17 Mar 08: Zachary Coile writes in the San Francisco Chronicle: "The United States has poured more than $500 billion into Iraq, mostly for military operations. But that figure is just a small piece of the much larger bill that taxpayers will pay in the future.
"Because the money for the war is being borrowed, interest payments could add another $615 billion. A heavily depleted military will have to be rebuilt at a cost of $280 billion. Disability benefits and health care for Iraq war veterans, many of them severely injured, could add another half-trillion dollars over their lifetime. . . .
"The price tag in Iraq now is more than double the cost of the Korean War and a third more expensive than the Vietnam War, which lasted 12 years. . . .
"Only World War II was more expensive. That four-year war - in which 16 million U.S. troops were deployed on two fronts, fighting against Germany and Japan - cost about $5 trillion in inflation-adjusted dollars."
Dave Lindorff explains why the Iraq War is driving the deficit and price of oil and food up.
Senate report (PDF) on the role of speculation in rising oil & gas prices.
Bad Money by Kevin Phillips. Subtitle: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism. In Bad Money, Phillips describes the consequences of our misguided economic policies, our mounting debt, our collapsing housing market, our threatened oil, and the end of American domination of world markets. [emphasis added]
Sunday, March 16, 2008
Thursday, March 6, 2008
More considerations
Think Progress » FLASHBACK: Economists Predicted That A Prolonged ...
| The Iraq Recession. I do hope this sticks as the label. ..... Did prolonged U.S. presence in Iraq lead us into a recession? ... thinkprogress.org/2008/01/23/iraq-recession/ - 74k - Cached - Similar pages |
BBC NEWS | Business | War with Iraq could spark recession
| Any conflict with Iraq together with a spike in oil prices, could endanger the world's economic recovery and hit consumers in the pocket. news.bbc.co.uk/1/hi/business/2240551.stm - 55k - Cached - Similar pages |
Between the Bits: Trying the war in Iraq to the recession
| Trying the war in Iraq to the recession. There are some thoughts that while war is usually good for the economy, the war in Iraq has been incredibly bad for ... johnhummel.blogspot.com/2008/ 01/trying-war-in-iraq-to-recession.html - 54k - Cached - Similar pages |
War News Good? Let's Create A Recession | Sweetness & Light
| And behold a comparison of both Google searches and news reports for the terms “Iraq War” and “recession” via Google Trends: ... sweetness-light.com/archive/ war-news-good-lets-create-a-recession - 31k - Cached - Similar pages |
Issues and Elections
http://www.scholarsandrogues.com/2008/01/16/getting-us-out-of-iraq-can-get-us- out-of-recession/. The article links to every way in which our American life ...
community.aarp.org/n/pfx/forum.aspx?tsn=1& nav=messages&webtag=rp-issues&tid=53453 - 130k - Cached - Similar pages
Peace Action Coalition's summary of economic effects and further commentary on the Moratorium of March 19th
Saturday, March 1, 2008
Become an Author and Join the Blog
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- Sharon
Members are welcome to become an author.
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Click log-in on the lower left.
Register and receive password.
You are now ready to log in with your new password on the s233401047.onlinehome.us site.
- Sharon
Friday, February 29, 2008
Getting us out of Iraq can get us out of recession
http://www.scholarsandrogues.com/2008/01/16/getting-us-out-of-iraq-can-get-us-out-of-recession/
The American Prospect’s Harold Meyerson has an op-ed in the Washington Post today outlining the nature of the coming recession, and how our economic response is going to have to change if we’re to fix it.
“Wait,” you’re thinking, “is he saying we’re in recession? Surely not! I know it’s a worry, but no one’s actually said it’s official yet.”
Let’s take a look at the facts, then:
Citigroup, America’s largest bank, has been hit with a staggering $10 billion in losses this quarter. Naturally, the company is doing what all companies do as a first response to crisis–cutting thousands of jobs–and is begging foreign investors to pump cash into its reserves to keep it solvent.
