The War On Terror And Aid To Joplin

I just want to remind everyone who has a Scroogish opinion about federal disaster aid to Joplin of one thing: The Iraq and Afghanistan wars are costing us at a minimum $3 billion—every week of the year.  To put that in perspective, that’s the reported estimated damage caused by the tornado that hit our city a week ago, destroying or severely damaging almost one-third of it.

Here is a conservative estimate of the total cost of the Iraq and Afghanistan Wars—no offsets for them, you know; all have been and are being paid for with borrowed money—as of 8:30pm Central Standard Time:

 

If you follow and buy into the argument by Nobel prize-winning economist Joe Stiglitz, you get a much higher number.  Just in the case of the Iraq War, Stiglitz estimated the cost to be, well, his book (co-authored with Linda Bilmes) was titled, “The Three Trillion Dollar War: The True Cost of the Iraq Conflict,” so you get the idea.  It’s a lot.

Stiglitz believes that the Iraq war has had particular macroeconomic effects that are not part of the calculation most people make when totaling up the cost of the war.  For instance, he argues that “the war has led to higher oil prices.”  In his book he only conservatively attributed a $5-10 increase to the war, but believes “a reasonable number would be at least $35 and probably much more.”

He also argues that the war spending in Iraq didn’t and doesn’t have much of a stimulative effect on our economy, either in the short or long run:

If we spend money for somebody from Nepal to work in Iraq it does not stimulate the American economy in the same way as building a road in America or hiring a teacher in America. It certainly does not increase long-run productivity in the United States.

The third argument he makes, related to the Joplin emergency funding issue,  is this one:

This war was financed totally by deficit financing, unlike any other war.  Normally when countries go to war they talk about shared sacrifice. As America went to war we lowered the taxes on upper-income Americans. Really very strange behaviour in a context in which we already had a large deficit. The national debt has grown by almost $1 trillion just because of the war and by 2017 we estimate it will rise by another $1 trillion.  That is a lot of money.

He adds:

These three factors have led to a depressing of the U.S. economy today and weakening the U.S. economy in the future.

He also believes that “lax monetary policy” by the Federal Reserve, which was implemented in order to compensate for the decreased purchasing power in the economy resulting from higher oil prices, led to a distortion in the economy that itself contributed to the pre-collapse bubble before the fall of 2008.  How do you calculate that cost?

Finally, Stiglitz points out that the long-term cost of disability payments and health-care costs for wounded soldiers, and the cost for replacing equipment lost or damaged during the war, all add up to his final cost of what he called “a war of choice.” 

And the simple point is that in the case of the war in Iraq or the war in Afghanistan—both wars of choice that have been deficit-funded—no one in the Republican Party argued that the costs of the wars had to be offset in the budget or else there would be no funding for those wars.

As a commenter on this blog pointed out,

Picking up the pieces of disasters such as the one that hit Joplin is one of the many reasons why we have a government in the first place.

So, before anyone argues with me about “bailing” out Joplin, or argues that the costs of emergency funding for our city should be offset with cuts elsewhere in the budget and thus become part of a protracted political fight, please tell me why you weren’t arguing since 2001 for cutting the budget to fund our war efforts.

That’s what I thought.

19 Comments

  1. The logic here makes sense to me. I have posted before on how the Iraq War made no sense relative to the so-called War on Terrorism, and that subject is well covered in Bob Woodward’s book, “State of Denial”.

    The GOP is hypocritical to demand budget cuts to compensate for disaster relief when a Republican administration funded an unnecessary war with uncompensated deficit spending. I haven’t heard a Republican try to defend this particular argument, but I assume any such effort would be based on the exigencies of “war”. “War” is a meme fueled by collective fear, as in 9/11. A tornado in Joplin Missouri generates no collective fear (except in Joplin).

    Both political sides now seem to agree that the fiscal crisis has reached criticality. Duane here argues that the right is hypocritical and stingy to balk at small federal expenditures after eight years of irresponsible and unnecessary spending. The right would argue, I assume, that fiscal calamity is upon us and we must finally take a stand on principle – better late than never. “How do you eat an elephant?” Answer- one bite at a time. But, it’s sure bad timing for Joplin to think that way, isn’t it?

