Q: Using your format for calculation of the Iraq war's cost, what would the cost of WWII actually be? Would it not potentially exceed the cumulative GDP of every year since 1941 in current dollars? Could your format be applied to unfunded Social Security and Medicare obligations and what would that cost be?

Submitted by Phil Brewster from Overland Park, KS

A: We believe that the kind of approach that we have taken for the Iraq war should become a matter of routine--we should do it for any future war. It would be of considerable historical interest to do it for earlier wars, but it would be an enormous amount of work. (Getting the information and analyzing it for the Iraq war was a major undertaking, and we were able to make use of a number of studies--of a kind that are not available for earlier wars.) The costs of caring for veterans of World War IIand providing disability compensation has been significant. In fact, expenditures didn't peak until 1993, 48 years after the cessation of hostilities--an important warning that we will be paying the bills for the Iraq war for decades to come. But medicine was not as good then as it is today, so the ratio of those who survived injuries to those who died was much lower. The unfunded liability associated with Social Security and Medicare obligations are large, though the nature of the uncertainties in their magnitude are quite different. For instance, in the case of social security, the gap in funding may be relatively small if migration continues at the current rate (measured as a percentage of our work force.) Still, under standard assumptions (which assume more limited migration), the gap in finance is sufficiently small that we could put social security on sound financial footing for the next fifty to seventy five years with a fraction of what the Iraq war has cost our economy.

Answered 04/09/08 18:52:20 by Joseph Stiglitz

Q: If you assume a 90% drawdown in Iraq of U.S. combat troops and contractor support within the next two years, what kind of macro economic policy would you prescribe to address our structural deficit and the declining income prospects of a growing proportion of Americans?

Submitted by Mark Wormington from Longview, WA

A: We have to realize that the peace dividend is going to be smaller than many people believe--we will stay have to pay disability benefits and health care for the many returning veterans, and we will have to pay to restore the military to its pre-war strength. Leaving Iraq will provide us an opportunity to ask the more fundamental question: how best to provide for our security in the twenty-first century. The Cold War is over, yet much of our military strategy remains unchanged. We are investing billions of dollars in weapons that don't work against enemies that don't exist. We can go more security for fewer dollars, and use the remaining dollars for investments that increase the productivity--and the wages--of the growing proportion of Americans who have seen their real incomes decline in the last 8 years.

Answered 04/09/08 18:43:37 by Joseph Stiglitz

Q: Thank you for writing the book and for raising awareness of the combined financial and human costs of this tragic fiasco (I am reading my copy). What else can we do as ordinary citizens to influence our elected officials to at least abandon the "emergency" supplemental appropriations in favor of proper budgeting of the Iraq war costs, when the burn rate is now known and predictable. I have written to my Senators and Congressman about this specific concern and have had LTEs published, including in both cases references to your excellent 2006 paper ("The Economic Costs of the Iraq War"). Not surprisingly the only coherent response to this specific question has been from my Senator Durbin.

Submitted by Robert Teiken from Crystal Lake, IL

A: Keep up doing what you are doing. Go to a campaign stop of your Congressman and ask him--put him on the spot. I think there is insufficient knowledge of the problem. Figure out a good time to write a letter to the editor to your local newspaper on the topic--for instance, the next time the President again uses an emergency appropriation to get more money for the war.

Answered 04/09/08 18:40:06 by Joseph Stiglitz

Q: So why was the true cost of the war so vastly underestimated? How expensive will this war get in terms of dollars if the conflict stretches out another five years?

Submitted by Jim from Rockville, MD

A: It appears that it was underestimated initially because the Administration ignored the voices of those who raised the cost issue. You recall that Larry Lindsey, the National Economic Advisor at the time, said that the war might cost $200 bn (instead of the $50 billion that Runmsfeld and Wolforwitz promised), and Lindsey was fired for his opinion. In academia, Yale Professor William Nordhaus published a very detailed study in 2003 showing that the war costs could reach $2 trillion if the war went badly -- again, the Administration seemed to expect a short, quick war and paid no attention. In addition, there were pockets of incredibly poor planning - the Dept of Veterans Affairs in 2005 and 2006 was still estimating costs based on its projections from 2001 -- before the war even started. And the Pentagon -which has flunked its financial audits for the past 10 years straight and has no system of tracking expenditures -- was incapable of producing a coherent long-term estimate of depreciation of equipment, munitions, etc. (Outside experts had to do this). In our book we estimate the costs through 2017 under 2 scenarios; first a fairly rapid drawdown of troops and cutting back on the mission of those remaining; and second a more slow drawdown with a continued military mission. You can read the details in the book but essentially it costs around $1 trillion more for the second scenario.

