Iraq, Afghanistan wars twice as expensive as expected, report says
'Hidden costs' behind skyrocketing price of war
President Bush's six-year invasion of Afghanistan and Iraq will end up costing Americans about $1.5 trillion, or nearly twice as much as the White House has actually spent to fight its wars, because of unseen costs like inflation, rising oil prices and expensive care for wounded veterans.
The estimate was revealed in a Democratic staff report from Congress's Joint Economic Committee. The staff report, titled "The Hidden Costs of the Iraq War," estimates that the Iraq and Afghan wars have cost the average family more than $20,000.
"The full economic costs of the war to the American taxpayers and the overall U.S. economy go well beyond even the immense federal budget costs already reported," said the report, which was obtained by the Washington Post.
The White House apparently has vastly underestimated the war's costs. It requested $804 billion -- just more than half the total costs -- to keep up its wars and occupations through 2008.
"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 U.S. employers that the report estimates at $1 billion to $2 billion," reports the Post's Josh White.
Furthermore, the report takes into account the massive healthcare costs for injured veterans and the declining economic productivity of vets who return home seriously injured. It also takes into account the massive interest the US will have to pay on the borrowed money that is funding the war.
Republicans took issue with the Democratic staff report.
"We'll see what they come up with, but it sure seems that the Senate leadership is trying to protect their continual proclamations of defeat instead of working for bipartisan progress," a spokesman for Sen. Sam Brownback (R-KS), the top GOP member of the joint panel, told White.
Some of the report's estimates need to be taken with a grain of salt, experts warn, because it is difficult to ascribe factors like increasing oil prices to the war in Iraq alone.
The report finds that skyrocketing oil prices -- which tripled since 2003 to surpass $90 per barrel recently -- cannot be blamed solely on the war in Iraq, but declining production from Iraq's ravaged oil fields have likely caused the price to tick up "between $4 and $5 a barrel."
The Democratic staff on the Joint Economic Committee -- which includes bipartisan representatives from the House and Senate -- is hardly the first to try to sum up the true costs of the war.
Harvard University economist Joseph Stiglitz last year attempted a similar study that would take into account outside costs of war -- such as long-term care for the thousands of US troops injured on the battlefield. He estimated a total cost as high as $2 trillion for the war in Iraq alone.
The Post spoke to Robert D. Hormats, vice chairman of Goldman Sachs and a former National Security Council staffer under Presidents Nixon, Ford and Carter. Hormats took issue with the specificity of some of the Democratic report's findings, but he said President Bush has taken greatly differed from his predecessors when it comes to funding the war.
"The wars will cost a lot more than the appropriated sums, and it's certainly true our children will be paying for this for a long, long time," he told the paper. "I'm very critical of the way they have financed the war, but I always hesitate to try to quantify any of these things, to make these numerical judgments."
The following video is from CNN.com, broadcast on November 13, 2007.