The Tab, Please: How Much For The War In Iraq?

Every taxpayer can expect to pay more than $300.

The fighting is over in Iraq, and now someone has to pick up the tab for the
hundreds of Tomahawk cruise missiles fired and JDAM bombs dropped. Someone
will also have to cover the cost of fixing Iraq’s oil wells, constructing a
telecommunications network within the country and generally maintaining
order, among other things.

That “someone” is going to be you, me, and each and every American taxpayer.

With Congress recently green-lighting a $74.7 billion budget to cover
expenses related to the war, the cost per citizen averages out to about
$324. That’s almost an Apple iPod ($399), the cost of a round-trip ticket
from New York to Los Angeles ($330), 19 Eminem CDs (at $16.99 each), or 33
thongs on sale at Victoria’s Secret (three for $29.50).

How did this war measure up to previous American conflicts? Consider this:
in 2002 dollars, the Iraq war costs more than the Revolutionary War ($2.2
billion), the War of 1812 ($1.1 billion), the Mexican-American War ($1.6
billion) and the Civil War ($62 billion) combined. While it will likely end
up costing about the same as the first Gulf War in 1991, the United States
had a broad coalition of partners in that conflict, from Germany and France
to Syria, who helped foot the bill.

So much for the cost of the war. What about the cost of peace? Housing,
feeding, and clothing the roughly 140,000 American troops currently in Iraq
isn’t cheap. And rebuilding Iraq’s infrastructure will be a major venture.

No one really knows how much it will ultimately cost. In fact, the Bush
administration’s top spokespeople on Iraq have specifically avoided venturing
even an educated guess in public.

At a Thursday hearing on Capitol Hill, senators pressed Deputy Secretary of
Defense Paul Wolfowitz hard to give a ballpark figure.

He declined to offer one. “The problem is it’s very difficult to predict
that,” he said, according to news agency UPI.

At a separate congressional hearing, Undersecretary of Defense Douglas J.
Feith was asked what the Pentagon believes the cost to rebuild would be. He said no
estimate exists.

Pushed for more details, Feith said, “I am not aware that anybody has pulled
together all of the threads.”

The Bush administration has long contended that much of the reconstruction
of Iraq could be paid for through revenues generated by the sale of the
country’s oil. But that was based on the assumption that petroleum
production and exports would restart quickly and ramp up beyond pre-war
levels of 2.5 million barrels a day.

That now looks highly unlikely. With the country’s petroleum business a
shambles due to looting, the country is struggling to produce just half the oil it did before the war. It could be years before Iraq becomes one of the world’s most elite oil exporters. Until then, the U.S. will have to spend out of pocket to modernize the country’s
antiquated operations.

Congress has already approved $2.5 billion toward overall post-war
reconstruction but that could be just a small fraction of what ultimately
will be needed.

“Just to get to 1 million barrels a day [output] they’ll need a $5 billion
investment in the oil fields,” Senator Joseph Biden (D-Delaware) estimated
during a recent hearing. Biden has long been one of the most vocal critics
of the administration’s post-war plans.

And there are plenty of major, costly infrastructure issues in Iraq as well.
It is estimated that just 3 percent of Iraqis have a telephone line in their
home. A report by the investment bank UBS Warburg estimates that it will
cost as much as $900 million to create a modern telecommunications network,
according to The Washington Post.

Meanwhile, there is the thorny problem of Iraq’s debt, which totals $26
billion from the 1970s and 1980s. Russia alone is owed $8 billion.

Wolfowitz has argued that the creditors should forgive all outstanding loans
and let post-Saddam Iraq start from scratch. The Russians, who have major
economic problems of their own, have been cool to the idea. Other creditors
include France and Germany and they too have yet to indicate that they are
willing to forgive the debts.

So long as those creditor nations are waiting in line for repayment, the
chances that Iraqi oil revenues will cover America’s out-of-pocket costs dim
further.

There are also the indirect costs involved with the post-war cleanup. The
U.S. is giving $8 billion to countries that lent their support to the war, or
at least stayed quiet and on the sidelines as it was being fought. Among
these is Jordan, which recently received $700 million to compensate for the
damage its economy suffered due to the war. Other countries include Israel,
Pakistan and Afghanistan.

Already, the war has impacted Americans beyond the $324 each has had to fork
over to cover its costs. “One of the ways in which a lot of us paid is in
the higher oil prices we saw in November and December, which was
attributable to the uncertainty of war,” said Dean Baker, co-director of the
nonpartisan Center for Economic Policy and Research in Washington, D.C.
While those prices have, for the most part, come back down to pre-war levels,
Baker said other areas of the economy might also be impacted.

“We don’t know, and the president doesn’t know, how long we’ll be occupying
Iraq. It could be a month or five years,” Baker said. “There will be costs
associated with that and we’ll pay them. For some time there will also be
hostility towards the United States around the world because a lot of people
did not agree with the war.” Baker said that hostility could result in fewer
American-made goods being sold abroad, from McDonald’s burgers to Boeing
jets.

As for the old WWII-era adage that war is good for the economy, Baker said
it’s just not as relevant anymore. “We needed World War II to stimulate the
economy,” he said. “We needed the government to spend a lot of money then.
Even the Korean War was a boost, with increased spending of nearly $700
billion. But this package is less than one-tenth of that, so it’s not the
same story.”

Either way, some supporters of the war argue that the final figures pale in
comparison to the potential costs of not going to war. “If we hadn’t gone to
war, someday a container ship off the coast might have launched a missile at
New York, or farther inland,” said David Almasi of the National Center for
Policy Research, a Washington, D.C.-based conservative think tank. “If we
hadn’t taken action against Hussein, we might be back there soon trying to
liberate Kuwait again, or another country in the region. You could say the
same thing for North Korea. Now that we know they have nuclear weapons, the
danger of going in there is higher, and perhaps we should have acted
earlier.”

— Gil Kaufman and Ethan Zindler, with additional reporting by Gideon Yago

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