What Else Could We Do with $300 Million a Day?

Estimates of the economic cost of the war have appeared here before, most recently this discussion of the present and future costs of treating the wounded, but I think it's important to keep reminding ourselves of the opportunity cost - what we give up - when we spend money on the war rather than for some other purpose. And it's also worthwhile to remember these totals do not include the human cost that the war has extracted, nor the costs to countries other than the U.S.:

What $1.2 Trillion Can Buy, by David Leonhardt, NY Times: The human mind isn’t very well equipped to make sense of a figure like $1.2 trillion. ... 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. ...

In the days before the war almost five years ago, the Pentagon estimated that it would cost about $50 billion. ... 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. ...

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 ... 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 ... 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... 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...

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...

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. ...

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. ...

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.