The True Cost Of The Iraq War
July 2 2004

The True Cost Of The Iraq War

Marc Krug

The war in Iraq has sent to their graves more than 850 Americans,
almost 120 coalition soldiers, and somewhere around 10,000 Iraqis – a
good portion of whom were civilians. Similarly dispatched from this
world were upwards of 90 contractors and 30 journalists.

In monetary terms, the war has cost Americans over $120 billion as of
June 30 and there is no end in sight. Nor will there ever be an end
as long as the Bush administration remains in power.

What is truly unfortunate is that these figures represent only the
traditional costs of the war. And while nothing exceeds the value of
a human life, the costs of this misbegotten war – both to America and
the world – amount to so much more than these figures alone can ever

For instance, the war has cost us the respect of many in the world
and of many astute Americans. Bush’s unilateralist policies, in which
he openly disdained those countries not sufficiently reckless to
support his war, have greatly damaged the strong relations we once
had with our allies. Relations that took decades to build – several
of which were battle tested during World War Two – were nearly
destroyed by Bush in weeks.

It’s not difficult to find evidence of these strained relations. On
June 16, a bipartisan coalition of 27 former senior diplomatic
officials and retired military commanders – including many who had
worked in the Administrations of Ronald Reagan and George H.W. Bush –
issued a statement quite critical of how our current President has
prosecuted this war, particularly the contempt he has displayed
toward former allies and the U.N.

“From the outset, President George W. Bush adopted an overbearing
approach to America’s role in the world, relying upon military might
and righteousness, insensitive to the concerns of traditional friends
and allies, and disdainful of the United Nations. Instead of building
upon America’s great economic and moral strength to lead other
nations in a coordinated campaign to address the causes of terrorism
and to stifle its resources, the Administration, motivated more by
ideology than by reasoned analysis, struck out on its own. Our
security has been weakened.”

And our security has indeed been weakened. The war in Iraq has cost
Americans much of whatever security they may have felt after
September 11. It’s done the same for the Iraqis who say they feel far
less safe now than when Saddam was still in power: actually, most
Iraqis polled by the C.P.A. in late May said they would feel safer if
we were to leave immediately. This sentiment derives partly from the
horrors disclosed at Abu Ghraib and Bush’s fictitious claim that the
torture and murder of prisoners ended with the departure of Saddam.
It also derives from the never-ending carnage in Iraq.

For these and other reasons, the Iraq war provided the most effective
recruitment device for terrorists conceivable. As Egyptian President
Hosni Mubarak said on March 31, 2003, twelve days after the war
began: “Instead of having one (Osama) bin Laden, we will have 100 bin
Ladens.” The London-based International Institute for Strategic
Studies (IISS) claims the war spurred a sharp increase in the
membership of al-Qaeda, who now number around 18,000. And who, after
the war in Afghanistan caused them to disperse, may have come to
America in large numbers.

Also weakened is international security. First, al Qaeda does not
target only the U.S., nor is it the only terrorist group whose
membership the war has increased. Furthermore, these terrorist’s most
common targets, besides Americans, are citizens of those countries
that have aligned themselves with America.

Second, amidst much noise and controversy, the State Department
recently revised the number of terror-related deaths worldwide from
307 to 625. This latter figure is the highest number recorded since
statistics of its type have been kept. So it would seem that the war
against terrorism has not only failed to decrease it; the war has
actually increased terrorism all over the world.

And third, by fighting a pre-emptive war, Bush has not only placed
certain countries at risk by setting a dangerous precedent; he has
also violated international law. For instance, his pre-emptive
invasion of Iraq has increased the likelihood that India might attack
Pakistan, Rwanda might enter the Congo by force, and Armenia might go
to war against Azerbaijan. Moreover, by fighting a pre-emptive war,
he has violated the U.N. Charter and the Nuremberg Charter.
Unfortunately, these are not the only international agreements Bush
has acted in disregard of.

By bombing civilian targets, our armed forces have violated the Third
and Fourth Geneva conventions, which are concerned with the
protection of civilian populations during wartime. American soldiers
have further dishonored these conventions by using certain tactics
against the Iraqi civilian population – specifically, imposing
curfews, closing entire towns, demolishing houses, and arresting and
kidnapping family members of wanted militants in the hopes that they
will turn themselves in once they’ve heard what has become of their

So it’s not difficult to understand the intense enmity that many
Arabs now feel towards Americans, thus making the U.S. a “flycatcher
for terrorists,” as one State Department figure put it. Consequently,
Americans feel less safe now than they ever did before. And for good

This feeling was fueled, however illegitimately, by the
Mueller-Ashcroft “press conference” in late May. In that bizarre
televised event, our two leading law enforcement officials presented
the pictures of seven nefarious terrorists – whose crimes,
whereabouts, and connections to each other remained largely unknown –
but who, no doubt, were at that very moment planning terrorist
attacks against America. Notably absent from this “press conference”
was Tom Ridge, Director of Homeland Security, who stated earlier in
the day on ABC’s Good Morning America, “that the threats are not the
most disturbing I have personally seen during the past couple of

The message seemed to be that America stood in peril of imminent
terrorist attack. But apparently not to any greater degree during
Ashcroft and Mueller’s imitation of America’s Most Wanted than at any
other time before or since. One can then only wonder why the “press
conference” was held at all, aside from the fact that fear of
terrorism plays right into one of Bush’s few remaining strengths.

