Estimates of possible war costs vary widely; according to one calculation, the Middle East conflict and the support of Israel also cost the USA a lot of money
As is well known, one can calculate a lot and with very different results. Therefore it is easy to calculate, especially if one has certain interests. The Bush administration once quoted costs of $40 billion to Congress for a naturally quick and successful war against Iraq. In another report, however, costs of between $99 billion and $1.9 trillion have now been calculated. And if you add the ongoing costs of supporting Israel, it could be really expensive for the U.S. – except for the rest of the world.
Whether the government has now realistically calculated the costs of various scenarios is not known. The 1991 Gulf War is said to have cost 61 billion dollars. In reality, however, the Americans had to pay much less, because the Allies, including Germany, paid all but $8 billion. And the U.S. government was lucky, too, because the economic consequences, such as increased oil costs, were short-term and relatively minor.
Congressional estimates for a new war ranged from 40 to 200 billion dollars (billion dollar budget for Bush and Rumsfeld). Lawrence B. Lindsey, a White House aide, had sought in September to smooth any pre-election excitement, saying the cost would be no more than 1 to 2 percent of U.S. gross national product. That was the equivalent of $100 to $200 billion (war costs are peanuts). The Pentagon’s annual military spending alone is already 350 billion dollars. The expenses for the war were not going to significantly increase the already existing debt, and the war would hardly have an economic impact, according to Lindsey.
Above all, costs arising after the war were not taken into account
However, the report War with Iraq: Costs, Consequences, and Alternatives, just released by the prestigious American Academy of Arts and Sciences (AMACAD), comes to different conclusions, especially if one includes undesirable scenarios more strongly. In the worst-case scenario, says William Nordhaus of Yale University, the costs could add up to $1.9 trillion. This is more than five times the 270 billion dollars that the Congressional Budget Office had calculated for the worst-case scenario of a three-month war, including ground troops, and a five-year occupation.
Nordhaus has gone through the available calculations of the costs of war and has found that in staring at the quick war, which the U.S. government naturally propagates, one has mainly ignored costs that can arise after the war. Here’s how Nordhaus puts a longer occupation and peacekeeping missions at $75 billion to $500 billion. In addition, funds for reconstruction of more than 100 billion and humanitarian aid of at least 10 billion could be obtained. At best, Nordhaus estimates that the U.S. would have to raise about $99 billion on its own if it acted without a UN resolution (for Iraq, by contrast, the war is said to have cost $230 billion due to destroyed infrastructure alone). Now already the USA have a deficit of 150 billion dollars, tendency further rising. Bush plans further tax cuts despite high expenditures, which also increases the national debt and does not necessarily contribute to economic stability. In total, the public debt amounts to 6,330,682,270,007.28 dollars.
Economically, a war could impact the entire decade and result in a gain of 17 billion at best or a loss of 400 billion at worst due to turmoil in the oil markets and a recession resulting from rising crude oil prices and declining productivity growth, which would naturally have a global impact:
"The risk of falling into recession is real, especially given that the U.S. economy grew very slowly in late 2002."
The impact of increased defense spending will likely benefit only some defense contractors. At least in the first U.S. Gulf War, the increase in defense spending of 0.3 percent of GDP did not have a positive impact on the economy, with GDP falling by 1.3 percent.
Another contribution to the report by Steven Millar (Harvard University) warns that a war will not necessarily be won cheaply and quickly. Hussein, for example, has now had ample time to prepare for an attack. Above all, he criticizes the fact that the U.S. government has so far tended to talk of "rosy scenarios" but does not explain publicly what will happen if the war degenerates into a catastrophe. Carl Kaysen (MIT), John Steinbrunner (University of Maryland) and Martin Malin (AMACAD), on the other hand, warn that the U.S. government is turning away from international law and international institutions. In particular, the Bush administration’s militaristic orientation, which does not want to tolerate a co-equal power next to it, calls for the very asymmetric reactions to U.S. global power that this strategy actually seeks to combat.
Middle East Cost Center
And there was another cost assessment of the American policy with regard to the Middle East, d.h. on the support of Israel. In total, according to economic consultant Thomas Stauffer in a lecture at the University of Main, who did the analysis on behalf of the U.S. Army War College, the U.S. has paid close to $1.6 trillion to Israel since 1973. That, he said, is twice as much as the Vietnam War cost.
Israel is the grossest recipient of U.S. foreign aid. In fiscal year 2003 alone, Israel will receive $2 billion in military aid and $720 million in economic aid. It has also received about three billion dollars annually in the past. In addition, Egypt has received $117 billion and Jordan $22 billion in aid in exchange for signing peace treaties, which, Stauffer said, are also politically part of the overall aid package "overall support package" for Israel.
But in addition there are further costs. After the 1973 war, President Nixon had re-supplied Israel with weapons, leading to an oil embargo against the U.S., which reportedly caused the U.S. to lose $420 billion (2001 value). The increase in the cost of oil cost an additional 450 billion. After this experience, the USA established the strategic oil reserve, which is said to have cost at least 130 billion.
Part of the military aid, which was supposed to be used to buy American weapons, was used by Israel to buy its own hardware, resulting in the loss of 125,000 jobs.000 jobs as a result. In addition, Pentagon-affiliated defense contractors can also buy systems from Israel. With financial and technical support from the U.S., Israel has become a major producer of military equipment. Half of the exported industrial goods are weapons. At the same time, Israel has become a competitor of the USA. Sometimes American arms sales are also blocked by Israel, such as the sale of F-15 fighter jets to Saudi Arabia in the 1980s. Also, the other trade restrictions that hit the U.S. for supporting Israel have been estimated to cost $5 billion a year, or 70.000 jobs in losses.
Stauffer’s calculations are also precarious if only because Israel has just received an additional four billion dollars in military aid from the U.S. government because of increased spending in the fight against the Intifada, or. suicide bombings and a loan of eight billion for the ailing economy.
Of course, all calculations of this kind are milquetoast calculations that work only on the amption of certain conditions, but can never really take into account all factors. The shorter the time horizon, the more skewed the calculation becomes when estimating the costs of war. In the case of Iraq, for example, it would also have been important to avoid the cost of another war "containment" including sanctions. In addition, a calculation of the costs of an international conflict and its consequences for a single country can hardly be considered realistic in view of the economic interdependencies. moreover, a war does not take place in only one country, but has an impact on many conflict zones all over the world, in this case especially on the middle east, but also on the whole middle east and on all countries with muslim inhabitants. Presumably, however, despite some short-term successes, war was always allowed to remain the expensive solution, especially since conflicts are generally not solved in this way, but only new ones are created.