Writing in these pages in early 2008, we put the total cost to the United States of the Iraq war at $3 trillion. This price tag dwarfed previous estimates, including the Bush administration's 2003 projections of a $50 billion to $60 billion war.
But today, as the United States
ends combat in Iraq
, it appears that our $3 trillion estimate (which accounted for both government expenses and the war's broader impact on the U.S. economy) was, if anything, too low. For example,
the cost of diagnosing, treating and compensating disabled veterans has proved higher than we expected.
The price of oil was less than
$25 a barrel, and futures markets expected it to remain around that level. With the war, prices started to soar, reaching
$140 a barrel by 2008.
That the Iraq war added substantially to the
federal debt. This was the first time in American history that the government cut taxes as it went to war. The result:
a war completely funded by borrowing. U.S. debt soared from
$6.4 trillion in
March 2003 to
$10 trillion in 2008 (before the financial crisis); at least a quarter of that increase is directly attributable to the war. And that doesn't include future health care and disability payments for veterans, which will add another half-trillion dollars to the debt. As a result of two costly wars funded by debt,
our fiscal house was in dismal shape even before the financial crisis -- and those fiscal woes compounded the downturn.
The Iraq war didn't just contribute to the severity of the financial crisis, though; it also kept us from responding to it effectively. Increased indebtedness meant that the government had far less room to maneuver than it otherwise would have had. More specifically, worries about the (war-inflated) debt and deficit constrained the size of the stimulus, and they continue to hamper our ability to respond to the recession.