January 21, 2003

DOES ANYBODY EDIT THE POST?:

-REVIEW: of A FREE NATION DEEP IN DEBT: The Financial Roots of Democracy By James Macdonald (Michele Wucker, Washington Post)
Two new books about the historical roots of debt could hardly be more timely. American consumers owe more than $1.7 trillion, not even counting home mortgages. A record 1.5 million bankruptcies were declared over the past year. Meanwhile, war with Iraq could cost as much as $2 trillion, roughly equivalent to a full year's U.S. federal budget, and much of it likely to be financed by borrowing.

Or $200 billion. But hey, what's 1.8 trillion dollars between friends. Posted by Orrin Judd at January 21, 2003 9:00 PM
Comments

I should save this article, and put it in a file labeled "proof that the media has a liberal bias". The estimation that a war in Iraq could cost 2 TRILLION dollars, tossed casually into an article in the Washington Post ostensibly reviewing a couple of books, is a perfect case in point.



This number is not correct. It could not possibly be correct. You could only get to this number by...well, the heck with it, you couldn't get to it, period, unless you were cooking the books for some ulterior motive (and what could that be, I wonder).



The idea that a shooting war in Iraq would cost five times the annual defense budget of the United States is risible. You could only get there by assuming that most of the military costs would not exist otherwise (but guess what, even if we don't go to war in Iraq we'll still have all the carriers, tanks, other equipment, and soldiers in inventory and/or on the payroll, so that assumption is already false).



You would then have to assume some huge increase in the price of oil, and add it to the bill. Despite the fact that as soon as the LAST shooting war in Iraq got going, the price of oil dropped dramatically.



I don't even know what other kitchen sinks get thrown into this calculation to get that number. They're all imaginary, anyway.



But the fact remains that some anti-war, left-wing kvetch with an axe to grind has picked up that number and inserted it, unchallenged, into an article where it can subtly influence the opinions of the casual reader.



And the books reviewed weren't even about the war in Iraq to begin with. Talk about creating your own opportunities. Sheesh.

Posted by: Harry Tolen at January 21, 2003 8:32 PM

Even better, here's a comment from an exchange today
between Rumsfeld and press. This number has been thrown around for a while now -- no excuse for this error in the Post:



Q: Mr. Secretary, on Iraq, how much money do you think the

Department of Defense would need to pay for a war with Iraq?



Rumsfeld: Well, the Office of Management and Budget, has come

up come up with a number that's something under $50 billion for

the cost. How much of that would be the U.S. burden, and how

much would be other countries, is an open question. I think the

way to put it into perspective is that the estimates as to what

September 11th cost the United States of America ranges high up

into the hundreds of billions of dollars. Now, another event in

the United States that was like September 11th, and which cost

thousands of lives, but one that involved a -- for example, a

biological weapon, would be -- have a cost in human life, as

well as in billions, hundreds of billions of dollars, that would

be vastly greater.

Posted by: Kevin Whited at January 21, 2003 11:04 PM

It could be a simple mistake by a book reporter, monumentally callow about economics, and an indolent editor. But why, I wonder, do these mistakes never run in the other direction?

Posted by: af at January 22, 2003 9:38 AM

Oh, I don't think they cooked any numbers. I think their just stupid. They probably saw the number 200 billion and thought, "Hey, isn't that just 2 trillion?"

Posted by: Merrijane at January 22, 2003 9:40 AM

The answer is that a study was done recently by William Nordhaus that came up with the $2 Trillion number. A short version of the findings was in the NY Review of Books. The full study can be found here:

">http://www.amacad.org/publications/monographs/War_with_Iraq.pdf




It really isn't that hard to come up with these things via google, you know.

Posted by: Al at January 22, 2003 9:55 AM

It's not just the actual battle itself that is being accounted in the $2 trillion figure, but the costs of a 10 year occupation. That is the high number given by the American Academy of Arts and Sciences


Check your facts, kid...

Posted by: PG at January 22, 2003 10:40 AM

The point is, I believe that the costs cited in those studies are highly exaggerated for polemic effect, yet they are the ONLY ones casually slipped into this article. We could debate them on the merits, but this article doesn't do that...it simply cites them just to get a scary number out into the public domain one more time. In a book review, no less.