Countrywide, America’s largest lender, reported spikes in delinquencies and foreclosures so severe that the company was looking at bankruptcy protection. It was hailed as a relief when Bank of America announced plans to buy the lender, but think about this–how bad is our economic state when our biggest giants in their respective industries are doing so poorly?
And what about the consumer, that bulwark of economic growth through spending? Well, thanks to a combination of collapsing home equity, high gas, energy, and food prices, and nearly insurmountable personal debt, consumers are falling behind on loan payments, credit card debt is on the rise, and retail sales are plummeting from lack of consumer spending.
If this isn’t a recession, it’s damn close, and like the wolf hungrily stalking its prey, will be upon us soon.
Back to Meyerson’s column. He accurately notes that the mazelike structures of current Wall Street investment strategies make it nigh-impossible to accurately oversee these transactions, which has led to so many billions of dollars’ worth of losses. Moreover, he also notes that without some serious infusion of jobs, cash, and direction from the government, this recession may deepen into a depression that will take years to recover from.
“Okay,” you may be asking, “but where can we get the money for such a thing? That’s going to be expensive!”
Well, here’s one simple idea–ending the war in Iraq immediately and bringing our troops home. Imagine what we could do with the influx of capital we’re wasting on a failed venture that has cost thousands of lives and tens of millions of dollars. I live in DC, so I used my own city as the basis for calculation:
Taxpayers in District Of Columbia will pay $2 billion for the cost of the Iraq War through 2007. For the same amount of money, the following could have been provided:
504,157 People with Health Care OR
3,465,229 Homes with Renewable Electricity OR
33,815 Public Safety Officers OR
33,333 Music and Arts Teachers OR
946,048 Scholarships for University Students OR
174 New Elementary Schools OR
6,801 Affordable Housing Units OR
620,958 Children with Health Care OR
266,133 Head Start Places for Children OR
33,333 Elementary School Teachers OR
29,432 Port Container Inspectors
Any one of these projects provides a golden opportunity for new jobs and economic revitalization for my city, or the even better long-term investment of raising kids with decent educations and the ability to make better lives for themselves. But we’ll never know, because that money went instead to turning a country into a protectorate of our empire just to keep the oil pumps working.
I said not long ago that in order to win, Democrats should run on the economy instead of Iraq, and I still hold to that. But I am rethinking that approach–instead of trying to push Iraq aside in people’s minds, Democrats and progressives should link the two together. Every dollar spent in Iraq, fighting a war started on a lie that has cost us immeasurably, is a dollar not spent on rebuilding our country’s prosperity, peace, and future solvency.
End the war, bring our troops home, and let’s get down to the equally painful business of rebuilding our country’s economic base and transiting us out from a system based on debt, consumption, greed, and graft. We’ve done it before, and we can do it again. We don’t have any choice in the matter.
The American Prospect’s Harold Meyerson has an op-ed in the Washington Post today outlining the nature of the coming recession, and how our economic response is going to have to change if we’re to fix it.
“Wait,” you’re thinking, “is he saying we’re in recession? Surely not! I know it’s a worry, but no one’s actually said it’s official yet.”
Let’s take a look at the facts, then:
Citigroup, America’s largest bank, has been hit with a staggering $10 billion in losses this quarter. Naturally, the company is doing what all companies do as a first response to crisis–cutting thousands of jobs–and is begging foreign investors to pump cash into its reserves to keep it solvent.
Countrywide, America’s largest lender, reported spikes in delinquencies and foreclosures so severe that the company was looking at bankruptcy protection. It was hailed as a relief when Bank of America announced plans to buy the lender, but think about this–how bad is our economic state when our biggest giants in their respective industries are doing so poorly?
And what about the consumer, that bulwark of economic growth through spending? Well, thanks to a combination of collapsing home equity, high gas, energy, and food prices, and nearly insurmountable personal debt, consumers are falling behind on loan payments, credit card debt is on the rise, and retail sales are plummeting from lack of consumer spending.
