From the NYTimes Business Page... ________________ What $1.2 Trillion Can Buy By DAVID LEONHARDT The human mind isn’t very well equipped to make sense of a figure like $1.2 trillion. We don’t deal with a trillion of anything in our daily lives, and so when we come across such a big number, it is hard to distinguish it from any other big number. Millions, billions, a trillion — they all start to sound the same. The way to come to grips with $1.2 trillion is to forget about the number itself and think instead about what you could buy with the money. When you do that, a trillion stops sounding anything like millions or billions. For starters, $1.2 trillion would pay for an unprecedented public health campaign — a doubling of cancer research funding, treatment for every American whose diabetes or heart disease is now going unmanaged and a global immunization campaign to save millions of children’s lives. Combined, the cost of running those programs for a decade wouldn’t use up even half our money pot. So we could then turn to poverty and education, starting with universal preschool for every 3- and 4-year-old child across the country. The city of New Orleans could also receive a huge increase in reconstruction funds. The final big chunk of the money could go to national security. The recommendations of the 9/11 Commission that have not been put in place — better baggage and cargo screening, stronger measures against nuclear proliferation — could be enacted. Financing for the war in Afghanistan could be increased to beat back the Taliban’s recent gains, and a peacekeeping force could put a stop to the genocide in Darfur. All that would be one way to spend $1.2 trillion. Here would be another: The war in Iraq. In the days before the war almost five years ago, the Pentagon estimated that it would cost about $50 billion. Democratic staff members in Congress largely agreed. Lawrence Lindsey, a White House economic adviser, was a bit more realistic, predicting that the cost could go as high as $200 billion, but President Bush fired him in part for saying so. These estimates probably would have turned out to be too optimistic even if the war had gone well. Throughout history, people have typically underestimated the cost of war, as William Nordhaus, a Yale economist, has pointed out. But the deteriorating situation in Iraq has caused the initial predictions to be off the mark by a scale that is difficult to fathom. The operation itself — the helicopters, the tanks, the fuel needed to run them, the combat pay for enlisted troops, the salaries of reservists and contractors, the rebuilding of Iraq — is costing more than $300 million a day, estimates Scott Wallsten, an economist in Washington. That translates into a couple of billion dollars a week and, over the full course of the war, an eventual total of $700 billion in direct spending. The two best-known analyses of the war’s costs agree on this figure, but they diverge from there. Linda Bilmes, at the Kennedy School of Government at Harvard, and Joseph Stiglitz, a Nobel laureate and former Clinton administration adviser, put a total price tag of more than $2 trillion on the war. They include a number of indirect costs, like the economic stimulus that the war funds would have provided if they had been spent in this country. Mr. Wallsten, who worked with Katrina Kosec, another economist, argues for a figure closer to $1 trillion in today’s dollars. My own estimate falls on the conservative side, largely because it focuses on the actual money that Americans would have been able to spend in the absence of a war. I didn’t even attempt to put a monetary value on the more than 3,000 American deaths in the war. Besides the direct military spending, I’m including the gas tax that the war has effectively imposed on American families (to the benefit of oil-producing countries like Iran, Russia and Saudi Arabia). At the start of 2003, a barrel of oil was selling for $30. Since then, the average price has been about $50. Attributing even $5 of this difference to the conflict adds another $150 billion to the war’s price tag, Ms. Bilmes and Mr. Stiglitz say. The war has also guaranteed some big future expenses. Replacing the hardware used in Iraq and otherwise getting the United States military back into its prewar fighting shape could cost $100 billion. And if this war’s veterans receive disability payments and medical care at the same rate as veterans of the first gulf war, their health costs will add up to $250 billion. If the disability rate matches Vietnam’s, the number climbs higher. Either way, Ms. Bilmes says, “It’s like a miniature Medicare.” In economic terms, you can think of these medical costs as the difference between how productive the soldiers would have been as, say, computer programmers or firefighters and how productive they will be as wounded veterans. In human terms, you can think of soldiers like Jason Poole, a young corporal profiled in The New York Times last year. Before the war, he had planned to be a teacher. After being hit by a roadside bomb in 2004, he spent hundreds of hours learning to walk and talk again, and he now splits his time between a community college and a hospital in Northern California. Whatever number you use for the war’s total cost, it will tower over costs that normally seem prohibitive. Right now, including everything, the war is costing about $200 billion a year. Treating heart disease and diabetes, by contrast, would probably cost about $50 billion a year. The remaining 9/11 Commission recommendations — held up in Congress partly because of their cost — might cost somewhat less. Universal preschool would be $35 billion. In Afghanistan, $10 billion could make a real difference. At the National Cancer Institute, annual budget is about $6 billion. “This war has skewed our thinking about resources,” said Mr. Wallsten, a senior fellow at the Progress and Freedom Foundation, a conservative-leaning research group. “In the context of the war, $20 billion is nothing.” As it happens, $20 billion is not a bad ballpark estimate for the added cost of Mr. Bush’s planned surge in troops. By itself, of course, that price tag doesn’t mean the surge is a bad idea. If it offers the best chance to stabilize Iraq, then it may well be the right option. But the standard shouldn’t simply be whether a surge is better than the most popular alternative — a far-less-expensive political strategy that includes getting tough with the Iraqi government. The standard should be whether the surge would be better than the political strategy plus whatever else might be accomplished with the $20 billion. This time, it would be nice to have that discussion before the troops reach Iraq. http://www.nytimes.com/2007/01/17/b...r=3&oref=slogin&ref=business&pagewanted=print
Who gives a **** about education, starving children, the homeless and healthcare when we've got a war on that needs to be financed. WTF is wrong with you rim?!?!? You need to get you priorities straight.
