What Iraq will cost the U.S.

Former White House economist Lawrence Lindsey ignited a furor with his estimate of the dollar cost of the Iraq war. For the first time, he tells how he came up with the number and what he thinks now.

The war has not been economically ruinous. The bill for Iraq over the past five years is now approaching a cumulative $500 billion, or about $100 billion per year on average. My hypothetical estimate got the annual cost about right, but I misjudged an important factor: how long we would be involved. Full Story »

Posted by Kaizar Campwala

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Review

Peter Halligan
3.1
by Peter Halligan - Oct. 1, 2008

The article provides an insight into the thinking of one players, albeit one who had "loose lips" as far as the Bush "group think" administration was concerned. Lindseys analysis highlights the fundamentally flawed strategic thinking that lies behind the American system of determining foreign policy and the acolytes whose stars rise and fall, depending on the ego of the encumbent President and the self-perpetuating arrogance of an overstaffed and overfunded state department military and intelligence community, as far as foreign affairs is concerned. The issue (to me at least) is touched on by Lindsey, but is not directly addressed. To compare a stance on a world (1941-1945) or civil war (1861-1865) with the economic impact of a loss in Viet Nam (avoiding the stalemate in Korea) with the occupation of Iraq (which is not a war, it is an occupation along the lines of Hitlers occupation of Holland) highlights two things. One the American foreign policy system results in interference in the fundamental human, legal and political rights of foreign countries that certainly subverts the laws of foreign countries and would ceratinly be illegal in the USA and, secondly, because these wars are "discretionary wars" and not wars where american states are under direct threat of foreign invasion, the "discretionary" military actions should be costed on a marginal basis, not as a percentage of GDP as a whole. That is, if the entire US GDP is at stake, as in a global conflict or conflict on american soil, then it is useful to compare against total US GDP. Where there is no such stake, the costs of conflict (or in this case, the dubious legality of an occupation of a foreign country, then the costs should reflected against the non-military productive capapcity of the economy. In this case, removing 150,000 people (troops), 100,000 private contractors from the economy, increasing the military budget to (a communist Soviet scale) 50% of all Federal taxes, causing the price of oil (on 20 million bbl/day of imports) to rise from US$25 to US$100 needs to be looked at from a US perspective AND the cost of 4 million refugees, probably 300,000 Iraqi dead, a complete demolition and necessary reconstruction of Iraq and the loss of American infleunce and credability globally. These impacts for a "discretionary" war or occupation are more likley to be of the order of ten years worth of possible MARGINAL GDP growth and will reduce American living standards for decades more.

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