IS IT REALLY A "$3 TRILLION WAR"?

[HT:JH]
In their new book, "The Three Trillion Dollar War," Joseph Stiglitz and Linda Bilmes estimate the true cost of the wars in Afghanistan and Iraq to be $3 trillion, an outrageous figure nearly six times the defense department's own numbers, says John Lott, the author of "Freedomnomics," and a senior research scientist at the University of Maryland.

Stiglitz and Bilmes, make a number of errors in their calculations, says Lott:

• They put their estimate of total costs of veteran injuries at over $900 billion ($630 billion from taking care of the wounded and $273 billion from the harm done to wounded and injured soldiers), although the Congressional Budget Office's Matthew Goldberg testified in October that the future medical care costs, disability compensation, and survivors' benefits up to 2017 would likely range from only $10 to $13 billion.

• On oil prices, Stiglitz and Bilmes argue since oil prices have increased as the war has gone on, this suggests the war has something to do with rising prices; however, Peter Hartley, a professor at Rice University who specializes in energy economics, says that oil experts almost unanimously agree the wars have not affected oil prices.

• The authors also calculate interest rates using a rate that is far too low and makes the future expenditures on the war look larger today than they really are.

Some notable war critics estimate the costs of the war to be close to $1 trillion, with their most realistic estimates at less than half that amount; still others place the best cost of the war estimates at a sixth of what Stiglitz and Bilmes claim, says Lott.

READ MORE