Jurgen Brauer: Price of War

KRT FORUM
By Jurgen Brauer
Global Beat Syndicate
(KRT)
AUGUSTA, Georgia — I am an economist. We are pretty dull and narrow-minded folks. Decisions, large or small, are made by using a ledger book, labeling one column "costs" and another "benefits." Assuming the same benefits might be gained, we also mark a third column: "costs of alternative option."
As governments and politicians do, the Bush administration keeps only the first two columns, jointly headed "war with Iraq." On the "benefit" side they write things like "U.S. national security." So do I. It is understandable that they cannot put a reliable dollar-figure to that, just as people cannot put a dollar-figure to wearing a seatbelt (which is also a safety issue).
But when I install a seatbelt in my car, at least I have a good idea of what to enter on the "cost" side. For example, I would enter not only the monetary cost but also the value of the relative inconvenience of wearing a seatbelt. And I would also need to consider that feeling "safe" induces some people to drive more recklessly, which causes more injuries and deaths.
In contrast, the Bush administration is curiously reluctant to put down a number for "cost of war with Iraq," let alone to put down a number for "cost of alternatives to war with Iraq." It is not impossible to come up with reasonable estimates and people have done so. Depending on the scenario, estimates range from $200 billion to $2,000 billion — but our governments tends to focus on projected budgetary outlays as their measure of "cost."
Economists do it differently. As in the seatbelt example, we look at all costs, budgetary and otherwise. For example, a future oil price spike, in case of war, is a cost of war. It is not a U.S. government budget cost, but it is a cost to our society at large, and to our economy, and it should be entered in the books. But even the very real government costs of occupying Iraq and staying there for several years have not been entered in the cost column. Put simply, the Bush administration is ‘low-balling’ the issue, and makes the claim that the benefit to be gained — national security — is worth the $100 billion or so it has put in its account books.
But is the looming war worth it if the real tab runs nearer $2 trillion?
As an economist I will not preach to you what your opinion, as American citizens, should be about "war" or "no war." But I do ask that we all consider, even if the administration does not, the total bill to be paid.
And then this "economist’s question": are there cheaper ways to achieve the same objective — national security? Let us, together, fill in the third column: "costs of the alternative option." For instance, we know that some countries, notably Germany and France, want to continue U.N. inspections at a somewhat accelerated and intensified pace. The Bush team objects.
To see why I do not understand the objection, we need to run the numbers. Currently, there are fewer than 300 inspectors in Iraq. Suppose we flood Iraq with 50,000 inspectors, at a cost of about $200,000 per inspector per year (a number based on past U.N. peacekeeping missions). That will cost $10 billion a year. The 10-year cost is therefore $100 billion (by which time Saddam Hussein will be old and creaky). Because Germany and France are so adamant, let us ask them to share the cost, proportionate to their populations: Germany, 80 million people, France, 60 million, the United States, 280 million. Russia and China are poor, so if they and all the others make token donations amounting collectively to the equivalent of 80 million people, it means 500 million people will be sharing the 10-year, $100 billion cost.
That comes out to $200 per person over ten years, or $20 per year. At current prices, that is about the cost half a tank of gas in many countries.
Clearly, costing out the alternatives to achieve the same benefit is an important exercise. Even if Iraq is as much of a threat as the Bush administration believes, my alternative is not only cheaper but will make the Germans and the French "put their money where their mouths are" — or show that they were merely posturing.