American Power And Imaginary Numbers

My conservative counterpart Donald Douglas of American Power breathlessly cuts and pastes the following from FOX News in his recent post "Total Costs of Iraq War Less Than Obama-Democrats' Economic Porkulus Package":

As President Obama prepares to tie a bow on U.S. combat operations in Iraq, Congressional Budget Office numbers show that the total cost of the eight-year war was less than the stimulus bill passed by the Democratic-led Congress in 2009.

According to CBO numbers in its Budget and Economic Outlook published this month, the cost of Operation Iraqi Freedom was $709 billion for military and related activities, including training of Iraqi forces and diplomatic operations.

The projected cost of the stimulus, which passed in February 2009, and is expected to have a shelf life of two years, was $862 billion...

And how's that "stimulus" working out?

Now I've mentioned on several occasions that economics is not my strong suit and that I even find that field of study fairly boring but I do speak English pretty well and I'm no slouch when it comes to basic mathematics so I was able to detect a few flaws in Don's argument here. Ignoring the fact that I automatically take people who use cute little nicknames like "Porkulus" when discussing serious political topics less seriously than those who speak like actual grown ups, the operational word one should really pay attention to in the above article is "projected".

The cost of the Bush administration's war in Iraq is stated flatly and in the past tense, as if the final bill has arrived in the mail and therefore will not increase past the stated $709 billion price tag while the final $862 billion cost of the stimulus is "projected" well into next year. Now this disparity might prompt an honest (or at least curious) person to ask, "Say, is there also a 'projected' final cost for the Iraq war as well?" Interestingly enough, there is:

As of February 2010, around $704 billion has been spent based on estimates of current expenditure rates^[1], which range from the Congressional Research Service (CRS) estimate of $2 billion per week to $12 billion a month, an estimate by economist Joseph Stiglitz.^[2]...

According to a Congressional Budget Office (CBO) report published in October 2007, the U.S. wars in Iraq and Afghanistan could cost taxpayers a total of $2.4 trillion dollars by 2017 when counting the huge interest costs because combat is being financed with borrowed money. The CBO estimated that of the $2.4 trillion long-term price tag for the war, about $1.9 trillion of that would be spent on Iraq, or $6,300 per U.S. citizen.^[9][10]

Stiglitz, former chief economist of the World Bank and winner of the Nobel Prize in Economics, has stated the total costs of the Iraq War on the US economy will be three trillion dollars in a moderate scenario, and possibly more in the most recent published study, published in March 2008.^[11] Stiglitz has stated: "The figure we arrive at is more than $3 trillion. Our calculations are based on conservative assumptions...Needless to say, this number represents the cost only to the United States. It does not reflect the enormous cost to the rest of the world, or to Iraq."^[11]

So the projected cost of Bush's war (which he never paid for in any of his budgets because apparently deficits didn't matter back then) is actually conservatively estimated at almost four times that of Obama's stimulus bill, which he passed in order to pull the country out of the economic recession and possible depression he inherited from Bush and company. And it seems that FOX News is having a little trouble with their own research as well. From the AP last week:

WASHINGTON — President Obama’s stimulus measure has created or saved as many as 3.3 million jobs and continues to boost economic growth in the second half of 2010, but it’s come at a higher price tag than originally billed.

Congressional analysts released new figures today estimating that the law enacted in January 2009, when it projected to cost $787 billion over a decade, would cost $814 billion. But that’s still less than the Congressional Budget Office estimated in January, when it said the measure would cost $862 billion.

So FOX's difference was only off by $48 billion or around 6% (maybe their researchers haven't read the news since January) but admittedly the stimulus did go over its projected budget by $27 billion or almost 4%. Now everyone knows that government spending almost always goes over its estimated costs so the 4% run over isn't surprising but noting that the stimulus went over its original projected cost might also prompt an honest (or at least curious) person to ask, "Say, was there also a 'projected' original cost for the Iraq war as well?" Interestingly enough, there was:

WASHINGTON — At the outset of the Iraq war, the Bush administration predicted that it would cost $50 billion to $60 billion to oust Saddam Hussein, restore order and install a new government.

Five years in, the Pentagon tags the cost of the Iraq war at roughly $600 billion and counting. Joseph E. Stiglitz, a Nobel Prize-winning economist and critic of the war, pegs the long-term cost at more than $4 trillion. The Congressional Budget Office and other analysts say that $1 trillion to $2 trillion is more realistic, depending on troop levels and on how long the American occupation continues.

Based on the time periods cited those numbers are from 2 1/2 years ago so they've obviously increased since then but if we use the higher original Bush administration estimate of $60 billion as well as the older CBO estimate of $1.9 trillion (much lower than Stiglitz's own current conservative estimates) the Iraq war will eventually go over its original projected budget by at least 3200%, again estimating extremely conservatively. Not only is this scenario the exact opposite of what Don tried to claim above but it's cost overruns are higher by several orders of magnitude.

Now I don't blame Don for foolishly stating what is an extremely obvious falsehood about the comparisons between the Bush administration's profligate wartime spending and the Obama administration's relatively modest depression averting spending. I actually had to Google complicated phrases like "original cost iraq war", "original cost stimulus", "projected cost iraq war" and "projected cost stimulus" to gain access to all of this esoteric information. And I don't know if you noticed but those phrases contain several words each, some of them are even multi-syllabic! So I guess Don can be forgiven for lazily cutting and pasting a story from the propaganda media wing of the Republican party rather than doing actual minimal research to make sure that what he's posting isn't an outright partisan lie. The man only has one PhD. after all. Hey, it's hard out here for a hack.