Spaced
01-08-2006, 08:25 PM
THE cost of the Iraq war could top $US2 trillion ($A2.65 trillion) after factoring in long-term health care for wounded US veterans, rebuilding a worn-down military and accounting for other unforeseen bills and economic losses, according to a new analysis.
The estimate by Nobel Prize-winning Columbia University economist Joseph Stiglitz and Harvard lecturer Linda Bilmes far exceeds projections made by the Bush Administration.
The figure is more than four times what the war was expected to cost taking in this year — about $US500 billion, according to congressional budget data.
The new study is billed as a detailed analysis not only of the potential costs of sustaining the operation in Iraq for at least several more years, but also the expenses likely to be incurred by American taxpayers long after US troops withdraw. The Government will have costly obligations to a new class of veterans, be forced to make new investments in stressed military ranks thinned by multiple tours of duty, and withstand the enduring impact of the war on the nation's overall financial outlook.
For example, the study attributes a portion of the increase in oil prices to instability in the Middle East caused by the 2003 invasion that toppled Saddam Hussein and sparked a bloody insurgency.
It estimates that the shock to the oil industry has already added at least $US25 billion to the price tag of the conflict.
The analysis also attempts to account for the war's impact on the ballooning federal deficit, its ripple effects on overall economic growth and investment, and losses in productivity.
"There are quite a few things that are not being captured in the budgetary numbers" presented by the Government, said Dr Stiglitz, who received the Nobel Prize in Economics in 2001. "When you add up all of those numbers, it increases substantially. I think $2 trillion is conservative."
The findings were to be presented yesterday at a conference of economists and social scientists in Boston.
The authors said their predictions were largely based on previous data — including from past conflicts — compiled by Government agencies, including the Pentagon, the Department of Veterans Affairs and the Congressional Budget Office.
For the purposes of their study, Dr Stiglitz and Dr Bilmes assumed the US mission in Iraq would last until 2010, but with a steadily declining number of US troops each year.
Money well spent:rolleyes:
The estimate by Nobel Prize-winning Columbia University economist Joseph Stiglitz and Harvard lecturer Linda Bilmes far exceeds projections made by the Bush Administration.
The figure is more than four times what the war was expected to cost taking in this year — about $US500 billion, according to congressional budget data.
The new study is billed as a detailed analysis not only of the potential costs of sustaining the operation in Iraq for at least several more years, but also the expenses likely to be incurred by American taxpayers long after US troops withdraw. The Government will have costly obligations to a new class of veterans, be forced to make new investments in stressed military ranks thinned by multiple tours of duty, and withstand the enduring impact of the war on the nation's overall financial outlook.
For example, the study attributes a portion of the increase in oil prices to instability in the Middle East caused by the 2003 invasion that toppled Saddam Hussein and sparked a bloody insurgency.
It estimates that the shock to the oil industry has already added at least $US25 billion to the price tag of the conflict.
The analysis also attempts to account for the war's impact on the ballooning federal deficit, its ripple effects on overall economic growth and investment, and losses in productivity.
"There are quite a few things that are not being captured in the budgetary numbers" presented by the Government, said Dr Stiglitz, who received the Nobel Prize in Economics in 2001. "When you add up all of those numbers, it increases substantially. I think $2 trillion is conservative."
The findings were to be presented yesterday at a conference of economists and social scientists in Boston.
The authors said their predictions were largely based on previous data — including from past conflicts — compiled by Government agencies, including the Pentagon, the Department of Veterans Affairs and the Congressional Budget Office.
For the purposes of their study, Dr Stiglitz and Dr Bilmes assumed the US mission in Iraq would last until 2010, but with a steadily declining number of US troops each year.
Money well spent:rolleyes: