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Friday, January 20, 2006


In last Sunday's NYTimes Louis Uchitelle presented this column about the cost of the Iraq War. Not that there was any agenda involved...

The economics of war is a subject that goes back centuries. But in the cost-benefit analyses of past American wars, a soldier killed or wounded in battle was typically thought of not as a cost but as a sacrifice, an inevitable and sad consequence in achieving a victory that protected and enhanced the country. The victory was a benefit that offset the cost of death.

The newest research was a paper posted last week on the Web ( by two antiwar Democrats from the Clinton administration: Joseph E. Stiglitz of Columbia University and Linda Bilmes, now at the Kennedy School of Government at Harvard. Their upper-end, long-term cost estimate tops $1 trillion, based on the death and damage caused by the war to date. They assumed an American presence in Iraq through at least 2010, and their estimate includes the war's contribution to higher domestic petroleum prices. They also argue that while military spending has contributed to economic growth, that growth would have been greater if the outlays had gone instead to highways, schools, civilian research and other more productive investment.
Actually these cost estimates run in 10-15% of GDP range including an estimate for lives cut short. A number of previous wars have been in the 30-80% range without any estimate for the cost of lives cut short. Think triple digit costs by comparable measure. Actually, here is a chart of direct costs of wars of the past.

In a paper last September, for example, Scott Wallsten, a resident scholar at the conservative American Enterprise Institute, and Katrina Kosec, a research assistant, listed as benefits "no longer enforcing U.N. sanctions such as the 'no-fly zone' in northern and southern Iraq and people no longer being murdered by Saddam Hussein's regime."

They concluded that the value of these benefits was relatively small - fair enough. What if this is an important step in defeating Islamofascism? The benefit of that would be enormous!

Anyone in denial over the Saddam - Al Qaeda connection might want to look at this column.

A three pronged approach is needed: physically defeating Islamist, playing the propaganda game, discrediting a dangerous ideology by supporting a new political example in a troubled region. It is a high risk - high reward strategy.

cost of lives cut short: $xxx
direct and indirect cost of military operations: $yyy
chance to defeat the latest flavor of totalitarianism: priceless

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