From the Melbourne Age.
Iraq war cost put at $1.7 trillion
Josh White, Washington
November 14, 2007
THE cost to the United States of the Iraq and Afghanistan wars is about $US1.5 trillion ($A1.69 trillion), according to a study by congressional Democrats.
The study estimates the wars' hidden costs such as higher oil prices, the expense of treating the wounded and interest payments on money borrowed to pay for them.
This is almost double the $US804 billion the White House has spent or requested for the wars, says the Democratic staff of Congress' Joint Economic Committee. The study, The Hidden Costs of the Iraq War, estimates the wars have cost the average American family of four more than $US20,000.
"The full economic costs of the war to the American taxpayers and the overall US economy go well beyond even the immense federal budget costs already reported," the 21-page draft study says.
It argues that war funding has diverted billions of dollars away from productive investment by American businesses in the US.
It says the conflicts are pulling reservists and National Guardsmen away from their jobs, resulting in economic disruptions for US employers estimated at $US1 billion to $US2 billion.
The committee, comprising House and Senate members from both parties and chaired by Democrat senator Charles Schumer, was expected to present the study on Capitol Hill last night.
"What this report makes crystal clear is that the cost to our country in lives lost and dollars spent is tragically unacceptable," Senator Schumer said.
Robert Hormats, vice-chairman of Goldman Sachs (International) and a member of the National Security Council staff under presidents Nixon, Ford and Carter, said the war was far costlier than the publicly stated cost.
But he said it would be hard to show the Iraq war had caused oil prices to skyrocket or oil producers in the Middle East to falter. He did not believe there had been a closing-off of US investment because of the war.
Oil prices have more than tripled since the US-led invasion of Iraq in March 2003 to a peak of more than $US90 a barrel, the study notes.
"The war in Iraq is certainly not responsible for all of this increase," it says, but it estimates that declining Iraqi production "has likely raised oil prices in the US by between $US4 and $US5 a barrel".
"Because of the many factors affecting oil markets, this should be seen as a highly approximate estimate," it says.
Mr Hormats agreed with the finding that the US was dangerously increasing its reliance on foreign debt and Americans would pay the price for generations.
"The wars will cost a lot more than the appropriated sums, and it's certainly true our children will be paying for this for a long, long time," he said. "I'm very critical of the way they have financed the war, but I always hesitate to try to quantify any of these things, to make these numerical judgements," he said.
The committee estimated injuries due to the wars could add more than $US30 billion in disability and medical care costs, including billions in lost earnings for soldiers who cannot work because of post-traumatic stress disorder.