    I can see both sides here. It IS hypocritical. Joplin DOES need help now, and such IS a fundamental function of government. And the amount required is tiny, tiny, compared to “war” costs. For the GOP to discover fiscal discipline at this late date and to demand it in the face of such pressing need is Scrooge-like.

    The link above, “Stiglitz believes”, is to his book, The Three Trillion Dollar War . . . “. I strongly urge any commenter to this post to read that paper. It is breathtaking in its clear indictment of the massive costs of that inane war, and also provides amazing clarity about our overall economy. (Having read it though, I still don’t understand why he says the Iraq War caused oil to go from $20 a barrel to $100. I guess it just did.)

    But here is what I see as the overarching irony of it all: ALL federal expenditures are small compared to those for Medicare and Medicaid, and yet entitlement reform is deadlocked in Congress. Democrats are, successfully now, employing a Death of Medicare meme without accepting the need to tackle accelerating medical costs by an increasingly corrupt and inefficient Medical Industry. Republicans are stubbornly refusing to put tax increases on the negotiating table, even at a time when income tax rates are at historic lows and the wealth disparity between rich and poor is at an historic high.

    Congressional intransigence reigns while Joplin sorts through the rubble. If entitlement reform were dealt with, such things as tornado aid would become a snap.

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  2. I know that you’re concerned about the costs of Entitlements but it’s unclear to me as to how you feel this issue should be resolved. Without Entitlements homelessness would increase many times over because there will never be enough jobs to insure that everyone will always be employed. And as you’ve stated above those in the middle class and below have seen their incomes stagnate at the same time that the wealthy have become wealthier. Entitlements fulfill a need that wouldn’t be filled in any other way so whether we like entitlements or not they will always be with us. Where we can agree is that entitlements need to be reformed however it’s the how that leaves the issue opens to near continuous debate?

    Even if by some good fortune every single American suddenly became employed there would still be 10’s of millions unable to pay for health care. All of them will ultimately end up in a hospital emergency room, often after their illness has become serious and life threatening. The costs of course are then dispersed out to the rest of us through ballooning healthcare costs. The most humane and cost effective reform would be if we got rid of Medicaid and private insurers and enrolled all Americans into Medicare. Doing that would eliminate administrative costs and increase negotiating power for medicines and technologies, and in time our health care costs could drop by almost half.

    One of the great benefits of the internet is the freedom to examine how similar problems are being dealt with in other industrialized countries. Nations such as Canada and those in Europe have much more effective and lower healthcare costs than we do. So why are we paying so much more and getting so much less for it? The number one problem with our healthcare delivery system is that it’s largely being delivered by uncaring profiteers.

    “The authors conclude that more negative access and cost experiences in the United States, plus wide disparities by income, underscore the importance of the Affordable Care Act’s emphasis on insurance expansion, benefit standards, and limits on costs for those with lower incomes. They note that the U.S. has the opportunity to learn from insurance innovations in other countries, including value-based benefit design.”

    http://www.commonwealthfund.org/Content/Publications/In-the-Literature/2010/Nov/How-Health-Insurance-Design-Access-Care-Costs.aspx

    http://www.reuters.com/article/2010/06/23/us-usa-healthcare-last-idUSTRE65M0SU20100623

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    • HL,

      Am I correct that your comment is directed to me?

      I don’t know how to fix Medicare, I only know that the basic structure of medical care needs to change. The single defining metric of a fix will be that the Medical Industrial Complex will be receiving much less profit when the fix is in, whatever it is.

      I find one thing significant and symptomatic of the problem: Congress has prohibited Medicare by law from negotiating the prices of drugs and equipment with manufacturers. That is telling and goes to my point above, doesn’t it?

      Jim

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      • Jim, re that profit motive – my local hospital is a private for profit. The next nearest is community supported NON profit. The non-profit is natioanlly recognized for excellence; it is by every measure the better hospital. The for-profit has a reputation for ordering more questionable (and costly) tests than any hospital in the region. And the place is dirty.

        I think Medicare with everyone, young and old, healthy and sick, paying in would be perfectly sound and sustainable.

