How much did the war in Iraq contribute to the deficit

September 1, 2010 8:25 AM

How much did the Iraq war actually cost with regards adding to the deficit?

So I saw a quote that over $1 trillion dollars was spent fighting the war in Iraq, and our deficit stands at $1.7 trillion but I doubt our debt would be $0.7T had we not fought the war (as a lot of that money was paid to US companies who paid taxes etc) so what kind of number are we looking at with regards the wars impact on the deficit?

posted by zeoslap to law & government (15 answers total)

US companies' taxes won't really have a measurable impact on the deficit, and a lot of the "cost" of the Iraq war will extend into the future, as far as paying for millions of veterans' benefits.
posted by Slinga at 8:29 AM on September 1, 2010

Investors Business Daily with chart showing deficit vs. Iraq war spending.
posted by Jahaza at 8:32 AM on September 1, 2010 [1 favorite]

- This post has another chart with the Bush tax cuts vs the wars vs stimulus vs recession.
posted by T.D. Strange at 8:40 AM on September 1, 2010 [1 favorite]

Well, this is assuming the war is over, which it is not. "Combat operations" may have ended, but our military is still there and still costing us money.
posted by elder18 at 8:44 AM on September 1, 2010 [1 favorite]

Debt and deficit are not the same thing. Debt is accumulated deficit. That $1T figure wasn't spent in one year, so even if it were never spent it's not a number that would be simply subtracted from the current deficit.
posted by sanko at 8:49 AM on September 1, 2010

zeoslap, this seems to me to be a question that may devolve into one set of figures compared or contrasted to another set of figures. I suggest you read the IBD article and the CBPP article and see if you can answer your question from these two pieces.

I am a student of rhetoric and of the three basic appeals of an argument--the reputation of the presenter, the logic of the arguments themselves (point by point), and the emotional appeal--is the argument crafted to inflame the passions or is it reasoned and reasonable.

You will have to make up your own mind of course. And there may be better arguments from the conservative side than IBD's, but on the basis of the two presented so far, I think that the Center on Budget and Policy Priorities is the more believable, because it more confirmable (it has references from whence they draw their points, IBD's does not), it is devoid of inflammatory speech where IBD's takes cheap shots, and considers more factors that contribute to the overall deficit that are edited--by choice or through wanting to only present a confirmation-biased argument (my words not theirs)--to present only a predictable condemnation of the current administration while ignoring the very real contributions of the Clinton and Bush contributions to the current state of the US Economy.
posted by beelzbubba at 9:14 AM on September 1, 2010 [1 favorite]

The single biggest cost of the Iraq war is one that will be paid over the next 60 years or so.

The law on veteran's benefits is that they are paid to soldiers who serve continuously for more than a certain period (I think 6 months). Ordinarily national guard units don't serve stretches which are that long, and are not entitled to veteran's benefits.

But full national guard divisions were activated and used in the Iraq War during the occupation/pacification stage, and they spent a year at a time in theater. That means that all of the soldiers in those units are now elegible for veteran's benefits.
posted by Chocolate Pickle at 9:28 AM on September 1, 2010

our deficit stands at $1.7 trillion but I doubt our debt would be $0.7T

Deficit is something different than debt.

The national debt is current somewhere around $13-14 trillion.

Trillion. With a T.

/me weeps quietly
posted by Cool Papa Bell at 9:28 AM on September 1, 2010 [2 favorites]

You will have to make up your own mind of course. And there may be better arguments from the conservative side than IBD's, but on the basis of the two presented so far, I think that the Center on Budget and Policy Priorities is the more believable, because it more confirmable (it has references from whence they draw their points, IBD's does not), it is devoid of inflammatory speech where IBD's takes cheap shots, and considers more factors that contribute to the overall deficit that are edited--by choice or through wanting to only present a confirmation-biased argument (my words not theirs)--to present only a predictable condemnation of the current administration while ignoring the very real contributions of the Clinton and Bush contributions to the current state of the US Economy.

The CBPP does not answer the question:

How much did the Iraq war actually cost with regards adding to the deficit?

It doesn't break out costs for the war in Iraq vs. the war in Afghanistan.

