On Mon, 10 Feb 2003, Ulhas Joglekar wrote:
> Here is what Stiglitz is saying in his article "War is no spur to
> economic growth", which I posted on lbo-talk on 24 January:
>
> "By contrast, the direct costs of a military attack on Saddam Hussein's
> regime will be minuscule in terms of total US government spending. Most
> analysts put the total costs of the war at less than 0.1% of GDP, the
> highest at 0.2% of GDP.
If I understand correctly, this figure is restricted not only to actual war costs, but even within the war costs, to the actual combat costs. There is a good short article summing up the various best conservative estimates at the Institute for International Strategic Studies:
http://www.iiss.org/iraqCrisis-more.php?itemID=11
A short summary:
1. The Congressional Budget Office (CBO) estimate for the actual war costs is 33bn (compared with 78bn in today's dollars for Gulf War I). That breaks down into 13bn for pre-war deployment; 9 bn for the first month of the fighting and 8 bn for each month thereafter; and 7 bn to get everyone home. The 33bn estimate is based on a 5-6 week war.
2. Peacekeeping costs. The US estimates that it costs $250,000 per year per peacekeeper in Bosnia. Iraq is a pretty big country with some unresolved issues. IISS estimates the necessary force to be 50,000 to 200,000, and the time of occupation to be difficult to estimate. But at the $250,000 figure, a 100,000 force for a five year period would cost $125bn. The IISS notes that the US occupied Japan for seven years and has had 30,000 troops in Korea for 30 years.
I should underline that like all figures, this is conservative. Bosnia is about as peaceful as a peacekeeping operation gets. Nobody is making trouble or trying to kill us. If in coming years there is medium-scale conflict with Kurds or Turkomen or Shias, or terrorist operations, then things would cost considerably more. Similarly if we are tempted to expand while we're there into something like the Woolsley plan in Eastern Saudi Arabia.
3. Reconstruction costs. The IISS bases its estimates here on William Nordhaus's article in the Dec 5th New York Review of Books. Nordhaus estimates that if the US wanted to give Iraqis a per capita GDP per head equal to Iran or Egypt, that would cost $20bn. A more ambitious "Marshall Plan" would cost $75bn over 6 years.
4. Oil market and economic shock costs. To iffy to summarize, but regarded as real risks. They lean on a Brookings Institute report by George Perry.
On the other hand, if you want less conservative (but still respectable) estimates, you might turn to the report "War With Iraq: Costs, Consequences and Alternatives" put out by the American Academy of Arts and Sciences at www.amacad.org. It's actually a collection of three essays -- a new one by Nordhaus on the economic costs; one by Steven Miller on other costs (lives, damages to international law, future cooperation, muslim opinion, etc.) as opposed to alternative routes; and one on the strategic doctrine behind it and its possible flaws. According to one news article linked to on their site, their combined worst case scenario would ended up costing $1.9 trillion over the decade following the war. And their middle case scenario is considerably higher than the figures quoted above.
I haven't read this report yet, but if either of you feel like reading and summarizing it for the rest of us, I'm sure we'd all be grateful.
Michael