Public Employee Press

As war costs slam U.S. economy…

In 2002, President Bush’s economic advisor Lawrence Lindsay predicted that the Iraq war would cost $200 billion.

Fast forward: So far, the U.S. Congress has allocated $600 billion for the unpopular war.
And when the bill eventually comes due, it will top $3 trillion, according to Nobel laureate economist Joseph Stiglitz and Linda Blimes, a budget and public finance lecturer at Harvard’s John F. Kennedy School of Government. ($3 trillion is a 3 and 12 zeroes.)

The war’s most tragic cost for the United States, of course, is the over 4,000 military men and women who have lost their lives serving in the U.S. military in the conflict over the past five years. Over 30,000 have suffered injuries.

Much of the public outrage over the war stems from alarm about the human toll, in addition to moral and political objections. But as the conflict drags on, concern also grows about the war’s damaging impact on the economy.

The war's family tab: $16,500
Each minute, the United States spends $278,000 on the war. The monthly cost of the war comes to $12 billion.

“The war has led directly to the U.S. economic slowdown,” says Stiglitz, who wrote “The Three Trillion Dollar War,” a study of the long-term economic cost of Iraq, with Blimes. Stiglitz points out that while the price of oil was $25 a barrel before the war, it now has ballooned to more than $100.

The Iraq conflict is the only war since the American Revolution to rely so heavily on borrowing abroad.

About 40 percent of the war is financed through borrowing from China, Japan and countries in the Middle East and Europe. Large interest and debt obligations are driving up the deficit and leaving a huge burden for future generations.

The cost of the war from 2002 to 2008 adds up to $16,500 for every family of four, according to a November report by the Joint Economic Committee of the U.S. House and Senate.

The country will feel the impact of the war for years as it assumes the cost of taking care of veterans and pays benefits to families.
Because of the war, the government will spend $590 billion in medical and disability payments over decades, according to Stiglitz and Blimes.

Other major expenditures will include $520 billion to bring the troops and military equipment home, $280 billion to replace military equipment and $615 billion to meet interest payments alone on the immense borrowing.

But the cost of the war goes beyond the direct military and military-related spending.

As the November JEC report points out, the cost of the war for a single day could fund Head Start for 58,000 more kids, make college affordable for 160,000 students through Pell grants, pay for 11,000 more border patrol agents, permit the hiring of 14,000 more police officers or pay for health insurance for children from low-income families. The lifelong loss of earnings of disabled veterans will amount to $370 billion, according to Stiglitz and Blimes.

Sadly, the war recalls an observation by President Dwight Eisenhower, who said, “Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed.”

— Gregory N. Heires

…McCain sticks with Bush’s warpath

At a time when a significant majority of Americans say they want to see an end to the body bags coming back from Iraq, Republican presidential candidate Sen. John McCain vows to stay the course in President Bush’s unpopular war in the Middle East.

While Democratic candidates Hillary Clinton and Barack Obama speak about their plans to bring the troops home, McCain refuses to discuss any timetable for getting out of the war, the second longest in U.S. history, after Vietnam.

McCain has gone so far to raise the prospect of a long-term military presence in Iraq much like the United States’ maintenance of bases in South Korea and Japan, where troops have been stationed for decades.

In fact, the Republican candidate’s Web site suggests that McCain would escalate the war.

“A greater military commitment now is necessary if we are to achieve long-term success in Iraq,” says a section of the site called “Strategy for Victory in Iraq.”

The statement continues, “More troops are necessary to clear and hold insurgent strongholds; provide security for rebuilding local institutions and economies; halt sectarian violence in Baghdad and disarm Sunni and Shia militias; dismantle al-Qaeda; to train the Iraqi Army; and embed American personnel in Iraqi police units.”

Bogus fiscal conservative image
Throughout his career in the U.S. Senate, McCain has portrayed himself as a fiscal conservative. And at first, McCain did oppose the Bush tax cuts.

But today, as he panders to the Republican Party faithful, McCain has flip-flopped on the tax issue, and he has signaled his willingness to spend whatever it takes to win the war in Iraq.

Victory in Iraq is far more important than the cost of the war, said Douglas Holz-Eakin, McCain’s chief economic adviser. The “foundation of U.S. international influence is its large, powerful economy which can absorb the narrow, resource costs of war and free the U.S. to pursue strategic and security goals,” he said earlier this year at a symposium on the federal budget.

Luis Miranda of the Democratic National Committee described McCain as “one of the leading figures keeping time on the drumbeat to war and standing with President Bush every step of the way.”

He said, “The last thing the American people want is a third Bush term, but that is exactly what John McCain offers on the war in Iraq.”

— GNH