of the previous posts on this thread? The freedom to dye your finger purple no doubt means less on a day-to-day basis than the freedom to go to your job without being blown up, or the freedom of a woman to leave her house and have male friends without being attacked by Islamic fanatics.

And no, I am not ignoring the bad things about the HuUssein regime; I'm merely pointing out that what they have now is no improvement, and in many ways worse. Or do you think a woman with a face scarred by acid is thinking "What really matters is, it wasn't Hussein who threw the acid at me"?

R C Dean|1.19.06 @ 10:13AM|#

We don't even have enough troops to maintain control in Iraq, and Iran is approximately three times the size.

We have more than enough troops (not in Iraq, of course) to put an iron boot on the neck of the Iraqis. The current problem in Iraq is only incidentally military; it is mostly political, and war-fighting troops are not the answer to it.

The reasons we don't have more troops in Iraq is that we are walking a fine line there - we don't want the Iraqis to resent us any more than necessary, we don't want to have more targets in Iraq than necessary, and we don't want the Iraqis to become more dependent on us than necessary.

If this war were being fought under WWII rules, we would have already invaded Iran and thrown the mullahs out, because they are actively supporting a cross-border insurgency in Iraq.

The Iranian army is no more capable of stopping the US military than the Iraqi army; probably less so.

Having Iraq run by Islamic fundies was part of the scheduled plan?

Having Iraq run under a constitution and by elected representatives was. C'mon, Jennifer, are you saying we can only succeed in Iraq if we don't let the Iraqis elect who they want?

And no, I am not ignoring the bad things about the HuUssein regime; I'm merely pointing out that what they have now is no improvement, and in many ways worse.

Yep, now that we have put good old US know-how behind gassing villages, draining swamps, mass graves, torture rooms, rape squads, corruption, oppression, and slow-motion genocide, things have gotten much worse. If Jennifer is arguing anything other than it would be better for the Iraqis if we had left Saddam in place, I don't see it.

Funny that not many Iraqis agree with her.

|1.19.06 @ 10:27AM|#

There's a new thread opened above about what's been going on in Iraq:

Thirty people were dragged from their cars at crude checkpoints erected on unpaved roads and shot dead execution-style in farming areas in Nibaei, a town near Dujail, about 50 miles north of Baghdad, said police Lt. Qahtan al-Hashmawi.
Insurgents also opened fire on a convoy of the mobile telephone company Iraqna, killing six security guards and three drivers in western Baghdad.

Hooray! Iraq is free!

C'mon, Jennifer, are you saying we can only succeed in Iraq if we don't let the Iraqis elect who they want?

Bush's excuse for invading in the first place was that it would make Americans safer and help us in this war on Islamic extremism we're supposedly fighting. Replacing a secular government with an Islamic extremist government doesn't help that.

|1.19.06 @ 10:30AM|#

How did a 4 year war (for the US) cost about 30 years worth of (current) economic output?

|1.19.06 @ 10:40AM|#

How did a 4 year war (for the US) cost about 30 years worth of (current) economic output?

It makes sense if you calculate the costs for ALL the countries involved. Most of Europe had to completely rebuild itself after the war.

|1.19.06 @ 12:49PM|#

Jennifer - There is no "Islamic extremist government" in Iraq now, and there won't be when the dust settles from the recent elections. Your projection is just wishful thinking from someone who wants the US enterprise to lose.

And yes, killing Islamic fascists in Iraq rather than waiting for them to kill us here -- or in Europe, or Africa, or Bali -- is certainly making the US safer.

|1.19.06 @ 1:33PM|#

Your projection is just wishful thinking from someone who wants the US enterprise to lose.

You really need to stop assuming that people whose opinions differ from yours are anti-USA. It would also help if you could learn to distinguish between "thinking we're going to lose" and "hoping we're going to lose."

I think most ninety-year-olds are going to be dead before too long; that doesn't mean I want them to die.

|1.19.06 @ 1:47PM|#

"Your projection is just wishful thinking from someone who wants the US enterprise to lose."

