Iraq War’s Ultimate Cost Much Higher Than First Thought
According to a newly released report from Harvard’s Kennedy School of Government, by the time all the bills related to the Iraq War are paid, they’ll amount to far more than the few billion dollars that advocates of the war were claiming we’d incur during the run-up to war:
By the most conservative reckoning, the Iraq and Afghanistan conflicts will cost $4 trillion, including operations to date, accrued veterans medical and disability costs; indirect costs to the Defense Department, social costs for veterans’ families and interest already paid. Any estimation of macroeconomic costs, such as the impact of higher oil prices on weakening aggregate demand, and the link between oil prices and decisions of the Federal Reserve to loosen monetary and regulatory policy prior to the financial crisis, would easily raise the cost to $5 or $6 trillion, (even if only a fraction of the “blame” is attributed to the wars). Throughout the past decade, the United States has underestimated the length, difficulty, cost and economic consequences of these wars, and has failed to plan how to pay for them.
What did we buy for $4 trillion? The U.S. still faces a perilous international security situation and a fragile economy. Today as the country considers how to improve its balance sheet, it could have been hoped that the ending of the wars would provide a peace dividend, such as the one during the Clinton administration that helped Americans to invest more in butter and less in guns.
Instead, the legacy of decisions made during the Iraq and Afghanistan conflicts will impose significant long-term costs on the federal government, and in particular, on the consolidated national security budget. These decisions extend far beyond the initial choices made to invade Afghanistan, to invade Iraq and to expand US military involvement in both countries. They include the decisions to expand medical care and disability benefits for war veterans, to grow the Department of Defense medical system; to increase military pay; to mobilize the Guards and Reserves; to deploy and use up large quantities of basic equipment; to support ongoing diplomatic presence and military assistance in the region; and to finance the conflicts with debt.
The United States will face difficult trade-offs in funding these long-term obligations as well as military operations, new initiatives, research, development and diplomacy. The national security agencies — which are already scheduled to decrease, will come under pressure. One likely result is that the budgetary constraints will tilt the US in a direction of fewer military personnel in the forces, due to the immediate and long-term cost of maintaining active-duty end-strength. Instead of end-strength, budget considerations will favor greater investment in unmanned weaponry, robotics, and other technological solutions — which may or may not be a wise choice over the longer-term.
In short, there will be no peace dividend, and the legacy of Iraq and Afghanistan wars will be costs that persist for decades.
We’ll be paying the consequences for our foolish decade of war for a very long time.
Read the entire report [PDF], it’s short but it’s really quite illuminating.
H/T: James Fallows