Hidden costs drive wars’ tab to $1.5 trillion, study finds
WASHINGTON - The economic costs to the United States of the wars in Iraq and Afghanistan so far total about $1.5 trillion, according to a new congressional study that estimates the conflicts’ “hidden costs” - including higher oil prices, the expense of treating wounded veterans and interest payments on the money borrowed to pay for the wars.
That amount is nearly double the $804 billion the White House has spent or requested to wage these wars through 2008, according to the majority staff of Congress’ Joint Economic Committee.
The report argues that war funding is diverting billions of dollars away from “productive investment” by American businesses in the United States. It also says the conflicts are pulling reservists and National Guard members away from their jobs, resulting in economic disruptions for U.S. employers that the report estimates at $1 billion to $2 billion.
The report estimates that the cost to the average family could more than double, to $46,300, over the next 10 years, with estimated economic costs reaching an estimated $3.5 trillion if the wars continue apace.
The committee, which includes House and Senate members from both parties and is chaired by Sen. Charles Schumer, D-N.Y., is expected to present the report this morning on Capitol Hill.
War-funding experts said the committee raises viable arguments but that some of the numbers should be met with skepticism. For example, it is difficult to calculate the precise impact of the Iraq war on global oil prices, and it is speculative to estimate how much the war will cost over time, as situations change daily on the battlefield.
Oil prices have more than tripled since the U.S.-led invasion of Iraq in March 2003, the report notes, to a peak of more than $90 per barrel. “The war in Iraq is certainly not responsible for all of this increase,” the report states, but it estimates that declining Iraqi production “has likely raised oil prices in the U.S. by between $4 and $5 a barrel.” The report added that “because of the many factors affecting oil markets, this should be seen as a highly approximate estimate.”
The committee estimated that injuries due to the wars could add more than $30 billion in future disability and medical care costs, including billions in lost earnings for veterans who cannot work because of post-traumatic stress disorder.
Although war costs have risen each year and the fiscal 2008 funding request is the highest so far, the direct and indirect costs of Iraq and Afghanistan are much lower than the costs of World War II and are just passing those of the Vietnam War. World War II is estimated to have cost $4.9 trillion in today’s dollars. According to Congressional Research Service reports, the Vietnam War cost $600 billion in today’s dollars and the 1991 Persian Gulf War cost $80 billion.