BBC News & Josh White / Washington Post – 2007-11-13 21:20:38
http://news.bbc.co.uk/2/hi/americas/7092053.stm
Hidden Costs ‘Raise US War Price’
• Note: The BBC report contains a link to the full report in pdf format.
(November 13, 2007) — The US wars in Iraq and Afghanistan are costing nearly double the amount previously thought, according to a report by Democrats in the US Congress. They say “hidden costs” have pushed the total to $1.5 trillion – almost twice the requested $804bn (£402bn).
Higher oil prices, treating wounded veterans, and the cost to the economy of pulling reservists away from their jobs have been taken into account. Republicans have not yet commented officially on the report.
The report was written by Democratic members of the Congress’s Joint Economic Committee. They calculate that between 2002 and 2008 the campaigns in Iraq and Afghanistan will have cost the average US family of four about $20,900.
The report adds that the amount could rise to $46,400 over the next decade. It also says the funding is diverting investment away from US businesses.
The Democratic authors included the costs of treating wounded veterans and mounting interest payments on money borrowed to finance the wars.
They estimate that treating veterans could add more than $30 billion to war costs, including disability payments and lost earnings for veterans affected by post-traumatic stress disorder.
Hidden Costs Jolt Price for Wars in Iraq, Afghanistan
Congressional Study Estimates $1.5 trillion Price Tag — So Far
Josh White / Washington Post
WASHINGTON (November 13, 2007) — The economic costs to the United States of the wars in Iraq and Afghanistan so far total approximately $1.5 trillion, according to a new congressional study that includes estimates the “hidden costs” of the conflict – among them higher oil prices, the expense of treating wounded veterans and interest payments on the money borrowed to pay for the wars.
That amount is nearly double the $804 billion the White House has spent or requested to wage these wars through 2008, according to the majority staff of Congress’s Joint Economic Committee. Its report estimates that to date the wars in Iraq and Afghanistan have cost the average family of four more than $20,000.
“The full economic costs of the war to the American taxpayers and the overall US economy go well beyond even the immense federal budget costs already reported,” said the draft report obtained Monday.
The report argues that war funding is diverting billions of dollars away from “productive investment” by American businesses in the United States. It also says that the conflicts are pulling reservists and National Guardsmen away from their jobs, resulting in economic disruptions for US employers that the report estimates at $1 billion to $2 billion.
The report estimates that the cost to the average family could more than double, to $46,300, over the next 10 years, with estimated economic costs reaching an estimated $3.5 trillion if the wars continue apace.
The committee, which includes House and Senate members from both parties and is chaired by Sen. Chuck Schumer, D-N.Y., is expected to present the report this morning on Capitol Hill.
“What this report makes crystal clear is that the cost to our country in lives lost and dollars spent is tragically unacceptable,” Schumer said in a statement Monday night.
Members of the committee’s minority staff could not be reached for comment.
War funding experts said that the committee raises viable arguments but that some of the numbers should be met with skepticism. For example, it is difficult to calculate the precise impact of the Iraq war on global oil prices, and it is speculative to estimate how much the war will cost over time, as situations change daily on the battlefield.
Robert Hormats, vice chairman of Goldman Sachs (International) and a member of the National Security Council staff under Presidents Nixon, Ford and Carter, said he agrees that the war is far costlier than the publicly stated price tag but said some of the report’s measures are problematic. He said he thinks it would be hard to show that the Iraq war has caused oil prices to skyrocket or oil producers in the Middle East to falter, and he said he does not think there has been a closing-off of US investment because of the war.
Oil prices have more than tripled since the US-led invasion of Iraq in March 2003, the report notes, to a peak of more than $90 per barrel.
“The war in Iraq is certainly not responsible for all of this increase,” the report states, but it estimates that declining Iraqi production “has likely raised oil prices in the US by between $4 and $5 a barrel.” The report added that “because of the many factors affecting oil markets, this should be seen as a highly approximate estimate.”
© 2007 Hearst Communications Inc.
Posted in accordance with Title 17, US Code, for noncommercial, educational purposes.
