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Report
Iraq War Costs Could Top $2 Trillion

A new study by Columbia University economist Joseph E. Stiglitz, who won the Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes concludes that the total costs of the Iraq war could top the $2 trillion mark. Reuters reports this total, which is far above the US administration's prewar projections, takes into account the long term healthcare costs for the 16,000 US soldiers injured in Iraq so far.

"Even taking a conservative approach, we have been surprised at how large they are," the study said, referring to total war costs. "We can state, with some degree of confidence, that they exceed a trillion dollars."

The higher $2 trillion amount takes a 'moderate' approach. Both figures are based on the projection that US troops will remain in Iraq until 2010, with steadily decreasing numbers each year. The economists also used government data from past wars, and included such costs as the rise in the price of oil, a larger US deficit and greater global insecurity caused by the war, the loss to the economy from injured veterans who cannot contribute as productively as they would have done if not injured, and the increased costs of recruiting to replenish a military drained by repeated tours of duty in Iraq. These are items which are almost never included by the US government when determining the cost of the war. Before the war started, Mitch Daniels, then the White House budget director, had said the war would be an "affordable endeavor" and rejected an estimate by the chief White House economic adviser that the war would cost between $100 billion and $200 billion as "very, very high."

The Office of Management and Budget "does not comment on this type of speculation," said spokesman Rich Walker. Reuters also reports that a Marine Corps spokeswoman, Lt. Col. Roseann Lynch, said Monday that the war is costing the US about $4.5 billion a month in military "operating costs," not including procurement of new weapons and equipment. Colonel Lynch said the war in Iraq had cost $173 billion to date.

Stiglitz has been an outspoken opponent of the war in Iraq. He was an adviser to President Bill Clinton and also served as chief economist at the World Bank. Bilmes was a former assistant secretary of Commerce in the Clinton administration. The BBC reports that Stiglitz himself says that there will be some people who will dismiss his estimates as based on his opposition to the war.

The Boston Globe reports, however, that despite his view, Stiglitz is not considered to be outside the mainstream.

"Stiglitz rants against globalization, and generally barks louder than he bites," said Timothy Kane, an economist at the conservative Heritage Foundation in Washington. "That is, he is a champion to the lefties, but never really says that free trade is bad."Martin Wolf of the Financial Times writes that while its true that critics will dismiss the two Clinton-era economists work, that would be a mistake. In fact, Wolfe argues, the Stiglitz-Bilmes study ignores some other critical data.

Among these are: costs borne by other countries, including those created by higher oil prices; costs consequent upon creating a link between Iraq and the jihadi movement that did not, on the evidence, previously exist; costs of increasing the income of some of the world's least desirable regimes, above all, Iran's; costs of throwing away the option to fight ground wars elsewhere or to fight in Iraq later on, under better conditions, better information and a better state of preparedness; costs of enraging many Muslims; costs to the effectiveness of the US military; costs of fragmenting the western alliance; the loss of Iraqi lives; the cost to US credibility of going to war on a false premise; and the cost to the US reputation of the torture scandals.

An editorial in the Brattleboro Reformer of Vermont argues that even if the Stiglitz-Bilmes estimates are exaggerated, it obvious that the war in Iraq is going to cost the American taxpayer far more than the Bush administration first said it would.

Conservatives are already pooh-poohing these figures, and the Bush White House will not comment on them. But it is more than clear that even if a plan was put on the table right now for a phased withdrawal from Iraq over the next 12 months, Americans will still be paying the heavy human and economic costs of this war, the largest and most expensive military engagement since Vietnam. We can't undo the mistake of invading Iraq. But we can confront the cost of doing so and have a realistic plan for paying for it.

Time magazine notes that "even as the economic toll worsens, there is some good news on the human front." According to Army data obtained by the magazine that have not yet been officially released, there were 8,367 divorces in 2005, down from 10,477 in 2004. It's still higher than before the war, but the lower figure shows that the programs, put into place by the military to help spouses deal with the pressures of long deployments and then reentry into the country, are showing signs of making a difference.

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