The three trillion dollar war

[Indiana]

The true costs of the War in Iraq may be staggeringly higher than the figures given by the Bush Administration. According to Nobel Prize winner Joseph Stiglitz the true costs of the Iraq war may now have eclipsed every other war but WW2, and it could eventually exceed it. I don't have the economic insight to pick his arguments apart, but he does provide some compelling evidence. Has anyone picked up this book yet, and can someone explain why fighting wars has become so much more expensive?

From The Times

The Bush Administration was wrong about the benefits of the war and it was wrong about the costs of the war. The president and his advisers expected a quick, inexpensive conflict. Instead, we have a war that is costing more than anyone could have imagined.

The cost of direct US military operations - not even including long-term costs such as taking care of wounded veterans - already exceeds the cost of the 12-year war in Vietnam and is more than double the cost of the Korean War.

And, even in the best case scenario, these costs are projected to be almost ten times the cost of the first Gulf War, almost a third more than the cost of the Vietnam War, and twice that of the First World War. The only war in our history which cost more was the Second World War, when 16.3 million U.S. troops fought in a campaign lasting four years, at a total cost (in 2007 dollars, after adjusting for inflation) of about $5 trillion (that's $5 million million, or £2.5 million million). With virtually the entire armed forces committed to fighting the Germans and Japanese, the cost per troop (in today's dollars) was less than $100,000 in 2007 dollars. By contrast, the Iraq war is costing upward of $400,000 per troop.

PS: Please keep this thread free of speculation on the reasons for the Iraq invasion yadda yadda.

[Phelps McManus]

Care to look up the body counts of WW2 and Vietnam? Compared to this Iraq War, it seems like money well spent.

Also, what is the point? Wasn't military spending what pulled us out of the Great Depression? Isn't this "3 trillion" just going to pay American salaries? I could think of worse ways for the government to spend money.

[Phelps McManus]

Wow. This article lost me with:

After the war began, these were increased from $12,240 to $100,000 (death benefit) and from $250,000 to $400,000 (life insurance). Even these increased amounts are a fraction of what the survivors might have received had these individuals lost their lives in a senseless automobile accident. In areas such as health and safety regulation, the US Government values a life of a young man at the peak of his future earnings capacity in excess of $7 million - far greater than the amount that the military pays in death benefits. Using this figure, the cost of the nearly 4,000 American troops killed in Iraq adds up to some $28 billion.

So, they calculate cost based on future earnings capacity. I wonder if they applied that calculation to the 400k military deaths in WW2 when comparing costs with the Iraq war.

Their final figure of 3 trillion is not fully outlined. They really just glaze it over with this:

From the unhealthy brew of emergency funding, multiple sets of books, and chronic underestimates of the resources required to prosecute the war, we have attempted to identify how much we have been spending - and how much we will, in the end, likely have to spend. The figure we arrive at is more than $3 trillion.

Color me dubious.

[Zuuljin]

Originally Posted by Phelps McManus

Care to look up the body counts of WW2 and Vietnam? Compared to this Iraq War, it seems like money well spent.

Also, what is the point? Wasn't military spending what pulled us out of the Great Depression? Isn't this "3 trillion" just going to pay American salaries? I could think of worse ways for the government to spend money.

I'm not an expert on any of this, but I'm pretty sure why WWII pulled us out of depression was that it opened up a lot of jobs, from building tanks, bombs, uniforms etc etc. Machines and the good ol automated factory line do that now. So basically this isnt really putting any money back into the economy, unless you count the money being paid to the troops, but that same money would have also been paid to them had they just got a normal job, minus all the death and fighting.

[Phelps McManus]

So where does the money go if not to troops or contractors?

