The Cost of War

When I was an undergraduate in 1980, the raging dispute among my classmates—the one that produced loud, raucous, and well-organized protests involving hundreds of students marching across Harvard Yard—was the attempt of the University Dining Services to do away with “hot” breakfasts. I remember the parade of angry students, chanting “We want it hot”—an event that caused alumni from the 1970s to shake their heads in dismay at our lack of serious political activism.

As a night-owl who seldom ate breakfast, I was not affected by that particular outrage. But I thought of it a few years ago, when Harvard students were noisily protesting yet another proposed dining hall cost-cutting measure–this time, to replace Cheerios and Fruit Loops with some kind of inferior generic cereal. Since then, Harvard students have made themselves heard on many subjects, from the wages of campus security guards to the proper use of Hilles Library. But Harvard—like most colleges around the country—has been curiously quiet on the subject of the Iraq War.

On the day the United States’ “coalition of the willing” invaded Iraq five years ago, one thousand Harvard students walked out of their classes in protest. What has happened since then? In the war, 1.6 million U.S. troops have been deployed. Four thousand of them have been killed and 60,000 have suffered wounds, injuries or serious disease. More than 300,000 servicemen and women have been treated for medical problems at VA hospitals and clinics, including 68,000 diagnosed with post-traumatic stress disorder (PTSD). Hundreds of thousands of civilians have died in Iraq, and millions have been forced to flee the country.

Apart from a handful of Harvard students who have gathered to honor our veterans and to commemorate the dead, the student body has in general managed to ignore these tragic developments. But the war will eventually affect the life of every student, because it is this current generation that will end up paying the $3 trillion bill.

Iraq is already the second-most expensive conflict in U.S. history, after World War II. By the end of 2008, the federal government will have spent $800 billion on the wars in Iraq and Afghanistan (government accounts make it hard to separate the two). However, this figure is just the “burn rate” spent on combat operations, such as transportation, equipment, fuel, combat pay, and employing the 100,000 contractors who support (and are supported by) the war effort.

That $800 billion figure ignores three major costs to be paid out over the next few decades. First is the cost of providing medical care and disability compensation for veterans. Thanks to better medical care on the battlefield, the survival rate in Iraq is much higher than in previous wars: a ratio of seven troops wounded in combat for every death compared to 2.5 in Vietnam and Korea. (Including non-battlefield injuries, the Iraq ratio is an astounding 15:1.) But the cost of medical treatment for these veterans will be very high.

Second is disability compensation. Already, one-third of the troops who have returned from Iraq have applied for disability benefits. This is a cost that continues for years—the peak year for paying World War II benefits was 1993. The federal government spends $4.3 billion a year in disability compensation for veterans of the first Gulf War, even though that conflict lasted only a month. Given the intensity of combat and the high injury rates in Iraq and Afghanistan, we expect close to 50 percent of current troops to qualify for long-term disability compensation.

Third is the cost to “reset” the military. Beyond its high human costs, the war has exacted a significant toll on transports and equipment. Vehicles and weapons are being used up at 10 times the peacetime rate. They are not being replaced nearly as quickly. On the personnel side, the military has lowered standards for physical fitness and education; even felons have become soldiering material as the armed forces pursues basic recruiting targets. The Army is paying huge re-enlistment bonuses in an effort to retain captains, who are quitting at alarming rates. It will take decades of investment to rebuild our military strength to pre-war levels.

Congress debated the decision to go to war, but not the decision on how to pay for it. Wars usually require understood sacrifice back home. But this administration and Congress have colluded to ignore and conceal this unpleasant truth, financing the entire war through reckless borrowing. Indeed, this is the first war in U.S. history to coincide with tax cuts and increased spending. It is also the first American war since the Revolution to be financed by international loans.

Taken together, these hidden costs to the federal government are likely to amount to nearly $3 trillion in today’s money. Who will pay this enormous price tag? Because all the money spent has been borrowed, most of the costs have been deferred. Students who have paid too little attention today are going to wake up in a few years to find their tax rates hiked or their government entitlements curbed as the full price of what we have done is presented by our creditors overseas.

As we enter the sixth year of combat, Harvard students should realize that each month we continue in Iraq will eventually cost them $25 billion. The question is whether today’s young people are willing to bear that price.

Linda J. Bilmes ’80, a former assistant secretary of commerce, teaches public finance at the Harvard Kennedy School of Government. She is coauthor (with Nobel laureate Joseph Stiglitz) of “The Three Trillion Dollar War: The True Cost of the Iraq Conflict.”

For comprehensive coverage of the Iraq War's impact at Harvard five years later, check out The Crimson's Iraq Supplement.