War Cost Update

Before we went to Iraq, Donald Rumsfeld told us the cost would be a war estimate of between $50 - $60 billion. Two academics estimate the government is spending $12bn a month in Iraq. A new book has hit the market, The Three Trillion Dollar War , by Joseph Stiglitz, Nobel Prize winning economist, and Linda Bilmes, a senior official during the Clinton presidency in the 1990s.

The authors project that 791,000 troops from Iraq and Afghanistan will claim disability compensation and benefits, noting that 39 per cent of the 700,000 troops who fought in the (brief) 1991 Gulf war claim disability. They estimate these costs from Iraq alone will be $371bn to $630bn. The extra costs to the defense budget - they estimate from $66bn to $267bn - come from the need to reset and replenish a military in which equipment has been used up at six to 10 times normal rates and human capital has been exhausted.

Their government spending estimate for the war is $1,292bn- $2,039bn, rising to $1,754bn-$2,655bn if interest is added.

Stiglitz and Bilmes add social costs not paid by the government, including the loss of productive capacity of those killed or wounded and quality of life impairments. These, they estimate, would amount to $295bn-$415bn for Iraq and Afghanistan

Add macro-economic costs deriving from higher oil prices and other effects including the impact on the economy of higher interest costs. For both Iraq and Afghanistan, they calculate this would come to between $187bn and $1,900bn. Yet, these estimates do not cover the cost outside the US.

Bilmes, who says the book leaves others to estimate the war's benefits, describes the book's 'three trillion' headline number as very conservative. She notes that the US federal government spent $108m last year on research into autism, a condition affecting one in 150 children. "We spend that in 4½ hours in Iraq. I'm sure, if they knew that, people would say it was wrong."