Saturday, January 21, 2006

Iraq: A New Estimate

In Tuesday's Los Angeles Times (I'm still trying to get caught up), Linda Bilmes and Joseph Stiglitz presented a brief overview of a paper they recently presented at the annual meeting of the American Economic Association (available here). As entertaining as Freakonomics may be and as helpful as it may be to have some numbers available when arguing public policy, I am generally skeptical of the economists' faith in their own ability to assign particular values to almost everything--including human lives. Still, Bilmes--a former assistant secretary of Commerce--and Stiglitz--winner of the 2001 Nobel Prize in economics--make a compelling argument for considering more than just the direct costs of the war, which are currently moving beyond $250 billion.

The argument, reduced to its simplest (i.e., monetary) terms, is this: The final cost to the United States of the war in Iraq is likely to be between $1 trillion and $2 trillion dollars. The wide range of the estimate is primarily due to the war's uncertain duration. The longer the United States is in Iraq, the closer we'll come to the $2 trillion figure.

For those who are inclined to judge the war in Iraq in terms of cost-benefit analysis, having a comprehensive accounting of the costs is an essential starting point.