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Friday, October 05, 2007


Hidden costs of war

People are (rightfully) outraged over the cost of the Iraq war (although of course the war deserves outrage even if the cost were in the millions), but they don't even realize how expensive the war is. Two hidden costs made the news recently. The first is Blackwater. Blackwater? Yes, Blackwater. Sure, everyone (except Fred Thompson, probably) knows all about Blackwater, thanks to their own behavior and the courageous reporting of Jeremy Scahill. And if you've been paying attention, you know that Blackwater has received more than a billion dollars in contracts from the U.S. Government. But those contracts are mostly from the State Department, not the Defense [sic] Department, which means that when Bush asks for (and the Democrats approve) another $190 billion for the war, that money isn't even included.

Hidden cost #2 - disability benefits for veterans. A commission recommended this week that those benefits be increased by 25%, which amounts to another $7.5 billion a year - that's $75 billion more in the next decade, or $450 billion over a 60-year (just to pick a number) lifespan of the veterans. That $450 billion? Also not included in the Defense [sic] budget.

More than a year ago, two Harvard economists released a study which calculated a $2 trillion cost of the war (and that for the U.S. only). And that was an underestimate! Consider this, from the paper (PDF):

Our estimates, for instance, assume that we have 136,000 troops stationed in Iraq in 2006. The Administration has recently announced a troop reduction, from 160,000 due to the pre-election build-up, to 140,000, a number which is still larger than the numbers employed in our analysis.
Well, we all know that assumption went by the boards, and that the costs have actually increased significantly since the paper was written. And then there's the real source of underestimation in the paper:
Assuming that the US begins to withdraw troops in 2006 and maintains a diminishing presence in Iraq for the next five years.
Of course we'd all like U.S. troops to be gone by 2011, but given that the three leading Democrats won't even commit to being out by 2013, it seems like a pipe dream unless the antiwar movement gets a lot stronger.

All in all, I suspect a revised estimate would be looking at $3 trillion now, if not more.

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