The Financial Legacy of Iraq and Afghanistan

The Congressional Republicans whine and carry on about the supposed big spending ways of Barack Obama and act as if they had no role in exploding the nation's budget deficit.   A new report out of the John F. Kennedy School at Harvard University indicates that somewhere between a quarter to one-third of the budget deficit is directly attributable to the unfunded fool's errand missions launched by Chimperator Bush and Emperor Palpatine Cheney with full GOP support.  Thus, to say that current Republican concerns about the budget deficit is disingenuous is an understatement.   Calling it an outright lie would be more on target.  Especially since the main targets of the GOP are elements of the social safety net that protect the nation's least fortunate.  Here are highlights from the report which need to be thrown back in the face of every Republican who voted for the irresponsible missions launched by Bush/Cheney:

One of the most significant challenges to future US national security policy will not originate from any external threat. Rather it is simply coping with the legacy of the conflicts we have already fought in Iraq and Afghanistan.

This legacy is debt - promises and commitments that extend far into the future. The years of conflict have left America still burdened with heavy costs, even with the ground combat phase drawing to a close. These costs include the immediate requirements to provide medical care for the wounded, as well as the accrued liabilities for providing lifetime medical costs and disability compensation for those who have survived injuries. Long-term costs also include structural increases to the military personnel and health care systems; depreciation on military equipment and weaponry; restoring the military, Reserves and National Guards to pre-war levels of readiness; and maintaining a long-term military and diplomatic presence in the region.

The US has already spent close to $2 trillion in direct outlays for expenses related to Operation Enduring Freedom (OEF), Operation Iraqi Freedom (OIF) and Operation New Dawn (OND). This includes direct combat operations, reconstruction efforts, and other direct war spending by the Department of Defense (DoD), State Department, Department of Veterans Affairs (VA) and Social Security Administration.

However, this represents only a fraction of the total war costs. The single largest accrued liability of the wars in Iraq and Afghanistan is the cost of providing medical care and disability benefits to war veterans. Historically, the bill for these costs has come due many decades later.

There are substantial social-economic costs that accompany these statistics. If fatalities are accounted for in the same way that that US civilian agencies value a life, the value of lives lost adds $44.6 billion to the cost of the wars.

The Pentagon also faces the task of replacing years of worn-out equipment, which will cost more than the amounts appropriated for this purpose. Equipment, materiel, vehicles and other fixed assets have depreciated at an estimated 6 times the peace-time rate, due to heavy utilization, poor repair and upkeep in the field, and the harsh conditions in the region. Even the logistics and cost of transporting equipment out of Afghanistan is predicted to cost billions.

Finally, the decision to finance the war operations entirely through borrowing has already added some $2 trillion to the national debt, contributing about 20% of the total national debt added between 2001 and 2012. This level of debt is thus one of the reasons the country faces calls for austerity and budget cuts  .  .  .  .  This does not include the interest payable in the future, which will reach into the trillions.

[I]t is unprecedented in US history that we pay for a war entirely from debt, and actually cut taxes repeatedly during wartime (as we did in 2001 and 2003). The only previous episode that is at all comparable occurred during the Revolutionary War, when the US colonies borrowed from France.

It is important to note that this borrowing has not been used to invest in the capital stock of the country.    For example, investing in education, infrastructure and knowledge (R&D) benefits the nation, so this is debt for a helpful purpose. By contrast, the war debt has been especially unhelpful. Large amounts have been spent on things that clearly did not benefit the United States - for example, $87 billion in reconstruction funding for Afghanistan, and $61 billion in Iraq, much of which has been squandered according to the Special Inspector General for Afghanistan Reconstruction (SIGAR) and Iraq Reconstruction (SIGIR) respectively. Moreover, the war spending diverted resources that might otherwise have been available to help stimulate  the economy during 2008-2009, when the US endured the worst economic collapse since the Great Depression.
 

We have therefore saddled the nation with the debt for the operational costs of the wars, in addition to future costs associated with veterans that were described above.

By the most conservative reckoning, the Iraq and Afghanistan conflicts will cost $4 trillion  .  .  .  What did we buy for $4 trillion? The U.S. still faces a perilous international security situation and a fragile economy. Today as the country considers how to improve its balance sheet, it could have been hoped that the ending of the wars would provide a peace dividend, such as the one during the Clinton administration that helped Americans to invest more in butter and less in guns.
Instead, the legacy of decisions made during the Iraq and Afghanistan conflicts will impose significant long-term costs on the federal government, and in particular, on the consolidated national security budget.

In short, there will be no peace dividend, and the legacy of Iraq and Afghanistan wars will be costs that persist for decades.

Remember, it was the GOP that brought the nation this disaster even as it slashed taxes for the wealthiest Americans.   The GOP needs to be held accountable.  And the public needs to be reminded who brought about the debacle and the mushrooming of the national debt.  It wasn't Barack Obama.