I remember when the President assured me that the war wouldn't cost anything; Iraqi oil money would pay for it. I remember when the White House got all testy about estimates the war would cost $250B... How outrageous to suggest war was so costly! Wars of the past were a sacrifice the President asked all citizens to shoulder; the invasion of Iraq was going to be painless. The president gave me a tax cut and told me to keep spending...

Now a Nobel-prize winning economist says the real costs will (conservatively) be 1-$2 trillion dollars. $2 trillion? $2 trillion TAX DOLLARS? So much for that $300 dividend i got. So much for the idea that Republicans are fiscally conservative. So much for the idea of accountability - these were MASSIVE screw ups and no one has even been fired.

How can these numbers be so different, after all they are both Harvard alumni? Maybe Bush was still in the eating club when his professors were covering life-cycle analysis and how to estimate costs? Or perhaps it is another result of Republican focus on weapon systems and willful ignorance of soldiers? Whatever the cause, the average citizen will pick up the tab.

Again the article (by a Harvard professor in the USA no less) was published first in the UK. Wonder how long the US media will take to pick it up?

Iraq war could cost US over $2 trillion, says Nobel prize-winning economist

· Economists say official estimates are far too low

· New calculation takes in dead and injured soldiers

Jamie Wilson in Washington Guardian

Saturday January 7, 2006

The real cost to the US of the Iraq war is likely to be between $1 trillion and $2 trillion (£1.1 trillion), up to 10 times more than previously thought, according to a report written by a Nobel prize-winning economist and a Harvard budget expert.

The study, which expanded on traditional estimates by including such costs as lifetime disability and healthcare for troops injured in the conflict as well as the impact on the American economy, concluded that the US government is continuing to underestimate the cost of the war.

Mr Stiglitz told the Guardian that despite the staggering costs laid out in their paper the economists had erred on the side of caution. "Our estimates are very conservative, and it could be that the final costs will be much higher. And it should be noted they do not include the costs of the conflict to either Iraq or the UK." In 2003, as US and British troops were massing on the Iraq border, Larry Lindsey, George Bush's economic adviser, suggested the costs might reach $200bn. The White House said the figure was far too high, and the deputy defence secretary, Paul Wolfowitz, said Iraq could finance its own reconstruction.

Congress has appropriated $251bn for military operations, and the Congressional budget office has now estimated that under one plausible scenario the Iraq war will cost over $230bn more in the next 10 years. According to Mr Stiglitz and Ms Bilmes, whose paper is due to be presented to the Allied Social Sciences Association in Boston tomorrow, there are substantial future costs not included in the Congressional calculations.

For instance, the latest Pentagon figures show that more than 16,000 military personnel have been wounded in Iraq. Due to improvements in body armour, there has been an unusually high number of soldiers who have survived major wounds such as brain damage, spinal injuries and amputations. The economists predict the cost of lifetime care for the thousands of troops who have suffered brain injuries alone could run to $35bn. Taking in increased defense spending as a result of the war, veterans' disability payments and demobilisation costs, the economists predict the budgetary costs of the war alone could approach $1 trillion.

Mr Stiglitz, a former World Bank chief economist, said the paper, which will be available on josephstiglitz.com, did not attempt to explain whether Americans were deliberately misled or whether the underestimate was due to incompetence.

But in terms of the total cost of the war "there may have been alternative ways of spending a fraction of that amount that would have enhanced America's security more, and done a better job in winning the hearts and minds of those in the Middle East and promoting democracy".