By its very definition, war spending—indeed, any government spending—improves GDP, as anyone who has ever taken an economics 101 course knows. Spending on World War II is credited with helping the U.S. decisively climb out of its depression slump. Likewise, the Iraq War helped the economy in some ways. But to many experts, the costs will far outweigh and outlast the benefits.
As U.S. operations in Iraq end, tallying up the costs and benefits of a nine-year ordeal is a daunting task. Estimates on Iraq War spending vary. The Congressional Research Service has put the Operation Iraqi Freedom pricetag at $806 billion. President Obama said that the Iraq War would cost over $1 trillion, all told. Either way, compared to past U.S. conflicts, spending on the Iraq war has been relatively small—at its height, spending on WWII helped drive government spending to 42 percent of GDP, according to the Congressional Budget Office. At its height, operations in Iraq cost around 1 percent of GDP.
But the long-term costs will well exceed this total, and the budgetary consequences are far-reaching.
On the positive side, the Iraq War did bolster the economy in some ways.
“It reduced unemployment compared to what it otherwise would have been” both with military and contractor jobs, says Stan Collender, a senior partner at Qorvis Communications who has also worked on both the House and Senate Budget Committees.
According to figures from the Commerce Department, GDP has grown at an average quarterly rate of 4.1 percent since the start of 2003, when the Iraq War began. While the war’s contribution to that growth was likely small, Collender believes it is significant.
“[Troops] were getting hazardous duty pay, which means they were sending more money home. We weren’t really on a wartime economy, certainly not compared to Vietnam or WWII, but you can’t say that it wasn’t an insignificant part of economic or GDP, given where the economy has been.”
Coming to a hard figure on the costs versus benefits of the Iraq War may indeed be impossible—particularly because untangling those costs from those of the simultaneous war in Afghanistan is difficult. However, it is clear that the costs of the war will ultimately go far beyond those of the costs of combat and reconstruction.
One key way that the war’s costs will outlast its operations is in veterans’ health care. A recent paper from the Center for American Progress estimates that the projected total cost of veterans’ healthcare and disability will run between $422 billion and $717 billion.
Columbia University Economics Professor Joseph Stiglitz and Linda Bilmes, a lecturer at Harvard’s Kennedy School of Government, have also argued that fighting in Iraq diverted resources from Afghanistan, prolonging conflict in that country. All told, Stiglitz and Bilmes have put the cost at well over $3 trillion.
Whatever the cost, some experts say that it wasn’t what was financed in the Iraq War but how it was financed that is problematic.
“The problem is not the impact on the GDP. It basically was financed through debt, which is a completely different issue,” says Anthony Cordesman, the Arleigh A. Burke Chair in Strategy at the Center for Strategic and International Studies.
“It’s really the decision of how to pay for it that has had such a negative effect on the U.S. economy. Because unlike any previous war in U.S. history, this was paid for entirely by debt at the same time that we cut taxes,” says Bilmes. While entitlements and other mandatory spending make up a majority of annual federal budgets and contribute heavily to deficits and debt, the Iraq War also contributed significantly. The Center for Budget and Policy Priorities has estimated that the wars in Iraq and Afghanistan, together with the Bush tax cuts, will account for almost half of the projected $20 trillion debt in 2019.
Cordesman stresses that asking “what if” can be an exercise in futility. Calculating the opportunity cost of engaging in the Iraq War, as opposed to however else government might have spent (or not spent) the same amount of money, “borders on the absurd,” he says, as there are countless alternatives to any option. “The opportunity cost of every decision you take is almost inevitably suboptimal,” he says.
Aside from whatever opportunities the U.S. missed by engaging in Iraq, there are also unquantifiable costs. A recent memo from the Center for American Progress, a left-leaning think tank, argues that ending Saddam Hussein’s regime empowered Iran, “remov[ing] the most significant check on Iran’s hegemonic aspirations.” Many returning vets will also face personal economic difficulties, coming home to a difficult job market.
