Firedoglake is pleased to welcome Linda J. Bilmes, co-author with Nobel economist Joseph E. Stiglitz of The Three Trillion Dollar War: The True Cost of the Iraq Conflict. Professor Bilmes is an expert in government finance, a former Commerce Department Chief Financial Officer; she now teaches at Harvard’s Kennedy School of Government.
In January 2006, Linda Bilmes and Joseph Stiglitz released their initial study of the costs of the Iraq and Afghanistan wars. Their estimates then — closer to $2 trillion — were met with the usual denial and misdirection that have come to characterize the Administration’s unwillingness to take responsibility for the consequences of their war decisions.
Since 2006 Bilmes and Stiglitz have verified the assumptions (and their conservatism) and updated the results. Most data is from official US sources, sometimes from hidden parts of the budget, with key data extracted from the Administration by veterans organizations via Freedom of Information Act requests.
The result is The Three Trillion Dollar War, a stunning and exhaustively documented assessment of the war’s massive costs. But there is far more here than a compilation of economic costs. We find an equally valuable treatise about how to think about the economic consequences of waging war, an analysis the Administration didn’t do, and still hasn’t.
We learn how badly our budgetary process works and how shamefully we still treat America’s veterans. There is also an intelligent discussion of the merits (and costs) of withdrawing versus staying, a chapter on "lessons learned," with practical recommendations for addressing issues they uncovered in the course of their research. We’ll have a chance to ask Professor Bilmes about their suggested reforms.
Many FDL readers are already familiar with the $3 trillion figure, having read the authors’ op eds in the Washington Post, The Times, or other publications or read about Stiglitz’ Congressional testimony or heard Linda Bilmes interviewed on NPR’s Fresh Air, which details the bureaucratic hurdles soldiers face transitioning from active duty to the Department of Veterans’ Affairs. And that’s a clue to the book’s larger value.
It is relatively straight forward to add up the annual Congressional authorizations, now approaching $800 billion through 2008, and to extend those into the future under different scenarios. But to assess the full costs of the Iraq war the authors had to unearth hidden parts of the war’s costs buried outside the "emergency" budget requests the Administration uses to keep most costs out of the usual budget process. How much will it cost to "reset" the military, replacing/repairing all the equipment that has been lost? How much will it cost for the Veterans Administration to deal with the types of injuries our soldiers are receiving in Iraq, from amputations to brain injuries and PTSD?
The well-known $3 trillion figure is the total for the authors’ "realistic-moderate" scenario (a "best-case" scenario is about $2 trillion) which assumes a substantial US occupation for several years. The authors start with the $645 billion budgeted so far (with $200 billion more requested this year) and adds the expected costs of future operations ($913 billion), the future costs of taking care of veterans’ medical needs and disability payments ($717 billion), and other hidden costs to government ($404 billion). To that $2.68 trillion subtotal, the authors reveal another $415 billion in "societal costs" (value of death and injuries, etc) to get to $3 triilion for that scenario.
Many costs can’t be easily quantified. We lost the insurance value of having much of the National Guard assigned to the war. The war’s macroeconomic effects could be another trillion or so, as oil prices rose from $25/bbl to over $100/bbl, and we reduced more productive public and private investments here. And what of the opportunity costs — what we didn’t do or won’t be able to do because we spent the money on war? Discussing Stiglitz/Bilmes, Nicholas Kristof today lists a few of countless possible examples:
A Congressional study by the Joint Economic Committee found that the sums spent on the Iraq war each day could enroll an additional 58,000 children in Head Start or give Pell Grants to 153,000 students to attend college. Or if we’re sure we want to invest in security, then a day’s Iraq spending would finance another 11,000 border patrol agents or 9,000 police officers.
While these societal costs are real, most aren’t part of the $3 trillion figure, nor are any of the costs to Iraqis — more trillions — or other nations. But the authors are candid about what we now face:
Most Americans have yet to feel these costs. The price in blood has been paid by our voluntary military and by hired contractors. The price in treasure has, in a sense, been financed entirely by borrowing. Taxes have not been raised to pay for it – in fact, taxes on the rich have actually fallen. Deficit spending gives the illusion that the laws of economics can be repealed, that we can have both guns and butter. But of course the laws are not repealed. The costs of the war are real even if they have been deferred, possibly to another generation.
From the book:
There is a simple message of this book, one that needs to be be repeated over and over again; there is no free lunch, and there are no free wars. . . .
In one way or another, we will be paying for these costs, today, next year, and over the coming decades — in higher taxes, in public and private investments that will have to be curtailed, in social programs that will have to be cut back. There is no free lunch — one cannot fight a war, especially a war as long and as costly as this war, without paying the price.
So with that, please welcome Professor Linda Bilmes to discuss this extraordinary book.
