Sunday, March 19, 2006

That Dollar Store Called Iraq

The first time I drove past a dollar store, I wondered if it was true that everything inside only cost a dollar. I passed the store numerous times always wondering the same thing. Finally one day I stopped and checked the store out. It turned out that yes, plenty of items cost a dollar, but as well many things cost more than a buck. This reminds me of Iraq.

Prior to the war, the Bush Administration didn't spend much time on pricing the war, but they did give us some estimates. In January of 2003, Donald Rumsfeld for instance had said that the budget office had "a number that's something under $50 billion." And several in the administration were claiming that the Iraqi oil would pay for the war and reconstruction.

Those estimates followed what former White House economic advisor Lawrence Lindsay had quoted in September 2002 of a price tag with an upper bound limit of $100 to 200 billion. White House budget director Mitch Daniels quickly dismissed that estimate as being "very, very, high." And between then and Rumsfeld's figure, Lindsay was dimissed from his job.

Three years into the war the price tag is something like $400 billion. It is hard to give an accurate figure as some of that $400 billion goes to Afghanistan. Congress in the past year has been lumping the two wars together in appropriation bills. But it's safe to assume that Iraq is around $300 billion at the low end.

I decided to do some math. The estimated population of the United States is just under 3oo million, at about 295 million. So three years into the Iraq War we can guestimate that the war has cost every human in America about $1,000. That's every human, whether you are just entering the workforce, or laying in a bed at a nursing home, or a three year old child, or asleep in a coma, we all can be essentially assigned a bill of $1,000.

According to the CBO the Iraq War is costing the Pentagon about $6 billion a month, or to each US human about 20 bucks a month. At a per day, the Pentagon $200 million, per American about 67 cents. It doesn't sound so bad per day or month.

Of course we all don't cover that bill the same. Some people are over in Iraq working for the American reconstruction companies, so their bill kind of goes around back into their paycheck, in fact they don't even have to pay income taxes as foreign workers. Kids and infants don't pay, plenty of Americans don't have income tax to fork over. That leaves the rest of us working stiffs. Who could guess what the share becomes for us, maybe $3,000 so far?

But are we paying for it as we go? That's a question I can't answer. It's quite possible we are just adding the cost of the Iraq War onto the federal budget deficit. Just this past week Congress raised the debt ceiling to $7 trillion in order to not default on US treasury notes. Seven trillion dollars, when you're talking those astronomical numbers who can tell what dollars are rotating around in Washington and in which direction they go or what hole they disappear into. Our federal deficit this year is projected to be $423 billion. I suppose the Iraq War can be shoved into that and by definition the national debt that the deficit adds to every year.

The Bush Administration has been running yearly deficits since the second year in office with some vague promise that the annual budget will balanced by 2009, delaying it until the next president's term, if then. Bush took us to war at the same time he gave tax breaks to the rich, and continues to give those tax breaks. Americans have not been asked to pay for this war technically. We haven't been asked to sacrifice at home with our dollars, and the rich certainly haven't had to sacrifice for Iraq.

No, this war has been foistered into the future. This war is being paid for by the government credit card, via treasury bonds, etc. that we pay interest on to the holders. Holders of those bonds now are about 50% foreigners and foreign countries.

It all seems so complicated, but it's still true that every American can be assigned 1,000 dollars so far. But get this, new estimates for the total cost of the Iraq War (bearing in mind we really don't know when the end will be) are $1 trillion, whew! That would send our bill to over $3,000 per person in the United States.

My problem is that no one asked me whether I was willing to pay that much for Iraq. Of course no one asked me whether I believed that there were weapons of mass desrtuction either. I didn't. I also didn't believe the cost estimates that were being put out back then. I also didn't believe that Iraqi oil would be paying for it. And now when I hear a figure of $1 trillion, I wonder if someone is finally being honest (the trillion doesn't come from the Bush crowd, they stopped estimating) or whether that estimate is lowballed.

This is why the Iraq War reminds me of that dollar store. The sign outside may say "Dollar Store" but the prices inside can be anything. In fact at $1 trillion, why didn't we just pay Saddam Hussein say $300 billion to sell us Iraq? We could all have saved plenty. "Here you go Saddam, a check for 300 billion. Now go live in Monoco, we are taking possession."


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