The Three Trillion Dollar War (By Joseph E. Stiglitz and Linda J. Bilmes)
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THE THREE TRILLION DOLLAR WAR
The True Cost of the Iraq Conflict
By Joseph E. Stiglitz and Linda J. Bilmes
Norton. 311 pp. $22.95
When congressional Democrats called a hearing last month to explore the costs of the Iraq war, their star witness was not some number-crunching Pentagon planner or a besieged administration budget official. It was Joseph E. Stiglitz, the Nobel Prize-winning Columbia University economist who is giving the White House heartburn with his forceful argument that the true price of the Iraq conflict will far surpass even the hundreds of billions of dollars already tallied.
The hearing came just days before the publication of The Three Trillion Dollar War, co-authored by Stiglitz and Harvard University lecturer and public finance expert Linda J. Bilmes. The book looks beyond the "emergency supplemental" budget requests and other official expenses and strives to estimate the full range of Iraq-related costs -- including long-term care for veterans -- that the nation will face for years to come.
The time is ripe for such an inquiry. The five-year anniversary of the invasion of Iraq finds the United States on the verge of recession, and the political debate is shifting toward whether the country should continue bankrolling such a war in the face of competing priorities.
Despite their sometimes technical prose, Stiglitz and Bilmes methodically build a compelling case that the costs of the war far exceed the $500 billion or so officially spent on it thus far. Yet by making many assumptions about the future course of the conflict -- from its duration (through at least 2017, they predict) to its impact on global oil prices ($5 to $10 extra per barrel, for seven to eight years) -- the authors will leave many readers unconvinced. Will the war prove extraordinarily expensive? Absolutely. But will the price tag be $2 trillion? $3 trillion? $5 trillion? It's impossible to know.
Nevertheless, the authors address the economic realities of the conflict far more fully than did the administration before the March 2003 invasion. Then-deputy defense secretary Paul Wolfowitz told Congress that Iraqi oil revenues would fully finance any postwar reconstruction, while Bush economic adviser Larry Lindsey lost his job for having the temerity to suggest that the conflict could cost $200 billion -- a fraction of the funds appropriated to date. "The tone of the entire administration was cavalier," Stiglitz and Bilmes write, "as if the sums involved were minimal."
In the book's most impassioned passages, the authors analyze the cost of veterans' care. They explain that the ratio of injuries to deaths among troops in Iraq is greater than in any past U.S. war, a development they hail as a "tribute to advances in battlefield medicine." With so many more injured troops surviving, however, veterans' disabilities and medical treatment have become "two of the most significant long-term costs of the Iraq war." Even the supposedly cheap Gulf War of 1991, they note, is still costing more than $4 billion annually in veterans' benefits.
The authors then grapple with assigning a monetary value to the lives of troops killed at war, settling on $7.2 million per individual based on the Environmental Protection Agency's cost estimate when someone dies in an environmental disaster. And, finally, the authors consider macroeconomic effects, assessing the impact of higher federal deficits and skyrocketing oil prices (which have gone from $25 to more than $100 per barrel since the war began) and estimating the foregone boon to the economy if even a portion of the funds spent on Iraq had gone toward schools, research, infrastructure or health care in the United States.
Stiglitz and Bilmes's final tally reaches $2.2 trillion in their "best case" scenario and $5 trillion in their "realistic-moderate" scenario -- and those figures don't even count the costs to Iraq, U.S. allies and the rest of the world. Choosing to err on the conservative side (and perhaps on the side of a catchier book title), the authors settle on $3 trillion.