Tuesday, July 18, 2006


Iraq: Let's Pause to Remember What Bush Administration Officials Told Us BEFORE the War About Iraq Reconstruction Costs.

In September, 2003, Paul Wolfowitz told the Senate “no one said we would know anything other than this would be very bloody, it could be very long and by implication, it could be very expensive." Here’s a record of what the administration AND PAUL WOLFOWITZ, in fact, said:

Press Secretary Ari Fleischer: “Well, the reconstruction costs remain a very -- an issue for the future. And Iraq, unlike Afghanistan, is a rather wealthy country. Iraq has tremendous resources that belong to the Iraqi people. And so there are a variety of means that Iraq has to be able to shoulder much of the burden for their own reconstruction.” [Source: White House Press Briefing, 2/18/03]

Deputy Secretary of State Richard Armitage: “This is not Afghanistan…When we approach the question of Iraq, we realize here is a country which has a resource. And it’s obvious, it’s oil. And it can bring in and does bring in a certain amount of revenue each year…$10, $15, even $18 billion…this is not a broke country.” [Source: House Committee on Appropriations Hearing on a Supplemental War Regulation, 3/27/03]

Deputy Defense Secretary Paul Wolfowitz: “There’s a lot of money to pay for this that doesn’t have to be U.S. taxpayer money, and it starts with the assets of the Iraqi people…and on a rough recollection, the oil revenues of that country could bring between $50 and $100 billion over the course of the next two or three years…We’re dealing with a country that can really finance its own reconstruction, and relatively soon.” [Source: House Committee on Appropriations Hearing on a Supplemental War Regulation, 3/27/03]

Defense Secretary Donald Rumsfeld: “If you [Source: worry about just] the cost, the money, Iraq is a very different situation from Afghanistan…Iraq has oil. They have financial resources.” [Source: Fortune Magazine, Fall 2002]

State Department Official Alan Larson: “On the resource side, Iraq itself will rightly shoulder much of the responsibilities. Among the sources of revenue available are $1.7 billion in invested Iraqi assets, the found assets in Iraq…and unallocated oil-for-food money that will be deposited in the development fund.” [Source: Senate Foreign Relations Committee Hearing on Iraq Stabilization, 06/04/03]

Defense Secretary Donald Rumsfeld: “I don't believe that the United States has the responsibility for reconstruction, in a sense…[Reconstruction] funds can come from those various sources I mentioned: frozen assets, oil revenues and a variety of other things, including the Oil for Food, which has a very substantial number of billions of dollars in it. [Source: Senate Appropriations Hearing, 3/27/03]

One thing is certain about the Iraq war: It has cost a lot more than advertised. In fact, the tab grows by at least $200 million each and every day.

White House economic adviser Lawrence Lindsey was the exception to the rule, offering an "upper bound" estimate of $100 billion to $200 billion in a September 2002 interview with The Wall Street Journal. That figure raised eyebrows at the time, although Lindsey argued the cost was small, adding, "The successful prosecution of the war would be good for the economy.”

U.S. direct spending on the war in Iraq already has surpassed the upper bound of Lindsey's upper bound, and most economists attribute billions more in indirect costs to the war effort. Even if the U.S. exits Iraq within another three years, total direct and indirect costs to U.S. taxpayers will likely by more than $400 billion, and one estimate puts the total economic impact at up to $2 trillion.

Back in 2002, the White House was quick to distance itself from Lindsey's view. Mitch Daniels, director of the White House budget office, quickly called the estimate "very, very high." Lindsey himself was dismissed in a shake-up of the White House economic team later that year, and in January 2003, Defense Secretary Donald Rumsfeld said the budget office had come up with "a number that's something under $50 billion." He and other officials expressed optimism that Iraq itself would help shoulder the cost once the world market was reopened to its rich supply of oil.

Those early estimates struck some economists as unrealistically low. William Nordhaus, a Yale economist who published perhaps the most extensive independent estimate of the potential costs before the war began, suggested a war and occupation could cost anywhere from $100 billion to $1.9 trillion in 2002 dollars, depending on the difficulty of the conflict, the length of occupation and the impact on oil costs.

The most current estimates of the war's cost generally start with figures from the non-partisan Congressional Budget Office, which as of January 2006 counted $323 billion in expenditures for the war on terrorism, including military action in Iraq and Afghanistan. Just this week the House approved another $68 billion for military operations in Iraq and Afghanistan, which would bring the total allocated to date to about $400 billion. The Pentagon is spending about $6 billion a month on the war in Iraq, or about $200 million a day, according to the CBO. That is about the same as the gross domestic product of Nigeria.

Scott Wallsten, a resident scholar at the conservative American Enterprise Institute, put the direct cost to the United States at $212 billion as of last September and estimates a "global cost" of $500 billion to date with another $500 billion possible, with most of the total borne by the United States.

That figure is in line with an estimate published last month by University of Chicago economist Steven Davis and colleagues, who put the likely U.S. cost at $410 billion to $630 billion in 2003 dollars.

Some estimates now say that the War Costs will exceed 1 trillion. And there has been a recent study that indicates the long term costs will exceed 2 trillion.

I guess the point is that Bush and his Crony Crew were WRONG AGAIN.

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