Iraq war could cost $1 trillion+

[zengrifter]

Cost of Iraq war could surpass $1 trillion
Estimates vary, but all agree price is far higher than initially expected

By Martin Wolk
Chief economics correspondent
MSNBC March 17, 2006

One thing is certain about the Iraq war: It has cost a lot more than advertised. In fact, the tab grows by at least $200 million each and every day.

In the months leading up to the launch of the war three years ago, few Bush administration officials were willing to comment publicly on the potential costs to the United States. After all, no cost would have been too high if the United States faced an imminent threat from an Iraq armed with weapons of mass destruction, the war's stated justification.

In fact, the economic ramifications are rarely included in the debate over whether to go to war, although some economists argue it is quite possible and useful to assess potential costs and benefits.

In any event, most estimates put forward by White House officials in 2002 and 2003 were relatively low compared with the nation's gross domestic product, the size of the federal budget or the cost of past wars.

White House economic adviser Lawrence Lindsey was the exception to the rule, offering an "upper bound" estimate of $100 billion to $200 billion in a September 2002 interview with The Wall Street Journal. That figure raised eyebrows at the time, although Lindsey argued the cost was small, adding, "The successful prosecution of the war would be good for the economy.”

U.S. direct spending on the war in Iraq already has surpassed the upper bound of Lindsey's upper bound, and most economists attribute billions more in indirect costs to the war effort. Even if the U.S. exits Iraq within another three years, total direct and indirect costs to U.S. taxpayers will likely by more than $400 billion, and one estimate puts the total economic impact at up to $2 trillion.

Back in 2002, the White House was quick to distance itself from Lindsey's view. Mitch Daniels, director of the White House budget office, quickly called the estimate "very, very high." Lindsey himself was dismissed in a shake-up of the White House economic team later that year, and in January 2003, Defense Secretary Donald Rumsfeld said the budget office had come up with "a number that's something under $50 billion." He and other officials expressed optimism that Iraq itself would help shoulder the cost once the world market was reopened to its rich supply of oil.

...continued here - http://www.msnbc.msn.com/id/11880954/