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April 10, 2006
Diaz Hendropriyono
Washington, DC
The War in Iraq certainly has not been, and is not going to be, cheap. But, i always wonder why it is so, considering what many thought, before the war began, that it was not going to be an expensive war.
When President Bush announced the War in Iraq, various differing opinions emerged in public in regards to the financial consequences of the war. The Congressional Budget Office estimated that the war would cost at least $44 billion. The House Budget Committee expected that it was going to be a short kind of war, one that could be accomplished within two months, followed by a three-month occupation. It was estimated to cost from $48 to $60 billion
The Bush Administration, however, forecasted that the cost of the Iraq war would not exceed the total cost of the first Gulf War, $80 billion in 2003 dollar, and on March 23, 2003 requested $74.7 billion to fund for an emergency spending plan. The cost would include $62.6 billion to fund for the Iraq War, $4.24 billion for antiterrorism defense in the U.S., $5 billion for key allies, and $2.4 billion for humanitarian relief and reconstruction efforts in Iraq
The administration argued that the estimated cost of the Iraq War would amount to less than 1 percent of Gross Domestic Product (GDP), and would be considered much cheaper than other wars. The Korean War and the Vietnam War cost U.S. taxpayers 15 percent and 12 percent of U.S. GDP respectively, while World War II spent a whopping 130 percent of GDP, or around $3 trillion, in 2003 dollars. It was then believed that the war could be executed at reasonable cost. John Cogan of the Hoover Institution defended that “at 1% of GDP, the war looks like a bargain.” Furthermore, the defense spending of other countries—such as Israel, the United Kingdom, and Germany, which spent 8.1%, 2.5%, and 1.5% of their GDP in 1999, respectively—made the Iraq War budget appear reasonable.
When considering the cost of the Iraq War, an alternative strategy should also be looked at. Economists from the University of Chicago considered the cost of continuing containment of Saddam. The direct cots of troops and equipment were expected to be $13 billion a year. Since past containment efforts had not been successful, the budget for containment may need to be increased by 50%, raising the cost to $19 billion a year. Furthermore, containment would have to be in place for at least 33 years, an optimistic duration considering the lifetimes of Eastern Europe, Soviet Union, North Korea and Cuba. When the expected cost of containment is discounted to the present, the cost of containment of Saddam would be around $380 billion. Adding the cost for homeland security would bring the total cost to $630 billion. The high cost an alternative strategy made the cost of Iraq War look incredibly small, and thus the Operation Iraqi Freedom was considered the more favorable strategy.
In his testimony to the House Apropriations Defense Subcommittee on September 30, 2003, Defense Secretary Donald Rumsfeld urged legislators to approve the $87 billion supplemental request for FY 2004 as an investment in peace in the Middle East. Rumsfeld compared the administration’s request with the Marshall Plan, or the European Recovery Program. The Marshall Plan provided the basis for European economic recovery after World War II, in a hope to prevent the influence of the communist parties in Western Europe. The reconstruction plan cost about $6 billion. Yet, Rumsfeld continued, “It cost about $90 billion in today’s dollars,” justifying the cheap cost of the reconstruction efforts in Iraq.
Finally, Chairman of the Joint Chiefs of Staff Air Force Gen. Richard Myers claimed that the U.S. would not be “going it alone” in these wars. At least 49 nations would send their troops to Iraq and Afghanistan. The North Atlantic Alliance would also participate. And he was convinced that 70 other countries around the world would help the war on terror worldwide. These factors have driven down the cost of the War in Iraq reflected in the budget request and made the budget seem even more appealing.
Unfortunately, U.S. policies are full of uncertainties. It is mainly because of these that the cost of war becomes unmanageable.
As the Operation Iraqi Freedom continued, uncertainties began to appear. The U.S. military has to always deal with some local resistances: the Jihad group led by Abu Musab Al-Zarqawi, the Saddam loyalists, such as the Ba’athist, the Fedayeen, and the Republican Guards, independent Islamic extremists, and other criminals who kidnap individuals for profits. This unexpected and relentless confrontation has extended the U.S. operation in the area and thus has contributed to the increased costs of the war.
What was once thought to be a cheap operation, then, turned out to be one of the most expensive wars in the U.S. history. At $252 billion, the war’s costs in Iraq and Afghanistan had already exceeded those of World War I and the first Gulf War by mid 2005. Although the amount spent on the War in Iraq had only hit $186 billion by that period, budget professor at the Kennedy School of Government at Harvard University Linda Bilmes estimated that it will cost $1.4 trillion by 2010. Meanwhile, economist Joseph Stiglitz assessed the final figure at $1 trillion to $2 trillion. The Congressional Budget Office estimated more conservatively, however, that the war expenses will amount to $600 billion. It seems plausible that these costs will expand as the Pentagon is spending around $6 billion a month on the Iraq War, according to CBO. In fact, the spending increase is reflected in President Bush’s $2.77 trillion budget request in early February 2006, which included increased outlays for the Iraq War.
With the staggering estimates offered by those scholars, it is perhaps arguable that the War in Iraq would still be cheaper than the containment strategy of Saddam Hussein mentioned earlier, estimated to cost around $630 billion.
In addition, The hope that the costs of war and reconstruction efforts could be shared by other allied forces has not fully yet become a reality. Rather than having more allied forces joining the war, the U.S. has started to lose its coalition partners as uncertainties occurred. Bulgaria withdrew its troop in January 2006 after losing 13 soldiers and two truck drivers, who were kidnapped and killed by the Abu Musab Al-Zarqawi group, and two-thirds of its 7.8 million citizens at home voiced out opposition with the war. Ukrainian troops left Iraq in December 2005 after losing 18 soldiers and having three engineers taken hostage. Meanwhile, Nicaraguan soldiers left Iraq for financial reasons, as its President Enrique Bolanos emphasized that the country could no longer afford to keep them there.
As more and more forces left Iraq because of these uncertainties, the U.S. will likely bear most of the costs of the War in Iraq. Thus, a continued budget increase for the war is simply unavoidable. Furthermore, the fact that the U.S. did not win a widespread support as it did in the first Gulf War—that its allies agreed in advance to share the costs of war—forced the U.S. to put much financial burden on its taxpayers, said Leon Panetta, a former budget director for the Clinton administration.
Life is full of uncertainties. Had the world not filled with them, the War in Iraq was actually going to be a cheap war. Really. Perhaps, the current administration just does not realize the extent of these uncertainties on the cost of war.
April 12, 2006
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