Real Cost of Iraq War

CAIRO — Though US President George Bush will leave office in nine months, the entire world will continue for many years to trail under the backbreaking, undeclared costs of his unnecessary Iraq war, insists prominent US economist Joseph Stiglitz.

"This kind of penny-wise, pound-poor behavior was just unbelievable," Stiglitz, a Nobel prize-winner in economics, told the Guardian on Thursday, February 28, in an interview on his new ground-breaking book "The Three Trillion Dollar War."

The book partly exposes misleading audits given by the Bush administration on the cost of the Iraq war, but largely reveals the domino effects of the war.

Stiglitz, a former chief economist at the World Bank and a senior advisor to the Clinton administration, said the general approach of the Bush administration's fiscal policy has been a "pastiche of corporate bail-outs, corporate welfare, and free-market economics that is not based on any consistent set of ideas."

"And this particular kind of pastiche actually contributed to the failures in Iraq."

The book, co-authored by Linda Bilmes; former Clinton financial advisor, takes the $500 billion figure declared by the Bush administration as the cost of the Iraq war to a mind-boggling $3 trillion.

They trace the not-publicized billions of dollars that fell between the cracks in Iraq, a staggering sum that reveals the real cost undertaken by American taxpayers, the US budgetary ills and effects of the war elsewhere, starting from a London high street to a shanty remote town in Africa.

The audits, obtained by Stiglitz after much investigation that laid bare deliberately obscured accounts, the $3 trillion is the true cost - to America alone - of Bush's Iraq adventure.

The rest of the world, including Britain, will shoulder about the same amount again, estimate the two prominent American economists.

Missing Money

Stiglitz and Bilmes discovered that daily military operations in Iraq (not counting, for example, future care of wounded) have already cost more than 12 years in Vietnam, and twice as much as the Korean war.

They found that America is spending $16 billion, the entire annual budget of the United Nations, a month on running costs alone in Iraq and Afghanistan.

The two economists found that the Pentagon was actually counting the costs of only combat troops before the February troop surge, brushing aside the costs of the new troops, the cost of death payments and caring for the alarming number of causalities.

The book cites the well-publicized $8.8 billion that went missing under former civil administrator of Iraq Paul Bremer and millions that went unaccounted for under a clumsy Pentagon's accounting system that some analysts compared to that of a grocery store.

But Stiglitz found the most disturbing, unbelievable spending was the money given to security guards.

He found that a contractor working as a security guard lands about $400,000 a year while a soldier only gets about $40,000.

"Nobody in their right mind would have done that. The Bush administration did that," Stiglitz told the Guardian.

"I couldn't believe. And that's not included in the cost the government talks about."

Stiglitz was similarly provoked by the non-bidding construction contracts given to giant US corporation like Halliburton, which received at least $19.3 billion in single-source contracts.

The two economists regretted that one of these three trillions spent on Iraq could have paid for 8 million housing units, 15 million public school teachers, one-year healthcare for 530 million children, or 43 million university scholarships.

"Money spent on armaments is money poured down the drain," they said.

Domino Effect

Stiglitz said that while the Bush administration will be history in nine months, subsequent administrations and generations will pay the price of its Iraq adventure.

To cover the colossal, towering spending in Iraq, Bush had to borrow money from countries at interest of couple of hundred billion dollars a year, which, by 2017, will add up to another trillion dollars or so, he notes.

Stiglitz said the US is now operating at such a deficit that it doesn't have the money to bail out its own banks.

"When Merrill Lynch and Citibank had a problem, it was sovereign funds from abroad that bailed them out. And we had to give up a lot of shares of our ownership. So the largest shareowners in Citibank now are in the Middle East. It should be called the MidEast bank, not the Citibank."

Worldwide, the Iraq war is the main culprit behind the skyrocketing oil prices, which climbed from $25 a barrel to $100 in the past five years, because of the disruptions and instabilities caused by the war.

Stiglitz said that rising oil prices have had the effect of lowering the average income by 3 percent in Africa and offset badly needed foreign aid.

"Yes, that's part of being in a global economy. You make a mistake of this order, and it affects people all over the world.”

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