Related posts:
- FDL Book Salon Welcomes Dahr Jamail, The Will to Resist: Soldiers Who Refuse to Fight in Iraq and Afghanistan
- FDL Book Salon Welcomes Senator Byron Dorgan, Reckless!: How Debt, Deregulation and Black Money Nearly Bankrupted America
- FDL Book Salon Welcomes Thomas Ricks – The Gamble: General David Petraeus and the American Military Adventure in Iraq, 2006-2008
- FDL Book Salon Welcomes Bradley Graham, By His Own Rules: The Ambitions, Successes and Ultimate Failures of Donald Rumsfeld
- FDL Book Salon Welcomes Richard McCormack, Editor of Manufacturing a Better Future for America
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This is Linda Bilmes. Please feel free to ask me any questions about the book, or the cost of the war.
Welcome, everyone. Professor Bilmes should be joining us soon to discuss the book and answer your questions.
As with all Book Salons please keep all comments on topic. Off-topic comments should to go the previous thread.
Hi Linda, welcome to the Lake. Thank you for taking the time to do this for this crew.
Your appearance on Democracy Now! was very illuminating.
I’m not going to comment or ask questions. I just going to read along. I haven’t read the book yet and would prefer not to expose my ignorance.
Peace Love Light
I am on line now
Dear Linda,
What part of the Three Trillion Dollars seemed to be the biggest surprise to folks you’ve talked with?
Sue
Welcome. I saw you on Democracy Now and it was amazing.
Welcome Professor Bilmes. Thanks for joining us. I was fascinated by your interview with NPR and the fact your received so many communications for veterans and their families about the VA. That seems to have influenced your recommendations in the final chapter. Can you tells what you found?
I do not see finance costs, costs to replace equipment, costs to train and develop senior noncoms and midlevel officers who have been leaving the army. Are these factored in under some of the headings?
Has a cost assessment been done of how many hundreds of billions of dollars have been exported to the Middle East in the last 5 years?
The biggest surprise is that until now, many people have not drawn the link between the war and the economy. The war did not produce the economic crisis, but it is one of the main factors that contributed to it. The public is only now beginning to understand that the money we have spent, the borrowing we have done, and the lack of investment in the US have all contributed to the economic downturn.
Welcome Professor Bilmes and thank you for your work.
Those last two quotes in the post are powerful — and ought to be sobering as well.
Linda, has your book gotten any reactions from political officeholders and/or candidates for office that show anything other than “let’s stick our heads in the sand and let the next Congress/President deal with it”?
Professor Bilmes, a great honor to have you here.
Welcome to the lake for this important discussion. Your op-ed and statistics therein have now made their way into current political speech and I say Bravo! I haven’t read the book, but come here from just wathing the Bill Moyer’s Friday program on his website, where he interviews and plays clips from Phil Donohue’s and Ellen Spiro’s “Body of War.” There is no accounting for the life and family costs for our nation and the whole of the Iraqi people. Thank you so much for your work and your speaking to the nation with this book.
we have had an unbelieveable response from hundreds of veterans around the country. The main issue is that the total number of veterans from this war who need medical treatment is already over 300,000 (including 70,000 wounded and injured) — much higher than the 30,000 “wounded in combat” figure that the Pentagon likes to use. This means that the cost of taking care of these troops is much higher, and of course this is why the VA is running out of money and space.
Professor Bilmes,
Welcome to FDL. I have not read your book but yesterday I read a column in the Hartford Courant by a gentleman named Rick Green who had spoken with your co-author and he (Mr Green) was directly connecting the cost of the war with the lack of finances available for many of Hartford’s needs.
We include in future costs the future defense costs of replenishing our military. We have not explicitly counted the cost of transferred wealth, but if you read chapter 5 on macroeconomic cost, this topic is explained.
Welcome to the Lake Professor Bilmes,
thanks Scarecrow.
You note in the book (and interviews) that the backlog of disability applications and appeals is now up to 400,000. How has the VA responded to these numbers and to the recommendations for fixing these problems?
yes, well the administraton has called us “cowards” and accused us of exaggerating the costs. but in fact the costs in our book are very conservative. Moreover, the administration has cut taxes at the same time we went to war — which means we have put all the war debt burden onto the next generation. If they believe it is worth fighting, they should have the courage to ask us to pay for it directly.
BTW what is the timeline you are basing your cost assessments on? Out in 2010? 2012? Never?
Aloha, Linda!
There’s an old saying amongst us Vets; “Nothing is too good for Vets, so nothing is what they get…!”
FWIW, it’s just staggering that Democrats have permitted this to all come from the GOP who asserts that they are “fiscal conservatives,” and who were so opposed to “nation building.”
This is a very important point. We are spending $12.5 billion per month in Iraq plus another $4 bn in Afghanistan – and this is just the combat cost, which doesn’t include the long-term costs of taking care of veterans, replacing equipment, and paying interest on the debt. This means we have less money available to pay for all the other things we need government to do — including aid to cities and states, health care and education. Who suffers? It is largely invisible — for example, local communities cut back on the number of buses to poor sections of town, so the poorest in our society have to wait 35 minutes in the cold for a bus, instead of waiting 15 minutes,
Hi Dr Blimes
How did they do this, in what forum?
