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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

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Mikey says:

    We’ll be paying the consequences for our foolish decade of war for a very long time.

    Indeed. And there’s also this:

    Ten years after Iraq war began, Iran reaps the gains

    Like or Dislike: Thumb up 10 Thumb down 0

  2. PJ says:

    What did we buy for $4 trillion?

    Eternal gratitude from Halliburton et al.? Well, actually, it’s not eternal, and there really is no gratitude, unless you’re a politician…

    Like or Dislike: Thumb up 12 Thumb down 0

  3. Gold Star for Robot Boy says:

    We’ll be paying the consequences for our foolish decade of war for a very long time.

    So the obvious solution is to impeach Obama and again pledge fealty to the guys who wet-dreamed up the Iraqi clusterfuck!

    Like or Dislike: Thumb up 14 Thumb down 0

  4. anjin-san says:

    I was at a Howard Dean rally early in his 2004 run. He predicted that the war would cost more than we had been told by orders of magnitude, and he made a number of other, very accurate predictions about where the war was taking us.

    Of course he was promptly excoriated by conservatives…

    Highly-rated. Helpful or Unhelpful: Thumb up 16 Thumb down 0

  5. john personna says:

    Hasn’t Stiglitz been right, early and often, with these short of numbers?

    Conservatives ignored Stiglitz, especially in the early days, and rejected his estimates out of hand. Well, it turns out …

    Like or Dislike: Thumb up 6 Thumb down 0

  6. Tsar Nicholas says:

    Sun rises in east.

    If the government does anything it’ll cost a lot more money than originally “expected” or “budgeted.” War. Public works projects. Social engineering. Vote buying. No matter. Whatever you thought it would cost you’ve underestimated it.

    But here’s where the left unplugs its brain and goes off the rails. Leftists get the costs of war. This blog headline will cause them reflexively to nod their heads and mentally to hang Bush, Rove and Cheney in effigy. Maybe literally so. Because leftists don’t like war. They’re against it. Unless they vote for it and then it becomes unpopular. Or whatever. But they don’t want war. Right? Hell, many of them started chanting that mantra circa 1967 and today they’re teaching our kids about how much America sucks. On the public dime, no less. Fair enough.

    But the same concept applies to every other thing the federal government does. AFDC. Medicaid. Medicare. Social Security. “Stimulus” bills. EPA. DOL. HUD. SEC. EEOC. NLRB. QE1. QE2. QEforever. Everything always costs more. And that spending has deleterious effects that last for decades and further has downstream negative ripple effects that also last for decades. Or more.

    If and when the left ever were to connect the dots between wanting to spend less money on war and needing to spend less money on everything else the government does then we’d have a fighting chance to avoid becoming a de facto banana republic. Unfortunately, however, the chances of the left clueing in to fiscal and economic realities are about the same as broad-based prosperity in the likes of Chicago, Philly, Baltimore, Newark, Camden, New Orleans and Detroit. You get the whole point, right?

    Poorly-rated. Helpful or Unhelpful: Thumb up 1 Thumb down 33

  7. john personna says:

    @Tsar Nicholas:

    I dare you to find the same ratio anywhere. From a $50B estimate, to a $4T tab.

    Go ahead.

    Highly-rated. Helpful or Unhelpful: Thumb up 19 Thumb down 0

  8. Rob in CT says:

    I love how some folks seem to think that spending money on education, infrastructure, health care or old-age pension payments is equivalent to spending money on war. There is feedback from both, but it seems to me there is more waste involved in the latter. You build a bomb, you use the bomb. The bomb is gone. You have to make more. In both cases, you’re paying people to do stuff (teacher, bomb maker, whatever), but in one case some of the cost is literally thrown away.

    Building a school (or providing better nutrition for a child, or removing some lead from the environment, building a tunnel under the Hudson, etc, etc)… has a longer shelf-life/higher ROI, even if the school system has problems. Even if there is waste – as there will be! Not all spending is equal, even if it’s all done by the government.

    War is the most wasteful spending you can devise.

    JP: one recent project with some pretty egregious cost inflation is the CA high-speed rail project. I doubt it’s the same magnitude though (~$50-$200B becomes ~$4T – a 20X increase). An older example would be the “Big Dig.” Dunno if it was 20X. It was pretty bad though.

    Like or Dislike: Thumb up 14 Thumb down 0

  9. Rob in CT says:

    Also, I’d like to add that our friend the Tsar, as he often does, has causation all backwards. The biggest triggers for US government growth have been wars. The Civil War, WWI, WWII: nothing comes close to those for increasing the size and scope of the federal government. So instead of whining about lefties not getting it, how about recognizing the warmongering is your most dangerous enemy?

    Like or Dislike: Thumb up 14 Thumb down 0

  10. john personna says:

    @Rob in CT:

    Now you’re just pressing my high speed rail button! lol

    Like or Dislike: Thumb up 2 Thumb down 0

  11. wr says:

    @Tsar Nicholas: I can take a million dollars, hire a few people and produce a product that will return several times my investment. Or I can take a million dollars, burn it to ashes, and flush it down the toilet.

    According to you, it’s exactly the same thing.

    I wonder why no one takes you seriously.

    Highly-rated. Helpful or Unhelpful: Thumb up 21 Thumb down 0

  12. @john personna:

    I dare you to find the same ratio anywhere.

