Contact l Sitemap

home industries issues reasearch weblog press

Home  » Industries » War & Disaster Profiteering

IRAQ: The Trillion-Dollar War

The cost goes well beyond -- ongoing current costs, foreign aid to reward cooperation in Iraq, inducements for recruits and for military personnel serving second and third deployments, replacing military hardware and long-term costs for disability and health payments of returning troops bring the price tag to over $1 trillion.

by Linda BilmesThe New York Times
August 19th, 2005

The human cost of the more than 2,000 American military personnel killed and 14,500 wounded so far in Iraq and Afghanistan is all too apparent. But the financial toll is still largely hidden from public view and, like the suffering of those who have lost loved ones, will persist long after the fighting is over.

    The cost goes well beyond the more than $250 billion already spent on military operations and reconstruction (See Chart). Basic running costs of the current conflicts are $6 billion a month - a figure that reflects the Pentagon's unprecedented reliance on expensive private contractors. Other factors keeping costs high include inducements for recruits and for military personnel serving second and third deployments, extra pay for reservists and members of the National Guard, as well as more than $2 billion a year in additional foreign aid to Jordan, Pakistan, Turkey and others to reward their cooperation in Iraq and Afghanistan. The bill for repairing and replacing military hardware is $20 billion a year, according to figures from the Congressional Budget Office.

    But the biggest long-term costs are disability and health payments for returning troops, which will be incurred even if hostilities were to stop tomorrow. The United States currently pays more than $2 billion in disability claims per year for 159,000 veterans of the 1991 gulf war, even though that conflict lasted only five weeks, with 148 dead and 467 wounded. Even assuming that the 525,000 American troops who have so far served in Iraq and Afghanistan will require treatment only on the same scale as their predecessors from the gulf war, these payments are likely to run at $7 billion a year for the next 45 years.

    All of this spending will need to be financed by adding to the federal debt. Extra interest payments will total $200 billion or more even if the borrowing is repaid quickly. Conflict in the Middle East has also played a part in doubling the price of oil from $30 a barrel just prior to the invasion of Iraq in March 2003 to $60 a barrel today. Each $5 increase in the price of oil reduces our national income by about $17 billion a year.

    Even by this simple yardstick, if the American military presence in the region lasts another five years, the total outlay for the war could stretch to more than $1.3 trillion, or $11,300 for every household in the United States.

    Linda Bilmes, an assistant secretary at the Department of Commerce from 1999 to 2001, teaches budgeting and public finance at the Kennedy School of Government at Harvard.





This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.