Also I wouldn’t say that Iraq is directly connected to the current financial meltdown. Rather it is the same bunch of idiots who are responsible for both Iraq and the house lending bubble.
Welcome.
I watched the Democracy Now interview…it was incredible. Two things jumped out at me…one was the skewed veteran injuries numbers and the websites that were taken down, and, two..this (copied from DN’s website). This really perked my ears up…what do you make of this?:
“AMY GOODMAN: Who is profiting from this war?
JOSEPH STIGLITZ: Well, actually, there are two big gainers in this war and only two: the oil companies and the defense contractors. And you see that where the pools of wealth are being created. One of the big pools of wealth are in the Middle East, the countries that are the oil exporters. We are transferring hundreds of billions of dollars from American consumers, businesses, to the oil exporters. You can look at it as simple as that.
AMY GOODMAN: Which countries?
JOSEPH STIGLITZ: Well, Saudia Arabia, Iran, Venezuela. You know, if you asked who were the countries that we would not want to help, many of them would be on the list that we have been helping.
AMY GOODMAN: So, what do you think of our headline today: President Bush helps the Axis of Evil? Iran and Venezuela, they benefit from the war in Iraq
JOSEPH STIGLITZ: They are the big beneficiary. That’s very clear. “
You mean,you can’t cut taxes and start a war without negative consequences. Surprise, surprise!
Thank you for joining today. I was very pleased to see your book get above the fold play in my local daily. I’m sure it was quite a shock to a number of readers.
The VA is trying to fix this by a typically government approach — by hiring thousands more claims adjudicator staff. This will not work because the fundamental problem is that the process itself is too complicated and long. There is no reason why a returning veteran with an arm blown off needs to fill in a 26-page form to prove beyond a reasonable doubt that this injury happened while he was on active duty, and to produce all the medical documentations from Germany to back this up. The process should be automatic. Therefore, the VA will simply end up with more staff, and it takes them 2-3 years to get trained into the overly complicated process. Meanwhile the backlog will grow longer.
Thanks for coming Professor Bilmes and thanks for your dedicated work on this subject. Do you know of anyone who has done a study on the costs for the Iraqi people of this war? Seems to me that even if everything goes perfectly from now on out, their costs are going to exceed ours. Or does the 3 trillion figure include some or all of this?
WH spokesman Tony Fratto dismissed the numbers and said, “People like Joe Stiglitz lack the courage to consider the cost of doing nothing and cost of failure.” That’s one example.
Courant column At what cost, this war
Thanks LS for that quote. I would add a resurgent Russia to the list riding high on energy revenues.
Chapter 6 in our book addresses the issue of costs to Iraq, to Britain, and other costs. But it is difficult to estimate the costs to Iraq. You have a country that until 200 was run by a tyrant but it was functional. Now it is dysfunctional. Over 2 million Iraqis have fled the country (including virtually the entire middle class – the doctors, lawyers, professors, architects, nurses, teachers, ect) and another 2 million who are internally displaced due to ethnic violence. There is still a lack of basic services, such as electricity, sanitation, garbage pick-up, clean running water, etc — all of which existed before the war. And of course there have been extremely heavy casualties, both due to the war and due to the lack of medical care.
This brings up the point why should disabled veterans be dumped in the VA system instead of kept in the army system where they would receive better benefits.
In strolling through John McCain’s campaign website, he has a lengthy “issues” page on Iraq, with no mention of paying for it in any way. Similarly, he has a lengthy page on Government Spending, with no mention of the war at all.
Let me say for the record that I’m not surprised.
It would be nice, however, if McCain were asked how a McCain administration intends to pay for this ongoing war/occupation of which he is so fond.
Almost Orwellian when you think about it.
Thx. A year ago the VA lost my paperwork in one week.
Do the numerous forms and red tape often require that the veteran hire an attorney to manage his case? If so, perhaps a large number of veterans end up giving up on (or screwing up) their own cases because they cannot (or feel that they cannot) afford to hire an attorney.
Okay, I have a question. So, if the cost is say $3 trillion…what will be the profit numbers for those making out like bandits in the same time frame? I hope that is not a stupid question. *G*
Do you think Congress today is interested in controlling these costs and starting to pay for them?
Prof. Bilmes, thank you for your contribution to the discussion of the war. It is good to have adults being part of what needs to be discussed since there do not seem to be any over at the White House. It seems from Day One of these conflicts that
liesmisinformation has been their way of talking to the American public.How are you and Joseph Stiglitz holding up with attacks from the administration that are directed at you?
Tony Fratto is a mindless Bushbot. Take out his battery and he would just stop.
One of the consequences of the war has been to increase the price of oil. In March 2003, the price was $25 per barrel, and the futures markets expected the price to stay in that range for the next 10 years. This was the prediction, even taking into account the rising demand from China and India and the developing world. But the invasion of Iraq changed the supply and demand equation. Seeing the instability in the region, the producers decided not to expand supply, or to invest in more refining capacity.
