Lots of Zeroes
So--- the Iraq War has cost three trillion dollars so far.
That's $3,000,000,000,000.00, if I have counted all the zeroes correctly.
That's the conclusion reached by Joseph Stiglitz, a Nobel Prize-winning economist, and Linda Bilmes, in their new book. Some interesting factoids:
. . . they have produced a picture of comprehensive obfuscation and bad faith whose power comes from its roots in bald fact. Some of their discoveries we have heard before, others we may have had a hunch about, but others are completely new - and together, placed in context, their impact is staggering. There will be few who do not think that whatever the reasons for going to war, its progression has been morally disquieting; following the money turns out to be a brilliant way of getting at exactly why that is.
Next month America will have been in Iraq for five years - longer than it spent in either world war. Daily military operations (not counting, for example, future care of wounded) have already cost more than 12 years in Vietnam, and twice as much as the Korean war. America is spending $16bn a month on running costs alone (ie on top of the regular expenses of the Department of Defence) in Iraq and Afghanistan; that is the entire annual budget of the UN. Large amounts of cash go missing - the well-publicised $8.8bn Development Fund for Iraq under the Coalition Provisional Authority, for example; and the less-publicised millions that fall between the cracks at the Department of Defence, which has failed every official audit of the past 10 years. The defence department's finances, based on an accounting system inaccurate for anything larger than a grocery store, are so inadequate, in fact, that often it is impossible to know exactly how much is being spent, or on what . . .
"There were actually so many things - some of it we suspected, but there were a few things I couldn't believe." The fact that a contractor working as a security guard gets about $400,000 a year, for example, as opposed to a soldier, who might get about $40,000. That there is a discrepancy we might have guessed - but not its sheer scale, or the fact that, because it is so hard to get insurance for working in Iraq, the government pays the premiums; or the fact that, if these contractors are injured or killed, the government pays both death and injury benefits on top. Understandably, this has forced a rise in sign-up bonuses (as has the fact that the army is so desperate for recruits that it is signing up convicted felons). "So we create a competition for ourselves. Nobody in their right mind would have done that. The Bush administration did that ... that I couldn't believe. And that's not included in the cost the government talks about."
Then there was the discovery that sign-up bonuses come with conditions: a soldier injured in the first month, for example, has to pay it back. Or the fact that "the troops, for understandable reasons, are made responsible for their equipment. You lose your helmet, you have to pay. If you get blown up and you lose your helmet, they still bill you." One soldier was sued for $12,000 even though he had suffered massive brain damage . . .
Yet on another level, Stiglitz is unsurprised, because such decisions are of a piece with the thoroughgoing intellectual inconsistency of the Bush administration. The general approach, he says, has been a "pastiche of corporate bail-outs, corporate welfare, and free-market economics that is not based on any consistent set of ideas. And this particular kind of pastiche actually contributed to the failures in Iraq."
. . . By way of context, Stiglitz and Bilmes list what even one of these trillions could have paid for: 8 million housing units, or 15 million public school teachers, or healthcare for 530 million children for a year, or scholarships to university for 43 million students. Three trillion could have fixed America's social security problem for half a century. America, says Stiglitz, is currently spending $5bn a year in Africa, and worrying about being outflanked by China there: "Five billion is roughly 10 days' fighting, so you get a new metric of thinking about everything."
And it is the world economy that is at stake, not just America's. The trillions the rest of the world has shouldered include, of course, the smashed Iraqi economy, the tens of thousands of Iraqi dead, the price, to neighbouring countries, of absorbing thousands of refugees, the coalition dead and wounded (before the war Gordon Brown set aside £1bn; as of late 2007, direct operating costs in Iraq and Afghanistan were £7bn and rising). But the rising price of oil has also meant, accoring to Stiglitz and Bilmes, that the cost to oil-importing industrial countries in Europe and the Far East is now about $1.1 trillion. And to developing countries it has been devastating: they note a study by the International Energy Agency that looked at a sample of 13 African countries and found that rising oil prices have "had the effect of lowering the average income by 3% - more than offsetting all of the increase in foreign aid that they had received in recent years, and setting the stage for another crisis in these countries". Stiglitz made his name by, among other things, criticising America's use of globalisation as a bully pulpit; now he says flatly, "Yes, that's part of being in a global economy. You make a mistake of this order, and it affects people all over the world."
And the borrowed trillions have to come from somewhere. Because "the saving rate [in America] is zero," says Stiglitz, "that means that you have to finance [the war] by borrowing abroad. So China is financing America's war." The US is now operating at such a deficit, in fact, that it doesn't have the money to bail out its own banks. "When Merrill Lynch and Citibank had a problem, it was sovereign funds from abroad that bailed them out. And we had to give up a lot of shares of our ownership. So the largest shareowners in Citibank now are in the Middle East. It should be called the MidEast bank, not the Citibank."
And so on.
It's not so much whether the Iraq War was/is justified--- you can argue about that till the cows come home--- but whether the money could/should have been spent in some other way that would have better protected America's interests.
This administration--- the worst ever. More corrupt than Harding, more obtuse than Buchanan, more profligate than Reagan, more bellicose than Polk (and with fewer results).
