$1.2 Trillion and Counting

An amount so huge almost doesn't make sense, but $1.2 trillion is actually a conservative estimate of how much the Iraq war is costing us.

There is also an opportunity cost here, i.e. the cost of foregoing the other things we could have spent this money on if we didn't have this war. The above table shows what the $200 billion a year we're spending in Iraq could have bought us, from universal health care to preschool education, carrying out all the recommendations of the 9/11 Commission, cancer research and immunization.

When former White House economic adviser Lawrence Lindsey claimed back in 2002 that the Iraq war would cost about $200 billion, Budget Director Mitch Daniels immediately refuted his estimate as being "very, very high". Donald Rumsfeld, Paul Wolfowitz and other Bush Administration officials insisted in Congressional hearings that Iraq, with its vast reserves of oil, would pay for the cost. There was of course, an obvious reason why they kept insisting the war would be cheap and easy: it was the only way they could get Congress to finance a war that shouldn't have happened in the first place.

Some might opine that even a trillion dollars is never too high to pay for our national security, but the Iraq war had nothing to do with ensuring our safety, as Matt Yglesias persuasively pointed out:

For $1.27 trillion, we have our hands full in a quagmire; the world hating us; worldwide acts of terrorism on the sharp rise; and much more. We could have done better. Much better. You might even say a trillion times better. Economists use the term “opportunity cost” to refer to the cost of an endeavor in terms of the opportunities that endeavor foreclosed. Iraq foreclosed advancing important humanitarian goals, killing and capturing terrorists more effectively, eliminating nuclear threats, and securing the homeland among other goals.

I am not a pacifist, but war as an automatic response to international crises is never smart. Diplomacy is hard work, but I agree with John Quiggin:

War is sometimes necessary in self-defence. But when war is adopted as an instrument of policy, it is often counterproductive and almost never cost-effective.

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