In our book we only attribute between $5-$10 of the oil price increase DIRECTLY to Iraq, but that doesn’t change the fact that we have transferred money out of the pockets of american consumers and businesses and into the pockets of oil producing nations like Venezuela, Russia and Middle eastern countries.
It’s not like a lawsuit where you might lawyers fees if you gain benefits.
When the VA shifted to an HMO business model the emphasis was cost cutting and the easiest way to do that is to refuse care. Sixteen years working at VA Medical Centers opened my eyes to the system. It has become a bureaucracy
that exists to ensure its continued existence.
Nothing is too good for our veterans…and nothing is what we get.
VN 63-64, 67-70
I hope that the costs of paying for this war (both deferred costs and future costs) goes down in history as the major element of George W. Bush’s “legacy.” I haven’t read you book, but it sounds like it will help that to happen.
You might recoup lawyers fees. . .sorry
Wasn’t it always like that, at least in our day?
The military tries to get the wounded discharged as quickly as possible. But many wounded servicemen and women are reluctant to leave because they will lose all their benefits and they know it takes at least 6 months to start receiving veterans benefits. So they are stuck in limbo in outpatient facilities — like Walter Reed. This is exactly what happened there.
Prof, did you do a cost-analysis of what we paid Halliburton/KBR/Blackwater etc… as opposed to what we would’ve spent if the military had done the work itself…? In regards to what was actually ripped off through the use of private contractors…
Raven: The final chapter has several recommendations on how to improve processing of applications for VA disability benefits. One of them is to create a Veteran’s advocate, to help push reforms and improvements from the inside.
Welcome Professor Bilmes. Given the fact that the economy is the thing that people are most worried about in this election (John McCain’s weak point), being able to examine the cost of the war in this way presents an incredibly valuable and timely opportunity. Thank you for your work.
Yes, I know what you mean. No contingency-based fee schedule. The veteran has to pay an atty by the hour or by contract out of pocket.
Hello, Professor, Scarecrow and Pups
I’m reading along today, but wanted to chime in and say thanks for being here and having this discussion.
FunnyDiva
The solution is to simplify the system. I have testified on this 4 times to Congress this year.
Think about it. The IRS takes everyone’s taxes and audits a few of them. They don’t audit everybody, and there is a short form. But the VA in effect audits every single returning veteran, and makes them all fill out and verify the long form. We should simplify : just accept whatever medical conditions are apparent when they leave the military and pay them a stipend. We can audit a subset of these claims later on to prevent fraud.
Veteran’s advocate at what level? Local, state, system?
Yea, and if they “win” all they would get is the benefit, nothing to pay the lawyer.
How did you feel when the spokesmen for the President called Joe Stiglitz a coward and left you out of the ad hominem screed? You don’t need to respond.
The contractor situation is complicated — we write a lot about it in the book. First of all, this is the first war where we have relied so heavily on the private sector. Which is a problem because it has different priorities from the government. for example after the fall of Saddam, there were 1 million unemployed men in Iraq. We needed to find jobs for them. But the private contractors in charge of rebuilding Iraq wanted to minimize costs, so they hired cheaper workers from Nepal, the Phillipines, etc. to do the work. This was cheaper in cost, but then some of these Iraqi men joined the insurgency, so it turned out more expensive.
There have been so many problems with the way the contracts are not supervised. Halliburton’s main sub, KBR, has been avoiding paying hundreds of millions of dollars of US taxes by employing its workers through shell companies in the Caymans. Meanwhile, Halliburton et al dont even pay insurance for their workers — the US Department of Labor absorbs all the costs.
Yes. The addeded benefit of this work is the explanations it provides for several public policy decisions. The book has a lengthy discussion of how spending for war has different effects on public and private spending and investments in our economy compared to non-war spending/investments. This discussion alone is worth the price. All our candidates should be reading this.
Question for Prof. Bilmes: what influence has the book had on the campaign staffs? Do you have champions or detractors among their economic advisers?
Look at the dollar vs Euro across the past 5 years. That is also a component of nominal oil prices, beyond the supply/demand adn risk premium factors.
Wow, the cost of doing nothing in Iraq?:
No WMDs, no Al-Qaida. Would that be $0.00?
Sounds like such a bad deal, no wonder he was afraid to look at it.
I had my own run-in with them last year, when the Assistant Secy of Defense, Winkenwender called me and my dean to question the number of wounded I was quoting. When I explained that the numbers came from HIS OWN WEBSITE, he was not happy, (especially when I faxed him his own website).
He then responded by CHANGING the website, so it is almost impossible to understand if you dont know what you’re looking for. Not sure where this would have ended up, but all the veterans organizations were very supportive of me and when Gates arrived Winkenwender was “retired”.
A friend of mine was hurt in Afghanistan early in the fighting, landing on rocks after jumping out of a helicopter at the 9,000 ft level of a mountain in the dark(he is a Green Beret) and hurt is back. He and the men under his comamnad hiked out 30 miles and through a firefight with the the Taliban. The Army wanted to just send him the Germany for medical services and he said no, thenit was to Walter Reed and he said no. Finally he got them to send him home to Arizona. After he got back here some pencil pusher decided he was off active duty so he wasn’t getting a paycheck and could return to his regular work till the Army relesased him.
