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December 2002 • Vol 2, No. 11 •

The Two Trillion Dollar War?

By Rod Holt

Socialist Viewpoint prints here an Associated Press report on the document made public December 5, 2002, by the American Association of Arts and Sciences (AAAS). The AP story is short but nevertheless shows the current tendency of reports to build castles in the air whenever they touch on the government’s expansionist policies.

A sobering and much more extensive summary of the AAAS document was written by William D. Nordhaus and printed in the New York Review of Books, December 5, 2002.

Nordhaus was a principle contributor to the AAAS paper. A hopeful reformer, he states, “If the estimates of American casualties mount to the thousands, if the costs to the economy are major tax increases or a deep recession, or if the United States becomes a pariah in the world because of callous attacks on civilian populations, then decision-makers in the White House and the Congress might not post so expeditiously to battle.”

We, for numerous reasons expressed in this magazine for two years, do not think the U.S. government will hesitate just because of the logic of the AAAS document no matter how compelling. Rather, the document will give a glimpse to many just how much “blood, sweat, and tears” the imperialists intend to wring from the bodies of the working class.

The AP report:

“WASHINGTON (Dec. 6)—In the worst case, a war with Iraq could cost the United States almost as much as the government spent in the last budget year—nearly $2 trillion, according to new projections.

“Researchers concluded in a study released Thursday that war with Iraq could cost the United States from $99 billion to more than $1.9 trillion over a decade.

“The lower figure assumes a successful military, diplomatic, and nation-building campaign; the higher figure assumes a prolonged war with a disruption of oil markets and a U.S. recession, the authors say in a study by the American Academy of Arts and Sciences.

“Both figures assume a U.S. involvement in the country for 10 years.

“White House spokesman Gordon Johndroe said it was premature to comment on cost estimates.

“War is the last resort,” he said. “We’re hoping for a peaceful solution.”

“The 1991 Persian Gulf War cost America an estimated $61 billion, but allies reimbursed all but about $7 billion. By some accounting methods, the United States may have even made a profit.

“Direct military spending could range from $50 billion in a short campaign to $140 billion in a prolonged war with Iraq, said the study titled, “War With Iraq: Costs, Consequences and Alternatives.” The study was done by the academy’s Committee on International Security Studies.

“The report cautioned that aside from the estimates of direct military costs, all the numbers should be “regarded as informed conjecture.”

“Occupation and peacekeeping costs could be $75 billion in the best case to $500 billion in the worst, the study said. Reconstruction and nation-building costs are estimated at $30 billion to $105 billion, and humanitarian aid at $1 billion to $10 billion.

“Economic ripples of war with Iraq are likely to spread beyond budgetary costs, with the prospect of raising the cost of imported oil, slowing productivity growth and possibly triggering a recession, the report said.

“A prolonged disruption of world oil markets could cost the U.S. economy up to $778 billion, the researchers estimated. On the other hand, Iraq’s huge oil resources could satisfy U.S. needs for imported oil at current levels for almost a century and otherwise benefit the economy by $40 billion.

“A short war could actually benefit the United States in terms of its macroeconomic impact, which includes employment, by $17 billion. A long war, in contrast, could have a $391 billion negative effect.

“The American Academy of Arts and Sciences, founded in 1780 and based in Cambridge, Mass., is an international society of scientists, scholars, artists, business people, and political leaders.”

—AP, Siobhan McDonough.

The above report misrepresents in some places and misunderstands in others. The main point is that Nordhaus and the AAAS calculate only the incremental costs, that is, they add up just the costs exceeding those now budgeted for “defense.”

What will happen after the war? That uncertainty is a large one. Nordhaus remarks:

“[Whenever] …the US intervened militarily over the last four decades, it has followed a “hit and run” philosophy by which bombing runs have seldom been followed by construction crews. The latest war in Afghanistan is a striking example. In the year ending September 2002, the US spent $13 billion on the war effort. By contrast, the total Pentagon effort committed to civil works or humanitarian aid has totaled only $10 million.”

The imperialists will not dare to leave Iraq in the manner that they are leaving Afghanistan. There is too much oil at stake for that to happen. (It is agreed that Iraqi oil reserves alone will keep the U.S. supplied for the next century.) The “regime change” and reconstruction will be necessary to enable U.S. oil to profit—and the working class will be forced to foot the bill.

To top it all off, there does not appear any chance that the U.S. economy will escape war without a recession—or worse. Nordhaus states, “A plausible outcome would be an average recession set off by a protracted conflict [i.e., more than 60 days—rh], with output losses in the range of 2 to 5 percent of GDP ($200 billion to $500 billion in today’s dollars).” We all know who suffers with an “average recession.”

Finally, perhaps not so hopefully after all, Nordhaus sums up his contribution, “Notwithstanding all the warning signs, the administration marches ahead, heedless of the fiscal realities and undeterred by cautions from friends, allies, and foes.”

I think William Nordhaus should join in the next antiwar demonstration to regain some optimism.





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