IRAQ: The Economic Costs Of War

February 29th, 2008 - by admin

Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Ali Frick, and Benjamin Armbruster / The Progress Report / Center for American Progress – 2008-02-29 23:14:09

(February 26, 2008 ) — With record oil prices, rising family debt, and a slowing housing market, Americans are now worried about the economy more than ever. Even 45 percent of economists expect a recession this year.

With the Bush administration spending $10 billion a month on the war in Iraq, it is therefore not surprising that Americans increasingly view withdrawal from Iraq as a way out of this economic slump. In fact, 68 percent of the public rank pulling out of Iraq first on a list of proposed economic remedies, beating out tax cuts. Yesterday, a coalition of progressive groups — including MoveOn, the Center for American Progress Action Fund, USAction, SEIU, VoteVets, and Americans United for Change — announced a new “Iraq/Recession” campaign.

This $15 million nationwide effort will aim to end the war by raising awareness of the domestic costs that have been neglected because of President Bush’s singular focus on Iraq. “There is great concern, anxiety, and angst about economic security,” former senator John Edwards told reporters yesterday.

“All of these things are made worse by the war in Iraq. … People don’t understand why we’re spending $500 billion and counting at the same time we have 47 million without healthcare, 37 million living in poverty.”

The Bush administration was anxious to go to war, but not anxious to pay for it. In April 2003, then-administrator of the Agency for International Development Andrew Natsios pledged that American taxpayers would pay no more than $1.7 billion to reconstruct Iraq. In March 2003, Paul Wolfowitz infamously predicted that Iraq would be able to “finance its own reconstruction.” In reality, total Iraq war requests and authorizations have amounted to $624 billion.

Yet just two months after announcing the invasion of Iraq, Bush ordered the first major wartime taxcut in history. The debt was $5.7 trillion when Bush took office; it will be $10.3 trillion by the time he leaves. Economists predicted this fall-out. In 2002, Gerd Hausler, director of international capital markets at the IMF, said that “a serious conflict with Iraq would not be a very healthy development” for the financial markets.

Robert Shapiro, undersecretary of commerce in the Clinton administration stated, “If the [Iraq] conflict wears on or, worse, spreads, the economic consequences become very serious.” More recently, Nobel laureate Joseph Stiglitz wrote in Vanity Fair, “The soaring price of oil is clearly related to the Iraq war. The issue is not whether to blame the war for this but simply how much to blame it.”

Last week, President Bush stated that the Iraq war has nothing to do with the faltering economy. “I think actually the spending in the war might help with jobs…because we’re buying equipment, and people are working,” he said. The Iraq war has created jobs — for the administration’s defense contractor allies. Bush’s most recent budget is a windfall for contractors. Between 2000 and 2005, procurement was the “fastest growing component of federal discretionary spending.”

Five years after the U.S. invasion of Iraq, however, national unemployment is going up. Between December 2006 and December 2007, the national unemployment rate increased by 13.6 percent in seasonally adjusted terms, from 4.4 to 5.0 percent.

“At a time of mounting deficits, when we are spending about $10 billion a month in Iraq, issues such as reforming the health-care system and repairing the national infrastructure are likely to remain neglected,” write John Podesta and Lawrence J. Korb of the Center for American Progress and Ray Takeyh of the Council on Foreign Relations in today’s Washington Post.

“The United States has too many national priorities that cannot be realized if yet another beleaguered administration prolongs this costly and unpopular war.” Indeed, Bush seems to deem domestic priorities as “excessive spending.” He recently vetoed a bill to provide expanded health insurance for 10 million children, and then requested $172 billion more for the war.

When the Senate passed a broad stimulus package that offered an extension of unemployment benefits and help for borrowers caught in subprime loans, the White House again called it unaffordable government spending.

While the Bush administration is devoting considerable resources to the conflict in Iraq, it is paying less attention to what happens when U.S. troops return home. A recent American Journal of Public Health study estimated that in 2004, “nearly 1.8 million veterans were uninsured and unable to get care in veterans’ facilities.”

