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America won't simply be paying with its dead. The Pentagon is trying to silence economists who predict that several decades of care for the wounded will amount to an unbelievable $2.5 trillion.
However, let us first backtrack to 2002-2003 to try to establish why the administration's sums were so wildly off-target. Documents just obtained under the Freedom of Information Act show how completely lost the Bush administration was in Neverland when it came to Iraq: Centcom, the main top-secret military planning unit at Donald Rumsfeld's Pentagon, predicted in its war plan that only 5,000 US troops would be required in Iraq by the end of 2006.
Rummy's deputy Paul Wolfowitz was such a whizz at the economics of it all that he confidently told us that Iraq would "really finance its own reconstruction". Rumsfeld himself reported that the administration had come up with "a number that's something under $50bn" as the cost of the war. Larry Lindsey, then assistant to the president on economic policy at the White House, warned that it might actually soar to as much as $200bn - with the result that Bush did as he habitually does with those who do not produce convenient facts and figures to back up his fantasies: he sacked him.
Let me pause to explain those deceptive figures. Look at the latest official toll of US fatalities and wounded in the media, and you will see something like 3,160 dead and 23,785 wounded (that "includes 13,250 personnel who returned to duty within 72 hours", the Washington Post told us helpfully on 4 March). From this, you might assume that only 11,000 or so troops, in effect, have been wounded in Iraq. But Bilmes discovered that the Bush administration was keeping two separate sets of statistics of those wounded: one (like the above) issued by the Pentagon and therefore used by the media, and the other by the Department of Veterans Affairs - a government department autonomous from the Pentagon. At the beginning of this year, the Pentagon was putting out a figure of roughly 23,000 wounded, but the VA was quietly saying that more than 50,000 had, in fact, been wounded.
There is now a backlog of 400,000 claims from veterans and waiting lists of months, some of which "render . . . care virtually inaccessible", in the words of Frances Murphy, the VA's own deputy under-secretary for health. Claims are expected to hit 874,000 this year, 930,000 in 2008. Casualties returning from Iraq meanwhile outnumber other patients at Walter Reed 17 to one, and many have to be put up at nearby hotels and motels rather than in the hospital beds they desperately need. Suicide attempts are frequent; often the less wounded end up having to care for the more seriously wounded.
Larry Lindsey told the Wall Street Journal in September 2002 that "the successful prosecution of the war would be good for the economy"; the WSJ echoed his thoughts in an editorial the same day, arguing that "the best way to keep oil prices in check is a short, successful war on Iraq". In 2002, the average cost of a barrel of oil was $23.71; today, it is hovering around $50. Dick Cheney's chums in firms such as his own Halliburton - or ExxonMobil, Shell, BP and Chevron - have profited enormously, but Bilmes estimates that even if only $5 of the oil-price increase can be attributed to the Iraq war, that alone adds $150bn to the cost of war.
Rummy's deputy Paul Wolfowitz was such a whizz at the economics of it all that he confidently told us that Iraq would "really finance its own reconstruction".
Rumsfeld himself reported that the administration had come up with "a number that's something under $50bn" as the cost of the war
Larry Lindsey, then assistant to the president on economic policy at the White House, warned that it might actually soar to as much as $200bn - with the result that Bush did as he habitually does with those who do not produce convenient facts and figures to back up his fantasies: he sacked him.
Estimating long-term costs using even the second, moderate scenario, Bilmes tells me: "I think we are now approaching a figure of $2.5 trillion." This, she says, "includes three kinds of costs. It includes the cash costs of running the combat operations, the long-term costs of replenishing military equipment and taking care of the veterans, and increased costs at the Pentagon. And then it includes the economic cost, which is the differential between reservists' pay in their civilian jobs and what they're paid in the military - and the macroecono mic costs, such as the percentage of the oil-price increase."