If this isn’t a recession, it’s damn close, and like the wolf hungrily stalking its prey, will be upon us soon.
Back to Meyerson’s column. He accurately notes that the mazelike structures of current Wall Street investment strategies make it nigh-impossible to accurately oversee these transactions, which has led to so many billions of dollars’ worth of losses. Moreover, he also notes that without some serious infusion of jobs, cash, and direction from the government, this recession may deepen into a depression that will take years to recover from.
“Okay,” you may be asking, “but where can we get the money for such a thing? That’s going to be expensive!”
Well, here’s one simple idea–ending the war in Iraq immediately and bringing our troops home. Imagine what we could do with the influx of capital we’re wasting on a failed venture that has cost thousands of lives and tens of millions of dollars. I live in DC, so I used my own city as the basis for calculation:
Taxpayers in District Of Columbia will pay $2 billion for the cost of the Iraq War through 2007. For the same amount of money, the following could have been provided:
504,157 People with Health Care OR 3,465,229 Homes with Renewable Electricity OR 33,815 Public Safety Officers OR 33,333 Music and Arts Teachers OR 946,048 Scholarships for University Students OR 174 New Elementary Schools OR 6,801 Affordable Housing Units OR 620,958 Children with Health Care OR 266,133 Head Start Places for Children OR 33,333 Elementary School Teachers OR 29,432 Port Container InspectorsAny one of these projects provides a golden opportunity for new jobs and economic revitalization for my city, or the even better long-term investment of raising kids with decent educations and the ability to make better lives for themselves. But we’ll never know, because that money went instead to turning a country into a protectorate of our empire just to keep the oil pumps working.
I said not long ago that in order to win, Democrats should run on the economy instead of Iraq, and I still hold to that. But I am rethinking that approach–instead of trying to push Iraq aside in people’s minds, Democrats and progressives should link the two together. Every dollar spent in Iraq, fighting a war started on a lie that has cost us immeasurably, is a dollar not spent on rebuilding our country’s prosperity, peace, and future solvency.
End the war, bring our troops home, and let’s get down to the equally painful business of rebuilding our country’s economic base and transiting us out from a system based on debt, consumption, greed, and graft. We’ve done it before, and we can do it again. We don’t have any choice in the matter.
The $3 Trillion War - Vanity Fair
After wildly lowballing the cost of the Iraq conflict at a mere $50 to $60 billion, the Bush administration has been concealing the full economic toll. The spending on military operations is merely the tip of a vast fiscal iceberg. In an excerpt from their new book, the authors calculate the grim bottom line.
In March 19, 2008, the U.S. will have been in Iraq for five years. The Bush administration was wrong about the need for the Iraq war and about the benefits the war would bring to Iraq, to the region, and to America. It has also been wrong about the full cost of the war, and it continues to take steps to conceal that cost.
In the run-up to the war there were few public discussions of the likely price tag. When Lawrence Lindsey, President Bush’s economic adviser, suggested that it might reach $200 billion all told, Secretary of Defense Donald Rumsfeld dismissed the estimate as “baloney.” Deputy Defense Secretary Paul Wolfowitz went as far as to suggest that Iraq’s postwar reconstruction would pay for itself through increased oil revenues. Rumsfeld and Office of Management and Budget Director Mitch Daniels estimated the total cost of the war in the range of $50 to $60 billion, some of which they believed would be financed by other countries.
For fiscal year 2008 the administration has asked for nearly $200 billion to fund the wars in Iraq and Afghanistan. If Congress provides the money, as it almost certainly will, then the total appropriated for direct operations in these two countries (including reconstruction, embassy costs, enhanced base security, and foreign aid) since the wars began will come to roughly $800 billion. It is extremely difficult to disentangle the Iraq and Afghanistan numbers, but Iraq is by far the larger endeavor and accounts for about three-fourths of the total. By the administration’s own reckoning, then, the cost of the Iraq war, counting only the money officially appropriated, will soon be some $600 billion, or more than 10 times Rumsfeld’s original number.