This number has jumped dramatically since 2000, when there were 290,000 uninsured veterans. Recently discharged veterans are also “having a harder time finding civilian jobs and are more likely to earn lower wages for years.” These costs will only continue to grow the longer the United States remains in Iraq. VoteVets has released a new ad on conservatives’ misplaced priorities here.


Today, the Senate will debate two Iraq-related bills sponsored by Sen. Russ Feingold (D-WI). “One would begin the pullout of troops from Iraq, while the other would require the Defense Department to provide the Senate with a report on the threat al-Qaida poses,” Roll Call reports. The Senate is expected to vote on a cloture motion today to move the bills into debate.

“Senate Republican leaders are strongly considering sidelining the use of the filibuster and agreeing to a full debate” on the bills. The legislation is not expected to pass, aides have acknowledged. “Certainly, there’s a lot of interest on our side to do some sort of Iraq legislation, but the reality is, it’s very difficult to get that through the Senate,” said a Democratic leadership staffer.

William J. Haynes, a central player in the Bush administration’s controversial interrogation policies, resigned yesterday from his post as the Defense Department’s General Counsel. In 2002 Pentagon memo, Haynes recommended the use of 14 harsh interrogation techniques on detainees at Guantanamo Bay, including “using ‘stress positions,’ like standing, for up to four hours.”

In 2006, with the strong backing of Vice President Cheney, President Bush nominated Haynes for a seat on the 4th U.S. Circuit Court of Appeals. But Haynes, despite his best efforts, was unable to overcome his status as a “prime mover” in the administration’s efforts to bypass the Geneva Conventions’ detainee rules, and his nomination was withdrawn in January 2007.

More recently, former Guantanamo prosecutor Col. Morris Davis told The Nation that Haynes had insisted that the administration “can’t have acquittals” at Guantanamo Bay. Davis resigned his post rather than work under Haynes’s command.

Over two hundred 9/11 First Responders, family members, and supporters will be rallying on Capitol Hill today. The rally is being conducted to draw attention to the health issues that the 9/11 rescue workers currently face.

Attorneys for Don Siegelman called on the Justice Department to appoint a special prosecutor after a key government witness involved in sending Siegelman to jail revealed he was told to write out his testimony to “get his story straight.” The defense was never told of the written testimony.

The Huffington Post has obtained a document showing that Sen. John McCain (R-AZ) “may have taken steps to protect his Republican colleagues from the scope of his investigation” into disgraced lobbyist Jack Abramoff.

In a Washington Post op-ed, John Podesta and Lawrence J. Korb of the Center for American Progress and Ray Takeyh of the Council on Foreign Relations debunk the prevailing doomsday scenario that an American departure from Iraq “would lead to genocide and mayhem.” “It is entirely possible,” they write, “that in the absence of a cumbersome and clumsy American occupation, Iraqis will make their own bargains and compacts, heading off the genocide that many seem to anticipate.”

President Bush predicted yesterday that voters will replace him with a Republican president who will “keep up the fight” in Iraq. “I believe the American people understand that success in Iraq is necessary for the long-term security of the American people,” Bush said.

The Pentagon announced yesterday that when the U.S. troop buildup in Iraq ends in July, it’s expected that “there will be about 8,000 more troops on the ground than when it began in January 2007.” There were 132,000 troops in Iraq when President Bush initiated the “surge,” but Lt. Gen. Carter Ham told reporters that by July the troop total was likely to be 140,000.”

The United Nations’s climate chief Yvo de Boer welcomed statements by Bush administration officials that the United States would accept a binding international commitment to reduce global-warming gases. But he said their insistence that China and other developing nations do the same “is not realistic.” “If it’s a quid pro quo, then it’s a nonstarter,” he said.

And Finally: The drug czar and the hippie. In his new book, Washington super lawyer Bob Bennett reveals that his brother, conservative commentator William Bennett, once “went on a date with hippie icon Janis Joplin” in the late ’60s. Of the date, “Bob says Bill told him at the time, ‘Let me put it this way, we were both disappointed.'”

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