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 [article id="1453176"]Gideon Yago[/article]

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