The administration’s estimates have been low—and wrong—from the start. Some of this is the result of its shortsightedness about every aspect of the war, beginning with its nature and duration. For instance, extensive use of reservists and the National Guard avoided the need to increase the size of the armed forces or resort to a draft—but at a heavy price, including reliance on highly paid contractors, people who in other contexts would have been called mercenaries. Another factor is the soaring price of fuel caused by the increase in the price of oil—which is itself, in part, a consequence of the war.
But even the $600 billion number is disingenuous—which is to say false. The true cost of the war in Iraq, according to our calculations, will, by the time America has extricated itself, exceed $3 trillion. And this is a deliberately conservative estimate. The ultimate cost may well be much higher.
Why the huge difference between our number and the administration’s? One big reason lies in the misleading way the federal government does its accounting. Any publicly owned business, no matter how small, is required by law to use a method of accounting that takes future obligations into consideration. This is known as “accrual” accounting. But Defense Department accounting is done on a “cash” basis, which logs only what the government is actually spending day by day and ignores future obligations. In the case of the Iraq war, the future obligations are huge. They include the cost of replacing military equipment, which is being used up at 6 to 10 times the peacetime rate. They also include the cost of providing health care and disability payments for our returning troops. These costs will be especially high because of our improved ability to keep even the most horribly wounded soldiers alive.
The cash type of accounting also provides an incentive to make short-term savings. It was only in 2007, four years after the war began, and after roadside bombs had caused some 1,500 American fatalities, that the Pentagon decided to replace its vulnerable fleet of 18,000 Humvees with vehicles designed to withstand blasts from so-called improvised explosive devices (I.E.D.’s). The short-term savings have resulted in a great deal of long-term human suffering and have brought on higher-than-anticipated costs for medical care.
Another obstacle to estimating the true costs is that many of them are buried in other government accounts and therefore don’t show up in the direct appropriations for the war. Further, some war-related spending has been pushed out of the government altogether and is borne by private parties. But just because it doesn’t show up in the government ledger doesn’t mean it isn’t a cost—it means only that someone else pays it. For example, the failure to provide adequate budgetary support for the Veterans Health Administration has forced many veterans to buy private medical care. While this reduces government spending, there are no real savings for the country. Similarly, relying on the National Guard and the reserves to help fight the war removes hundreds of thousands of workers from the civilian labor force, imposing real costs on the economy as a whole—not to mention on the men and women who are suddenly called to active duty, and on their families.
Finally, we should point out that the procedure used by the administration to fund the Iraq war was chosen deliberately in order to deflect close attention. The administration has requested nearly all the money for the war in the form of “emergency” funding, which is not subject to standard budget caps or vigorous scrutiny. Emergency funding is intended for genuine crises, such as Hurricane Katrina, where the utmost speed is required to get the money to the field. The continued use of this emergency procedure—five years after the war began—is budgetary sleight of hand that makes a mockery of a democratic budget process.
To understand why the true costs of the war are so much higher than the official estimates, we can start by looking at America’s veterans. No one has suffered more from the administration’s blindness and stinginess. To date, more than 1.6 million American troops have been deployed in the Iraq and Afghanistan operations. More than 4,000 have been killed. More than 65,000 have been wounded or injured, or have contracted a disease. Of the 750,000 troops who have been discharged so far, some 260,000 have been treated at veterans’ medical facilities. Nearly 100,000 have been diagnosed as having mental-health conditions. Another 200,000 have sought counseling and re-adjustment services at walk-in vet centers.
