War Costs Update

May 3, 2007 at 10:02 am
Contributed by: Chris


I have been meaning to revisit the cost of the Iraq war for some time, but this snippet from yesterday’s Progress Report did a suitable job of it, so I’m just pasting it here.

Back in 2003-4, I had numerous email conversations that went on for days with some of my readers about the expected cost of the war. Somehow, they believed the Administration’s lowball estimates, claiming that the $200 billion figure cited by White House economic adviser Lawrence Lindsey was way over the top, that it was the result of “double counting” and a whole lot of other nonsense.

I, for one, never bought that. I thought $200 billion and several years was itself extremely lowball…and so far, I’ve been right.

Not that any of the aforementioned readers have had the decency to admit it.

This war isn’t going away any time soon. Not even if the Congress votes to de-fund it. The Saudis have said recently and publicly that our occupation of Iraq is illegal and unjustified, but I think that’s just a requisite CYA for domestic assuagement. They know better than anyone that if the U.S. military wasn’t in Iraq right now quelling the Shi’ites, that Saudi forces would have to step into the breach–which they no-how want to do. They need us there to fight a proxy war for them.

Especially now that a recent Woods-Mackenzie study has reviewed Iraq’s oil reserves and concluded that they were much larger than previously thought–second only to Saudi Arabia’s–there’s no way we can leave Iraq. Not now, and probably not ever.

So what does this do for the accounting on the War on Terror War for Energy?

I’m now raising my estimate: Half a trillion is still lowballing it. Big time.

The U.S. military has spent an average of $44 billion a year to protect oil operations in the Persian Gulf, and they’ve been doing that for years. Here’s a sneak preview from a new article I just finished, which will go out later this week:

We import about 800 million barrels per year of black gold from the Persian Gulf. Divided into $44 billion, that works out to slightly less than $55 a barrel. When oil is trading on the open market around $65!

If those protection costs weren’t externalized onto the U.S. military (your tax dollars at work!) but priced into the world market, I reckon that would put oil at around $120 a barrel.

Does anybody still think renewable energy is too expensive compared to oil?

This administration has lied pretty much every time it has opened its mouth about the Iraq war. From the missing WMDs to the purported connections between Saddam and al Qaeda; from the alleged attempt to purchase Nigerian yellowcake to the outing of Valerie Plame; from the assertion that Iraq could fund its own reconstruction to the firing of the guy who provided the (lowball) $200 billion estimate; from the promise that we would be greeted as liberators, to the denial that Iraq has descended into a civil war that we cannot win; from the completely fabricated stories about Pat Tillman and Jessica Lynch, to the persistent under-reporting of casualties, woundings and long-term illnesses suffered by soldiers; from the “they hate us because we’re free” pabulum to the secretive attempt to privatize Iraq’s oil wealth and put it into the hands of U.S. oil companies…it has been one, big, fat, cynical, outrageous, and unforgiveable lie.

And speaking of shamless liars, check out the latest bit of “revisionist history” visited upon us by none other than Mr. “Global Warming is a Hoax” himself:

“The whole idea of weapons of mass destruction was never the issue, yet they keep trying to bring this up.”

— Sen. James Inhofe (R-OK), 4/27/07, criticizing Congress and the media for “mischaracterizing” the reasons for U.S. involvement in Iraq


“Our intelligence system has said that we know that Saddam Hussein has weapons of mass destruction — I believe including nuclear.”

— Inhofe, 8/18/02

Ugh. I mean…??? How dumb (or forgetful) do these guys think we are?

When I think about how that half a trillion plus has been and will be spent, with hardly any serious debate on the alternatives…and then think about how far half a trillion would take us in developing renewables and weaning ourselves off of foreign oil…I just shake my head. It just seems too brain-dead to be true. Is there nobody driving this bus?

But that discussion is for another time…

Until then,


According to the Congressional
Research Service
, the vetoed
$124 billion Iraq supplemental and the President’s new “request for $116
billion” to fund the war in the next fiscal year will “push
the total for Iraq to $564 billion
.” That amount is “about ten
times more
than the Bush administration anticipated before the war started
four years ago, and no one can predict how high the tab will go.” Before the
war, the White House estimated the “conflict would cost about $50 billion” and
“White House economic adviser Lawrence Lindsey lost
his job after he offered a $200 billion estimate
.” Robert Hormats, author of
The Price of Liberty, worries that the Bush administration’s “painless” approach
to war funding in which the “average American” feels “no economic consequence”
will hamper our nation’s ability to address domestic concerns like Social
Security and Medicare. A new
by the Center for Economic and Policy Research shows that Hormats’s
concerns are legitimate and that sustained expenses of the war in Iraq will
likely lead “to fewer
jobs and slower economic growth
.” The study shows that while some short-term
benefits to increased military spending are likely, the long-term strains on the
economy produces “considerably
” inflation and interest rates, reduces the number of available jobs,
and “diverts
from productive uses, such as consumption and investment.” As
Hormats said of the war time economy, “You
can’t have business as usual

1 Comment

  1. Hey folks,

    You can call this a war on energy if you like, but that is a gross over-
    simplification of the inneptitude that is neoconservatism and the Bush
    White House. I wish it had been about energy because at least then the
    Bush Administration would have shown some strategic sense. Besides,
    Saddam was good for oil in that he kept if flowing–Iraq is still not up to
    pre-Saddam production level.

    I never supported the nutty idea of an interventionist policy that was the
    genesis for invading Iraq and also never thought that it would be
    cheap. Frankly, I care about only one people, the American people, and
    preserving their interests. Which is why I  didn’t want us in Somalia
    and don’t want us in Darfur or any other foreign land not critical to our
    nation’s interest.

    I think you are correct in noting whether those wanting an immediate
    exit out of Iraq are ready for the very real possibility of a regional war,
    one that could go critical? What if the Saudis believe that now is the time
    to settle the Sunni-Shi’ite issue once and for all. We might conclude that
    leaving Iraq abruptly is just as short-sighted as getting in was.

    There may be an argument for staying in Iraq while we rebuild our Army
    and Marines, that has begun only now, to a sufficient size needed to
    dominate in inter-Iraq battle so that we can force an amicable and fair
    government structure, because the cost, both human and financial, may
    be high but the cost if we just leave Iraq now could be even higher. That
    must, simply must be considered in the calculus that forms our

    And, lest anyone think that I’m some gutless, silk-suit neocon like so
    many in the Bush Administration, beginning on 9/11, when I was 38, and
    only up until last December, I worked hard to get inducted into any
    branch of the military, but was consistently told I was too old. Finally,
    last December my own two war-hawk Senators told me it wasn’t going
    to happen. I wanted to join to put my engineering graduate degree to
    work against those who killed so many of our countrymen. 

    It’s off-topic, but I am getting closer to Chairman Charlie Rangle’s
    thinking that it may be time to re-introduce the draft because all should
    serve, even when they don’t want to, regardless of economic status.  It
    is odd though that it’s a Democrat, and Korean War vet, proposing
    something that a Republican should be shouting from the highest
    mountain. Makes me love the guy even more.

    Jim Hillhouse

    Comment by Anonymous — May 5, 2007 @ 1:02 pm

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