Trillion Dollar Conundrum

25 November 2008 |permalink | email article

Barack Obama was smart to name his economic team ahead of his national security team. Declining to estimate how many billions a major economic stimulus package would cost he said “we’ll do what’s required.”

Back-of-the-envelope calculations by Nobel Prize economist Paul Krugman are that the package should be huge, on the order of $600 billion.

But there is an inseparable connection between economics and national security.

It’s astonishing that the main stream media has yet to connect the staggering amount required for an economic recovery with the obscene cost of the Iraq war. Together, they will test Obama’s fiscal dexterity after Jan. 20 more than any president in American history, including FDR.

Now in its sixth year, George Bush’s reckless rush to war is costing about $12 billion a month, triple its “burn” rate of its earlier years. That’s what the economist Joseph E. Stiglitz, another Nobel winner, and co-author Linda J. Bilmes wrote in their recent book.

In “The Three Trillion Dollar War” they project, working beyond 2008 the Iraq and Afgan wars, including long-term military occupations of these countries—and depending on scenarios—it will cost the U.S. budget between $1.7 trillion and $2.7 trillion, or more, by 2017.

The book reports the two wars will have cost the U.S. $840 billion in 2007 dollars by Sept. 30, the end of fiscal year 2008.

That total far surpasses the $670 billion in 2007 dollars the Congressional Research Services says was the price tag for the 12-year Vietnam War.

Unlike 1933, when Herbert Hoover and FDR did not talk before the inauguration, Bush and Obama are in touch. But Obama is now the “shadow” president on the economy.

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