Of course, the human costs of the Iraq War are without a doubt its most lasting and tragic legacy. In addition to more than 32,000 U.S. soldiers wounded in Iraq, the war killed over 4400 U.S. soldiers, according to Icasualties.org, not to mention more than 104,000 Iraqi civilian casualties, according to Iraqbodycount.org.
By: Danielle Kurtleben, U. S. News and World Report, December 15, 2011
The conventional wisdom keeps telling me that Mitt Romney, for all his many faults (chronic dishonesty, incessant flip-flopping, cowardice, etc.), is at least a smart guy who cares about policy. Romney may lack integrity, we’re told, but at least he’s a vaguely technocratic wonk.
Except, I’m not at all convinced this guy is any smarter than his hapless Republican rivals. Romney speaks in complete sentences, which makes him look like a genius compared to Rick Perry, but consider some of the things the former governor says about his understanding of public policy. Here’s a gem from Iowa earlier today:
“Medicaid. You wonder what Medicaid is; those who aren’t into all this government stuff. You know, I have to admit, I didn’t know the differences between all these things until I got into government. Then I got into it and I understood that Medicaid is the health care program for the poor, by and large.”
I see. So, Mitt Romney, despite two degrees from Harvard, learned what Medicaid is when he became governor in 2002. He was 55 years old at the time.
Before he “got into government” and discovered what Medicaid is, Romney helped run a health company, which relied heavily on funding from — you guessed it — Medicare and Medicaid. What’s more, in his book, Romney boasts about having been a health care consultant, where he developed an expertise in how to deal with entitlements.
But he didn’t know what Medicaid was until he got into government?
Now, I know what some of you are thinking. “Romney didn’t mean what he said this morning,” you’re going to tell me. “He was only saying he didn’t understand Medicaid so that he could pretend to relate to the people in the audience. This wasn’t ignorance; it was pandering.”
Perhaps. I can’t say with certainty what Romney is ignorant of, and what he only pretends to be ignorant of.
But if this is the accurate explanation, let’s appreciate a disconcerting fact: Romney is so desperate to appear folksy, he’s willing to lie about his lack of awareness to get people to relate to him. And that’s just sad.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, December 16, 2011
First he gutted worker’s rights, then slashed state education funding and dumbed-down sex ed. Next on Wisconsin Gov. Scott Walker’s hit list? Breast and cervical cancer screenings for women. Come January 1, Wisconsinites who rely on Planned Parenthood to access free cancer screenings may be out of luck.
The Wisconsin Well Woman Program is an 17-year-old state service created to ensure that women ages 45 to 64 who lack health insurance can access preventive health screenings. It is administered by the Department of Health Services and provides referrals and screenings for breast cancer, cervical cancer, and multiple sclerosis at no cost. The state currently uses a number of contractors to coordinate and provide those services, including Planned Parenthood. But now, in a move that could leave many women in the state without access to the program, the Walker government is ending Planned Parenthood’s contract.
In four Wisconsin counties, Planned Parenthood is the only health care provider currently contracted as a coordinator for the cancer screenings. Coordinators evaluate women for eligibility, enroll them in the program, and then connect them to health care providers that can perform the exams. The coordinators also do community outreach, letting women know that there are options for preventative care even if they don’t have health insurance. Planned Parenthood Advocates of Wisconsin has been a contractor since the program began—including during the terms of previous GOP governors Tommy Thompson and Scott McCallum—but the group recently learned that its contract is being terminated at the end of the month.
Beth Kaplan, a spokeswoman for the Department of Health Services, told Mother Jones that no decision has been made on the contract and would not comment on why it might not be continued. But Tanya Atkinson, executive director of Planned Parenthood Advocates of Wisconsin, says they were told that the state is cutting them out of the program. “They have very clearly stated that they were ending the contract with us,” she says. [UPDATE: Walker himself has confirmed that the state is ending its contract with Planned Parenthood.]