[Zuuljin]

It does go to the troops and contractors, but we see no direct benefit from that money. The troops would be getting paid here, without having to go fight and die, except they would be benefiting our country by offering a direct service to the people. (NOT ARGUING THAT DEFENSE IS NOT A SERVICE. IN THIS WAR, THAT IS DEBATABLE, WHICH WE ARE AVOIDING) However the money that is being thrown away is through the contractors, as they are offering no direct benefit to our country. They would be better served fixing our own shitty roads and buildings, probably hiring all the troops if they weren't over there.

Then theres the HUGE amount of money spent on ammunitions, equipment and transport, which all goes straight to the giant companies running this, and also a pretty large chunk on all the paper pushers keeping track of all this stuff.

Just think what this country could do if it spent 3 trillion on itself! Instead of more troops, hire more police to patrol our own war-torn streets. Instead of rebuilding their shit, rebuild our shit. Instead of spending on building tanks and missiles, god forbid they put it into education.

The thing is, as I think has been said before, we are losing this war by the sheer amount of money being spent. They are just holding out, causing our dollar to go into he shitter. They know they cant win toe to toe, but they can win by bleeding us dry. The fact that this small war, which is just us intervening in a civil war, is costing nearly the price of fucking WWII should be a huge red flag.

[Jedah]

Originally Posted by Zuuljin

I'm not an expert on any of this, but I'm pretty sure why WWII pulled us out of depression was that it opened up a lot of jobs, from building tanks, bombs, uniforms etc etc.

WWII pulled us out of the great depression in that we had massively ramped up production capabilities and were the only major industrial power whose shores never saw devastation. It was post war production that really pulled us out.

[Schatze]

You have to remember that even discounting indirect costs, a lot of the war funding is kept out of the official "Iraq War Cost X to Date". Whether it's as simple as using ear marks or supplementals that don't count for the official budget, to the eventual VA costs since the Iraq war has spawned upwards of 40k American casualties by this point (not KIA, wounded; KIA is cheaper, especially with the type of injuries that are coming out of Iraq), to the depletion/procurement/etc. of equipment.

It's actually amazing how far medical science and medicine and military medicine on the battlefield have progressed. Without it, even with superior capabilities, U.S. KIA would be at a similar rate to Vietnam.

Gonna check out this book [edit; not a book, bleargh], but you can really see the fudging when you compare the budgeting for "the Iraq War" versus the GAO's estimates of actual cost.

edit: yes it was the fact that you could change a factory from a refrigerator plant to a munitions plant back to a refrigerator plant, or turn the tank plant into some other plant that really gave the economic boost combined with a huge influx of newly freed workers, many of them from rural backgrounds, to work in these factories.

Not to mention that Iraq is essentially being paid with borrowed money so each year the actual % of the budget allocated to paying off the interests on debts increases and the actual spendable budget itself (relatively) decreases

[Brand]

Book forum...

[Havelock]

Since we're comparing the Iraq war to other wars in terms of monetary costs, it seems appropriate to consider comparisons in terms of other measurements of cost (especially as Schatze touched on this already). The extremely low KIA relative to earlier wars is definitely driving the cost way up.

March 2, 2008: While every combat death is a tragedy, the war in Afghanistan has been notable for how few of them there have been. We'll use a standard measure of combat losses, the number of troops in a combat division (12-20,000 troops) who are killed each day the division is in combat. Since late 2001, there have been .12 American combat deaths per division day in Afghanistan. During the Vietnam war, the average division lost 3.2 troops a day, which was similar to the losses suffered in Korea (1950-53). In Iraq, the losses have been .44 deaths per division per day. By comparison, during World War II the daily losses per American averaged (over 400-500 combat days) about twenty soldiers per day. On the Russian front, German and Russian divisions lost several times that, and often over a hundred a day for weeks on end.

For short campaigns, which Iraq and Afghanistan are not, the losses were similar. That's why the concept of "days in combat" is used. During World War II, and before and since, divisions would often be out of the combat zone for days, or weeks, before going back into action. Thus the spectacular six week German conquest of France in 1940, saw their combat divisions taking 30 dead (on average) per day. But during another spectacular military victory, the 1967 Six Day War, Israeli dead were 22 per division per day, and that actually went down to 18 a day during the less spectacular 1973 war.

