In a new book titled The Three Trillion Dollar War, Nobel Prize-winning economist Joseph Stiglitz and Linda Bilmes argue that President Bush massively understated the cost of the Iraq and Afghanistan wars. Combined with interest on debt, future borrowing, cost of continued military presence, and veterans health care, they estimate a potential cost of up to $5 to $7 trillion.
“People like Joe Stiglitz lack the courage to consider the cost of doing nothing and the cost of failure. One can’t even begin to put a price tag on the cost to this nation of the attacks of 9/11,” said White House spokesman Tony Fratto, conceding that the costs of the war on terrorism are high while questioning the premise of Stiglitz’s research.
In recent interviews, Stiglitz said Bush’s war accounting practices “are so shoddy that they would land any public firm before the Securities and Exchange Commission for engaging in deceptive practices.” “We had to use the Freedom of Information Act to uncover things that we never would have known,” he said.
The White House has a sensitive spot for assessments of the wars’ costs. In October, the CBO conservatively said the wars may cost $2 trillion over the next decade. White House Press Secretary Dana Perino retorted that the CBO’s estimate was “pure speculation” and “wildly premature.” When the Joint Economic Committee said the “hidden” costs of the wars totaled $1.5 trillion, OMB Chairman Jim Nussle derided it as “clearly partisan.”
While the White House says it is “not worried” about the price tag of war, they should be. The war costs are the “hidden cause of the current credit crunch” and housing crisis, Stiglitz’s book argues.
UPDATE: In a hearing with Stiglitz today, Sen. Charles Schumer (D-NY) said he is “tremendously disappointed” in the White House’s attack:
I was also tremendously disappointed to read in the paper today that the White House has disparaged Prof. Stiglitz and the work he has done. It is the height of hypocrisy for an administration that has been so secretive, so unwilling to face the truth and the true costs of their policies and this war to disparage the courage and conviction of someone like Professor Stiglitz.