The true cost of the Iraq war: $3 trillion and beyond

September 5th, 2010  |  Source: Washington Post

By Joseph E. Stiglitz and Linda J. Bilmes

Writing in these pages in early 2008, we put the total cost to the United States of the Iraq war at $3 trillion. This price tag dwarfed previous estimates, including the Bush administration’s 2003 projections of a $50 billion to $60 billion war.

But today, as the United States ends combat in Iraq, it appears that our $3 trillion estimate (which accounted for both government expenses and the war’s broader impact on the U.S. economy) was, if anything, too low.

There is no question that the Iraq war added substantially to the federal debt. This was the first time in American history that the government cut taxes as it went to war.

The result: a war completely funded by borrowing. U.S. debt soared from $6.4 trillion in March 2003 to $10 trillion in 2008 (before the financial crisis); at least a quarter of that increase is directly attributable to the war. And that doesn’t include future health care and disability payments for veterans, which will add another half-trillion dollars to the debt.

As a result of two costly wars funded by debt, our fiscal house was in dismal shape even before the financial crisis — and those fiscal woes compounded the downturn.




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