Financial Costs for Iraq Could Pay for Social Security Woes...Twice

Former United States secretary of commerce, Linda Bilmes, and Columbia University professor Joseph Stiglitz offered a staggering prospective of the financial cost to the United States for invading Iraq in 2003.

To wit, the two say, not having invaded Iraq would have saved at least $1 trillion ($1,000,000,000,000) or enough cash to "fix Social Security for the next 75 years twice over" should the figure come in at $2 trillion as they estimate. Bilmes and Stiglitz presented their findings at the American Economic Association meeting in early January.

"Thinking back to the months before the war there were few reasons to invade quickly, but many [reasons] to go slow," they wrote in The Los Angeles Times, but President George W Bush's policy was not to wait for United Nations inspections to continue...to discover what we now know...no weapons existed in Iraq. "Invade now," as President Bush suggested in 2003; and deal with consequences later, which is what his critics have been saying all along.

The White House estimates they've spent only $357 billion to cover ongoing operations in Iraq and Afghanistan; however, they have not been able to tally-up a total cost for the invasion in March 2003 through January 2006 due to various spending tag-ons to other Bills approved by congressional leaders. The $400 billion deficit, although minimal compared with the gross domestic product figure, is still borrowed money meaning interest is owed on top of the tax increases undoubtedly needed to cover the costs.

The writers determine the final cost of the invasion would run between $1 trillion and $2 trillion. While no price tag could be placed upon lives lost from United States' military personnel, there are calculations associated with estimating long-term financial losses associated with a high casualty rate.

Included in the pair's calculations are combat costs for years to come, which does cover benefits for 17,000 injured military personnel. Current military equipment has now been in use for three years and it too will have to be replaced.

"Our study also goes beyond the budget of the federal government to estimate the war's cost to the economy and our society. It includes, for instance, the true economic costs of injury and death. For example, if an individual is killed in an auto or work-related accident, his family will typically receive compensation for lost earnings. Standard government estimates of the lifetime economic cost of a death are about $6 million. But the military pays out far less — about $500,000. Another cost to the economy comes from the fact that 40 percent of our troops are taken from the National Guard and Reserve units. These troops often earn lower wages than in their civilian jobs. Finally, there are macro-economic costs such as the effect of higher oil prices -- partly a result of the instability in Iraq."

As one could expect in their conclusion, the authors say that $2 trillion could have gone much further had it been spent on improving conditions in the United States. However, the financial costs associated with Iraq alone does not include security the homeland from terrorism, nor the costs associated with any anti-terrorism programs issued by the White House.

Whether or not military lives were lost due to poor planning and preparation remains a myster, but President George W Bush himself argued during his re-election campaign that troops "needed new body equipment" for protection in Iraq...necessities in 2004 that apparently missed the original shopping list from rushing to war the authors conclude.

"Penny-pinching in such matters during the rush to war has led to steep long-run costs for the nation and, tragically, for the individuals involved."

As of 20 January 2006 the United States military has lost 2,225 lives in Iraq and suffered some 17,000 military injuries with nearly 8,000 injuries being reported as critical.