To your mind, is it possible to be pessimistic about Iraq and not want "the US enterprise to lose"?

Some of us thought a fundamentalist state(s) a likely outcome from the onset; indeed, some of us opposed the occupation for that very reason. It seems...um...silly to dismiss those concerns with flag waving. ...Opposing bad wars is my patriotic duty.

|1.19.06 @ 2:13PM|#

C'mon, Jennifer, are you saying we can only succeed in Iraq if we don't let the Iraqis elect who they want?

One of the major purposes of the Iraq War was to make the American people safer from terrorism. If the Iraq War, instead, created a new fundamentalist state and a natural ally for a nuclear, state sponsor of terror, then that's a legitimate criticism. ...regardless of whether the Iraqis elect someone like Mahmoud Ahmadinejad.

Really, if the Iraqis elected someone like Mahmoud Ahmadinejad, would the democratic process make that outcome any less horrible? Will democracy have made Americans any safer from international terrorism?

|1.19.06 @ 3:05PM|#

Levi,

I agree with you that Iraq is not currently run by an "Islamic Extrmist Government". It is being run by Bush, Cheney, Rumsfeld, and Halliburton. They will continue to run the country when their puppets become the elected officials. If the future elections are not rigged, then the Islamic fundamentalists will eventually take over and will establish an Islamic theocracy. The freedom of Iraqi citizens will evaporate. We may win in the short run, but we will certainly lose in the long run.

I also agree that we are killing Islamist fanatics in Iraq and that this is preferable to having to kill them in the local bowling alley. I contend that our misguided invasion of Iraq has created far more radicalized Islamist terrorists throughout the world than we could possibly hope to kill (regardless of location). The Bush neo-cons depend upon myopic jingoists such as yourself to swallow their bullshit to perpetuate their mismanagement.

|1.19.06 @ 3:08PM|#

Bravo to Ken Shultz! You are the only other person I've seen who noticed that the only tangible effect of the Iraq War on democratic movements in the region has been the collapse of the anti-regime movement in Iran, and the rise of an even more oppressive, even more anti-American politicaly dynamic there than existed before.

Remember when a million students were in the streets? When security forces personnel were being convicted for attacking them, because the government was afraid of what the public would do if they weren't held to account?

|1.19.06 @ 4:49PM|#

Yawn!

|1.20.06 @ 12:12AM|#

Where do I start with this statement? Sucks for them, huh? I'm sure the Iraqis see it your way. "Sure, my family's all been killed and I can't go to the grocery store without roundin' up a posse, but look at my blue thumb!"

I didn't say that they were better off free, only that they WERE free. Maybe Ben Franklin was wrong; maybe it is better to be safe than free.

But your argument the same as that of people who defend Bush's wiretap policy by saying "I guess you would rather be blown up by terrorists than let the NSA listen to people's phone calls". According to the Iraqi Body Count project's highest estimate, 31657 Iraqis have been killed (by all causes) during and after the invasion. That's 0.12% of the population. So not only has the average Iraqi not lost any family members in the war -- the average Iraqi doesn't even KNOW anybody who has been killed in the war. Even if we assume that the body count under Hussein would have been zero, that still means that the Iraqis traded a 100% chance of living in a totalitarian dictatorship for a 0.12% chance of being killed as a citizen in a democracy.

I'd make that trade any day. Any libertarian would.

|1.20.06 @ 1:51AM|#

I still find justifications for the war citing that the Iraqis are better off for it, and, indeed, grateful, ...um...dubious.

...not because I doubt that the Iraqi people are better off. As I've commented before, if the people of Japan and Germany are grateful for all the destruction after all these years, that's great. ...that's not why I would have supported World War II though; my reasons would have had more to do with what was best for America and Americans.

I hope the Iraqi people are better off for us having bombed, invaded and occupied their country--I really do. ...but I'm much more interested in whether doing so was in the best interest of the American people. ...and from my perspective, it doesn't look like it was. Maybe time will prove me wrong--I can only hope.