The proposed defense budget for the next fiscal year calls for the expenditure of more than 608 billion dollars. That number includes a separate appropriation for continuing the war as well as expenditures from other budgets like an appropriation to the Department of energy to work on the nation’s nuclear arsenal. All totaled the tab works out to be more than a million dollars a minute, 24/7.
From the start, the cost of the war has been underestimated by both democrats and republicans. Moreover, Official Washington is hard pressed to provide a hard count of how many soldiers of Al Qaeda there are. It is possible that by war’s end, the U.S. will have spent more than 100 million dollars for every member of Al Qaeda.
Analysis, from various quarters in recent days, suggest the financial burden of the war effort is mounting to dramatic levels.
The casualty toll for American forces in Iraq is now 4,000 dead. The number of Iowans who have been lost in combat-related incidents has now reached 65.
Beyond the pain of those numbers the war presents heavy fiscal obligations that will extend to future generations.
The war which has pushed a million Iraqis from their own country will cost the U.S., according to Nobel winning economist Joseph E. Stiglitz, more than 3-trillion dollars. The numbers and analysis are contained in a new book by Stiglitz and Harvard professor Linda J. Bilmes.
The authors contend the Bush administration’s budget fails to fully account for extended obligations like care for returning veterans or the replacement of military equipment or the extensive macro-economic impact of the spending.
Ismael Hossein-zadeh, Drake University, economics professor: “What is misleading here is that there is no partition between the war and the economy.”
Drake University economics Professor Ismael Hossein-zadeh has been researching military spending for years. He too has a recent book examining the impact of military spending on the economy.
He says the macro-economic cost is already being felt, and the effects are being reported but not in the context of the war.
Hossein-zadeh: “For example it has created a consumer backlash in the Middle East and the Muslim world at large which that means that we cannot sell as much agricultural products to that part of the world as we could. In fact we in fact anything that is brand America like AOL.com, Pizza Hut, Starbucks, McDonalds, Wal-Mart, American Airline, they're all loosing business in the Muslim world especially Middle East, but we don't, I'm sure we haven't heard that in let's say main stream media.
Americans have heard how the mounting budget deficit is being financed by foreign lenders – including governments like China. And they do know the value of the dollar is declining against major currencies like the euro.
To some extent a weaker dollar fuels more Iowa exports, but it also makes American assets cheaper for foreigners to buy. The war has weakened the economy and made the nation less secure.
Hossein-zadeh says the money spent by the military is diverted from investment in acute needs at home.
“We in economics use this fancy term opportunity costs that means opportunities that are lost as a result of eroding our resources to military spending and those opportunities include both physical infrastructure like roads, bridges, and so on. As well as what is called soft or social infrastructure or human capital. That investment in education, public health, public housing, job training, and so on.
And the enormous cost of the diversion of resources means the responsibility of caring for returning citizens will fall more heavily on states and communities and the families of those who have served.
Well surely most of them are hit twice. Once when they loose the higher pay to go and serve the country at then for lower pay and often when they come back disabled or with severe injuries then they are not covered, I mean their expenses and medical care is often not covered as it should be and they are left to be at least partially is responsible for taking care of themselves as well as becoming unable to do any kind of job that would support them and their families for the rest of their lives. So, that's why I think the burden of war is disproportional falling on those service men and women who pay in many ways.”