Answered 04/09/08 14:01:08 by Linda Bilmes

Q: Why don't you show in more detail what each 12 billion dollars each month would buy? Billions. trillions of dollars, these are abstractions for the public. Talk in terms of schools built, highways fixed, healthcare provided ect. Than it will sink in and make a difference.

Submitted by K.B. from Newark, New Jersey

A: go to national priorities project .org and they provide that information

Answered 04/09/08 13:54:29 by Linda Bilmes

Q: I wonder how much of the three trillion dollar amount is from the lack of accounting oversite. The Bush administration has blocked many oversite initiatives. We need a new Truman commission to hold military contractors and suppliers accountable and liable for sanctions. Professor Stiglit's book is horrific to any rational American..

Submitted by Michael Niebauer from Coalport PA

A: You are right. In the private sector, the Congress almost unanimously passed the Sarbanes-Oxley law which requires detail accountability for financial reports. This followed the Enron and other acccounting scandals. But there is no comparable requirement in government. The war has been funded through a series of "emergency" supplementals, which circumvent all the normal checks and balances on spending, and avoid all the normal oversight mechanisms in government. The lack of oversight has led to profiteering, overpayments to contracts, the fact that KBR has been able to evade hundreds of millions in taxes by employing people through shell companies in the Cayman Islands -- etc.

Answered 04/09/08 13:53:14 by Linda Bilmes

Q: Does $3 trillion include only the Iraq War, or the cost of the larger War on Terror, including the cost of future wars, should we ever decide to confront those actually responsible for the attacks on 9/11 and the rise of Al Qaeda? http://www.asecondlookatthesaudis.com Thanks.

Submitted by Bill B. from Chicago, IL

A: The $3 trillion refers to the cash cost of the war to date, + the long-term costs of providing medical care and disability compensation to veterans, + the cost of military reset (equipment and personnel) + interest costs if you count budgetary costs or economic and social costs if you account for war costs on an economic basis.

Answered 04/09/08 13:49:50 by Linda Bilmes

Q: Americans can't grasp the incredible cost of this War of Choice. Suggestion: United States University Economists/Professors, from several schools, host a joint meeting asap. The audience majority should include "average" Americans and your assignment is to allow them to ask questions and for your panel to answer these inquiries in common sense words. The Main Stream Media has rarely attempted to educate us about this War of Choice. With no DRAFT, most Americans read a few headlines and go about their daily lives with little understanding of just how they are being impacted on a daily basis and will be for years/generations to come. MAKE A SPLASH TO GET THE NEWS COVERAGE SO DESPERATELY NEEDED. THE MSM IS LAZY AT BEST. Inviting "average" Americans will be most helpful. Salesclerks, farmers, auto workers, office workers, cooks and servers, bus drivers, small shop owners, teachers, truckers, and on and on. Sorry but very few will buy and read your book. You need to step it up to the next level by educating us. How about it? There is little time to wait.

Submitted by Midwest Maggie from Highland Park, IL

A: I am just an ordinary professor doing research with the help of some student volunteers and 1/2 of a faculty assistant. But remember what we know from the Bible. In the loaves and fishes story -- even one small boy could make a difference. In Elija (2 Kings 4:42-43) there is a similar story of loaves of barley. We can each make a difference -- I urge you to go forth and try to help with this!

Answered 04/09/08 13:47:49 by Linda Bilmes

Q: What do you think the result of this expense will be on the pocketbook of the average American family? How will this effect the value of the US dollar and the cost of everyday products, food, clothing, not big screen TV’s?

Submitted by Fred Lang from Wilmington, De

A: Right now the average American household spends $100 per month to support the war (directly) and racks up another $100 in debt every month for long-term war costs (such as long-term medical care for wounded veterans). In addition, the war has contributed to the increased in oil prices. Oil cost $25 per barrel before we invaded Iraq and it now costs more than $100 per barrel. In our book we only attribute $5-$10 of this increase directly to the Iraq war but even this amount increased what we spend every month.