Atkinson says the DHS cut is politically motivated; as far as she knows, her group was the only service provider whose contract was not renewed. The move puts in question what will happen to the more than 1,000 women that access the Well Woman Program through Planned Parenthood in Winnebago, Fond du Lac, Sheboygan, and Outagamie counties every year. Doctors found 15 cases of cervical and breast cancer in the 1,260 women screened in those counties in 2010—cases that likely would not have been detected if women didn’t have access to the Well Woman Program. The county health officers in two of those counties have already issued statements decrying the state for targeting Planned Parenthood for the cut and for risking the health of their residents.
I’ve been thinking about the term “capitalism” since Frank Luntz, the renowned pollster, told Republicans to quit saying it. The Occupy Wall Street movement has turned “capitalism” into a dirty word, he said. If Republicans want to win in 2012, they’d better stop worrying and learn to love “economic freedom” instead.
It’s a stunning turning of the tide. No matter the kind of conservative—Southern, evangelical, libertarian, Tea Party, or old-school Rockefeller patrician—conservatives have never hidden their allegiance to the moneyed class and power elite. I have never in my lifetime seen a conservative counsel against expressing one of the major tenets of conservative ideology. You might as well advise the GOP to stop trying to repeal the New Deal and start defending labor rights.
I’ve been thinking about this rhetorical shift while riding the bus in New Haven every day. The passengers are typically at the bottom of the 99 percent. Some are destitute; some are unemployable. Most are working poor, people with full-time minimum-wage jobs who cannot rise above poverty. I wonder what they’d think of John Mackey’s definition of “economic freedom.” The CEO of Whole Foods wrote in The Wall Street Journal in November that the phrase means “property rights, freedom to trade internationally, minimal governmental regulation … sound money, relatively low taxes, the rule of law, entrepreneurship, freedom to fail, and voluntary exchange.” My guess is they’d think very little of it.
Mackey’s definition is meaningful only if you already have money. Real money. Money you don’t have to spend right away, money that can sit around for a while. But when you don’t have real money, it has nothing to do with “economic freedom.” If Mackey were defining “capitalism,” that would be one thing. The working person might have nothing to say to that. The abstract nature of “economic freedom,” though, invites interpretation, and, for the working person, it has everything to do with making a living.
Though “economic freedom” is now synonymous with capital, it used to be synonymous with labor. It makes sense. Government isn’t the largest force in our lives. Corporations are. They dictate when to work, where and how. Or none of the above if you’ve been laid off. They don’t want to pay for full-time work, health care, or pensions. During their golden age, unions were seen as a step toward greater security, which was a step toward greater freedom. If you, as an individual, didn’t have to worry about bargaining for wages, retirement, or life insurance (because your labor posed actual physical risk), you were freed of that burden. In other words, economic freedom wasn’t freedom from the rule of government; it was freedom from the rule of corporations.
More profoundly, labor’s “economic freedom” is in keeping with the grandest narratives of American history, with colonists fighting the British colonizers, slaves fleeing their masters, women struggling for the right to vote, African Americans appealing for their inalienable rights. In each of these, a David battles a Goliath—and the underdog wins. Only in America. Where is the moral thrust of capital’s “economic freedom” narrative? Making more money? Nah.
Some have warned that Luntz is setting a trap. The temptation among progressives has been to talk even more about capitalism since Luntz is “frightened to death” by the Occupy movement. If they do, critics say, Republicans will be able to portray progressives as socialists. No doubt they will, but not because the Occupiers are focused on capitalism. Conservatives are willing to cry socialist anytime something irritates business. It doesn’t take raising a country’s collective consciousness to the dangers of corrupt capitalism to draw rhetorical fire like that.
Talking about capitalism in America is somewhat like talking about class. As a social reality, it’s so familiar as to be invisible, which is convenient for those, like the moneyed class and power elite, who don’t want to talk about it. But once you start talking about an invisible force that can affect anyone, you start wondering why it doesn’t benefit everyone. That, to me, is what the Occupy movement needs to keep doing: pointing out what should be obvious to all of us.
An enormous propaganda machine paid for by capital has made it necessary for thousands of people to march in the streets and camp in public parks to make what should be truly unremarkable observations: Rich people don’t always deserve their riches, and people who work hard often can’t make ends meet. This is about capitalism, because this is about the nature of work—and the enormous constraints faced by Americans employed or not. So, no matter what kind of rhetorical hocus-pocus Republicans come up with next year, no matter what they call capitalism, the elephant is still in the room. There’s no replacing plainspoken truths.
