The Opportunity Cost of War in Iraq

Cost of the War in Iraq
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I was inspired by a fantastic article published by the Sietch Blog called Bending Swords Into Wind Turbines, so I decided to bring together some data to share on the opportunity costs associated with the ongoing war in Iraq.

Just to be clear, I’m not espousing any political position. I’m only interested in coming to an understanding of what alternatives we are forgoing by spending money, effort and lives in Iraq as opposed to spending them on something else. We’re talking about a whole boatload of money here, so it’s nice to know what else we could be getting for our dollar.

Just to get this out of the way, some of the human costs (which I do recognize are most important) that are not as easy to translate directly into monetary terms are1:

  • 3,653 U.S. soldiers dead
  • 26,953 U.S. soldiers wounded
  • 1 in 5 returning U.S. soldiers suffer from post-traumatic stress disorder
  • Hundreds of thousands of Iraqis dead
  • 2 million Iraqis displaced in Iraq
  • 2 million Iraqi refugees in other countries

We should also remember that losing 3,653 citizens and injuring 26,953 more translates to financial losses from lack of future productivity, but as I already stated it would be hard to calculate the lifetime impact to the US economy.

Now as far as the real costs we can count, the U.S. alone has already allocated $456 Billion on the war in Iraq. This is the money we know we have already spent, and does not include future expenditures or expenditures in Afghanistan and other Global War on Terror operations since 9/11 (which incidentally total $610 Billion)2. Estimates place the total including post-war expenses in the $1.5-2 Trillion range.

Compare the real-time counter at the top of the page to this chart3, which is from 2005 so hasn’t been updated recently, and you’ll see that the Iraq war is already the 3rd most costly in US history. These are inflation adjusted numbers by the way.

Cost of Wars

There are, of course, other things that we could have done with the money. If we look at it from a security perspective, we could have done ALL of the following4:

  • $7.5 billion to safeguard our ports.
  • $4 billion to expedite upgrading the Coast Guard fleet.
  • $2 billion to improve cargo security.
  • $10 billion to protect all U.S. commercial airliners from shoulder-fired missiles.
  • $5 billion to purchase state-of-the-art baggage screening machines.
  • $240 million to equip the airports with walk-through explosive detectors.
  • $7 billion to put 100,000 police officers the nation’s streets.
  • $2.5 billion to increase funding for fire departments.
  • $350 million for integrating emergency radio systems nationwide.
  • $3 billion to secure major roads and rails.
  • $30.5 billion to secure from theft the world’s nuclear weapons-grade material.
  • $2.25 billion to expedite the work of the Nunn-Lugar Threat Reduction program.
  • $24 billion to add two divisions to the Army.
  • $15.5 billion to double the number of active-duty troops in the Special Operations Forces.
  • $8.6 billion to rebuild Afghanistan.
  • $11 billion to buy Afghanistan’s opium crop.
  • $10 billion to increase U.S. development assistance to the neediest countries.
  • $775 million to dramatically increase public diplomacy.

And we’d still have spent just a little over $200 billion, or less than half of the current running total.

From a general perspective we could have done one of the following with the funds spent to date on the war:

  • The cost of the Iraq war has exceeded the anticipated cost of the Kyoto Protocol to control greenhouse gases ($300 Billion)
  • Provided 48.6 million children with health care coverage for the length of the Iraq War
  • The US could be generating 15% of its electricity supply in renewable energy (wind or solar) for the same or less money.
  • Built 3.5 million affordable housing units
  • 18% of the dwelling units in the United States could have a 2.5 kW photo-voltaic system – assuming no drops in price or increases in technology.
  • Built 45,800 elementary schools

The New York Times reports these alternatives to the annual expenditures:

Annual Cost of War

And… what the heck, here is Senator Obama throwing out a few statistics as well:

One final thing to think about for comparison purposes. The United Nations’ Global Fund seeks US$10 billion a year to halt the ravages of AIDS, tuberculosis and malaria, and total development assistance from all donor nations to “least developed countries” stands at about US$6 billion a year.

