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Thursday, May 04, 2006


The $1 $2 trillion war

Just a few posts ago, I wrote: "And including the money that will need to be spent in the future, even if the war stops today, closer to $1 trillion." That was a valid statement...sort of. The $1 trillion figure comes from a paper (pdf link) by Linda Bilmes, a lecturer at the Kennedy School of Government at Harvard, and Joseph E. Stiglitz, a Professor at Columbia University and a 2001 Nobel laureate in economics. News reports of the study appeared in the press a few days ago, but now an extensive yet easy-to-read summary of the article has been published in the latest issue of Harvard Magazine.

Reading that article reminded me of the conclusion I had seen in the press but forgotten -- that although $1 trillion is the estimated amount of "money that will need to be spent" (obviously dependent on assumptions about what will happen in the future!), it is not the total economic cost of the war (the human cost is another issue). The economic costs include the increase in the price of oil, the growth in the economy that would have occured had the $1 trillion been spent on other things rather than war ("It's hard to imagine any way of spending that money that would have a less positive impact on the U.S. economy [than spending it on war]," says Bilmes), and the economic value (not the emotional value) of the lost lives, for which the authors use a "standard figure" of $6 million per death.

Which brings us to the final point, which you won't find in the Harvard Magazine article, nor in any of the more limited press coverage I saw, but you will find in the article itself -- the cost estimate in this article is the cost to the United States only.

Nor have we included in this paper any of the costs borne directly by other countries, either directly (as a result of military expenditures) or indirectly (as a result of the increase in the price of oil.) Most importantly, we have not included the costs of the war to Iraq, either in terms of destruction of property (infrastructure, housing) or the loss of lives. Clearly, including these would increase the cost of the war substantially -- perhaps by an order of magnitude.
Indeed, imagine if they valued Iraqi lives at $6 million each. If we guess that 200,000 Iraqis will have died by the "end" of the war (or have already died, according to some estimates), that's $1.2 trillion more right there.

I can't claim to have read the paper seriously yet, it's 37 pages long, but it looks to be a valuable resource.

Speaking of valuable resources, on a completely different subject but in the same issue, a very interesting article entitled "Fueling our Future" about oil, coal, nuclear power, global warming, etc. Including some interesting pictures of what Miami and Manhattan will look like (or, more accurately, won't look like) under certain plausible scenarios of global warming.

Update: In re-reading this post, I realize I really need to add something I've written before. The author is quoted in the article as saying, "How can you weigh the benefits against costs if you don’t know what the costs are?" That may be true in general, but the war isn't wrong because it will cost $2 trillion, and it wouldn't be "right" if it only cost $2 billion or even $2 million. The war is wrong because it's wrong. The cost is relevant, of course, in helping to make people appreciate the full impact of the decision. But it isn't a factor in deciding right or wrong.

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