This is not meant to be a thread on the right/wrongs of the Iraq war.
I am just curious when the media reports that it costs the US $340 million/day for the war if that number is over what it would cost if the military was all at home?
Certainly being overseas in a combat area is more expensive. Shipping supplies, lost equipment, medical care and so on are increased. But if the whole military was sitting back in the US you’d still be paying the soldiers and buying equipment and paying for combat exercises and so on.
So if the military was at home would that $340 million/day disappear or turn into something like $300 million/day (just grabbed $300 million as a random example)?
The cost of the war as generally reported by the media is indeed the marginal cost. Since 2001, overseas military operations have been funded separately from the baseline (some say “peacetime”) cost of the military. To put it simply, Congress passes one appropriations bill for the routine costs of the military (including pay for active duty military) and another supplemental appropriations bill for the wartime costs (including pay for National Guardsmen who are activated to be sent overseas). So your theoretical figure of $340 million would be zero if the war were not ongoing.
There are a few areas in which costs get mixed, but the figures you see in the media are very close to the true direct costs borne by the government. There have been other figures floated (ranging into the trillions of dollars) that are estimates of indirect costs (e.g., oil prices, future payment of debt, economic downturn, etc) but those are not realized costs that the government would pay directly.
I would guess that fuel alone would be a huge cost for the war. As an example, the M-1 Abrams Main Battle Tank gets .6 miles to the gallon according to globalsecurity.org. I happen to be serving in a cavalry regiment right now, so I can say from personal experience that while at home those tank don’t move an inch for the most part.
FWIW not an entirely theoretical figure. I got it from here. They look like they have an agenda but I suspect whatever the number is it would be something in that ballpark.
Upon a day’s reflection, there’s one thing I left out – a substantial part of the reason that war costs keep escalating is that the longer our troops and their equipment are overseas, the more “reset” costs there are going to be. Reset is a term for making sure that when troops come back, their worn-down equipment is either fixed or replaced. The longer Humvees are used, for example, more and more will need replacements.
Costs for reset of equipment will continue for probably a couple years after we’re done with Iraq, somewhere in the broad range from maybe something like $30 billion at the low end to maybe something like $120 billion toward the high end. Additional DOD health care costs would also continue for some time, but I can’t even give a WAG on that. So war costs wouldn’t drop to zero immediately upon withdrawal, but they would go to zero within a couple years.
That quote is at odds with what Joseph Stigliz, her co-author, has said in numerous public statements.
For example, in these remarks Stiglitz focuses on future entitlement spending, opportunity cost, the cost of oil, the non-stimulation of the economy by war spending, increasing debt and the “crowding out” issue for interest rates, and the effect on the economy. One cannot read pages 5 and 6 without getting deeply into the indirect costs that are NOT paid through government expenditures.
Same thing here: “Finally, our $3 trillion dollars estimate also includes costs to the economy that go beyond the budget, for instance the cost of caring for the huge number of returning disabled veterans that go beyond the costs borne by the federal government - in one out of five families with a serious disability, someone has to give up a job. The macro-economic costs are even larger. Almost every expert we have talked to agrees that the war has had something to do with the rise in the price of oil; it was not just an accident that oil prices began to soar at the same time as the war began.”
It appears that Ms. Blimes and Dr. Stiglitz need to get on the same page.
To estimate the true cost don’t you have to subtract out all the money made by people in Iraq. I know a contractor and he is doing very well with all the new governement business he got. His wife and kids now have a lot more than he could’ve ever got without that Iraq business.
Now I’m not saying the opportunities like this offset the cost of the war but certainly they must be subtracted out. OK it won’t help a lot probably but still shouldn’t that be subtracted out?
The amount of extra tax revenue can be subtracted out, but the number of people making money in Iraq or due to the war is likely to be a tiny fraction of the number who are losing money because of the price of oil or whatever.
And whenever I buy a jug of milk from the grocery store, the grocery store owner and employees, the dairy farmers, and the truckers who delivered it all make a profit. Do I have to subtract out their profits from “the true price of a jug of milk”? Because if I do that, it turns out that milk is free.