On the road to national bankruptcy

Remember when the Bush administration, specifically then deputy Secretary of Defense Paul Wolfowitz said invading Iraq would "pay for itself"?

That was around the same time that one of Bush's economic advisors, Lawrence Lindsay, in a September 2002 interview with the Wall Street Journal, suggested an invasion of Iraq would cost, at the upper limits of somewhere between $100 billion and $200 billion.

The Bush administration didn't like that much so they had Mitch Daniels, Director of the Office of Budget and Management publicly declare that Lindsay's estimates were "very, very high". Then Donald Rumsfeld jumped in by saying that the OBM had provided an estimate of under $50 billion for the total cost of the war.

They then fired Lindsay.

On Wednesday, this appeared.

The war in Iraq could ultimately cost well over a trillion dollars -- at least double what has already been spent -- including the long-term costs of replacing damaged equipment, caring for wounded troops, and aiding the Iraqi government, according to a new government analysis.

The United States has already allocated more than $500 billion on the day-to-day combat operations of what are now 190,000 troops and a variety of reconstruction efforts.

In a report to lawmakers yesterday, the nonpartisan Congressional Budget Office estimated that even under the rosiest scenario -- an immediate and substantial reduction of troops -- American taxpayers will feel the financial consequences of the war for at least a decade.

The calculations include the estimated cost to leave some US forces behind for at least several years to support the Iraqi government, but they also predict other long-term costs, such as extended medical care and disability compensation for wounded soldiers and survivor's benefits for the families of the thousands of combat-zone fatalities.

The percentage of total revenue taken in by the US government which is being spent on the Iraq war:

The cost of the war in Iraq and other military operations has soared to the point where "we are now spending on these activities more than 10 percent of all the government's annually appropriated funds," said Robert A. Sunshine, the budget office's assistant director for budget analysis.

Unlike the figures first produced by the Bush administration, most of which they pulled out of their asses, these ones are extrapolated from known expenses over the past five years.

And then there's the "surge" which was the subject of a lot of bandied-about figures.

Representative James P. McGovern, a Worcester Democrat and a member of the budget panel, said that [Gordon] England [deputy secretary of defense] couldn't give a firm answer when asked how much the Pentagon needed to pay for Bush's decision to dispatch 30,000 more troops to secure Iraq earlier this year. England said the costs the Pentagon anticipated a few months ago for military operations in fiscal year 2008 -- about $142 billion -- will no longer be enough.

Just haul out the credit card and pay for it.

But McGovern said he is worried about the long-term financial impact of the war, adding that his primary concern is that the United States is borrowing money to pay for it. Some leading economists have predicted that, depending on how long troops remain in Iraq, the endeavor could reach several trillion dollars as a result of more "hidden" costs -- including recruiting expenses to replenish the ranks and the lifelong benefits the government pays to veterans.

"It is being paid for on the national credit card," McGovern said. "It is being put on their backs of our kids and grandkids. That is indefensible."

McGovern said he is considering proposing that a "war tax" be levied on all Americans to cover the ballooning expenses.

"We should find a way to pay for it so that when this war is over we are not bankrupt," he said.

Right! A war tax. Why didn't the "war president" think of that?

In case you're having trouble sorting out the massive scale of a trillion dollars, this was written over a year and a half ago.

And where have the players who brushed off any thought of the Iraq war costing anything more than a few billion dollars?

Paul Wolfowitz - Left his post as Deputy Secretary of Defense in January 2005 to become the president of the World Bank. Resigned under a cloud having made particularly outlandish arrangements for his girlfriend, also an employee of the World Bank, to receive a highly paid job working for the State Department while still on the World Bank's books. Now a visiting scholar at the American Enterprise Institute, a right-wing think tank.

Mitch "The Blade" Daniels - Resigned as Director of the Office of Management and Budget under the cloud of an investigation into "insider trading" relating to issues with Eli Lilly pharmaceuticals, a company of which he had been a senior vice-president. Ran for and won the governorship of Indiana. Tried to raise taxes on individuals and corporations earning over $100,00 annually and tried to raise taxes on cigarettes by 25 cents per pack. This confused conservatives everywhere. Bush quit calling him "My man Mitch".

Lawrence Lindsey - CEO of the Lindsey Group, writes for the Wall Street Journal and the Weekly Standard. Also a visiting scholar at the American Enterprise Institute. Had a history of disagreeing with people on economic issues. He was usually right.