|
The Trillion-Dollar War
By LINDA BILMES
Cambridge, Mass.
08/20/05 "New
York Times" -- -- 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. 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.
Copyright 2005 The New York Times Company
From: http://www.nytimes.com/
| 