The Hidden Cost of War: Expensive

Donald Rumsfeld estimated a war with Iraq would cost $60 billion back in 2003. Five years later, the cost of Iraq war operations is more than 10 times that estimate. The video clip provides insightful information on the hidden cost of war. One word can summarize the cost: EXPENSIVE. So what's behind the uncontrollable figures?

Source: Good Magazine

Joseph E. Stiglitz and Linda J. Bilme's exhaustively researched book, The Three Trillion Dollar War: The True Cost of the Iraq Conflict, breaks down the price tag, from current debts to the unseen costs we'll pay for many years to come. RESOURCES: The Three Trillion Dollar War: The True Cost of the Iraq Conflict; War At Any Price? The Total Economic Costs of the War Beyond the Federal Budget. By the Joint Economic Committee; threetrilliondollarwar.org.

Updated news on cost of wars:

CBS News (Jan 7, 2009): The Cost Of War: $136 Billion In 2009 - Defense Secretary Puts Price Tag On Fighting In Iraq And Afghanistan.

Our View:

• In the past, during WW I and WW II, wars were actually good for the US economy and hence, economists like to bring up this historical facts. However, this time, it might not be the case. Why? In the past, US had the upper hand and therefore became one of the big winners; there were no other significant countries that could challenge the might of the US economy and defense power.  
• In addition, this time, it might not be the case as US needs a significantly more money by any historical standard to bailout the sinking economy. As long as US continues to be involved in multiple wars (e.g.: wars in Iraq, Afghanistan, and other places on the planet earth) at the same capacity and level of involvement, it is hard to see how the US economy during this recession could recover quickly when the US government needs to print and/or borrow more and more money to bailout sinking companies and assets.
• However, at the same time, it is unlikely that US will be able to withdraw significantly from all the wars and wars-related spending that it is currently involved without increasing security risks to US and the world. As a matter of fact, sooner or later, the new US government under Obama will need to finally realize that speaking about the grand plan to get out from wars is a lot easier than implementing the plan in the real world. But wait, don't the economists say that war is good for the economy? Well, the fact is even at the current expensive cost of existing wars, US economy continues to shrink which means in order for the theory that war is good for the economy, US will need to be involved in more wars to rejuvenate defense spending and hopefully the economy...not a good option and also not a humane solution.
• This led us to be somewhat bearish view on the US economy in the long-term as long as US government is still heavily burdened with similar or escalating costs of wars. It is almost always far easier to enter a war event than to exit one, not alone multiple wars.