He finally got a chance to talk with JD Hayworth and tell him about the situation so I understand JD’s staff got on the Army and it got straightened out.
My friend is an officer and had connections up to the top. Woe to anyone who doesn’t.
To the Vet’s here my friend did 3 tours in Vietnam, later Desert One in Iran(on the aircaraft that was destroyed)Panama , Grenada, 1st Iraq, Kosovo, and of course both Afghanistan and Iraq. One of the nicest guys you want to ever meet. (And a Phd.)
Both the Clinton and Obama campaigns have requested copies of the book, and I believe they are both using some of the information in it.
Clinton last week gave a speech referring to the war cost in “trillions”. Obama gave a speech this week noting the link between the war and the economic downturn.
Still, I dont see anyone addressing the issue of how we finance the war, and whether we should continue to pay for the whole thing with deficits.
I think to the beginning of 2007 the increase in cost attributable to Iraq was probably more in the $15/bbl range taking $30/bbl, the cost of the Cushing spot and import spot at the time the war began–both of which coincidentally declined once hostilities were initiated.
Anyway to the point above. Producers have been developing fields in the Persian Gulf area. The problem is that what is being developed is not equal to the amount of what is being lost due to gradual exhaustion of the old elephant fields. As for refinery capacity, that has more to do with domestic politics. Each barrel kept and refined at home is one less that can be exported for foreign exchange.
What’s wrong with this picture?
The alternative to invading Iraq was not free. Remember at that time we were enforcing the no-fly zone policy of containment, which involved flying some 30,000 sorties over the northern and southern non-fly zones for a cost of $10 billion annually.
We substracted this savings from the cost of the war. So really one should compare the cost of continuing that policy — around $50 bn over 5 years — with the $3 trillion cost of the war.
Sorry, I was just being snarky. ;^}
Bush never will have that discussion, just like he won’t talk about what is going to happen when he leaves this mess to the next President.
You have no idea how many veterans have contacted me directly for help. It is a national disgrace that we are spending so much money for the war and still many returning servicemen are falling through the cracks.
Even so, several orders of magnitude less…..
Aren’t we in effect, paying and borrowing, for wars in order to generate profits for the oil companies and the rest of the international military-industrial complex? This is just business. What will “they” make from the $3 trillion that will be invested from “our” taxpayer money and the national debt to other countries?
Isn’t that the bottomline…aren’t we just being “duped” and “mugged” so to speak?
I was referring more to the traditional roles the military used to perform, such as feeding and supplying the troops in theater… I seem to recall $25 6 packs of Coke, billing for meals not served, etc…! I agree with the nefarious tricks you describe too…
We learn how badly our budgetary process works and how shamefully we still treat America’s veterans. There is also an intelligent discussion of the merits (and costs) of withdrawing versus staying, a chapter on “lessons learned,” with practical recommendations for addressing issues they uncovered in the course of their research. We’ll have a chance to ask Professor Bilmes about their suggested reforms.
Seems logical to conclude that voting Republican is a very bad idea. They’ve held the reins for nigh 8 years, didn’t do anything to stop the pending 9ll catastrophe, convoluted our attackers with Saddam, and got us into this fiasco. With McCain stating unequivocally that he will stay and fight til we win, and Obama and Clinton campaigning to end the war – it seems that one of the lessons learned is vote Democratic.
What are your thoughts on this, Professor?
Thank you. I imagine countless hours have been spent by this administration on aggressive push back. It cannot be easy nor particularly productive work.
Has anyone ever calculated what 3 trillion dollars would buy for US infrastructure including schools and limited universal healthcare?
Well one mistake is to think we have been given a “tax cut”. Because we have borrowed so much money, this is not really a tax cut, but its just a way of deferring paying our debts until later –or until the next generation. And we have to pay the debt back with interest, plus interest on the interest. It’s like borrowing on a credit card in order to give youself an extra $100 per week — eventually, you cant do it any more.
Re Winkenwender, he left the government and got a job with a company that just happened to get a contract in the area that Winkenwender had been overseeing when he was in govrnment. It’s part of 272 in my scandals list if anyone is interested.
It is said that Ronald Reagan defeated the Soviet Union by forcing them into unsustainable military expenditures.
Per Sun Tzu, The Art of War (400 BC):
Per Osama bin Laden (Oct 29, 2004):
Welcome Linda. I recently purchased your book and saw your C-SPAN presentation on Book Notes. Between your efforts and Naomi Klein’s The Shock Doctrine, I wonder why any Democrat wants to be president, to try to fix the mess we’re in. What are your ideas about where to start after we are out of Iraq?
