Countdown to General David Petraeus' Visit to Capitol Hill: 5 Days

The Cost of the War in Iraq to Our Economy

Next week, General David Petraeus and Ambassador to Iraq Ryan Crocker will testify before Congress about the Iraq war. As many media reports have made apparent, the intention of General Petraeus and Ambassador Crocker next week is simply to announce a continuation of the current strategy -- the decision to maintain at least 140,000 U.S. troops in Iraq indefinitely was made weeks ago.

The American people understand the enormous cost of the war in Iraq and are looking for more than running out the clock until the next President takes office in January 2009.

The Cost to Our Economy

What Economists Are Saying:

Joseph Stiglitz, Columbia University professor and winner of the Nobel Prize for Economics

Linda Bilmes, Harvard University professor and budget expert

"There is no such thing as a free lunch, and there is no such thing as a free war. The Iraq adventure has seriously weakened the U.S. economy, whose woes go far beyond loose mortgage lending. You can't spend $3 trillion -- yes, $3 trillion -- on a failed war abroad and not feel the pain at home." [Washington Post op-ed, 3/9/08]

"[The] cost to the U.S. economy comes in two major forms. First, the war has diverted government expenditures from schools, roads, research and other areas that would have stimulated the economy in the short run and produced stronger economic growth in the long run. We have the financed the war with deficits, and the higher deficits, too, will impose a long-run burden on the economy. Second, higher oil prices, in large measure a consequence of the war, have weakened the American economy. A realistic but conservative estimate for the war's macro-economic impact is roughly $1.9 trillion." [Excerpt, "The 3 Trillion Dollar War," 2008]

Robert Hormats, vice chairman of Goldman Sachs' international division

"We should be going into that period of baby boomer retirements in very good fiscal shape. Instead, we're going into that period in bad fiscal shape, with big deficits." [Politico, 4/1/08]

Steven Kosiak, Director of Budget Studies at the Center for Strategic and Budgetary Assessments

"We basically financed the war on an international credit card." [San Diego Union-Tribune, 3/30/08]

Dan Seiver, San Diego State University finance professor

"We're spending [money on the Iraq war] at a time when we need to improve our education system, our infrastructure and our health care system. Those things would make our economy grow stronger and faster. But instead, the money is being spent in Iraq." [San Diego Union-Tribune, 3/30/08]

The Facts:

· Contrary to the notion that war spending bolsters the economy, Robert Reischauer, former director of the Congressional Budget Office, said recently that the domestic benefits of war spending have been "muted" because spending is "stimulating economies elsewhere, not the least being the economies of Iraq, Kuwait and Saudi Arabia." [Reuters, 3/13/08]

· "With enactment of the FY 2008 Consolidated Appropriations Act (PL 110-161), Congress has approved a total of about $700 billion for ... the three military operations initiated since the 9/11 attacks [Iraq, Afghanistan, and enhanced military base security]. ... Of that total, CRS estimates that Iraq will receive about $526 billion. In FY 2007, DOD's monthly obligations for contracts and pay averaged about $12.3 billion, including about $10.3 billion for Iraq and $2.0 billion for Afghanistan." [Congressional Research Service, February 5, 2008]

· The United States has spent more than $45 billion on reconstruction contracts in Iraq -- even as many of our needs -- education, health care, roads and bridges, etc. -- here at home go unmet. [AP, 3/11/08]

· In testimony before the Senate Appropriations Committee, Comptroller General David Walker noted American taxpayers are bearing a considerable fiscal burden as the Iraqis experience budget surpluses. "The Iraqis have a budget surplus... We have a huge budget deficit...One of the question is who should be paying." [AP, 3/11/08]

· The price of oil has skyrocketed since the Iraq war began. The national average price per gallon of regular gasoline before the start of the Iraq war was $1.73. Today, it is $3.29 -- an increase of more than 90 percent. This was predicted. "[In March 2003,] Sung Won Sohn, then an economist for Wells Fargo Bank, noted that anytime there is conflict in the Middle East, oil prices hit record figures. He warned that the longer the war lasted, the higher the prices would go." [San Diego Union-Tribune, 3/30/08]

· The U.S. military is being squeezed at the pump in Iraq as well -- paying an average of $3.23 per gallon of fuel -- compared to $1.36 per gallon paid by Iraqi residents. [AP, 4/2/08]

· The U.S. economy is facing a recession. But our ability to implement full-scale economic stimulus is hampered by expenditures of close to $200 billion on the Iraq and Afghanistan wars in 2008 alone and by a skyrocketing national debt.

The Cost of Iraq War Broken Down

Second: $3,919

Minute: $235,160

Hour: $14.1 million

Day: $338.6 million

Week: $2.4 billion

Month: $10.3 billion

Year: $123.6 billion

[Congressional Research Service, 2/22/08]