What $1.2 Trillion Can Buy
"I don't want to abolish government. I simply want to reduce
it to the size where I can drag it into the bathroom and drown it in the
bathtub." ---Grover Norquist,
presidential adviser and conservative strategist, close business and political
ally of Jack Abramhoff
By DAVID LEONHARDT
Published: January 17, 2007
The human mind isnÕt very well equipped to make sense of a figure
like $1.2 trillion. We donÕt deal with a trillion of anything in our daily
lives, and so when we come across such a big number, it is hard to distinguish
it from any other big number. Millions, billions, a trillion — they all
start to sound the same.
The analysis by Scott Wallsten and Katrina Kosec is available
here. Since it was published, they have increased some of their cost estimates.
The analysis by Linda Bilmes and Joseph Stiglitz appeared in the
Milken Institute Review and is available here.
Likewise, some of their cost estimates — like those covering
health care and disability payments for veterans — have risen since the
article appeared.
At the outset of the war, William Nordhaus, an economist at Yale,
wrote an essay examining why countries typically underestimate the cost of
wars.
The way to come to grips with $1.2 trillion is to forget about the
number itself and think instead about what you could buy with the money. When
you do that, a trillion stops sounding anything like millions or billions.
For starters, $1.2 trillion would pay for an unprecedented public
health campaign — a doubling of cancer research funding, treatment for
every American whose diabetes or heart disease is now going unmanaged and a
global immunization campaign to save millions of childrenÕs lives.
Combined, the cost of running those programs for a decade wouldnÕt
use up even half our money pot. So we could then turn to poverty and education,
starting with universal preschool for every 3- and 4-year-old child across the
country. The city of New Orleans could also receive a huge increase in
reconstruction funds.
The final big chunk of the money could go to national security.
The recommendations of the 9/11 Commission that have not been put in place
— better baggage and cargo screening, stronger measures against nuclear
proliferation — could be enacted. Financing for the war in Afghanistan
could be increased to beat back the TalibanÕs recent gains, and a peacekeeping
force could put a stop to the genocide in Darfur.
All that would be one way to spend $1.2 trillion. Here would be
another:
The war in Iraq.
In the days before the war almost five years ago, the Pentagon
estimated that it would cost about $50 billion. Democratic staff members in
Congress largely agreed. Lawrence Lindsey, a White House economic adviser, was
a bit more realistic, predicting that the cost could go as high as $200
billion, but President Bush fired him in part for saying so.
These estimates probably would have turned out to be too
optimistic even if the war had gone well. Throughout history, people have
typically underestimated the cost of war, as William Nordhaus, a Yale
economist, has pointed out.
But the deteriorating situation in Iraq has caused the initial
predictions to be off the mark by a scale that is difficult to fathom. The
operation itself — the helicopters, the tanks, the fuel needed to run
them, the combat pay for enlisted troops, the salaries of reservists and
contractors, the rebuilding of Iraq — is costing more than $300 million a
day, estimates Scott Wallsten, an economist in Washington.
That translates into a couple of billion dollars a week and, over
the full course of the war, an eventual total of $700 billion in direct
spending.
The two best-known analyses of the warÕs costs agree on this
figure, but they diverge from there. Linda Bilmes, at the Kennedy School of
Government at Harvard, and Joseph Stiglitz, a Nobel laureate and former Clinton
administration adviser, put a total price tag of more than $2 trillion on the
war. They include a number of indirect costs, like the economic stimulus that
the war funds would have provided if they had been spent in this country.
Mr. Wallsten, who worked with Katrina Kosec, another economist,
argues for a figure closer to $1 trillion in todayÕs dollars. My own estimate
falls on the conservative side, largely because it focuses on the actual money
that Americans would have been able to spend in the absence of a war. I didnÕt
even attempt to put a monetary value on the more than 3,000 American deaths in
the war.
Besides the direct military spending, IÕm including the gas tax
that the war has effectively imposed on American families (to the benefit of
oil-producing countries like Iran, Russia and Saudi Arabia). At the start of
2003, a barrel of oil was selling for $30. Since then, the average price has
been about $50. Attributing even $5 of this difference to the conflict adds
another $150 billion to the warÕs price tag, Ms. Bilmes and Mr. Stiglitz say.
