THE human cost of the more than 2,000 American military personnel
killed and 14,500 wounded so far in Iraq and Afghanistan is all too
apparent. But the financial toll is still largely hidden from public
view and, like the suffering of those who have lost loved ones, will
persist long after the fighting is over.
The cost goes well beyond the more than $250 billion already spent on
military operations and reconstruction. Basic running costs of the
current conflicts are $6 billion a month - a figure that reflects the
Pentagon's unprecedented reliance on expensive private contractors.
Other factors keeping costs high include inducements for recruits and
for military personnel serving second and third deployments, extra pay
for reservists and members of the National Guard, as well as more than
$2 billion a year in additional foreign aid to Jordan, Pakistan, Turkey
and others to reward their cooperation in Iraq and Afghanistan. The bill
for repairing and replacing military hardware is $20 billion a year,
according to figures from the Congressional Budget Office.
But the biggest long-term costs are disability and health payments for
returning troops, which will be incurred even if hostilities were to
stop tomorrow. The United States currently pays more than $2 billion in
disability claims per year for 159,000 veterans of the 1991 gulf war,
even though that conflict lasted only five weeks, with 148 dead and 467
wounded. Even assuming that the 525,000 American troops who have so far
served in Iraq and Afghanistan will require treatment only on the same
scale as their predecessors from the gulf war, these payments are likely
to run at $7 billion a year for the next 45 years.
All of this spending will need to be financed by adding to the federal
debt. Extra interest payments will total $200 billion or more even if
the borrowing is repaid quickly. Conflict in the Middle East has also
played a part in doubling the price of oil from $30 a barrel just prior
to the invasion of Iraq in March 2003 to $60 a barrel today. Each $5
increase in the price of oil reduces our national income by about $17
billion a year.
Even by this simple yardstick, if the American military presence in the
region lasts another five years, the total outlay for the war could
stretch to more than $1.3 trillion, or $11,300 for every household in
the United States.
Linda Bilmes, an assistant secretary at the Department of Commerce from
1999 to 2001, teaches budgeting and public finance at the Kennedy School
of Government at Harvard. |