I had 2 nephews who have served, one to Afghanistan the other to Iraq and I am very glad they both came home safe. But here in the little tiny corner of the Hopi Reservation where I live is a family who’s son was the first Navajo serviceman to die in combat since Vietnam. It so damn sad, I can’t imagine what they and other families are going through.
And for the people who are lost and wounded what are the losses in future productivity that they would have brought to our nation?
or paying down the interest on the national debt.
I am a Democrat, but I do not believe the Democrats have been blameless in this whole fiasco. Bush made the decision to go to war without planning for it, but the Democrats and Republicans have jointly decided to finance the whole thing using “supplemental” emergency money which circumvents all the normal checks and balances and allows for little oversight or scrutiny of where the money is going. Neither party had the guts to ask for the funding now. This supplemental scam has, inevitably, led to huge cost overruns, overbillings to contractors, and billions of dollars for which the Pentagon has — in their words — “lost visibility”.
There are Republicans who have been critical of this funding strategy, as well as Democrats — but too few of them.
I had never heard of this guy.
Ms Bilmes,
I think part of your calculation includes “replacement” cost for the equipment lost in the Iraq war.
Why should we replace it? Why all of it?
We have over spend and over procured and it is this equipment which the military is itching to use (use up) to continue the (corrupt) procurement process.
While the cost of this war was obscenely high, we simplty should not be advocating replacing the DOD’s lost gear. We should take this opportunity to note that they won’t be getting all this in the future because it is wasteful.
“With McCain stating unequivocally that he will stay and fight til we win…”
___________
Yeah, let’s ponder the precise, stable equilibrium point constituting a “win”. I love that. Lessee, a politically unified, internally peaceful, democratic Iraq strong enough to “defend itself” against regional hostiles, yet not too strong militarily to itself constitute a threat to its neighbors. Right, we’re gonna bring that about during my lifetime, LOL!
Hence, McBu’ush’s 100 year war.
Welcome to the Lake, Professor Bilmes, and congratulations on your book.
You said:
There have been so many problems with the way the contracts are not supervised. Halliburton’s main sub, KBR, has been avoiding paying hundreds of millions of dollars of US taxes by employing its workers through shell companies in the Caymans. Meanwhile, Halliburton et al dont even pay insurance for their workers — the US Department of Labor absorbs all the costs.
Since Cheney is now calling the war a successful endeavor, is that because he still is connected to Halliburton?
Cheney’s contractors have actually had the gall to state openly that contract cost/performance data are proprietary.
Thank you for this question which is very important.
It seems harsh to translate the value of a human life into economic terms, but it is also unfair to ignore the economic cost to the country of losing 4000 young men and women in their prime. The way economists and others do this is using a method called “value of statistical life” . The federal government, when it is deciding on regulations for the EPA, OSHA, FDA or other civilian matters, considers the life of a prime life at $7.2 million.
But the military only values a life — on its books — as $500,000 (thats the amount we pay to families who lost someone).
Obviously this drastically understates the true economic loss to the economy, so we have included the $7.2 million figure in our book. This is just one of the economic costs that the administration’s cost of war figure does not take into account.
He’s just another wanker, one of thousands of ideologues, crooks, and incompetents that the Bush Administration stuffed the government with. Their way of dealing with any problem is simply to deny that there is a problem.
I’d very much appreciate congress to act on Waxman’s proposal to close the loophole for private contractors working outside of the US, to report fraud and abuse…
How much of this is going on and how does it hide true casualty numbers?
Hello, Linda, welcome to the Lake and for this extremely important discussion. I think I must read this very powerful book. I wonder if a majority of Americans realizes the staggering costs of this colossal blunder that is the Iraq War. The brain injuries and lost limbs and the lifetime of medical care that our veterans will need. It’s shocking. “So?” says Dick Cheney. Unbelievable!
Sounds like you are taking a shot at bipartisanship. Just kidding. Thanks for your reply. The Congress was Republican, Dubya and Dick were saber rattling like hell and calling everyone who questioned them sissies, Merca haters and terrist enablers, the media was helping them do it, and it was easier for Dems to go along to get along. Too bad there was so little leadership from the minority party.
Dr. Blimes, I was wondering if you thought we’d actually have some responsible public funding eventually, or if we’re doomed to this cycle of no one wanting to pay taxes for government services indefinitely
What you must realize that the cost of the war… almost every dollar spent GOES TO USE CORPORATIONS and a fraction goes to soldiers pay.
Corporations are making out..$1TT $2TT who cares… it’s good for business!
We cannot avoid replacing equipment. For example, the National Guard estimates that half of its equipment has been used up in Iraq. (You may recall that during the severe tornadoes in Kansas last summer the were not enough vehicles to get to the rescue because they had been taken to Iraq). We have 42,000 light trucks there, thousands of basic heavy vehicles, aircraft, helicopters, and other materiel.
This is actually the equipment that we USE in ground warfare (as opposed to the billions we’ve spent on the F-22 fighter, which has not flown a single sortie in Iraq or Afghanistann, because its designed for Cold War needs). I do not see any choice but to replenish equipment, ready stocks, materiel, etc.
