The $3-Trillion War

Posted on Apr 16, 2008

Flickr / Kevindooley

By James Harris

Harvard scholar Linda Bilmes speaks about the book on the Iraq war’s costs that she wrote with Joseph Stiglitz. The two former Truthdiggers of the Week have been working hard to uncover even more hidden expenses for the war, which they estimate will cost the taxpayers and their children trillions of dollars.

Listen to this interview.

Transcript:

James Harris: This is Truthdig.  James Harris here with Linda Bilmes.  She is the co-author of the new book, “The Three Trillion Dollar War.”  She’s also a Harvard economist, and she did serve in the Department of Commerce during the Clinton administration.  As we watch the sensational news coverage of the governor of New York’s resignation, “The Three Trillion Dollar War” reminds us that nearly 4,000 American soldiers and more than half a million Iraqis have been killed in this war.  And that spending will total more than $3 trillion.  Linda, why is it important that we take this war, and our spending, more seriously?
 
Linda Bilmes: Well, I think if you look at what happened throughout this war, we have essentially translated the human cost into a financial cost, and then we’ve deferred that cost to the next generation.  So what I mean is, we are fighting the war with a volunteer Army, with soldiers and Marines who we pay, and with another army of contractors who we pay, but all of that money has ... been borrowed.  So, in effect, the average American has not felt the cost of the war, either in blood or in treasure, and that accounts for the fact that although I think people feel very badly about it, it is not as immediately gripping as some of the scandals in the news.
 
Harris: You’d mentioned off-air that you’re not a very popular person at the White House right now.  In a nutshell, they’re saying it’s easy to go in a room, write a book and point fingers about how much this war costs.  The White House’s position to this point is, pretty much, “What’s the cost of doing nothing?  What is the cost of not bringing democracy to Iraq?”  How do you respond?
 
Bilmes: Well, you know, and actually, first of all, it is very challenging to write a book like this because the numbers are simply not there.  The way the government keeps its accounts is very misleading, and government accounting is very poor.  So they don’t actually produce any materials that would enable the average person who doesn’t spend two years working on it and uses the Freedom of Information Act—without doing that, you really cannot tabulate all of the costs of the war that are hidden and all the long-term costs.  And so when the president says that he does not go to war, as he said, “on the basis of green-eye-shaded accountants,” I think we should all consider whether it is correct to go to war with no idea of what it’s going to cost.  And you know the president and his advisers said that this war would cost us $50 or $60 billion.  At the time Larry Lindsey, who was the economics adviser, said that it might cost $200 billion, and he was fired for that moment of honesty.  And now we have a situation where even the Congressional Budget Office is saying that this war will cost $1.7 to $2.7 trillion, we have our estimate of $3 trillion at least.  The Joint Economic Committee says it will cost $3.5 trillion.  So there is a general consensus that the cost is so large that it is of very considerable concern and that it is having a major impact on our economy.  So I don’t see how one can ignore this any longer.

Harris: Why is it that there is no accountability for the spending that has taken place over the last five years?
 
Bilmes: Well, that is a very good question.  There is no accountability for the spending that has taken place.  And, unlike any other war, in this war, the United States cut taxes and raised spending at the same time it was going to war.  And, unlike any other war—apart from the Revolutionary War—we borrowed something close to 40 percent of the money for this war from overseas.  You know, in the Revolutionary War, the colonies borrowed from France.  So we have financed this war with debt, and if you look at how the money for the war has been appropriated in Congress, it is simply ... it is simply unbelievable.  But all of the money has been appropriated through a series of what are called “Emergency Supplementals.”  And what these are is a vehicle that exists in order to circumvent the normal checks and balances on budget spending.  And it exists because, in certain circumstances, in genuine emergencies, such as Katrina, you want to get the money to the field very, very quickly without going through the normal budgetary process.  But here we are, five years, 25 supplemental appropriations later, still funding the war on a bipartisan basis through this emergency mechanism which denies both Democratic and Republican budget experts in the Congress and in the Budget Office and other places the chance to actually look at how much it costs to get anything done.  And under these circumstances, it is inevitable that we will see the kind of shenanigans that we have seen in terms of profiteering and corruption and cost overruns and overpayments to Halliburton, and money on which, as the Pentagon puts it, we have “lost visibility.”

  Harris: So 25 times over the last five years we’ve used this discretionary funding, these Emergency Supplemental Funds.  And you said this is done to circumvent the normal budgetary process.  That sounds like a short way of saying, “We can get this by them if we do it this way.”  Have any laws been broken?

Bilmes: Well, you know, here you have a situation where, I mean, laws have not been broken because there’s no law that would have anticipated that anyone would have done something like this.  The reason for having this Emergency Supplemental concept in the first place is so that, if Congress enacts something new during the year or if there was a genuine emergency, that there is a way to get money quickly to a new program or to an emergency area.  And what has happened here is that you had an administration and a Congress that has not wanted to face, or to vote on the full cost of the war.  So instead you’ve had a series of dribs and drabs that have been appropriated outside the regular budgetary caps.  And we as taxpayers have all seen this:  $25 billion here, $72 billion here, $52 billion here.  It’s gone on and on and on, to the point that people are almost, I think, hardly notice.  And this is, I think, one of the things we have criticized heavily.  But, in addition, what’s important about the money that is being appropriated is that this is simply the tip of the iceberg in terms of the total cost of the war.  Because the money that has been appropriated to date, the $800 billion that will have been appropriated for the wars through 2008, that is only paying for the combat operations.  That’s the monthly—annual burn rate of the operations going on in the field right now.  And that ignores the cost of taking care of our veterans when they come home, providing disability compensation for our veterans, of replenishing all the military equipment that’s been used up, of resetting the military forces to their prewar strength, and of paying interest on all the money we’ve borrowed to pay for the war.  So if you add all of those up, you essentially double or triple the amount of money that we are spending every month.

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