Re: The Mother of All Budget Busters

In article <43C89CB0.7010503@xxxxxxxxxxxxxxxxxxx>,
Dan Clore <clore@xxxxxxxxxxxxxxxxxxx> wrote:

> News & Views for Anarchists & Activists:
> http://groups.yahoo.com/group/smygo
>
> Asia Times
> Jan 14, 2006
> Iraq, the mother of all budget busters
> By David Isenberg
>
> "If Bush had come to the American people with a request to
> spend several hundred billion dollars and several thousand
> American lives in order to bring democracy to Iraq, he would
> have been laughed out of court."
> -- noted political scientist Francis Fukuyama
>
> It turns out the eventual cost of the war in Iraq will not
> be several hundred billion, but according to a new study at
> least a thousand billion dollars -- US$1 trillion, in other
> words. This figure dwarfs any previous estimate by orders of
> magnitude.
>
> Given the projected cost of $1 trillion to $2 trillion, one
> might imagine that American taxpayers are now rolling on the
> floor in hysterical laughter while gasping for air.
>
> To get an idea of the economic black hole the Iraq war could
> become, it is useful to remember some of the past estimates
> given by the administration of President George W Bush.
> Recall, for example, when then-White House economic adviser
> Lawrence Lindsey suggested in 2002, six months before the
> war, that the mission could cost $100 billion to $200
> billion, Bush fired him because his estimate was up to three
> times the $70 billion the administration estimated.
>
> Conservative columnist Paul Craig Robert wrote after the
> latest estimate: "Americans need to ask themselves if the
> White House is in competent hands when a $70 billion war
> becomes a $2 trillion war. Bush sold his war by understating
> its cost by a factor of 28.57. Any financial officer
> anywhere in the world whose project was 2,857% over budget
> would instantly be fired for utter incompetence."
>
> The latest study was done by US economist and Nobel Prize
> winner Joseph Stiglitz, who teaches at Columbia University,
> and Linda Bilmes of Harvard University.
>
> For the sake of comparison, consider that late last summer
> the Pentagon was spending $5.6 billion per month on
> operations in Iraq, an amount that exceeds the average cost
> of $5.1 billion per month (in real 2004 dollars) for US
> operations in Vietnam between 1964 and 1972. Currently, the
> Pentagon is spending about $6 billion per month in Iraq. The
> total direct cost of the decade-plus Vietnam War to the
> United States was estimated to be $600 billion. And not even
> three years after its start, Iraq has already cost 42% of
> what the Vietnam war did.
>
> While the economic costs are staggering, they are not a
> total surprise. Lawrence Korb, a former assistant secretary
> of defense during the Ronald Reagan administration and now a
> senior fellow at the Center for American Progress, recalled:
> "I said at least $500 billion or a trillion before the war."
>
> Economically, he said, "it's a tremendous shock". He notes
> that the costs of the war come at a time when other
> governmental expenditures are scheduled to increase. "From
> 2007 to 2011, [baby] boomers start sucking up money, plus
> the Medicare drug benefits. It makes budget planning more
> difficult." He predicts the defense budget will be flat for
> at least the next five years.
>
> Currently, according to Steve Kosiak, director of budget
> studies at the Center for Strategic and Budgetary
> Assessments, the Pentagon's direct costs of military
> operations and foreign assistance in Iraq are about $250
> billion. He notes that the government does not include many
> important costs.
>
> "There are clearly additional costs. We are financing the
> war through deficit financing. That will be at least $100
> billion over the next decade." He added that government
> figures do "not include overall economic impact, such as the
> rise in oil prices generated by the war".
>
> Stiglitz and Bilmes agree with Kosiak. They note: "Given
> that at the onset of the war, the [US] was already running a
> deficit, and no new taxes have been levied, it is not
> unreasonable to assume, for purposes of budgeting, that all
> of the funding for the war to date has been borrowed, adding
> to the already-existing federal budget deficit. In the
> conservative scenario we assume that these funds are
> borrowed at 4% and repaid in full within five years. The
> moderate scenario assumes that the country continues to have
> a deficit over the next 20 years and therefore interest
> continues to accrue."
>
> This presents political difficulties for the Bush
> administration. According to Korb, "Possible actions the
> administration will have to take include keeping the
> [military] budget flat, rescinding tax cuts and rescind drug
> benefits."
>
> But some of the most interesting revelations of the new
> study have not been noted. For example, despite the
> political rhetoric one hears from all politicians, it turns
> out that America's fighting men and women are not worth that
> much.
>
> The authors wrote: "The military may quantify the value of a
> life lost as the amount it pays in death benefits and life
> insurance to survivors -- which has recently been increased
> from $12,240 to $100,000 [death benefit] and from $250,000
> to $500,000 [life insurance]. But in other areas, such as
> safety and environmental regulation, the government values a
> life of a prime age male at around $6 million."
>
> So a civilian death is worth at least $5.4 million or about
> 11 times that of a serviceman or woman. The economic cost
> for civilian deaths also applies to private contractors.
> According to the study, the cost of the American soldiers
> who have already lost their lives adds up to about $12 billion.
>
> It is reminiscent of the old military cliche, "Nothing is
> too good for our boys, so that's what we'll give them -
> nothing."
>
> The report also reveals that caring for wounded military
> personnel is going to be a far bigger and more expensive job
> than previously thought. The study notes that the Veterans
> Benefits Administration had originally projected that 23,553
> veterans returning from Iraq would seek medical care last
> year, but in June it revised this number to 103,000. It also
> is now responsible for providing care to an estimated 90,000
> National Guard personnel, who previously were not eligible
> for its services. To meet these unforeseen demands, the
> administration appealed to Congress for an emergency $1.5
> billion in funding for fiscal 2005. It is likely to face a
> shortfall of $2.6 billion in 2006.
>
> It is unclear, though, how much of a difference to the
> policy debate the study will make. According to Korb: "Had
> the study come out before we went to war, it might have made
> a difference. But now its impact will only be incremental.
> It might influence the administration to withdraw troops
> more quickly than previously planned.
>
> "I wish we had thought about this before we got into this mess."
>
> David Isenberg, a senior analyst with the Washington-based
> British American Security Information Council (BASIC), has a
> wide background in arms control and national security
> issues. The views expressed are his own.

There is ample evidence that Bush and his coterie did think about this,
and that the Iraq war is achieving precisely what they hoped it would:
it is draining away trillions of dollars needed for entitlements and
social programs, undoing the New Deal. It is simultaneously transferring
immense wealth and political power to Haliburton, Bechtel, and the oil
millionaires who are our military-industrial cartel. 9/11 made Bush's
flimflam possible, but the plans to exploit a war were on the table
before then, with the invasion of Iraq as the centerpiece of the thing.
.