But this is small compared to the cost of restoring our overstretched forces to their pre-war strength. Right now we are rapidly losing officers at the captain level, despite huge re-enlistment bonuses. We are having trouble recruiting into the Army, despite enlistment bonuses, and having already lowered standards for health, fitness, education and legal background.
We had that problem down here in New Orleans during Katrina. Half of our Guard’s hardware was in theatre. They spent days just trying to find basic trucks and helicopters.
Curious where you got the $7.2 million figure. In some of the assessments done by EPA, I have read they used a $3.7 million number. (This was at the time they were trying to apply a 40% discount to those over 70.)
Thank you for comment. We need to understand too that some of the wounded might not achieve a productive life and will require life-term care. How many talents hve we lost and will lose because of this is something we can only guess at. Might have been another Jimi Hendrix in there.
If the DOD were run like a business we would be down sizing it and we should. I would hope that when these new requests for procurement come up our congress take a long hard look at DOD budget requests. They are obscene even for “light trucks”… and hammers and towels and toilets.
$500,000 (thats the amount we pay to families who lost someone).
That’s how much they get after holy hell was raised by people like Don Imus.
Kind of ironic that the Repugs were hounding Clinton over Kosovo and Mogadishu… I seem to recall them saying Bill was straining our military back then…! 8-(
Can you tell us about some of the difficulties you got in trying to extract information? And did it become harder after the 2006 study came out?
All of the high water equipment was in the desert in Iraq.
Hand hits forehead.
The military does report hostile and non-hostile deaths, so mostly we believe that deaths such as this one are reported.
But they do not report non-hostile injuries. So if a soldier is hurt because his helicopter crashes during transportation (because it is flying at night because its not safe to fly during the day) that does not show up on the “wounded” list. The Pentagon keeps a second, hidden set of books for this kind of injury. This second set of books shows more than 70,000 of our troops have been wounded in action, injured in accidents, or suffered serious diseases that required them to be evacuated from the region.
look in the book in footnotes for $7.2 figure.
Don’t forget – contractors pay no payroll taxes or medical insurance premiums either! The gubmint pays for medical care for the contractors employees!
some numbers from some ‘friends’
Gotta make sure no one gets a Purple Heart that doesn’t qualify!
It was difficult to write this book, because of the way the government keeps its books. The government uses “cash” accounting, which only looks at expenditures THIS YEAR, instead of “accrual” accounting, (what businesses use) ,which counts the full cost of an item.
Secondly the Pentagon accounting is a nightmare. It has flunked its financial audit for the past 10 years in a row, and according to its own inspector general and auditors it has thousands of material weaknesses. It really has no idea where money is going. Moreover it uses various odd mehcanisms such as “cash flowing” to use mony intended for the end of the year at the beginning. And appropriations for something like “repairs” can be spent anywhere — in Kansas or Kandahar. So for all of us who are studying the cost of war (including the Congressional Research Service, the Congressional Budget Office, and the Joint Economic Committee), it has been very challenging.
Any sense about the level of theft? In my tours of Korea and Vietnam it was so widespread it was unreal. It’s hard for me to imagine resourceful GI’s are not liberating stuff.
So in your Congressional appearances, have you received any interest by the Dem committees in reforming the DoD accounting practices, or the way the US does its budgeting wrt to the “accrual” method? Or is all of this just a bridge too far? All the more reason to get the campaign advisers interested?
What about the DOD trillions missing that Rummy mentioned in Sept 01? Never mentioned since.
thanks for being here with us linda.
what surprised you most while doing the research for this book?
The issue of corruption has surfaced in particular with regard to Iraqi oil revenues. Even though Iraq has only barely returned to its pre-war levels of production, the increase in oil price from $25 per barrel to $100+ per barrel means that the Iraqis are earning much higher oil revenues. To date, not much of this money is being used for rebuilding Iraq, and there are serious allegations that it may be finding its way into private bank accounts.
i meant professor bilmes, meant no disrespect
Where bipartisanship really does exist it usually involves long running scams like the Social Security “surplus” or Pentagon budgeting. Can you really see John Murtha or Carl Levin actually go out on a limb for this?
Ms Bilmes, are you alleging corruption? You didn’t even mention the hundreds of thousands of barrels that are siphoned off and sent to the black market before they end up in our gas tanks.
We are literally BRIBING IRAQI TRIBES to fight each other. That is what our DOD is doing. passing out hundred and hundreds of thousands of dollars, See Dan Rather’s film .
What surprised me the most was how little planning had gone into this war.
For example, the VA ran out of money completely in 2005, 2006 and 2007 because it was basing its projections for medical needs on 2001-2002, before the war began.
On the military side, we did not plan ahead to procure good armour for our troops, so we had to “go to war with the Army we had” (as Rumsfeld put it), which meant not equipping our young people with the best protection. And then keeping them there for 15 months tours of duty — many serving 2nd, 3rd, and 4th tours — because we had not planned for a long occupation.
