The Three Trillion Dollar War
Encyclopedia
The Three Trillion Dollar War is a 2008 book by Nobel Prize
laureate Joseph Stiglitz
and Harvard
professor Linda Bilmes
, both of whom are American
economists.
The book examines the full cost of the Iraq War, including many hidden costs. The book also discusses the extent to which these costs will be imposed for many years to come, paying special attention to the enormous expenditures that will be required to care for very large numbers of wounded veterans. The authors conclude by illustrating the opportunity cost
of the resources spent on waging the war.
The total cost of $3 trillion is consistent with numerous government studies. These include the Joint Economic Committee of Congress, which estimated that the war will cost $3.5 trillion, and the non-partisan Congressional Budget Office
, which has projected that the total cost will reach between $1.4 and $2.2 trillion. The Stiglitz-Bilmes work builds on an earlier study by Yale
economist William Nordhaus
, who predicted in 2002 that the war could reach $2 trillion if it went badly. Numerous economists, including James K. Galbraith
of the University of Texas and Nobel Laureate Lawrence Klein
have supported the methodology in the book. Economist Fred Foldvary also wrote a positive review of the book in Econ Journal Watch. He believes better knowledge of both the budgeted and implicit costs of the war as spelled out in the book will further a more coherent dialogue on present and future related policy matters.
Alan B. Krueger
argued the estimate was too high for three reasons. First, it counts future interest payments on the debt created by military spending as well as the direct expenditures, which is double counting. Second, it counts increased military recruitment costs that incorporate a premium for higher risk of death or injury and the direct cost of the deaths and injuries, which is also double counting. Third, it attributes to the war an increase in the price of oil, and loss to the American economy of almost half a trillion dollars.
Other academics, including John Lott
, Richard Zerbe, and Edgar Browing, echo those criticisms, and in addition challenge the Lancet surveys of Iraq War casualties to determine the number of Iraqi deaths.
Nobel Prize
The Nobel Prizes are annual international awards bestowed by Scandinavian committees in recognition of cultural and scientific advances. The will of the Swedish chemist Alfred Nobel, the inventor of dynamite, established the prizes in 1895...
laureate Joseph Stiglitz
Joseph E. Stiglitz
Joseph Eugene Stiglitz, ForMemRS, FBA, is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences and the John Bates Clark Medal . He is also the former Senior Vice President and Chief Economist of the World Bank...
and Harvard
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
professor Linda Bilmes
Linda Bilmes
Linda J. Bilmes is the Daniel Patrick Moynihan Senior Lecturer in Public Policy at Harvard University. She is a full-time faculty member at the Harvard Kennedy School where she teaches public policy, budgeting and public finance...
, both of whom are American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
economists.
The book examines the full cost of the Iraq War, including many hidden costs. The book also discusses the extent to which these costs will be imposed for many years to come, paying special attention to the enormous expenditures that will be required to care for very large numbers of wounded veterans. The authors conclude by illustrating the opportunity cost
Opportunity cost
Opportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...
of the resources spent on waging the war.
The total cost of $3 trillion is consistent with numerous government studies. These include the Joint Economic Committee of Congress, which estimated that the war will cost $3.5 trillion, and the non-partisan Congressional Budget Office
Congressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
, which has projected that the total cost will reach between $1.4 and $2.2 trillion. The Stiglitz-Bilmes work builds on an earlier study by Yale
YALE
RapidMiner, formerly YALE , is an environment for machine learning, data mining, text mining, predictive analytics, and business analytics. It is used for research, education, training, rapid prototyping, application development, and industrial applications...
economist William Nordhaus
William Nordhaus
William Dawbney "Bill" Nordhaus is the Sterling Professor of Economics at Yale University. Nordhaus lives in New Haven, Connecticut, with his wife Barbara.-Career:...
, who predicted in 2002 that the war could reach $2 trillion if it went badly. Numerous economists, including James K. Galbraith
James K. Galbraith
James Kenneth Galbraith is an American economist who writes frequently for mainstream and liberal publications on economic topics. He is currently a professor at the Lyndon B. Johnson School of Public Affairs and at the Department of Government, University of Texas at Austin. He is also a Senior...
of the University of Texas and Nobel Laureate Lawrence Klein
Lawrence Klein
Lawrence Robert Klein is an American economist. For his work in creating computer models to forecast economic trends in the field of econometrics at the Wharton School of the University of Pennsylvania, he was awarded the Nobel Memorial Prize in Economic Sciences in 1980...
have supported the methodology in the book. Economist Fred Foldvary also wrote a positive review of the book in Econ Journal Watch. He believes better knowledge of both the budgeted and implicit costs of the war as spelled out in the book will further a more coherent dialogue on present and future related policy matters.
Alan B. Krueger
Alan B. Krueger
Alan Bennett Krueger is an American economist, Bendheim Professor of Economics and Public Affairs at Princeton University and Research Associate at the National Bureau of Economic Research. On March 7, 2009, he was nominated by President Barack Obama to be United States Assistant Secretary of the...
argued the estimate was too high for three reasons. First, it counts future interest payments on the debt created by military spending as well as the direct expenditures, which is double counting. Second, it counts increased military recruitment costs that incorporate a premium for higher risk of death or injury and the direct cost of the deaths and injuries, which is also double counting. Third, it attributes to the war an increase in the price of oil, and loss to the American economy of almost half a trillion dollars.
Other academics, including John Lott
John Lott
John Richard Lott Jr. is an American academic and political commentator. He has previously held research positions at academic institutions including the University of Chicago, Yale University, the Wharton School at the University of Pennsylvania, and the University of Maryland, College Park,...
, Richard Zerbe, and Edgar Browing, echo those criticisms, and in addition challenge the Lancet surveys of Iraq War casualties to determine the number of Iraqi deaths.
External links
- Radio interview of Stiglitz and transcript about this book, May 29 2009.
- ThreeTrillionDollarWar.org
- The Times Online: The three trillion dollar war