The war has also guaranteed some big future expenses. Replacing
the hardware used in Iraq and otherwise getting the United States military back
into its prewar fighting shape could cost $100 billion. And if this warÕs
veterans receive disability payments and medical care at the same rate as
veterans of the first gulf war, their health costs will add up to $250 billion.
If the disability rate matches VietnamÕs, the number climbs higher. Either way,
Ms. Bilmes says, ÒItÕs like a miniature Medicare.Ó
In economic terms, you can think of these medical costs as the
difference between how productive the soldiers would have been as, say,
computer programmers or firefighters and how productive they will be as wounded
veterans. In human terms, you can think of soldiers like Jason Poole, a young
corporal profiled in The New York Times last year. Before the war, he had
planned to be a teacher. After being hit by a roadside bomb in 2004, he spent
hundreds of hours learning to walk and talk again, and he now splits his time
between a community college and a hospital in Northern California.
Whatever number you use for the warÕs total cost, it will tower
over costs that normally seem prohibitive. Right now, including everything, the
war is costing about $200 billion a year.
Treating heart disease and diabetes, by contrast, would probably
cost about $50 billion a year. The remaining 9/11 Commission recommendations
— held up in Congress partly because of their cost — might cost
somewhat less. Universal preschool would be $35 billion. In Afghanistan, $10
billion could make a real difference. At the National Cancer Institute, annual
budget is about $6 billion.
ÒThis war has skewed our thinking about resources,Ó said Mr.
Wallsten, a senior fellow at the Progress and Freedom Foundation, a
conservative-leaning research group. ÒIn the context of the war, $20 billion is
nothing.Ó
As it happens, $20 billion is not a bad ballpark estimate for the
added cost of Mr. BushÕs planned surge in troops. By itself, of course, that
price tag doesnÕt mean the surge is a bad idea. If it offers the best chance to
stabilize Iraq, then it may well be the right option.
But the standard shouldnÕt simply be whether a surge is better
than the most popular alternative — a far-less-expensive political
strategy that includes getting tough with the Iraqi government. The standard
should be whether the surge would be better than the political strategy plus
whatever else might be accomplished with the $20 billion.
This time, it would be nice to have that discussion before the
troops reach Iraq.
=================
New York City: Another Disaster Brought by Republicans
The specific explosion in New York City was not brought to us by
Republicans, but as sure as the sun rises in the morning you can believe there
will be more such disasters orchestrated by the Republican Party and the
Democrats who play along with policies designed to assuage the moderates but
end up irritating everyone.
News item: Blast shows age of U.S. infrastructure: With a blast
that made skyscrapers tremble, an 83-year-old steam pipe sent a powerful
message that the miles of tubes, wires and iron beneath New York and other U.S.
cities are getting older and could become dangerously unstable.
This country was built on investment, investment in
infrastructure. Urban residents paid to help bring rural electrification to the
farms. Easterners paid for dams that watered the western plains. City resident
paid for highways that opened up the suburbs. Rural folks helped pay for lands
given to the railroads that brought agricultural goods to the cities.
Now the Republicans are making sure that no one pays. Roads are
deteriorating, schools are firetraps and unable to provide reliable Internet
connections, airports are inadequate to handle the demands of modern day air
traffic, sewage and water systems are strained.
Waxing America, October 12, 2005: Fix the bridges and the
dams. "A right-wing
government that strangles public expenditures for public works is largely
responsible for what happened in New Orleans." (Katrina Compounded, Sept.
1, 2005)
Here in the Badger State the chant may be led by the Wisconsin
Manufacturers & Commerce and their minions in the legislature, but they
have their counterparts in every state house and in the nation's capital.
"I
don't want to abolish government. I simply want to reduce it to the size where
I can drag it into the bathroom and drown it in the bathtub." ---Grover Norquist, presidential
adviser and conservative strategist, close business and political ally of Jack
Abramhoff
The reports warning about the pending crisis are brought by the
American Society of Civil Engineers, (ASCE) not your most liberal Kos-reading, Clinton-loving,
acid-dropping, sandal-wearing, Volvo-driving, band of followers of Abbie
Hoffman, Doctor Spock, and Little Sally.
ASCE estimates that $1.6 trillion is needed over a five-year period to bring the nation's infrastructure to a good condition.