No adequate preparation was made for casualties on this scale. The Department of Veterans Affairs (V.A.) and other agencies have been overwhelmed—both by the need for immediate medical care and by the demand for disability benefits. Already, a quarter of a million returning veterans have applied for disability benefits. Not surprisingly, many disability claims are complex: the average veteran cites five separate disabling medical conditions. The least fortunate among the veterans have suffered unimaginable horrors: brain trauma, amputations, burns, blindness, and spinal damage. Because a greater number of the injured are surviving today, the relative costs of long-term care will be greater than for any previous war. This is the surge the administration doesn’t talk about.
[two more pages]
by Joseph E. Stiglitz and Linda J. Bilmes April 2008
In March 19, 2008, the U.S. will have been in Iraq for five years. The Bush administration was wrong about the need for the Iraq war and about the benefits the war would bring to Iraq, to the region, and to America. It has also been wrong about the full cost of the war, and it continues to take steps to conceal that cost.
In the run-up to the war there were few public discussions of the likely price tag. When Lawrence Lindsey, President Bush’s economic adviser, suggested that it might reach $200 billion all told, Secretary of Defense Donald Rumsfeld dismissed the estimate as “baloney.” Deputy Defense Secretary Paul Wolfowitz went as far as to suggest that Iraq’s postwar reconstruction would pay for itself through increased oil revenues. Rumsfeld and Office of Management and Budget Director Mitch Daniels estimated the total cost of the war in the range of $50 to $60 billion, some of which they believed would be financed by other countries.
For fiscal year 2008 the administration has asked for nearly $200 billion to fund the wars in Iraq and Afghanistan. If Congress provides the money, as it almost certainly will, then the total appropriated for direct operations in these two countries (including reconstruction, embassy costs, enhanced base security, and foreign aid) since the wars began will come to roughly $800 billion. It is extremely difficult to disentangle the Iraq and Afghanistan numbers, but Iraq is by far the larger endeavor and accounts for about three-fourths of the total. By the administration’s own reckoning, then, the cost of the Iraq war, counting only the money officially appropriated, will soon be some $600 billion, or more than 10 times Rumsfeld’s original number.
The administration’s estimates have been low—and wrong—from the start. Some of this is the result of its shortsightedness about every aspect of the war, beginning with its nature and duration. For instance, extensive use of reservists and the National Guard avoided the need to increase the size of the armed forces or resort to a draft—but at a heavy price, including reliance on highly paid contractors, people who in other contexts would have been called mercenaries. Another factor is the soaring price of fuel caused by the increase in the price of oil—which is itself, in part, a consequence of the war.
But even the $600 billion number is disingenuous—which is to say false. The true cost of the war in Iraq, according to our calculations, will, by the time America has extricated itself, exceed $3 trillion. And this is a deliberately conservative estimate. The ultimate cost may well be much higher.
Why the huge difference between our number and the administration’s? One big reason lies in the misleading way the federal government does its accounting. Any publicly owned business, no matter how small, is required by law to use a method of accounting that takes future obligations into consideration. This is known as “accrual” accounting. But Defense Department accounting is done on a “cash” basis, which logs only what the government is actually spending day by day and ignores future obligations. In the case of the Iraq war, the future obligations are huge. They include the cost of replacing military equipment, which is being used up at 6 to 10 times the peacetime rate. They also include the cost of providing health care and disability payments for our returning troops. These costs will be especially high because of our improved ability to keep even the most horribly wounded soldiers alive.
The cash type of accounting also provides an incentive to make short-term savings. It was only in 2007, four years after the war began, and after roadside bombs had caused some 1,500 American fatalities, that the Pentagon decided to replace its vulnerable fleet of 18,000 Humvees with vehicles designed to withstand blasts from so-called improvised explosive devices (I.E.D.’s). The short-term savings have resulted in a great deal of long-term human suffering and have brought on higher-than-anticipated costs for medical care.