Answered 04/09/08 13:39:40 by Linda Bilmes

Q: One comment that has been raised is: What would have been the cost of doing nothing? How do you respond? Bill Gerling

Submitted by William Gerling from Dallas Tx

A: Remember that prior to the invasion of Iraq we were actively following a policy of containment that involved enforcing the southern and northern "no-fly" zones in Iraq. That policy, which involved flying some 30,000 sorties per year, cost some $10 billion per year. It was an effective policy since it did apparently stop Iraq from developing any weapons of mass destruction. We have substracted this amount (over $50 bn by now) from the cost of the war.

Answered 04/09/08 13:37:10 by Linda Bilmes

Q: Given that current estimates project a 3,000,000,000 pricetag for the current war, if John McCain is elected President and we maintain troops for at least another decade, what would the projected cost to our economy be? What would the personal responsibility of every individual in this country be for such an amount. I would suggest that every American considering electing John McCain be sent a bill requesting a check for their share of the total cost. Those of us opposed to this war will happily earmark our share of the burden towards helping those injured and/or in need as a result of this debacle.

Submitted by William Rothschild from Monterey, CA

A: Every American household will this year pay about $1200 for the war -- $2000 if you include the long-term costs of caring for veterans and military reset. To date we are just borrowing this money and none of the candidates has addressed the issue of how we pay for the ongoing cost.

Answered 04/09/08 13:34:42 by Linda Bilmes

Q: What will be the cost of taking care (Physically & Mentally) of our troops once they come bk from Iraq?

Submitted by Patrick Hall from Orlando, FL

A: The overall long-term cost of providing medical care and disability compensation to veterans from Iraq and Afghanistan, over the course of their lives, is some $500-$700 billion in today's dollars.

Answered 04/09/08 13:32:54 by Linda Bilmes

Q: what sort of a world class transportation system could we have built in the U.S. wth 3 trillion? and how many people would have been put to work doing this.

Submitted by rob trerotoli from fort lauderdale fl

A: There are so many big problems that could have been fixed with the $600bn we have already spent -- making Social Security solvent for 50 years, or providing health insurance for children, or re-investing in our infrastructure, which would have stumulated the economy for decades to come. The opportunity cost of the war -- which we have not quantified in our book - is staggering.

Answered 04/09/08 13:31:37 by Linda Bilmes

Q: Why does the media consistantly let the Bush administration (and much of Congress) get away with ignoring costs of war like debt service and long-term health care ?

Submitted by Erik from Billings, Montana

A: There has been some excellent reporting in the media -- including reports by Stella Hopkins (Charlotte Observer), Charles Sennott (Boston Globe) Dana Priest (Washington Post), Nick Kristof and Bob Herbert (NY Times), David Francis (Christian Science Monitor), Linda Robinson (US News& World Repor), Dan Ephron (Newsweek), Mark Benjamin (Salon), and many others. Despite this -- overall the media has been reluctant to delve into the details of the war costs and to really understand and report them.

Answered 04/09/08 13:29:57 by Linda Bilmes

Q: How do you measure success anyway? Is winning the war in Iraq more important than the economy?

Submitted by Danel from Boston, ma

A: Our book simply lays out the full cost of the war in Iraq, so that the public can decide whether or not it is worth it. What is unacceptable is to make that decision without understanding the full cost of waging the war, in terms of the financial cost, the strain on our military, and the economic impact. Secondly, the war has until now been financed entirely by borrowing, largely from abroad. This is the first time in US history that we have paid for a war this way. If the war is worth fighting, then we should have a discussion on how best to pay for the war. President Johnson raised taxes to pay for Vietnam, President Reagan raised taxes to pay for the military build-up in the Cold War, but President Bush has cut taxes during this war -- adding some $800 bn to the national debt.

Answered 04/09/08 13:26:36 by Linda Bilmes

Q: Many people - myself included - feel that the Iraq war was a distraction from our much more justified and relevant efforts in Afghanistan to topple the Taliban and establish security in that region. Even assuming we withdraw from Iraq in the future and thus no longer pay the upfront $12 billion a month costs you have mentioned for the war, we still will be faced with that $3 trillion enormous burden of debt accrued. Considering the current war was financed with money we didn't really have, and you suggest the necessity of tax hikes and spending cuts to deal with the costs of the Iraq war, is it really feasible - as many hope - that resources in the form of money or additional troops would be freed up to help with the situation in Afghanistan? Simply put, at this point, can we really afford to be fighting any wars?