The IBD article (which I just happened to have handy) actually does cite its sources, although it doesn't link to them, they're easily googlable. The Source is this piece from the American Thinker. That piece also cites its source, this CBO document (pg. 15) for Iraq War appropriations and deficit numbers as well as the 2010 U.S. Statistical Abstract.

The current state of the U.S. Economy and your or IBD's or CBPP's opinions on it (or Randall Hoven's, for that matter) is not relevant to answering the question of how much the Iraq War added to the deficit.
posted by Jahaza at 9:50 AM on September 1, 2010 [1 favorite]

The AP weighs in with its own fact check.

FTA:

OBAMA:"Unfortunately, over the last decade, we have not done what is necessary to shore up the foundation of our own prosperity. We have spent over a trillion dollars at war, often financed by borrowing from overseas. This, in turn, has shortchanged investments in our own people, and contributed to record deficits."

THE FACTS: This is partly true. For sure, the costly Iraq and Afghanistan wars have contributed to the nation's budget deficit — but not by as much as Obama suggests. The current annual deficit is now an estimated $1.5 trillion. But as recently as 2007, the budget deficit was just $161.5 billion. And that was years after war expenses were in place for both the Afghanistan and Iraq conflicts.

Most of the current deficit is due to the longest recession since the 1930s. It has seriously depressed tax revenues while increasing costs to the government — including social safety-net programs such as unemployment insurance and spending by both the outgoing Bush and incoming Obama administrations on stimulus programs and on bailouts of banks and automakers.
posted by BobbyVan at 10:23 AM on September 1, 2010 [1 favorite]

The worst part of the debt racked up for the Iraq war is that it is not debt that produces a return. It is like shipping big bales of money to foreign countries and lighting it on fire. Hell even the tax cuts produce some long term benefit that stays with us (although I would say not even worth it) but something whereas spending our treasure on pointless foreign wars that produce no benefit to our long term stability or energy availibility is just foolish. This was always my biggest problem with the war-a pointless waste of resources (capital, human, and international good will). A logical argument could be made for the first phase of the afghan war and pursuing bin laden but engaging in nation building there just never works out-hell even Alexander the great and Genghis Khan had a tough time (and they didn't have a critical news media or concerned populace riding their ass).
posted by bartonlong at 11:38 AM on September 1, 2010

BobbyVan -

I do not follow the author's line of logic. To equate the spending in Iraq as a correlary to absolute values fo yearly deficits is meaningless as there is little evidence that the costs of the war will have a potential positive benefit (save for contractors and private companies that reaped gov't contracts) on our economy; in short, it is a sunk cost in absolute terms.

To say that our deficit was a mere $161.5 billion in 2007 neglects the fact that the 100-200 billion we spent that year on our war operations could have effectively erased that year's fiscal deficit and taken a bite out of current debt.

In short, the sunk costs are directly correlated to our national debt and are escalating our rise into the zone of no return: when the cost of servicing your debt becomes too onerous to pay (default zone).
posted by Hurst at 12:18 PM on September 1, 2010

Hurst: The author's logic is simple: the current $1.5 trillion budget deficit has little to do with the wars in Iraq and Afghanistan.
posted by BobbyVan at 2:43 PM on September 1, 2010

The author is pretty much quipping on President Obama's choice of diction rather than the message: the current national debt has greatly been exacerbated by our involvement in both wars. Our current fiscal defecit is a byproduct of devastated tax receipts (unemployment, depreciated assets/properties) and ever-increasing expenditures (defense, meidcare/medicaid, ss, unemployment insurance).
posted by Hurst at 7:56 PM on September 1, 2010

From the American Thinker analysis: "The Iraq War accounts for less than 8% of the federal debt held by the public at the end of 2010 ($9.031 trillion)."

Significant, yes. But the non-partisan CBO figures show that the 2009 stimulus was more expensive than operations for the entire Iraq war.

Media Matters has also taken up the case. They quibble with some of the figures, but the chart they produce shows the cost of the Iraq War and the Stimulus Act to be roughly equivalent ($865 billion for Iraq War vs. $814 billion for the Recovery Act). I'll leave it to others to evaluate the impact of these massive expenditures -- both seem of dubious value to me.
posted by BobbyVan at 6:51 AM on September 2, 2010