February 26, 2007
ALL ABOUT PERSPECTIVE:
Iraq War Sticker Shock: An iconoclastic economist discusses how the White House cooked the books on its march to war (Koshlan Mayer-Blackwell, February 21 , 2007, Mother Jones)
Joseph Stiglitz has never shied away from using his platform as a Nobel Prize winner in Economics to point out policy follies in high places. In 2002, after he had left a post as the World Bank's chief economist, he published the bestseller Globalization and Its Discontents, in which he took the International Monetary Fund and the Treasury Department to task for their overzealous approach to privatization in Russia and their one-size-fits-all response to the East Asian financial crisis. Now an economics professor and director of the Initiative for Policy Dialogue at Columbia University, Stiglitz remains an outspoken critic of subsidies and other trade practices that hurt less developed countries.Last year, Stiglitz received renewed attention for a paper [PDF], co-written with Harvard professor of public finance Linda Bilmes that projected that the total economic costs of the Iraq War would exceed a trillion dollars. [...]
MJ: You predicted that the total cost of the Iraq war would top a trillion dollars. Can you put a number like that into perspective?
JS: That was last year. I think it is clear from what has happened since then that a trillion dollars was a vast underestimate. We are talking at least between one and two trillion dollars now. To put that into perspective, President Bush went to the American people at the beginning of his second term, saying that we have a major crisis with our Social Security system. For somewhere between a half and quarter of the cost of the war in Iraq you could have fixed all the problems associated with Social Security for the next 75 years and still have had a lot left over. Put in another way: We are now spending something like $10 billion a month--$120 billion dollars a year--on Iraq. The amount the entire world gives in foreign aid, on an annual basis, is about half that.
To put it into perspective, for about 10% of one year's GDP we removed one of the most genocidal regimes in the world and liberated the Kurds and Shi'a. So here's the interesting question for the Left: if we can free people so cheaply how can it be justified morally not to do so? Posted by Orrin Judd at February 26, 2007 5:26 PM
Or, to put it in another perspective, the annual cost is 1% of the GDP.
Posted by: sam at February 26, 2007 5:52 PMI was talking about the Iraq war to a dear but very liberal friend of mine recently. She was opining that Bush II was the worst president we've ever had, that more people are being killed in Iraq now than during Saddam's time, and that we could be spending all that money on -- something else. None of that shocked me.
What I was shocked to find was that she thought we were spending more money (adjusted) that we did during Vietnam!! She didn't want to believe that we weren't, or at least that it was a much tinier fraction of our GNP than the Vietnam War had been. She said she found it "hard to believe", and she meant it. I pointed out the salient differences, like 500,000 troops there at peak time, fighting pitched battles year-round with an actual army that had actual tanks, artillery, supply lines from up north, etc. Not to mention the large-scale bombing campaigns that this war hasn't seen at all, at least not since the very beginning. And 50,000+ deaths!!!
This woman's smart, too. I know you never make it as far as Vietnam in high school history classes, but jeez. How the heck did she become convinced of that!!
Due to my finance background, I am always suspicious of cost estimates. I am willing to bet that many of these cost estimates are total and not incremental costs.
Posted by: Rick T. at February 26, 2007 7:22 PMWell, not to be prejudicial or anything, but Mother Jones is not a place where I expect knowledgeable or accurate information about anything that has to to with economic or accounting numbers.
Posted by: Raoul Ortega at February 26, 2007 8:20 PMAren't economists supposed to know that there is a cost of *not* doing something as well?
How much is it worth to not see a mushroom cloud over NYC, or to not see white clouds of poison gas billowing out of the subway tunnels?
Posted by: ray at February 26, 2007 8:41 PMU of Chicago study: Cost of War $100 billion to $870 billion; cost of containment $200 billion to $700 billion. Human cost of one year containment:10,000 to 30,000 Iraqi deaths. Source: GSB Magazine, vol. 29, no. 1, Winter 2007, p. 24
"We are now spending something like $10 billion a month--$120 billion dollars a year--on Iraq. The amount the entire world gives in foreign aid, on an annual basis, is about half that." Mayhaps the world is too stingy in their foreign aid?
Anyway, getting rid of a blood thirsty monster and his monstrous sons: priceless.