Nobel Prize-winning economist Joseph Stiglitz spoke about his newest publication, "The Three Trillion Dollar War," - an economic perspective on the Iraq war's social, political and monetary costs - on Tuesday night's Foreign Affairs Symposium to a receptive audience.
According to government estimates, the U.S. has already spent over $600 billion on the war in Iraq, but Stiglitz disagrees with these approximations.
"The U.S. went to war with an estimated initial budget of $100 to 200 billion ... things have turned out pretty differently. We are now spending 12 billion a month," he said. "The conservative estimate of the cost of war is between $3 to 5 trillion."
In order to put this high price tag into perspective, Stiglitz compared the cost of the war with the funding required for fixing the Social Security system.
"Roughly for the one-sixth of the cost of the Iraq war, we could have put the Social Security system into sound standing," Stiglitz said. In fact, he claimed, the United States could even double the amount of aid given to Africa "with the cost of a few days of fighting in Iraq."
According to Stiglitz, the primary factor in this $3 to 5 trillion estimate is the $12 billion per month that it costs just to support the troops on the ground.
Further into the discussion, Stiglitz also noted the danger of building debt in order to pay for the war.
"This is the first war that was paid by America's credit card. When we went to war, we [already had] a deficit," Stiglitz said. "40 percent of our deficit has been financed abroad."
Stiglitz also noted that the standard U.S. Army "death gratuity" for those killed in the war is $500,000. However, this number does not include the enormous cost of a series of other compensations as well as the lost economic productivity of the individual, according to Stiglitz.
He also maintained that the state of America's economic performance and the effects of the ongoing war are related. To a large extent, the economy is negatively affected by the war.
"We know that wars can stimulate the economy according to Keynes's economics. However, we also know that you don't have to fight a war to get the economy right," he said. "The Iraq war expenditures actually do not stimulate the economy as much as improvements in education, health care and other social programs in the long run."
According to Stiglitz, another depressing effect the war has on the U.S. economy is the large accumulation of national debt.
"Deficits do matter," he said, warning policy makers not to overlook the potential damaging effects of the permanent state of deficit spending.
The current increasing national debt could also have the potential to lower private capital investments, thereby provoking a general slowdown in relatively stable economic growth that America has experienced since 2003.
Most importantly, he called for a more comprehensive system of checks and balances to curtail U.S. military power around the globe.
Finally, Stiglitz talked about one of today's most controversial policy issues? - bringing back the troops:
"If we leave today, there will probably be chaos. If we leave in four years, there will probably be chaos as well, though most Iraqis will probably want us to leave today."
In fact, even if America does stabilize the situation there, Stiglitz emphasized that Iraq is only a small country within the entire region.
"Terrorism will probably move to other countries, and all in all, is this the right way to spend trillions of dollars just for a possible national security threat?"
In his concluding remarks, Stiglitz re-emphasized the importance of citizens and taxpayers being fully informed about the true cost of an ongoing war.
"We went to the war for the sake of democracy, and part of being informed in a democracy is knowing the cost [and] making the cost of the war transparent to the people. The true cost of this war is that we will pay the cost of this war in the decades to come."
Stiglitz is currently a professor at Columbia University's Business School, Graduate School (in economics) and School of International and Public Affairs.
He was awarded the Nobel Prize in economics in 2001 and was also a member of the Council of Economic Advisors from 1993-1995 for the Clinton administration.
