May 24, 2013
Joseph Stiglitz on Recession
Posted on Jun 3, 2008
By James Harris
Harris: And they’re not doing it, I imagine, because, aside from long-run consumption, getting that down, there was another component you were going to speak about that, in the future, doesn’t look good for the U.S.
Stiglitz: We have also been encumbering ourselves with huge debts, some of them apparent, some of them not so apparent. You know, this war has cost us $3 trillion, we estimate. That’s conservative. A more reasonable estimate is somewhere closer to $4 trillion or $5 trillion. Among those costs are $600 billion in unfunded entitlements to pay for the health care costs and disability benefits of our injured/disabled returning veterans. About 40% of the 1.65 million people who’ve already been deployed are coming back with disabilities. Some of them very, very serious disabilities. That’s an obligation that we’ve taken on and we will be paying this for decades to come. Because we borrowed every dime of this war, Americans are going to have to pay those bills. There’s no such thing as a war for free. Just like the economists say, there’s no such thing as a free lunch. And yet the administration was trying to pretend that you could have a war and not pay any sacrifice, not encumber your lifestyle. But the fact is that somebody is going to have to pay that price.
Harris: I just saw the report—I believe on “20/20”—that 300,000 soldiers have reported post-traumatic stress disorder. So these are people that fall into the category that you’re talking about, that will call upon the U.S. to pay for their health care. Am I getting that wrong, or is that right on?
Stiglitz: You’ve got it. I mean, one of the things is, right now, one of the—you might call it duplicitous—one of the shocking things that we uncovered as we were doing research on our book, on “The Three Trillion Dollar War,” is that so many of the veterans, when they come back from the battle in Iraq, fight a new battle: a battle with the bureaucracy to get the benefits to which they thought they were entitled. One of the reasons is that the Bush administration has underfunded the Veterans Administration. You know, they say that we’ll give our troops everything they need, they’ll give our veterans everything they need, but the reality is that they have vastly underfunded it. As late as 2005/2006, they were basing their budget on ... data from 2002, before the war, as if there had been no casualties, as if there had been no injuries in the war. The result of this is, the backlog of 400,000 has built up in the VA, the Veterans Administration. And so even when they go to the VA hospitals, they may not be able to get the care, particularly for psychological problems, for PTSD, that they need. We know from Vietnam what happens when you don’t deal with these problems quickly. You wind up with problems of homelessness, people who have a hard time putting their life together. And it looks like we’re on the road to another disaster like that, unless we resolve to do something about it very quickly.
Stiglitz: I agree. And one of the scandals, again, that we discovered as we were doing this—discovered in the public sense—that people in the armed forces have known about this. You know, after World War II, we had the GI Bill of Rights that guaranteed every GI a right to an education and really had a very big effect on transforming our country. People got to go to college. They changed the face of America. Well, you know, the returning veterans in this war aren’t getting the same benefits. They have to sign up at the beginning of their service to get those education benefits. They have to pay, upfront, a couple of thousand dollars. If they don’t do that upfront—and that takes away a large fraction of their salary for the first period of their enlistment—they can’t get them. They can’t say in three years, “Oh, by the way, I’d like to get a GI bill. I’d like to get these education benefits.” They say, “Too bad; you didn’t sign up for this when you first signed up.”
You know, an 18-year-old is very different from a 22-year-old. An 18-year-old may not be able to think about what he wants. A 21-year-old is beginning to think more seriously. So rather than facilitating their ability to become active contributors, well-educated contributors to our economy, to our society, we put roadblocks. And I think it’s all based on an attempt to save money. To say, “Well, if we make them pay upfront, maybe they’ll forget about it, maybe they won’t ... and then maybe we can make money out of our education program!”
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