Study: Iraq War Could Cost $1.9
Trillion
By Siobhan McDonough, Associated Press,
December 6, 2002
In the worst case, a war with Iraq could cost the United States
almost as much as the government spent in the last budget year —
nearly $2 trillion, according to new projections.
Researchers concluded in a study released Thursday that war with Iraq
could cost the United States from $99 billion to more than $1.9
trillion over a decade.
The lower figure assumes a successful military, diplomatic and nation-
building campaign; the higher figure assumes a prolonged war with a
disruption of oil markets and a U.S. recession, the authors say in a
study by the American Academy of Arts and Sciences.
Both figures assume a U.S. involvement in the country for 10 years.
White House spokesman Gordon Johndroe said it was premature to
comment on cost estimates.
"War is the last resort," he said. "We're hoping for a peaceful
solution."
The 1991 Persian Gulf War (news - web sites) cost America an
estimated $61 billion, but allies reimbursed all but about $7
billion. By some accounting methods, the United States may have even
made a profit.
Direct military spending could range from $50 billion in a short
campaign to $140 billion in a prolonged war with Iraq, said the study
titled, "War With Iraq: Costs, Consequences and Alternatives." The
study was done by the academy's Committee on International Security
Studies.
The report cautioned that aside from the estimates of direct military
costs, all the numbers should be "regarded as informed conjecture."
Occupation and peacekeeping costs could be $75 billion in the best
case to $500 billion in the worst, the study said. Reconstruction and
nation-building costs are estimated at $30 billion to $105 billion,
and humanitarian aid at $1 billion to $10 billion.
Economic ripples of war with Iraq are likely to spread beyond
budgetary costs, with the prospect of raising the cost of imported
oil, slowing productivity growth and possibly triggering a recession,
the report said.
A prolonged disruption of world oil markets could cost the U.S.
economy up to $778 billion, the researchers estimated. On the other
hand, Iraq's huge oil resources could satisfy U.S. needs for imported
oil at current levels for almost a century and otherwise benefit the
economy by $40 billion.
A short war could actually benefit the United States in terms of its
macroeconomic impact, which includes employment, by $17 billion. A
long war, in contrast, could have a $391 billion negative effect.
The American Academy of Arts and Sciences, founded in 1780 and based
in Cambridge, Mass., is an international society of scientists,
scholars, artists, business people and political leaders.
