Book Review of Joseph E. Stiglitz and Linda Bilmes's The Three Trillion Dollar War

By Gerald L. Houseman

Truth is an inevitable casualty of war, and the war of choice undertaken in Iraq is no exception. Lawrence Lindsey, an economic adviser to Bush in 2002, was fired for giving the press his estimate of an overall cost of $200 billion for the this war; Defense Secretary Rumsfeld oracularly declared this to be “baloney.” At the moment the total expenditure is in the neighborhood of $800 billion, but Stiglitz and Bilmes, as their title indicates, say a conservative estimate of the final cost will be $3 trillion. Any reader of their discouraging tome would be justified, all the same, in concluding that the tab, for a wide assortment of reasons, will be considerably higher.

Few will be surprised to know that the Bush Administration hides the figures. The “emergency” funding system adopted in place of a regular appropriation escapes normal scrutiny or budget caps. The “Decider’s” government also mocks the truth with its secrecy assault on the number of casualties, including those occurring during non-combat operations, even though these are vital for budgeting; and it works hard to insure that its expenditures for those infamous mercenaries, the 140,000 or so contractors and sub-contractors, must be the subject of guesswork as well. Then there are the endemic problems of Pentagon accounting, which has been in need of an overhaul for several generations. And cost estimates are also made impossible by being hidden in other parts of the Pentagon budget and in other agencies of the government.

Such obstacles do not leave these co-authors clueless, however. They provide a list of considerations far too long to set out here, but these include the cost of replacing equipment, the inefficiencies of relying so much on the National Guard, the full costs of health care and disability payments for thousands of returning veterans, restoring and re-structuring the Army, inflation, interest (because the war is largely debt-financed), and of course the macro-economic effects felt and endured by the populace. Stiglitz and Bilmes do not go into detail on that king of boondoggles, the Vatican-sized embassy now under construction in Baghdad, and they have little to say about the complex of bases Bush has proposed to build — and is now building — to protect Iraq’s (and our Texas-led and-centered) oil domain.

All of this can seem a peripheral concern when one remembers the massive numbers of horrors and deaths visited upon the people of that unfortunate country; and it goes without saying that the budgetary and accounting horrors pale for anyone who, like myself, has visited a VA facility and has observed a maimed young person trying to cope with a new and unfamiliar kind of existence.

Despite such obvious considerations, we must salute Stiglitz and Bilmes for performing a yeoman service. This is a time in which information blanks appear to be far more abundant than facts, when knowledge is thwarted by secrecy and executive orders, and laws are made up to serve expediency without benefit of much or even any review. Pentagon budgetary affairs are addressed on occasions too few and far between, and these hard researchers (and good websites like the Center for Defense Information) strive to give us some kind of a handle on what is going on.

Stiglitz and Bilmes can in no way be regarded as coldly detached. They point out that most Americans have failed to realize the costs of the Iraq war unless they are family members involved with the voluntary military. Their taxes have not been raised to pay for the war, and the rich have actually enjoyed tax cuts, a previously unheard-of benefit in wartime. But deficit spending cannot be ignored forever, and the nation’s gas pumps now display the cost of the weakened dollar, which in its turn is one of the costs of deficits and the war. And that’s not “baloney.”

Gerald L. Houseman is the author of Economics in a Changed Universe: Joseph E. Stiglitz, Globalization, and the Death of "Free Enterprise".