Monday, November 01, 2010

How the Iraq and Afghanistan Wars are sinking the US economy

by Linda Bilmes , The Daily Beast,

Linda J. Bilmes is a professor at the Harvard Kennedy School of Government. She is co-author with Joseph Stiglitz of the New York Times bestseller The Three Trillion Dollar War: The True Cost of the Iraq Conflict. Bilmes has written extensively on financial and budgetary issues in newspapers, magazines and academic journals including the New York Times, The Washington Post, and the Financial Times.

Nobel Prize recipient Joseph Stiglitz and Harvard budget guru Linda J. Bilmes are revising their original $3 trillion war cost estimate. As Bilmes reports, the Iraq and Afghanistan wars are at least 25 percent costlier than previous projections.

As Election Day draws near, it’s pretty clear: Voters are worried about jobs, the budget deficit and the rising national debt.

But behind those issues—behind the ads and candidates’ speeches, behind the rhetoric about “out-of-control” government spending—there lurks a hidden, less-talked-about issue: the cost of the ongoing wars.

Already, we’ve spent more than $1 trillion in Iraq, not counting the $700 billion consumed each year by the Pentagon budget. And spending in Iraq and Afghanistan now comes to more than
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$3 billion weekly, making the wars a major reason for record-level budget deficits.

Two years ago, Joseph Stiglitz and I published The Three Trillion Dollar War in which we estimated that the budgetary and economic costs of the war would reach $3 trillion.

Taking new numbers into account, however, we now believe that our initial estimate was far too conservative—the cost of the wars will reach between $4 trillion and $6 trillion.

For example, we recently analyzed the medical and disability claim patterns for almost a million troops who have returned from the wars, and, based on this record, we’ve revised our estimate upward to between $600 billion and $900 billion—a broad specter, yes, but certainly also a significant upward tick from our earlier projection of $400 billion to $700 billion, based on historical patterns.

Similarly, our estimates for the economic and social costs associated with returning veterans can be expected to rise by at least a third—the staggering toll of repeated deployments over the past decade.

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