By: John Stoehr, The American Prospect, December 16, 2011
Can we please bury the notion that Newt Gingrich is some kind of deep thinker? His intellect may be as broad as the sea, but it’s about as deep as a birdbath.
I’m not saying the Republican presidential front-runner is unacquainted with ideas. Quite the contrary: Ideas rain through his brain like confetti, escaping at random as definitive pronouncements about this or that. But they are other people’s ideas, and Gingrich doesn’t bother to curate them into anything resembling a consistent philosophy. Given enough time, I’m convinced, he will take every position on every issue.
The week’s most vivid example of Gingrich’s intellectual promiscuity sent principled conservatives into apoplexy. Mitt Romney, his chief opponent for the GOP nomination, had called on Gingrich to return the $1.6 million in consulting fees he received from housing giant Freddie Mac. Gingrich replied that he would “be glad to listen” if Romney would first “give back all the money he’s earned from bankrupting companies and laying off employees” during his time as head of the investment firm Bain Capital.
If this were a column about Gingrich’s hypocrisy, the point would be that he has been scorchingly critical of Freddie Mac while accepting tons of the firm’s money. But this is about his shallowness — and the fact that, in blasting Romney, he adopted the ideas and rhetoric of Occupy Wall Street.
Republicans are supposed to believe that “bankrupting companies and laying off employees” is something to celebrate, not bemoan, because this is seen as the way capitalism works. Even in the heat of a campaign, no one who has thought deeply about economics and adopted the conservative viewpoint — which Gingrich wants us to believe he has done — could possibly commit such heresy.
Gingrich doesn’t just borrow ideas from the protesters he once advised to “get a job, right after you take a bath.” He’s as indiscriminate as a vacuum cleaner, except for a bias toward the highfalutin and trendy.
Take his solution for making the federal government so efficient that we could save $500 billion a year: a management system called Lean Six Sigma. There’s no way Gingrich could resist such a shiny bauble of jargon. Why, the name even includes a letter of the Greek alphabet — the sort of erudite touch that a distinguished professor of history, such as Gingrich, could not fail to appreciate.
I won’t argue with the corporate executives who say that Lean Six Sigma works wonders for their firms. But is a technique developed by Motorola to reduce the number of defects in its electronic gear really applicable to government? There’s no reason to think it would be, unless you somehow restructured government to introduce competition and a genuine, not simulated, profit motive. I guess Professor Gingrich will get back to us on that; at the moment, he’s too busy playing with his new piece of management-speak.
Another example is Gingrich’s bizarre claim last year that “Kenyan, anti-colonial behavior” was the key to understanding President Obama. Aside from being one of the stranger, least comprehensible utterances by a prominent U.S. politician in recent memory — and that’s saying something — it was also completely unoriginal. Gingrich was citing and endorsing a hallucinatory piece in Forbes by Dinesh D’Souza. It was merely the idea du jour.
Gingrich finds it hard to watch an intellectual fad pass by without becoming infatuated. Do you remember Second Life, the digital realm? In 2007, he told us it was “an example of how we can rethink learning” and potentially “one of the great breakthroughs of the next 10 years.” I know Second Life still exists, but have you heard a lot about it recently? Has it changed your world?
Gingrich didn’t originate the idea of solving the health insurance problem through an individual mandate, but he supported it — before bitterly opposing it. Nor was he saying anything new last week when he made the offensive claim that Palestinians are an “invented people.” His xenophobic views about the alleged threat to the United States from Islam and sharia law conflict with earlier statements praising immigration and the melting pot as great American strengths. But for Gingrich, the word contradiction has no meaning.
Gingrich’s debating technique is dogmatic insistence, rather than persuasion. His discourse knows no past and no future, just the glib opportunism of now.
By: Eugene Robinson, Opinion Writer, The Washington Post, December 16, 2011