More details can be found at any of the following:

Article Written by
John P.

John P. is CEO of Livid Lobster and co-host of Geek Beat TV. You can also find him on Twitter, Facebook and Google+.

Comments

  1. Dawood Mamedoff says:

    This war is the second expensive for U.S. after the World War II. Here I’ve tried to summarize all costs of the Iraq war for Americans:

    http://www.myhowtoos.com/en/red-hot/86-all-costs-of-war-in-iraq-for-usa

  2. One of my fellow authors put up a blog post about the cost of war. It fits nicely with some of the points that you have made here, so, I thought I’d direct you to it… at EverydayCitizen.com …. she calls the post:
    Economists Explain: Bush Destroyed Our American Dream and it’s at this address:
    http://www.everydaycitizen.com/2007/11/his_war_costs_much_more_than_w.html

    Love your blog,
    Nora

  3. Tom says:

    Today near Capitol arrested 200 participants in the rally against the war in Iraq!

  4. Tom says:

    Or, instead of killing nearly a million Iraqis, we could have given each and every family about $100,000. I bet democracy may have gotten a foothold then.

  5. John P. says:

    Good point Scott. I hadn’t even thought about that.

    John

  6. Scott says:

    The other opportunity is leaving it in the hands of families. Every dollar ripped out of the hands of a family increases risks in that family. It can cause a day delay in getting the brakes checked, or a day delay in throwing out the potato salad. The increase in risk of death is small, but it adds up. Economists estimate that taking a billion dollars out of US family income costs about 200 lives. For the presented cost of war, that means about 100,000 lives. Of course, since much of the war cost is borrowed, that targets our children more than the populace in general. Of these lives, it is hard to say “that man died because of the war” or “that little girl died because of the war”, so it gets little press. Yet on the average, we know it happens.

  7. MG says:

    A friend of the family was one of those 19 year olds :(

    God bless him, he was completely sold on the idea of defending his nation against terrorists, but he died instead defending a nation who’s terrorists are its own citizens. The sad part is that with the recent announcement that 190,000 US guns have been “lost” in Iraq, he could have been killed by one of our guns (source: http://gnn.tv/headlines/15005/U_S_has_lost_190_000_guns_in_Iraq ).

    I may be jaded, but I just don’t think you can force democracy down someone’s throat with a barrel of a gun. It has to be a fundamental desire to change the core of a country, and that will can’t be introduced by a foreign occupying nation :(

  8. BradDet says:

    Yep, thanks for the clarification. And if you used another counter, that already exists it’s not lazy it’s smart, why re-invent the wheel !

  9. The middle east has been at war for centuries. To think throwing thousands of 19 year olds with guns into the mix will solve it, is very bad thinking.

    Gosh, that just sums it up, doesn’t it?

    So sad, so sad.

    And yes, John – I agree about the not making profits from war – ugh, it just sickens me.

    I know I am an idealist, but, come on! You know?

    A lot of bloggers do the Wednesday Hero thing on their blogs, and I can’t even read them, because I just start crying and get so upset every time. So now I try to scroll past them really fast!

  10. Johny says:

    We should now somehow try to calculate how much the oil in Iraq and Afghanistan are worth, and how much the key supporters of the war earned by selling weapons or anything related to defense, or to the war in some manner… Those are the numbers which matter to them, because that is what is going in their pockets, the cost of the war is being paid by tax payers and therefore it’s a win-win situation for them (them = the government members who supported the war and the people, big company owners who backed them up).

  11. Eric says:

    Heh, no joke John – I would LOVE to see that sort of legislation. Of course then you’d have to boil down deeper to find who has connections to what, but at least it would give us means to go after war profiteers.

    At the end of the day, to know that someone’s life could be an issue of your net profit or bottom line is despicable. :(

  12. John P. says:

    I think we should pass a law prohibiting anyone from making a profit from war time activity. If you sell products to support war efforts you are only allowed to charge cost plus 10%. Then let’s see how many wars we get into and how long they last.

