Nobel prize winning economist Joseph Stiglitz on how the Iraq War contributed to the global economic meltdown.
Card: Can we afford the Iraq War?
Stiglitz: What we have been doing, as I say, is been borrowing totally to finance this war. In our book with Linda Bilmes, we estimated that the cost of the Iraq war will be over 3 trillion dollars. Some of these are budgetary costs, one and half two trillion dollars, some of it is cost born to our economy that goes beyond the budget. Cost of families and about a fifth of the families in which somebody has been seriously injured, somebody has to give up a job to care for the person who has been injured. And this war, has had a large number of very serious injuries. We estimate that over 40% of those returning from Iraq are coming back with disabilities and we will have to finance that. We have to pay for the healthcare, we have to pay for disability benefits, these… this is… these are numbers that are not yet included in our national deficit and our national debt. These are bills that are yet due. We estimate that that bill itself is in excess of 600 billion dollars. Since we did our book, since it went to press, new numbers are coming out from the [IB] study that shows that a third of the returning veterans are coming back with what I call invisible wounds, traumatic brain injury, post-traumatic stress syndrome, serious depression. Again, huge costs that are going to be born by our society, by our economy, by our taxpayers so these are large costs. Now, the concern is that while the war is been very expensive and the President… the administration was not honest to us, when we went to war… Larry Lindsey was the Chief Economic Adviser at that time said it might cost a 100 or 200 billion dollars. He was rewarded for that [IB], you might say part honesty because, of course, it was a vast underestimate by being fired. The administration said, “Baloney, the total cost would be 50, 60 billion dollars,” we’re now spending that amount of money every three to four months up front, not including the cost of paying for the veterans, the disability benefits, not including the cost of resetting the military because we’ve been using up equipment much more rapidly than we’ve been replacing it. But the saddest part of all of this is that while we’ve been spending so much money, while this huge debt has reduced our room for maneuver to address, not only the economic crisis but a whole set of other social problems that we face, we haven’t even got security. What do we buy for this? Now, economists talk the economic opportunity cost. What we could have done with 3 trillion dollars, 2 trillion dollars, 4 trillion dollars, the mind boggles. The President talked about the problem, “Social Security might bankrupt our country,” he said. Well, the fact is, for about a sixth of the cost of the Iraq war, we could have put the Social Security System on sound financial grounds for the next 75 years or more. And we’ve created a gap, [IB] on disability that is equal to the gap that we had in Social Security. So, that’s just one example. The President said that, you know, America is one of the few countries that does not have financed healthcare for all its citizens… view that healthcare is our basic right and Congress passed a bill to provide healthcare for poor children who don’t have insurance, if they don’t get healthcare, they could be scarred for life. The President said that we could not afford them. We were talking about a few days of fighting in Iraq and we were willing to sacrifice our children for a few days of fighting in Iraq. But that’s the economic opportunity cost but there’s beyond that, the security opportunity cost. We aren’t buying security. The world is a big world out there, Iraq is a little small place in that global map. Even if we got security in Iraq, it doesn’t mean that we have global security and we’ve seen that. Things have been going worse in Afghanistan which was related to 9/11, Iraq was not related to 9/11. The death rate in Afghanistan is sure… is increasing. In fact, given the number of troops we have, the death rate now is actually greater than that in Iraq, the… adjusted for the number of troops. The… things are going badly in Pakistan. Conflict is expanding. So the point is that… that we haven’t bought the security that Americans want. The bottom line… you asked the question, can we afford the war? We can afford security, we can’t afford wasting money. We’ve been wasting money in Iraq, we’ve not been getting the security that we need, we’ve been wasting money more broadly in our military expenditures, and we’ve been spending with weapons that don’t work against enemies that don’t exist. We still are… we’ve started fighting the war on terrorism, we didn’t cut back on the cold war expenditures. So, the fact that, you know, in the last 5 years, expenditures on military beyond the war on terrorism has increased half a trillion dollars. Now, the answer is can we afford this kind of [IB]? Well, some people are doing very well, [IB] stock has soared but can we as a country afford it? I don’t think so. I think we have to husband our resources, both if we want security and if we want a strong economy. If we don’t have a strong economy, we won’t have the resources to address, not only our security needs, but all our other needs.