Nobel laureate Joseph Stiglitz reveals true cost of war during Kellogg visit
Government accounting flaws, deception hide grim numbers associated with Iraq conflict, claims former World Bank economist
By Matt Golosinski
Northwestern University/Kellogg School
April 21, 2008 - The United States is bleeding money. That’s the alarm sounded by Joseph Stiglitz in his new book The Three Trillion Dollar War, a narrative that details what he and co-author Linda Bilmes, a Harvard professor of public finance, say are the staggering hidden costs of America’s current Iraq War. He brought his discussion to the Kellogg School on April 18, speaking to a capacity audience from Kellogg and the larger Northwestern University and Evanston communities.
To hear the former World Bank chief economist and senior vice president detail the economic circumstances associated with the conflict, now in its fifth year and costing U.S. taxpayers $12 billion each month, is to enter a realm that rivals the bleak, madcap world conjured by Joseph Heller’s classic satire Catch-22. For Stiglitz, a 2001 Nobel Prize winner, the tragedy of war is compounded by significant — and deliberate, he contends — flaws in how the Bush Administration has accounted for the war’s expenses.
Citing the broader economic implications that extend beyond official budgetary figures that he said obscure the war’s reality, Stiglitz believes the U.S. government is “vastly undervaluing” the war’s impact on the economy, including its negative influence through lost opportunities that might otherwise shore up domestic infrastructure and education or enhance technological innovation. Stiglitz calculated that one-sixth of the Iraq War’s cost would fund Social Security for the next 75 years, while “just a few days of fighting” would provide healthcare to all U.S. citizens currently lacking it.
By using a cash accounting system that minimizes up-front costs while obscuring or ignoring massive long-term expenditures, such as those associated with equipment repair and replacement or healthcare outlays for soldiers injured or killed in the war, the U.S. government has convinced some Americans that the Iraq conflict carries a far more modest price tag than Stiglitz and Bilmes say is accurate. In fact, Stiglitz, a professor at Columbia Business School, believes his own $3 trillion figure is “conservative.” The real figure may be closer to $4 or even $5 trillion, he said, noting that the Bush Administration’s current tally is only $600 billion — dramatically larger than its initial estimate of $50 to $60 billion, but well off the mark that Stiglitz has calculated using what he considers a more accurate system called accrual accounting. He said that this approach assesses many of the inevitable future costs associated with the war, including demobilization and restoring the military to its pre-war strength. But chief among these costs is long-term care for those killed or disabled by the conflict, expenses that Stiglitz said will continue for the next 50 years.
(Continued here.)
By Matt Golosinski
Northwestern University/Kellogg School
April 21, 2008 - The United States is bleeding money. That’s the alarm sounded by Joseph Stiglitz in his new book The Three Trillion Dollar War, a narrative that details what he and co-author Linda Bilmes, a Harvard professor of public finance, say are the staggering hidden costs of America’s current Iraq War. He brought his discussion to the Kellogg School on April 18, speaking to a capacity audience from Kellogg and the larger Northwestern University and Evanston communities.
To hear the former World Bank chief economist and senior vice president detail the economic circumstances associated with the conflict, now in its fifth year and costing U.S. taxpayers $12 billion each month, is to enter a realm that rivals the bleak, madcap world conjured by Joseph Heller’s classic satire Catch-22. For Stiglitz, a 2001 Nobel Prize winner, the tragedy of war is compounded by significant — and deliberate, he contends — flaws in how the Bush Administration has accounted for the war’s expenses.
Citing the broader economic implications that extend beyond official budgetary figures that he said obscure the war’s reality, Stiglitz believes the U.S. government is “vastly undervaluing” the war’s impact on the economy, including its negative influence through lost opportunities that might otherwise shore up domestic infrastructure and education or enhance technological innovation. Stiglitz calculated that one-sixth of the Iraq War’s cost would fund Social Security for the next 75 years, while “just a few days of fighting” would provide healthcare to all U.S. citizens currently lacking it.
By using a cash accounting system that minimizes up-front costs while obscuring or ignoring massive long-term expenditures, such as those associated with equipment repair and replacement or healthcare outlays for soldiers injured or killed in the war, the U.S. government has convinced some Americans that the Iraq conflict carries a far more modest price tag than Stiglitz and Bilmes say is accurate. In fact, Stiglitz, a professor at Columbia Business School, believes his own $3 trillion figure is “conservative.” The real figure may be closer to $4 or even $5 trillion, he said, noting that the Bush Administration’s current tally is only $600 billion — dramatically larger than its initial estimate of $50 to $60 billion, but well off the mark that Stiglitz has calculated using what he considers a more accurate system called accrual accounting. He said that this approach assesses many of the inevitable future costs associated with the war, including demobilization and restoring the military to its pre-war strength. But chief among these costs is long-term care for those killed or disabled by the conflict, expenses that Stiglitz said will continue for the next 50 years.
(Continued here.)
Powered by Blogger
0 Comments:
Post a Comment
<< Home