Submitted by Lucas Adams from San Diego, CA

A: we do agree that one of the costs of the war in Iraq has been to divert attention and resources from Afghanistan. The long-term costs of the war in Iraq will be felt for decades in terms of payments to veterans, funding for military reset and interest payments on the debt. Afghanistan is a different set of political decisions but it is an equally if not more expensive war, because the cost of transporting equipment, fuel, food, contract support and other needs to remote areas is extremely high. One difference of course is that NATO contributes a large percentage of the troops so we are not the only ones footing the bill.

Answered 04/09/08 13:22:02 by Linda Bilmes

Q: With the war costing so much money, the Rupblicans under Bush have borrowed so much money from China and when Americans talk about any government and generation paying for their debts I do not see the present Administration doing that. They do not even want to ask Iraq to pay for their reconstruction. The government is the first that I know that gave tax cuts to the rich in times of a war without end only to indebt the future of America. How do you think America can lead the world when they cannot face Abuses of Human rights perpetrated by China in Tibet and Dafur because America is so financially dependent in the name of loans from China. To me what I see as the consequence of this Iraq War is that America has become a "Toothless Bulldog" to the extent that they cannot even face a small militia of Alqueda in the small mountains of Afghanistan but will camouflage in an endless failing war in Iraq.

Submitted by Venatius from Laurel, MD

A: This is the first time in US history that we have borrowed all the money to wage a war, and the second time we have borrowed from abroad to fund a war. (The first time was when the colonies borrowed from France to fight England). We are also paying world oil prices of over $3 gallon for fuel instead of insisting on subsidized Iraqi oil.

Answered 04/09/08 12:48:02 by Linda Bilmes

Q: Who has the responsibility for naming the subcontractors, who apparently represent cheaper labor from countries outside Iraq instead of Iraqi firms which might provide employment for needy Iraqis. If it is the primary contractors, shouldn't our government attempt to influence this selection in order to help bring more employment to Iraq?

Submitted by Audrey Jaffa from Worcester, PA

A: The prime contractors have the responsibility and I agree with you that the government could intervene much more forcefully in the guidelines for selections of subcontractors. Most federal agencies do require that primes hit certain benchmarks for things like percentage of subcontractors that are drawn from small business, minority-owned businesses, etc. But in this case we have not required that the primes hire local Iraqis, even though it is clearly in the US interest that they do so. Why? Basically because many Iraqis become security targets if they work for US companies, and therefore they are less reliable than say, imported Philipino workers housed in a compound. The US has not found a way around this problem.

Answered 04/09/08 12:45:45 by Linda Bilmes

Q: Is our economy salvageable?

Submitted by Mike Kendall from Lakeland, FL

A: The US is a wealthy country and the war is not going to ruin the US economy. But the war has weakened our economy in several ways. First, the money spent (which largely pays for foreign subcontractors in Iraq to do transportation, cooking, laundry, repairs, and of course fuel costs) does not stimulate the US economy. Second, the war has contributed to the increase in oil prices. Third, we have borrowed the money for the war, thus increasing deficits and adding to the national debt. Fourth, we have less ability to stimulate the economy in this downturn because we are already in deficit (unlike in 2001 when we had a surplus so the recession was mild). Even if the US income levels were to fall 10%, we would still be a rich country compared to most, and we could recover. But it is a mistake to think that we can have a war for free -- which is what the Administration is implying.

Answered 04/09/08 12:42:27 by Linda Bilmes

Q: Do you think that Bush will go down in history as the biggest rip off artist of the middle class? Im 77 years old and have never lived under a worst administration and that includes Nixon and Hoover. I am also a Korean War veteran. By the way what took place at that secret meeting Cheny had with his rich oil tycoon friends early on in the Bush administration????

Submitted by Roy from Coram,NY

A: I wrote an article in Vanity Fair last fall asking the question, from the perspective of economics, who will go down in history as America's worst president, Herbert Hoover or George Bush. I conclude that, in terms of long term damage, George Bush is likely to win that dubious honor. The problems with the American economy that have come out into the open in the last few months have bolstered Bush's claim as victor in that contest.

Answered 04/07/08 12:33:11 by Joseph Stiglitz