Nevertheless, the growing fear of Islamic terrorism has now become
part of the American landscape. But it is only one of many costs that
this war has forced Americans to endure.

Fighting this war, while simultaneously lowering taxes, has not only
created a substantial and ever increasing deficit; it has also
resulted in decreased federal and state spending. The deficit alone
has partly caused an increase in interest rates and a rise in the
Consumer Price Index.

Deficits are rather easy to understand: they happen when your
expenses exceed your income. In the case of the federal government,
the cost of the war plus its other expenses exceed the income it
derives largely from taxes, which now are substantially less because
of the cuts. To finance this deficit, the US Treasury Department must
borrow money by selling IOUs in the form of bills, notes, and bonds
to the public.

But as the debt increases, the government has to sell more of these
IOUs to what often is a reasonably fixed group of buyers. In other
words, the supply of IOUs goes up, while the demand does not – at
least not to the same extent. To compensate, the government has to
increase the incentive for individuals and institutions to buy more
of these IOUs. It does this by raising the financial reward for
buying them – namely, the interest paid to the purchaser. As a
result, one type of interest rate goes up. And, eventually so do
other types of interest rates.

Unfortunately, it gets worse. Keep in mind that interest constitutes
one cost of producing goods and services; so rising interest rates
cause the price of those goods and services to eventually rise as
well. Actually, this process already began months ago: the Consumers
Price Index for the first quarter of 2004 came in at 4.4 %, more than
twice what it was for all of 2003 (1.9%). Also keep in mind that the
first quarter ended before the rapid upward spike in oil costs,
caused largely by the war in Iraq. So most likely, we could be
looking at a 6% rise in the Consumers Price Index for the second

Put simply, when the price of petroleum products goes up, so will the
price of everything shipped by truck or plane as both use petroleum
products. Furthermore, your drive to buy those increasingly expensive
goods will cost you more – as will your drive to the job whose
paycheck now buys you increasingly less. In addition, if crude oil
prices stay at around $40 a barrel, the U.S. Gross Domestic Product
(GDP) will fall by over $50 billion a year. And remember, a recession
is defined by two straight quarters of negative GDP growth.

In addition to the costs of higher interest rates, higher gas prices,
and rising inflation, the war in Iraq has brought about other
hardships as well. For example, it wasn’t until June 7, 2004 that all
American soldiers had bullet proof vests. Before then, their families
or loved ones often spent $600-$1,000 buying this equipment
themselves before shipping it overseas at their own expense.

Additionally, many National Guard units have now become depleted by
losing so many members to fighting the Iraq war that some states
worry whether they have enough people to fight whatever natural
emergencies that might occur within their boundaries. So the next
cost of the war in Iraq could be the fire that burns out of control
for weeks because there aren’t enough National Guard members to help
stop it.

Also, the families of National Guard members currently in Iraq have
learned by necessity how to survive without their primary breadwinner
– often by living in substandard housing and using food stamps to
eat and welfare to buy necessities. And when the Guard members do
return, they often do not find their old jobs waiting for them. The
law guaranteeing them their right to the job they left behind has
lately been very laxly observed and even more laxly enforced.

To make matters worse, the Bush administration’s initial proposal for
discretionary veterans’ benefits for FY 2005 was $3.8 billion short
of what was needed, according to leading veterans’ organizations. The
House of Representatives in May boosted Bush’s proposal by $1.2
million, still leaving a $2.6 million shortfall.

But for all Americans, the war meant that many programs would be cut,
such as grants for low-income schools and family literacy. In fact,
the FY 2005 budget proposes deep cuts in many essential domestic
programs. With the exception of Homeland Security, funding for
domestic discretionary programs was essentially frozen. Programs
slated for elimination included Community Development Block Grants,
Rural Housing and Economic Development, and Arts in Education grants.
Nevertheless, the tax cuts proceed unabated.

Perhaps the greatest beneficiaries of the war in Iraq were the
defense contractors, particularly the politically connected
Halliburton, whose subsidiary KBR (Kellogg Brown & Root) became the
recipient of $7 billion in slightly over two years. To show their
gratitude, KBR overcharged $61 million for gas and $16 billion for
meals, 2/3rds of which were never delivered. Eventually, in March
2004, the government stepped in and withheld $160 million slated to
reimburse KBR for these phantom meals.

Just this last June, four former Halliburton employees claimed that
the company routinely wasted money, charging $45 for cases of Coke
and $100 dollars for bags of laundry. The company also instructed
employees to overstate on their time cards and to abandon nearly new
$85,000 trucks in the desert when they got flat tires. In many cases,
these trucks were entirely empty, although the U.S. Government was
billed for transporting what employees derisively referred to as
“sailboat fuel.”

So there you have the war in Iraq: death, destruction, damaged
relations with our allies, disrespect for prevailing international
law, diminished purchasing power for the dollar, and decreased
spending on what America truly needs.

I, for one, can truly live without it. As can the tens of thousands
who may yet die if the war continues too much longer.