"Readers may be surprised to learn just how difficult it was for Nobel Prize-winning economist Stiglitz and Kennedy School of Government professor Bilmes to dig up the actual and projected costs of the Iraq War for this thorough piece of accounting. Using 'emergency' funds to pay for most of the war, the authors show that the White House has kept even Congress and the Comptroller General from getting a clear idea on the war's true costs. Other expenses are simply overlooked, one of the largest of which is the $600 billion going toward current and future health care for veterans. These numbers reveal stark truths: improvements in battlefield medicine have prevented many deaths, but seven soldiers are injured for every one that dies (in WWII, this ratio was 1.6 to one). Figuring in macroeconomic costs and interest-the war has been funded with much borrowed money-the cost rises to $4.5 trillion; add Afghanistan, and the bill tops $7 trillion. This shocking expose, capped with 18 proposals for reform, is a must-read for anyone who wants to understand how the war was financed, as well as what it means for troops on the ground and the nation's future." Publishers Weekly (Starred Review) (Copyright Reed Business Information, Inc.)

"When congressional Democrats called a hearing last month to explore the costs of the Iraq war, their star witness was not some number-crunching Pentagon planner or a besieged administration budget official. It was Joseph E. Stiglitz, the Nobel Prize-winning Columbia University economist who is giving the White House heartburn with his forceful argument that the true price of the Iraq conflict will..." Washington Post Book Review (read the entire Washington Post review) far surpass even the hundreds of billions of dollars already tallied.

The hearing came just days before the publication of 'The Three Trillion Dollar War,' co-authored by Stiglitz and Harvard University lecturer and public finance expert Linda J. Bilmes. The book looks beyond the 'emergency supplemental' budget requests and other official expenses and strives to estimate the full range of Iraq-related costs — including long-term care for veterans — that the nation will face for years to come.

The time is ripe for such an inquiry. The five-year anniversary of the invasion of Iraq finds the United States on the verge of recession, and the political debate is shifting toward whether the country should continue bankrolling such a war in the face of competing priorities.

Despite their sometimes technical prose, Stiglitz and Bilmes methodically build a compelling case that the costs of the war far exceed the $500 billion or so officially spent on it thus far. Yet by making many assumptions about the future course of the conflict — from its duration (through at least 2017, they predict) to its impact on global oil prices ($5 to $10 extra per barrel, for seven to eight years) — the authors will leave many readers unconvinced. Will the war prove extraordinarily expensive? Absolutely. But will the price tag be $2 trillion? $3 trillion? $5 trillion? It's impossible to know.

Nevertheless, the authors address the economic realities of the conflict far more fully than did the administration before the March 2003 invasion. Then-deputy defense secretary Paul Wolfowitz told Congress that Iraqi oil revenues would fully finance any postwar reconstruction, while Bush economic adviser Larry Lindsey lost his job for having the temerity to suggest that the conflict could cost $200 billion — a fraction of the funds appropriated to date. 'The tone of the entire administration was cavalier,' Stiglitz and Bilmes write, 'as if the sums involved were minimal.'

In the book's most impassioned passages, the authors analyze the cost of veterans' care. They explain that the ratio of injuries to deaths among troops in Iraq is greater than in any past U.S. war, a development they hail as a 'tribute to advances in battlefield medicine.' With so many more injured troops surviving, however, veterans' disabilities and medical treatment have become 'two of the most significant long-term costs of the Iraq war.' Even the supposedly cheap Gulf War of 1991, they note, is still costing more than $4 billion annually in veterans' benefits.

The authors then grapple with assigning a monetary value to the lives of troops killed at war, settling on $7.2 million per individual based on the Environmental Protection Agency's cost estimate when someone dies in an environmental disaster. And, finally, the authors consider macroeconomic effects, assessing the impact of higher federal deficits and skyrocketing oil prices (which have gone from $25 to more than $100 per barrel since the war began) and estimating the foregone boon to the economy if even a portion of the funds spent on Iraq had gone toward schools, research, infrastructure or health care in the United States.

Stiglitz and Bilmes' final tally reaches $2.2 trillion in their 'best case' scenario and $5 trillion in their 'realistic-moderate' scenario — and those figures don't even count the costs to Iraq, U.S. allies and the rest of the world. Choosing to err on the conservative side (and perhaps on the side of a catchier book title), the authors settle on $3 trillion.

In their original 2006 academic paper on this topic, Stiglitz and Bilmes estimated the war's price tag at $1 trillion to $2 trillion. Now they're at $3 trillion, and Stiglitz seems comfortable going higher; he recently told Bloomberg News that the true cost is 'much more like $5 trillion.'

A trillion here, a trillion there — pretty soon the line between 'estimate' and 'guess' gets a bit blurry. On occasion, Stiglitz and Bilmes appear to overreach. They often count the wars in Iraq and Afghanistan together, and they find ways to link all manner of bad things to the U.S. invasion. For example, because solutions to global problems such as AIDS, climate change and poverty require U.S. leadership, and because the Iraq war has diminished Washington's moral standing in the world, the war is worsening AIDS, climate change and world poverty. Really?

Stiglitz has been a bit of a hero to the left for his widely read critiques of globalization, and 'The Three Trillion Dollar War' promises to garner much attention as well. Excerpts have appeared in U.S. and international publications, and the book is set to be translated into Dutch, French, German, Italian, Japanese and Spanish.

To no one's surprise, the White House already has dismissed its conclusions. 'People like Joe Stiglitz lack the courage to consider the cost of doing nothing and the cost of failure,' White House spokesman Tony Fratto recently told reporters. 'What price does Joe Stiglitz put on attacks on the homeland that have already been prevented? Or doesn't his slide rule work that way?'

Stiglitz and Bilmes should be commended — not disparaged — for their painstaking work. But war critics should weigh the numbers carefully. 'We're grateful to him,' Sen. Charles Schumer (D-N.Y.) gushed over Stiglitz at the congressional hearing. 'His book title speaks for itself.'

Except it doesn't. The book's title suggests a level of precision that is not borne out in its pages. The book's stronger lesson is the sheer range of costs — and foregone opportunities — that the authors ably identify.

'In one way or another, we will be paying for these costs, today, next year, and over the coming decades — in higher taxes, in public and private investments that will have to be curtailed, in social programs that will have to be cut back,' they write. 'One cannot fight a war, especially a war as long and as costly as this war, without paying the price.'

Carlos Lozada is a deputy national editor at The Washington Post."

Reviewed by Carlos Lozada, Washington Post Book World (Copyright 2006 Washington Post Book World Service/Washington Post Writers Group)
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Apart from its tragic human toll, the Iraq War will be staggeringly expensive in financial terms. This sobering study casts a spotlight on expenses that have been hidden from the U.S. taxpayer and measures what this money would have produced if it had been invested in the economy.

Winner of the 2001 Nobel Prize in Economics, Joseph E. Stiglitz of Columbia University is the author of Making Globalization Work and Globalization and Its Discontents. Linda J. Bilmes, a professor of public finance at Harvard's Kennedy School of Government, is a former assistant secretary for management and budget in the U.S. Department of Commerce.