The unbelievable cost of US wars

As the American media's increasing focus on the presidential race and the political debate in Washington shows diminishing concern for the Iraq war, a little noted speech in the American Senate shed light on the unbelievable cost of the Iraq war.

Republican Senator Ted Stevens said that the cost of the wars in Iraq, Afghanistan and the so-called war against terror was close to $15 billion a month, most of it for the Iraq war. Stevens was not criticising the spiralling cost of wars with little to show for; he was speaking in support of additional funding for them.

Using similar US military operations in the Balkans, Afghanistan, and the 1990 Gulf War, the Congressional Budget Office had estimated the cost of the Iraq war to be $9 billion a month in addition to the cost of deploying troops in the Gulf region estimated to be $13 billion.

The Pentagon had estimated that the Iraq war would cost about $50 billion.

When Lawrence Lindsey, who worked as a White House economic adviser, calculated a more realistic figure of $200 billion, he incurred the wrath of President George W. Bush who quickly got rid of him and his unpleasant message. Bush preferred to hang on to the illusion that the war would be easy and cheap.

In February, the US Secretary of Defence Robert Gates told a congressional hearing that the wars in Iraq and Afghanistan could cost $170 billion in the next fiscal year, in addition to the $515.4 billion regular Pentagon budget that Bush has requested.

A more comprehensive calculation was made by Joseph Stiglitz, a Nobel Economics laureate from Columbia University and a former White House adviser.

Stiglitz examined the true cost of the war by taking into account not just the budgetary cost of the war but also its cost to the economy. He calculated that the Iraq war will cost the American people up to $2 trillion.

"If our objective is to have stability in the Middle East, secure oil, or extend democracy," he told Spiegel magazine, "you can do a lot of democracy buying for this sum. To put it in context: The whole world spends $50 billion a year on foreign aid."

Remarkably, the $2 trillion figure calculated by Stiglitz is turning out to have been too conservative.

A report prepared for the Democrats on the Joint Economic Committee (JEC) of the House and Senate warns that unless there are significant changes of policy in Iraq, the wars in Iraq and Afghanistan, could end up costing the US close to $3.5 trillion.

Democratic Senator Chuck Schumer, chairman of the JEC said: "What this report makes crystal clear is that the cost to our country in lives lost and dollars spent is tragically unacceptable."

Stiglitz and Linda Bilmes, using conservative estimations, recalculated and arrived at a figure of total cost to the American economy of $3 trillion - not including "the enormous cost to the rest of the world, or to Iraq". They point out that this makes the Iraq war twice as expensive as the First World War.

The staggering cost of the war has also increased due to incompetence and corruption. On December 6, CBS News reported that a Pentagon audit revealed that more than $1 billion was unaccounted for in military equipment and services provided to the Iraqi security forces.

The report by the US Defence Department's Office of Inspector General also found that American commanders used sloppy accounting for a $5.2 billion fund used to train and equip Iraqi security forces.

More money

Yet, remarkably, Bush is asking for more money to carry out wars that he is unable to bring to conclusion. Last December he asked Congress for an additional $42.3 billion in "emergency" funding for Iraq and Afghanistan

At the same time, in what the New York Times described as "the latest exercise of irresponsibility", Bush vetoed a bill that would have provided health insurance for millions of uninsured American children.

As Stiglitz puts it in the Spiegel magazine: "The only people benefiting in this war are Bush's friends in the oil industry. He has done the American economy and the global economy an enormous disfavour, but his Texan friends couldn't be happier."

Evidently Bush does not think so. He found enough courage to claim the contrary when a reporter asked him recently if the war in Iraq might have played a role in bringing about an economic recession.

Bush said: "Actually the war in Iraq is good for the US economy. It provides a lot of jobs... I mean, we need materials over there, so it is actually good for the economy."

Professor Adel Safty's book 'Leadership and Democracy', is published in New York, 2004.