When basso gets intimidated by facts he attacks the New York Times, as if it would make people forget.
Any response to the substance of the article? Any comment whatsoever on the opportunity cost of this war? The substance is the reason it is on the business page, but you don't seem to have the ability to debate substance anyway - never mind.
to me, it seems like a good point that instead of spending 1.2 trillion on the war, the govt could be doing some great things for our country. however, if you went back 5 years and if there was no 9/11, does anyone really think that the government would be doing anything close to what the article describes? for example, if someone suggested doubling the amount of money spent on cancer research, would it have any chance of happening? i doubt it. its a good article that might wake some people up, but to me it doesnt really change my opinion of anything.
you make a good point. remove 9/11, afghanistan and iraq, and suddenly give us 5 years to spend $1.2 trillion.... maybe some of it gets spent, the rest will be returned in tax cuts. connect this to the vote for bush thread, this is why i vote republican... but wish i didn't have to vote for bush. let the people spend the money how they see fit, not the government.
From the only Conservative republican left in Congress: HON. RON PAUL OF TEXAS Before the U.S. House of Representatives January 11, 2007 Escalation is Hardly the Answer Mr. Speaker, A military victory in Iraq is unattainable, just as it was in the Vietnam war. At the close of the Vietnam war in 1975, a telling conversation took place between an NVA Colonel named Tu and an American Colonel named Harry Summers. Colonel Summers reportedly said, “You never beat us on the battlefield.” Tu replied, “That may be so, but it is also irrelevant.” It is likewise irrelevant to seek military victory in Iraq. As conditions deteriorate in Iraq, the American people are told more blood must be spilled to achieve just such a military victory. 20,000 additional troops and another $100 billion are needed for a “surge.” Yet the people remain rightfully skeptical. Though we’ve been in Iraq nearly four years, the meager goal today simply is to secure Baghdad. This hardly shows that the mission is even partly accomplished. Astonishingly, American taxpayers now will be forced to finance a multi-billion dollar jobs program in Iraq. Suddenly the war is about jobs! We export our manufacturing jobs to Asia, and now we plan to export our welfare jobs to Iraq-- all at the expense of the poor and middle class here at home. Plans are being made to become more ruthless in achieving stability in Iraq. It appears Muqtada al Sadr will be on the receiving end of our military efforts, despite his overwhelming support among large segments of the Iraqi people. It’s interesting to note that one excuse given for our failure is leveled at the Iraqis themselves. They have not done enough, we’re told, and are difficult to train. Yet no one complains that Mahdi or Kurdish militias or the Badr Brigade (the real Iraq government, not our appointed government) are not well trained. Our problems obviously have nothing to do with training Iraqis to fight, but instead with loyalties and motivations. We claim to be spreading democracy in Iraq, but al Sadr has far more democratic support with the majority Shiites than our troops enjoy. The problem is not a lack of democratic consensus; it is the antipathy toward our presence among most Iraqis. In real estate the three important considerations are location, location, location. In Iraq the three conditions are occupation, occupation, occupation. Nothing can improve in Iraq until we understand that our occupation is the primary source of the chaos and killing. We are a foreign occupying force, strongly resented by the majority of Iraq’s citizens. Our inability to adapt to the tactics of 4th generation warfare compounds our military failure. Unless we understand this, even doubling our troop strength will not solve the problems created by our occupation. The talk of a troop surge and jobs program in Iraq only distracts Americans from the very real possibility of an attack on Iran. Our growing naval presence in the region and our harsh rhetoric toward Iran are unsettling. Securing the Horn of Africa and sending Ethiopian troops into Somalia do not bode well for world peace. Yet these developments are almost totally ignored by Congress. Rumors are flying about when, not if, Iran will be bombed by either Israel or the U.S.