Although Orrin's original point might have been that this is just a typo that was not caught, the fact is that this is a perfect example of media bias and how far they will go to twist the terms of the debate.

Posted by: Harry Tolen at January 22, 2003 10:53 AM

I'm sympathetic to Orrin's position, believe me. But I think he is just flat-out wrong here. The book is about DEBT, after all, and here we have a possibility that the Government will be incurring a massive amount of debt to fund our policies in Iraq. So it seems to me to be an appropriate place to put the number.



It is difficult for me to comment on the validity of the number itself. As the report itself acknowledges, it is the high-end of the range. I don't know the author of the report, but it doesn't seem to me to be made-up numbers like the Marc Herold figures on Afghan civilian casualties. But I could be wrong on that...



In any case, I certainly think it was defensible for the writer to use the $2 trillion figure and for his editor to let him use it...

Posted by: Al at January 22, 2003 1:39 PM

People:



Let's get a grip on reality here. I'm sure someone claims that the war in Iraq will cost $2 Trillion, but how about a little perspective: that would mean it would cost pretty nearly what all of WWII cost in inflation adjusted dollars.

Posted by: oj at January 22, 2003 4:00 PM

$2 trillion is, at today's prices, about 66 BILLION barrels of oil.



Will a war that lasts a week cost as much as all the oil in western Asia?



I don't think so.



Was the reviewer an ex-grinding moron?

Posted by: Harry at January 22, 2003 4:36 PM

I've read the report cited as the source for the $2 trillion figure (look on p. 82 of the report for a chart summarizing the accounting), and as I said before, you can only get there by loading everything including the kitchen sink and a 500-year flood into the numbers.



But the point is that the general public reading the reviews of these two books never gets to see where the numbers come from. There are no footnotes or citations to lead them to the report. Nor do they hear that this report itself is forced to admit that the costs could be as low as $99 billion (although because he has another axe to grind, the author tries to minimize that possibility). Nor is it mentioned that well over 50% of the $2 trillion number has nothing to do with government spending and wouldn't be financed by borrowing in any case.



Again, the issue here is not that the study is flawed (although it is), it is that it has been selectively mis-quoted in a major media source to create a false impression amongst casual readers. Manipulation by the media at its finest.

Posted by: Harry Tolen at January 22, 2003 4:55 PM

The writers says "as much as" $2 trillion. That implies that the number is the high end of the range. And, indeed, the $2 trillion figure is the high end of the range for war costs.



I would think that the comparisons to costs of WWII, etc. are not appropriate; this figure gives the indirect 10-year cost, including a number of items (the largest items, in fact) that are not direct costs. Are the figures for WWII's cost all the indirect costs over 10-years?



Finally, this is a book review. No footnotes are needed. The writer wanted to make a point about debt in today's world. The point was not about all the nuances of accounting for Iraq-war costs. Seems to me to be perfectly defensible to use a study (which at least seems to be respectable) to make the point.

Posted by: Al at January 22, 2003 7:21 PM

Al:



The study is de facto idiotic. Do you seriously think that defeating Iraq, even if we rebuild it for ten years (which we'll do with their own oil revenue) will cost more than the four years of WWII? The proposition just isn't serious. The author can easily be forgiven biffing a number, though the editor probably can't. But they do go on to assert in plainer English that the war will cost an entire year's budget of the U.S.. This is deranged.

Posted by: oj at January 22, 2003 9:28 PM

OJ speaks sooth. And the devil, in this case, is in the details. Although stating nothing clearly, thus maintaining a Nixonian "plausible deniability", the author (and editor) in this case do yeoman's work to IMPLY that the war will cost U.S. taxpayers $2 trillion. Thus leading to a later lecture (Wash. Post reader vs. someone else) that "as it is well known that this war will cost the U.S. $2 trillion, how can you conclude...").



My own guess is less than $150 billion, dealer's fees, tax, and license included. So shall we meet up in a year and run the tab to see who was right?

Posted by: Harry Tolen at January 22, 2003 10:49 PM

Harry:



Being Left means never having to admit you were wrong.

Posted by: oj at January 23, 2003 9:03 AM
« JUST TELL ME WHO YOU WANT ME TO BE: | Main | TED FINDS AN ACORN: »