It's the numbers, stupid.
That's $3,000,000,000,000.00, if I have counted all the zeroes correctly.
That's the conclusion reached by Joseph Stiglitz, a Nobel Prize-winning economist, and Linda Bilmes, in their new book. Some interesting factoids:
. . . they have produced a picture of comprehensive obfuscation and bad faith whose power comes from its roots in bald fact. Some of their discoveries we have heard before, others we may have had a hunch about, but others are completely new - and together, placed in context, their impact is staggering. There will be few who do not think that whatever the reasons for going to war, its progression has been morally disquieting; following the money turns out to be a brilliant way of getting at exactly why that is.
Next month America will have been in Iraq for five years - longer than it spent in either world war. Daily military operations (not counting, for example, future care of wounded) have already cost more than 12 years in Vietnam, and twice as much as the Korean war. America is spending $16bn a month on running costs alone (ie on top of the regular expenses of the Department of Defence) in Iraq and Afghanistan; that is the entire annual budget of the UN. Large amounts of cash go missing - the well-publicised $8.8bn Development Fund for Iraq under the Coalition Provisional Authority, for example; and the less-publicised millions that fall between the cracks at the Department of Defence, which has failed every official audit of the past 10 years. The defence department's finances, based on an accounting system inaccurate for anything larger than a grocery store, are so inadequate, in fact, that often it is impossible to know exactly how much is being spent, or on what . . .
"There were actually so many things - some of it we suspected, but there were a few things I couldn't believe." The fact that a contractor working as a security guard gets about $400,000 a year, for example, as opposed to a soldier, who might get about $40,000. That there is a discrepancy we might have guessed - but not its sheer scale, or the fact that, because it is so hard to get insurance for working in Iraq, the government pays the premiums; or the fact that, if these contractors are injured or killed, the government pays both death and injury benefits on top. Understandably, this has forced a rise in sign-up bonuses (as has the fact that the army is so desperate for recruits that it is signing up convicted felons). "So we create a competition for ourselves. Nobody in their right mind would have done that. The Bush administration did that ... that I couldn't believe. And that's not included in the cost the government talks about."
Then there was the discovery that sign-up bonuses come with conditions: a soldier injured in the first month, for example, has to pay it back. Or the fact that "the troops, for understandable reasons, are made responsible for their equipment. You lose your helmet, you have to pay. If you get blown up and you lose your helmet, they still bill you." One soldier was sued for $12,000 even though he had suffered massive brain damage . . .
Yet on another level, Stiglitz is unsurprised, because such decisions are of a piece with the thoroughgoing intellectual inconsistency of the Bush administration. The general approach, he says, has been a "pastiche of corporate bail-outs, corporate welfare, and free-market economics that is not based on any consistent set of ideas. And this particular kind of pastiche actually contributed to the failures in Iraq."
. . . By way of context, Stiglitz and Bilmes list what even one of these trillions could have paid for: 8 million housing units, or 15 million public school teachers, or healthcare for 530 million children for a year, or scholarships to university for 43 million students. Three trillion could have fixed America's social security problem for half a century. America, says Stiglitz, is currently spending $5bn a year in Africa, and worrying about being outflanked by China there: "Five billion is roughly 10 days' fighting, so you get a new metric of thinking about everything."
And it is the world economy that is at stake, not just America's. The trillions the rest of the world has shouldered include, of course, the smashed Iraqi economy, the tens of thousands of Iraqi dead, the price, to neighbouring countries, of absorbing thousands of refugees, the coalition dead and wounded (before the war Gordon Brown set aside £1bn; as of late 2007, direct operating costs in Iraq and Afghanistan were £7bn and rising). But the rising price of oil has also meant, accoring to Stiglitz and Bilmes, that the cost to oil-importing industrial countries in Europe and the Far East is now about $1.1 trillion. And to developing countries it has been devastating: they note a study by the International Energy Agency that looked at a sample of 13 African countries and found that rising oil prices have "had the effect of lowering the average income by 3% - more than offsetting all of the increase in foreign aid that they had received in recent years, and setting the stage for another crisis in these countries". Stiglitz made his name by, among other things, criticising America's use of globalisation as a bully pulpit; now he says flatly, "Yes, that's part of being in a global economy. You make a mistake of this order, and it affects people all over the world."
And the borrowed trillions have to come from somewhere. Because "the saving rate [in America] is zero," says Stiglitz, "that means that you have to finance [the war] by borrowing abroad. So China is financing America's war." The US is now operating at such a deficit, in fact, that it doesn't have the money to bail out its own banks. "When Merrill Lynch and Citibank had a problem, it was sovereign funds from abroad that bailed them out. And we had to give up a lot of shares of our ownership. So the largest shareowners in Citibank now are in the Middle East. It should be called the MidEast bank, not the Citibank."
And so on.
It's not so much whether the Iraq War was/is justified--- you can argue about that till the cows come home--- but whether the money could/should have been spent in some other way that would have better protected America's interests.
This administration--- the worst ever. More corrupt than Harding, more obtuse than Buchanan, more profligate than Reagan, more bellicose than Polk (and with fewer results).
It's the numbers, stupid.
posted by dubjay at 4:46 PM
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