    John

  13. Eric says:

    John,

    I think the reason we’ve kept going this long is perception and momentum. One feeds the other unfortunately. We see this with the new candidates who are being called flip floppers for now holding new positions now that they’re on the podium and in need of votes. It seems that you want to avoid decrying the war (or that if you do, you have a supporting voting base to leverage you), for fear of looking too different from the other candidates.

    Ron Paul’s been a voice of reason to some of us for words like this:
    http://youtube.com/watch?v=dZmPS0XmeBw

    The argument has been reduced to this:

    If we leave now, Iraq will be left a mess.

    Implying the implausible, that if we stay it WON’T be a mess.

    Eventually you have to do the math. With the complete lack of willingness to be anywhere NEAR transparent by Bush, Cheney, and good ol Alberto, I can’t trust them to truly justify the war any longer. We’re losing funds, losing power, losing popularity, and worst of all we’re losing our future generations.

    By simply declaring defeat, cutting our losses, and admitting we need to find more efficient and more intelligent responses to wars like the War on Drugs and War on Terror, we could win.

    But with the momentum, any candidate who tries to say that we’re not winning the war on terror or that we’re not winning the war on drugs, instantly faces possible political slaughter.

    The ends have to justify the means, and every second that number grows larger, the means are becoming less and less justifiable in my mind.

    The War on Drugs isn’t successful. Most people in their 20′s know that within 12 hours they could secure a drug connection to get just about anything. The War on Terror isn’t successful because Bin Laden is still free and we’re helping fight people that had nothing to do with 9/11.

    I hate the fact that my daughter is in school with teachers who are underpaid, who have to pay for school materials out of their own pocket, and that I have to struggle to keep crappy healthcare paid for. To know that we’re spending OVER A TRILLION DOLLARS between the war on drugs and the war on terror, but that we can’t afford to take care of our own citizens..

    It definitely makes me sad.

    The middle east has been at war for centuries. To think throwing thousands of 19 year olds with guns into the mix will solve it, is very bad thinking.

    Why not focus on the healthcare system that those soldiers will need when they come back maimed, injured, and suffering from things that may take years to manifest?

  14. Pumpkin says:

    It makes me ill to think of all the money that has been spent and will be spent because of this war. Not to meantion you can’t put a price on life. So many lives have been taken or destroyed already.

    From the beginning when the cost of the war was skyrocketing I kept thinking of how much better it would have been to have dumped all that hard cash into our school systems. I think that would have been smarter than starting this war. It would have been an investment in America’s future.

  15. John P. says:

    Brad,

    I should have explicitly stated how that number was being derived, but I actually didn’t think about it. After I read it myself I was satisfied and then put it out of my mind. Sometimes I find it difficult to decide what to put in an article, and what to leave out. I try to cover enough to be complete, but not so much as to be exhaustive. :-)

    I was far to lazy to make one myself, so I got the counter from CostOfWar.com. You can get one to put in a post as well. It’s just a simple javascript.

    In order to get it to float over on the left side of the page I used a standard feature I baked into my theme called a “pullquote”. You basically need to wrap the javascript in a DIV element and apply some style. It would look like this:
    <div style="float:left; border-top: double black; border-bottom:double black; padding: 5px"> Place JavaScript Here </div>

    Hope that helps, and let me know if you need any assistance or anything.

    John

  16. BradDet says:

    Sorry John,

    My math’s is not so good, and I must admit all the numbers and calculations confuse me a bit..though I do appreciate their shock value.

    Could you elaborate a little more on how you extrapolated the $ counter from the figures. Are you taking the estimated $ over say a 6 month period and working back to a per/second calculation, with the notion that future costs will remain fairly steady with past averages?

    I apologize if you explain this in your entry, I’ve scanned through it several times now, and I can only shiver at the numbers. Also what tool are you using to generate the clock/$. It is a very clean looking calculator, did you make it yourself?

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