Another obstacle to estimating the true costs is that many of them are buried in other government accounts and therefore don’t show up in the direct appropriations for the war. Further, some war-related spending has been pushed out of the government altogether and is borne by private parties. But just because it doesn’t show up in the government ledger doesn’t mean it isn’t a cost—it means only that someone else pays it. For example, the failure to provide adequate budgetary support for the Veterans Health Administration has forced many veterans to buy private medical care. While this reduces government spending, there are no real savings for the country. Similarly, relying on the National Guard and the reserves to help fight the war removes hundreds of thousands of workers from the civilian labor force, imposing real costs on the economy as a whole—not to mention on the men and women who are suddenly called to active duty, and on their families.
Finally, we should point out that the procedure used by the administration to fund the Iraq war was chosen deliberately in order to deflect close attention. The administration has requested nearly all the money for the war in the form of “emergency” funding, which is not subject to standard budget caps or vigorous scrutiny. Emergency funding is intended for genuine crises, such as Hurricane Katrina, where the utmost speed is required to get the money to the field. The continued use of this emergency procedure—five years after the war began—is budgetary sleight of hand that makes a mockery of a democratic budget process.
The Other Surge
To understand why the true costs of the war are so much higher than the official estimates, we can start by looking at America’s veterans. No one has suffered more from the administration’s blindness and stinginess. To date, more than 1.6 million American troops have been deployed in the Iraq and Afghanistan operations. More than 4,000 have been killed. More than 65,000 have been wounded or injured, or have contracted a disease. Of the 750,000 troops who have been discharged so far, some 260,000 have been treated at veterans’ medical facilities. Nearly 100,000 have been diagnosed as having mental-health conditions. Another 200,000 have sought counseling and re-adjustment services at walk-in vet centers.
No adequate preparation was made for casualties on this scale. The Department of Veterans Affairs (V.A.) and other agencies have been overwhelmed—both by the need for immediate medical care and by the demand for disability benefits. Already, a quarter of a million returning veterans have applied for disability benefits. Not surprisingly, many disability claims are complex: the average veteran cites five separate disabling medical conditions. The least fortunate among the veterans have suffered unimaginable horrors: brain trauma, amputations, burns, blindness, and spinal damage. Because a greater number of the injured are surviving today, the relative costs of long-term care will be greater than for any previous war. This is the surge the administration doesn’t talk about.
[two more pages]
Wednesday, February 27, 2008
Total Economic Cost of the War
Link to Vanity Fair's excerpt of Stiglitz' book "The $3 Trillion War"
Link to Democracy Now's interview of Stiglitz
Link to Times of London article by Stiglitz
Link to FDL Book Salon interview of co-author Linda Bilmes
Tuesday, February 26, 2008
Bush & the governors
Robert Pear writes in the New York Times: "President Bush rebuffed appeals from the nation's governors on Monday to increase spending on roads, bridges and other public works as a way to revive the economy.
"Governors said Mr. Bush had told them at a White House meeting that he wanted to see the effects of his economic stimulus package before supporting new measures.
"A bipartisan group of governors is pushing for major road and bridge projects as a way to create jobs and foster economic development. But the White House says the money could not be spent fast enough to be of much immediate help. . . .
"Gov. Edward G. Rendell of Pennsylvania, a Democrat who is vice chairman of the National Governors Association, described the response as 'a fairly significant no.'
"'There are tens of billions of dollars of infrastructure projects ready to go,' Mr. Rendell said. 'I asked the president if he would support spending on those projects as part of a second stimulus package, and he said no.'
"Governors said Mr. Bush had told them at a White House meeting that he wanted to see the effects of his economic stimulus package before supporting new measures.
"A bipartisan group of governors is pushing for major road and bridge projects as a way to create jobs and foster economic development. But the White House says the money could not be spent fast enough to be of much immediate help. . . .
"Gov. Edward G. Rendell of Pennsylvania, a Democrat who is vice chairman of the National Governors Association, described the response as 'a fairly significant no.'
"'There are tens of billions of dollars of infrastructure projects ready to go,' Mr. Rendell said. 'I asked the president if he would support spending on those projects as part of a second stimulus package, and he said no.'
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