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        • Duane, I noted this morning that we’ve been in 80 military actions since WWII, so we can lay off police and fire teachers. And leave Joplin to take care of itself – or, as our Republican friends owuld put it – take responsiblity for yourselves,

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      • Jim,

        Just one correction. When you say, “Congress has prohibited Medicare by law from negotiating the prices of drugs, and equipment,” you mean, “Republicans in Congress….” That point needs to be made always, as those not following this stuff very closely will just assume it is both parties who are the problem on that particular issue.

        Duane

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        • Reply above was for you. I seem to have replied to myself, narcissist that I am.

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      • Jim

        I have got to start reviewing and editing my comments before posting since I’ve once again sent errors to the net such as except instead of accept.

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    • Actually Jim, I think you are being charitable to the Republicans to say, “the GOP to discover fiscal discipline at this late date.” They didn’t discover it recently, they just hauled that argument out when it suited them. Back when we were debating whether to end tax cuts for the wealthy, they talked about jobs, and they were mum about deficits. Whenever we talk about a benefit for the poor, suddenly their concern for the deficit comes to the fore. The shame is the degree to which they control the conversation by pumping out their message through Fox, Limbaugh, et. al.

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      • JW,

        I have to repeat your perfect comment:

        Back when we were debating whether to end tax cuts for the wealthy, they talked about jobs, and they were mum about deficits. Whenever we talk about a benefit for the poor, suddenly their concern for the deficit comes to the fore.

        Today’s Republican philosophy in a nutshell.

        Thanks,

        Duane

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  3. For a heartbreaking look at our bungled first years in Iraq (which is probably why we’re stil lthere), try “Imperial Life in the Emerald City” (Rajiv Chandraskekaran) or “Assassin’s Gate” (Geroge Packer).

    Duane – looks like you and I both visited cos-of-war dot com and icasualties dot org this morning.

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    • Moe,

      I guess I’ve grown a little tired of the hand-wringing over a few billion dollars needed in this community to help–and I said, help–rebuild it. It really makes me sick. So, yep, I decided to look again at the war spending and watch that ticker tick off the bucks. It’s something I don’t want people to forget.

      Duane

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  4. “HL,

    Am I correct that your comment is directed to me?”

    To a point yes, since I largely agree with most of your views regarding entitlements, which we need to deal with sooner than later. Where things get a little fuzzy is trying to pin down which solution you would vote for. I know your heart is in the right place, and I’m just trying to make certain that your head and heart are in agreement.

    Trying to resolve healthcare costs seems to be an exclusive American confusion, since so many other nations are doing a much better job at it than we are. I have to accept that either we’re too stupid to do it and should ask for help from those who have, or except the fact that too many hands are on tit of our country milking it dry. Unfortunately I fear the latter is more likely to be true. The US will never resolve its entitlement over-costs until it resolves how healthcare is delivered, and I can’t see any possible solution beyond that of the dissolution of private insurers.

    I intended to add “Jim” to the top of my last post but suffered an “oops moment” as I hit “post comment,” which by the way I seem to do all too often.

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    • Right, HL. When your fingers get ahead of your brain, it’s called Anson Syndrome. It might be curable – still investigating.

      Like

  5. ansonburlingame

     /  May 31, 2011

    Jim,

    I have withheld comments on this particular blog but take a shot anyhow. First it was DQ and now some kind of syndrome!

    Medicare for all and everyone chipping in to make it so was posted above.

    Can you imagine how far out in front my brain is beyond my fingers on THAT view alone, but you see no fingers flying over such rubbish.

    Anson

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    • I had a feeling of humor when I typed it, but obviously that doesn’t come through, and I didn’t even add an emoticon. I should have. It was a cheap shot in a weak moment, Anson, and I apologize.

      That said, I must add in candor that many of your previous posts showed evidence of haste: jumbled syntax, rambling topics, and poor spelling. But your meaning would usually come through pretty well. Not always, but usually. Your last post was much improved. IMO.

      Jim

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  6. Anson

    “First it was DQ and now some kind of syndrome!”

    I didn’t know that Jim’s comment would offend you so I hope that you don’t take offense that I kind of repeated elsewhere, however I did upgrade it to Anson-itis and add an emoticon.:>)

    Like

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