-- possibly with nuclear weapons. Our CIA says Iran is ten years away from producing a nuclear bomb and has no delivery system, but this does not impede our plans to keep “everything on the table” when dealing with Iran. We should remember that Iran, like Iraq, is a third-world nation without a significant military. Nothing in history hints that she is likely to invade a neighboring country, let alone do anything to America or Israel. I am concerned, however, that a contrived Gulf of Tonkin- type incident may occur to gain popular support for an attack on Iran. Even if such an attack is carried out by Israel over U.S. objections, we will be politically and morally culpable since we provided the weapons and dollars to make it possible. Mr. Speaker, let’s hope I’m wrong about this one. link
While I agree that tax cuts would be better than every single one of the other choices mentioned, 9% of the federal budget goes to interest on the National Debt. If we start paying it down, we can get bigger tax breaks in the future.
How much of your own money are you going to spend on cancer research, or educating 3 and 4 year olds? Are you willing to write a check to the department of Homeland Security to help secure your borders?
Blah its also like saying The Texas lotto has generated over 7 billion ( I think ) to the Texas education system.... But you know what ... where the hell does all that money go? We are closing schools in the State of Texas at a fast rate with a high percentage of dropouts....
Tons of private money is spent on cancer research. I give to St. Judes, and every dollar that you spend on medicine, some of it is going to medical research. I don't want to spend any money educating 3 and 4 year-olds. They need to be home playing. The bureaucratic functions of the Department of Homeland Security is necessary at some level (federal or state), but it is a bloated monstrosity that needs to go on a diet.
the question is why should they tell me how to spend it? allow me to spend where and how i like. this is the biggest issue between the 2 parties... or it was anyway. other than his gun view, i would vote for giuliani in a heartbeat. i could care less about gay marriage (they should be civil unions but whatever), and abortions are fine with me. let people have them... just quit trying to take my money and spend it on government funded social programs. i think its pretty clear the private sector is more productive than the public. having said that, it goes against pretty much everything bush has done in office, which is what frustrates such a large portion of the right. he is, almost entirely, opposite of what i thought i was voting for. the $1.2T is such a boondoggle, and defines both of 43's terms. and for the record, to address your question, when i file my taxes in the next few weeks i'll be claiming a nice portion of money that i gave to: 1) church 2) st judes 3) american cancer society side note for weslinder, the company i work for (Jared) donate to st jude as well: http://www.stjude.org/corporate/0,2516,410_2076_3262,00.html Sterling has donated $8.1 million from the sale of nearly 2 million holiday gift items and through corporate and employee donations - completing endowments of the Patient Registration Area, the Solid Tumor Clinic and the renovation of the entire Patient Care Center second floor along with its continued upgrade. Sterling’s newest commitment is a $15 million multi-year donation for the remodeling and expansion of the St. Jude cafeteria.
i dont think its bloated, i think its mis-managed. and lets not forget basic functions. highways. airports. public transportation. public hospitals. these all require government backing. educating poor 3-4 year olds gives them a huge boost. which provides us with a bigger talent pool and new ideas and helps keep the economy going. there is nothing more worthy of investment, nor anything which yields a better return than education.
I was thinking about this a bit yesterday... When I got out of grad school in 1986, I remember reading something that claimed the entire wealth (there's probably a better Econ term) of the US was about $13 Trillion... meaning it would take that much to buy every piece of land, every fighter jet, every TV, every pair of socks, etc. in the United States. (The figure was arrived at by some economists during the period where the Japanese were buying up a bunch of stuff.) No doubt that figure has risen substantially since then, but still... I suspect $1.2 Trillion is enough to buy everything in a number of states. Our current debt is about $8.7 Trillion. I remember it was a big deal when the debt first crossed the $1 Trillion mark in the early 80's.
