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The U.S. will have spent well over two trillion dollars on the Iraq war by the time it's all over. Some very smart people believe the total will reach about three trillion. That's enough money for almost anything you can think of. Almost anything. It's enough to make sure no one in the world goes hungry or thirsty again. It's enough to cure goodness knows how many diseases. It's enough money to make a good start on exploring the solar system. It's enough money to do all the research required on understanding climate change as well as developing a suite of technologies for tackling the problem. It might even be enough money to cure cancer if it were spent wisely. Not that anyone would have got permission to do any of those things. You need a lot of permission to do good and it's unpopular, whereas to start a war you need answer to no one. But even if the U.S. had just put the money in the bank instead of spending it on hurting Iraqis it would come in pretty handy right now. The U.S. has 11 trillion dollars in mortgages outstanding and the credit crunch and the coming recession is going to imperil a not inconsiderable fraction of them. Three trllion would be enough to allow the government to buy out all the diciest mortgages, thus ensuring that no one important in the financial community suffered because of the reckless gambling of the last few years. And given that the government is probably going to do that anyway, it would probably be nice if they had the money to pay for it.
Comments: 3
Except, Rob, the US has paid most of that $3 trillion to their own countrymen (soldiers, defence industry, etc). It is still sloshing around the US economy and will come back to the government's coffers in one form or another.
Posted by: NaomiM on March 12, 2008 06:04 PM
You are quite right, Naomi, that it has nearly all gone to American corporations, but I think it will have a long way to go before any of it ends up at the Treasury. Corporate tax levels have plummeted in recent years, as have revenues from capital gains tax - which is where most of that money will escape. Add in the fact that many Iraq-based contractors have been given tax exempt status and it's only the remaining fraction that goes on salaried wages for newly created domestic jobs that will contribute a cut back into the federal coffers. Personally, I'd be surprised if much of that $3 trillion showed up as tax or everyday consumer spending.
Posted by: Rob on March 12, 2008 06:33 PM
I will have to go off and study Joseph Stiglitz and Linda Bilmes breakdown of the figures in 'The Three Trillion Dollar War', but it does worry me that they say "The issue is not whether America can afford three trillion dollars. We can." - so what are they going to spend the next 3 trillion on? Personally I quite like the idea of a trip to Mars, preferrably before a hurricane wipes out Houston Control.
And as for financing it on the never never, that's what governments have always done - by issuing Gilts.
And to think we'd only just paid off WW2.
Posted by: NaomiM on March 13, 2008 01:50 PM