Another thing that surprised me was how we made stupid, tragic decisions in order to “save money”. For example, the Marines urgently requested in January 2005 that we buy MRAPs instead of Humvees, because MRAPs protect against explosive devices (IEDs) and Humvees do not. But the Pentagon didn’t do it because the MRAPs cost 3x the price of Humvees. Finally 2 years later in Feb 2007 when Gates got there he decided to replace all 18,000 Humvees with MRAPs. But in those 2 years, thousands of our troops were killed or severly injured by IEDs — and even apart from the financial cost, we’ll be paying the medical costs for these veterans for the rest of their lives.
CNN just cited your book, Linda! 8-)
You don’t have to call me Dr Raven!
Thank you to everyone who participated in this event. I hope you will read the book and recommend it your friends, colleagues, and elected officials.
If there is hope for the future, it is due to people like you who are participating intelligently in these kind of discussions. Best wishes, Linda Bilmes.
So we now know in spades what we knew before. The DOD is incompetent, the vendors are incompetent, the appropriations committee is incompetent.
Our DOD process is run by a series, thousands right down to the bean counters of incompetents.
Accountability moment.
Thanks Doc!
Thanks so much for coming to the Lake and answering our questions. It’s a great book, highly readable and a valuable resource.
Yes, Thank you! Very informative book!
Thank you for time today! Come back soon too!
Thank you so much Professor Bilmes, for this evening and for all the work you’ve done piecing this tragic accounting together. The numbers are just beyond comprehension. staggering.
and thanks, too, Scarecrow.
Thank you Professor Blimes.
Mahalo for being here today!
raven-you da ’man’ (i know, no chatter)
professor bilmes says–”when Gates got there he decided to replace all 18,000 Humvees with MRAPs. But in those 2 years, thousands of our troops were killed or severly injured by IEDs — and even apart from the financial cost, we’ll be paying the medical costs for these veterans for the rest of their lives.”
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and i bet the cost of 18,000 humvees and the medical costs might even-out that 3:1 cost ratio?
thanks, a lot to digest.
For those who haven’t ordered The Three Trillion Dollar War, you can order via the Amazon link in the Book Salon corner on the right. This is one you’ll want to have.
Thank you so much for all your hard work on this book.
Thank you, Dr Bilmes.
raven at 123 says-”You don’t have to call me Dr Raven!”
but we can, if we want to!
”you can call me ’ray’”
and i did # 137 AFTER our guest was gone, just want to clarify that.
thanks scarecrow, that was a good one.
You can call me jay but ya doesn’t have to call me. . . oops!
I was in a mixed service group and we had to constantly steal Army radios (PRC-10, etc) cuz the Navy’s didn’t cover the freqs we operated on. If something wasn’t nailed down it disappeared. Rampant. Everywhere.
Late to the thread & haven’t read all the comments, but what has become of the work of the commision on verterans medical treatment (Donna Shalala & someone else, maybe Bob Dole?)? It seems to have disappeared into the woodwork, a commission reports usually do.
raven-
”You can call me jay but ya doesn’t have to call me. . . oops!”
…….late for dinner…
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southerndragon–when i worked at the phone company we each had our own ’secret mark’ on our tools, but there were some who would steal ’em anyway……you’d be working with someone, usually a jerk, and THERE’S MY TOOOL! in their box.
you had to go through all kinds of stuff with your foreman to replace certain tools, so these ’lovely guys’ would just steal one so they didn’t have to….
The accrual problem is fascinating. My otherwise useless congressman, Jim Cooper, is really interested in this issue. He forced the government to begin the process of reporting on an accrual basis. I read the results of that in book form for a recent year, and the results of operations of the Pentagon are in fact indecipherable.
Just who in the White House is responsible for telling Bush the true cost of the war. Also given our Presidents handling of the economy does he really have an MBA or do you think he might have been “Passed”.
Cause either he is being lied too, he does not understand, or he is and has been lying to us all along.
[Mod Note: edited at commenter’s request.]
ecahn and anyone else i’ve emailed-email not working right for a few days according to server-i sent letters, don’tknow if they made it out yet, if you wrote me back, my email is not working correctly, if you didn’t, that’s ok…not working right out or in, so don’t know what’s still stuck in the server, they’re working on it. sent out one to someone, they sent back just fine, but noone else, and i know there’s a few in the tubes right now from friends that called.
they’re working on it.
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wow, what a book salon, gonna take a while to absorb it.
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harry shearer on, 2nd favorite radio show, be back later.
Mod my comment at 144 MBA or fu should read MBA or do could you please fix it? :)thanks
I did send you an email. Let me know if/when I should resend it.
thingscomeundone–i know people who worked their butts off for their masters and people who ’covered’ classes for professors to get theirs, some who didn’t even go to class that i could tell…….
ecahn–thanks, i’ll let you know, i think it has something to do with it being spring break and easter weekend, maybe the real talent is out of town. it’s a little local company, but they usually are right on top of everything, that’s why i stay with them. so, don’t know what it is…..should be soon.