By contrast, the three week invasion of Iraq in 2003 saw U.S. troops suffering 1.6 dead per day per division. During the 2006 Israeli war in Lebanon, Israel lost 8 soldiers per division per day.

With the dramatic drop in casualties, came another big shift. In World War II, one in three casualties was killed. In Iraq and Afghanistan, only 12 percent of the casualties were fatal. This does not change the dramatic difference between combat losses then and now. In World War II, U.S. divisions suffered about 60 dead and wounded per combat day, while in Afghanistan there has been one (1) per combat day, and in Iraq, 3.5. So by any measure, U.S. troops have learned how to avoid getting hit. The reasons are better equipment, tactics, weapons, leadership and training than in the past. With an all-volunteer force, the troops are smarter and more physically fit than in the past. Many of the life-saving innovations U.S. troops have come up with in the past seven years have not gotten much publicity. Good news doesn't sell, but in this case, it has definitely saved lives.

Then there's force protection. The 300,000 World War II combat dead reinforced Americans traditional aversion to warfare. This, despite the fact that Europeans had suffered even more in the World Wars (Russia had lost 10 million troops in World War II combat, and another 20 million soldiers and civilians to non-combat losses, while this only caused an additional 100,000 U.S. deaths.) When Korea came along, the trend to take extraordinary measures to limit U.S. losses began in earnest. Some pundits point out that this force protection mania limits the effectiveness of American troops. Some soldiers and marines agree, but most are quite content to see their chances of surviving combat increased.

[Indiana]

I understand the enormous ammount of wounded soldiers drive up costs for lifelong treatments, but which other major factors can you point to in modern warfare, that differs from WW2. Is the munitions used more expensive, or is it the outsourcing of much of the logistic services to private companies part of the answer too?

Oh and this IS a book. The article I linked is just a preview.

Joseph Stiglitz and Linda Bilmes, 2008. Extracted from The Three Trillion Dollar War, to be published by Allen Lane on February 28 (£20). Copies can be ordered for £18 with free delivery from The Times BooksFirst 0870 1608080.

[Schatze]

Yes, the munitions are far more expensive, the training of soldiers is far more expensive, the logistics and upkeep is far more expensive, the equipment provided is far more expensive. Everything is so vastly more expensive.

One tail kit to modify one modern dumb bomb into one modern not-so-dumb bomb probably costs more than an inflation adjusted top of the line fighter or bomber did.

Even when you factor in inflation, modern high tech war is just so much more damned costly than it was 69 years ago (66 for you Americans :P).

[Frax]

Do they break down the cost of the war as a percentage of national budget and compare the two? I don't know the figures for sure but I thought WW2 was a stunningly high percentage of all US expenditures over four years, while the Iraq war overall is a tiny portion of the budget.

[Schatze]

Considering the initial quotation in the first post says that WWII was the only war more costly than the current Iraq war... I think that answers your question?

[Mimirswell]

Originally Posted by Frax

Do they break down the cost of the war as a percentage of national budget and compare the two? I don't know the figures for sure but I thought WW2 was a stunningly high percentage of all US expenditures over four years, while the Iraq war overall is a tiny portion of the budget.

Today the budget is just under 20% (3 Trillion) of the total GDP (17 Trillion). In 1945, the Federal Budget was 41% of the total GDP and the Defense budget was 79% of that. The current Defense Budget including the Wars in Iraq and Afghanistan make up just under 30% of the total Budget.

Overall, even if the cost of the war was 2 Trillion per year, it would be less relative to the overall GDP of the Korean War (14%) and only slightly more than Vietnam (9%). Currently, the entire Defense Budget is 4%.

What these articles are citing is not the relative value (% of GDP) but the total cost without inflation between WWII and present. The wars in Iraq and Afghanistan are more expensive in cost but not comparative to the actual GDP.