    Hell…I dare him to find a right-wing debacle he can’t somehow blame on “the left.”

    Gotta love this, though:

    Because leftists don’t like war. They’re against it.

    Who told you that and why did you believe them?

    (Seriously…..a guy calling himself “Tsar Nicholas” saying “Leftists don’t like war.” That’s not what your namesake said!)

    Like or Dislike: Thumb up 9 Thumb down 0

  13. Rafer Janders says:

    @Rob in CT:

    You build a bomb, you use the bomb. The bomb is gone. You have to make more. In both cases, you’re paying people to do stuff (teacher, bomb maker, whatever), but in one case some of the cost is literally thrown away.

    Though at least if you use the bomb and have to make another, that adds a multiplier effect to the economy. Most weapons systems, however, are never really “used” — you build a tank, the tank sits there. You build a nuclear missile, it sits there and is never fired. You build a destroyer, it never engages in sea to sea surface combat with another navy.

    At least if you build a bridge or road, people use the bridge or road.

    Like or Dislike: Thumb up 6 Thumb down 0

  14. grumpy realist says:

    Tsar is one of those sillies who thinks that the level of environmental and food protection they have in China (dead pigs in the water, soy sauce made from human hair) is just dandy.

    Move there already, mmkay?

    Like or Dislike: Thumb up 5 Thumb down 0

  15. KariQ says:

    But it was all worth it to replace a brutal Sunni dictator with a brutal Shiite dictatorship under the thumb of Iran.

    Like or Dislike: Thumb up 8 Thumb down 0

  16. Neil Hudelson says:

    The “few billions” comment wasn’t a lie. They just coughed when they said “thousands”. It should have been “A few thousand billions.”

    It’s similar to Neil Armstrong’s famous words.

    Like or Dislike: Thumb up 3 Thumb down 0

  17. al-Ameda says:

    By the most conservative reckoning, the Iraq and Afghanistan conflicts will cost $4 trillion

    The war in Iraq was not worth the cost. It was sold on a false pretext and had nothing to do with the terror attack of September 11th.

    $4 trillion squandered? And yet, what do we hear from conservatives? Constant complaining about the Obama Administration’s $500 million (that’s right, $0.0005 trillion) loan guarantee to Solyndra.

    Like or Dislike: Thumb up 5 Thumb down 0

  18. anjin-san says:

    @ al-Ameda

    $500 million (that’s right, $0.0005 trillion) loan guarantee to Solyndra

    Don’t forget, Obama ate dog too.

    These folks are focused on the real issues.

    Like or Dislike: Thumb up 5 Thumb down 0

  19. C. Clavin says:

    Tsar once again shows us…well…judge for yourself…
    The Big Dig is the poster child of Government mismanagement. Originally slated at $2.8B…the final cost is about $22B. For the sake of round numbers on a Saturday morning lets say that’s a 10X over-run. Applied to Iraq that would make the original $50B estimate $500B.
    But here’s the difference that Tsar is too intellectually challenged to understand…we use the Big Dig. Despite its cost over-runs…it provides value.
    Iraq on the other hand was a total waste…on a cost over-run scale that makes the Big Dig look reasonable. And we gained nothing in return for our $4T. Zip…nada…bubkis.
    That there are still fools like Tsar willing to defend Iraq explains much about our current politics.

    Like or Dislike: Thumb up 5 Thumb down 0

  20. C. Clavin says:

    My favorite government cost over-run is the Grand Coulee Dam.
    Fiscal Conservatives, including recent Republican heart-throb Calvin Coolidge, fought the dam over its cost. And at a final cost of $270M and 33% over budget they may have had a point.
    But here is what Republicans generally, and people like Tsar specifically, are seemingly incapable of grasping.
    Infrastructure is investment.
    Had Republicans and Calvin Coolidge won out and there were no Grand Coulee Dam…there would be no pacific northwest…no Portland…no Seattle. No cheap entiful power for the labs that built the bomb that won WW2…or for Boeing…or anyone else.
    So no Tsar…all government cost over-runs are not like Iraq.
    The fact that you are unable to recognize the difference says all anyone needs to know about you.

    Like or Dislike: Thumb up 5 Thumb down 0

  21. Franklin says:

    @Rob in CT:

    You build a bomb, you use the bomb. The bomb is gone. You have to make more.

    Also, in the case of Iraq and Afghanistan, you have to rebuild what the bomb blew up.

    Like or Dislike: Thumb up 2 Thumb down 0

  22. Davebo says:

    Look guys. Can we all just agree that Tsar is the low hanging fruit of the internet and ignore it from now on?

    Definitely not the sharpest bowling ball on the rack and frankly I believe it’s some type of poorly coded auto responder.

    It has to be right?

    Like or Dislike: Thumb up 3 Thumb down 0

  23. Pat says:

    @john personna: How about the change Obama promised us? We got it all right, but not the way he alluded to it.

    Like or Dislike: Thumb up 0 Thumb down 2

  24. al-Ameda says:

    @Pat:

    How about the change Obama promised us? We got it all right, but not the way he alluded to it.

    The fundamental change was was caused by the financial catastrophe and collapse of 2008.

    I also find that the people who say that Obama promised change and has not delivered – are the same people who want no part of the change that Obama promised and who are glad that the Republican Party has obstructed as much normal governance as possible.

    Like or Dislike: Thumb up 1 Thumb down 0