The Iraq war, says economist Joseph Stiglitz, is "the first U.S. war
financed entirely on credit."
When the war started, the Bush administration said it would cost no more
than $60 billion. But the U.S. budget was already in deficit, so the
administration had to borrow money to finance the invasion. About 40
percent of the money was borrowed from China and other international
investors---the first time since the Revolutionary War that foreigners
financed a U.S. war.
At the same time, the administration and Congress lowered taxes instead
of raising them, as is customary in wartime. The Federal Reserve kept
interest rates low, which encouraged middle-class Americans to go on a
consumption binge financed by credit cards and home-equity loans.
Today, say Stiglitz and other economists, the bills for the country's
spending spree are starting to come due, in the form of higher prices, a
weakened dollar, and lower living standards.
"There’s no such thing as a free war," Stiglitz said. "The U.S.---and
the world---will be paying the price for decades to come."
But at least we're getting our money's worth. Right?
Contractors hired to rebuild the country's infrastructure or provide
security have overcharged the U.S. for everything from soft drinks---$45
a can---to gasoline. Millions of dollars in no-bid reconstruction
contracts were diverted to things such as Super Bowl tickets,
prostitutes, watches, and jewelry. And much of the reconstruction work
has been substandard. ...
"This became the lens through which Iraqis now see
America---incompetence, profiteering, arrogance," said House Democrat
Henry Waxman of California, a vocal critic of the war.
More here:
http://www.theweekdaily.com/news_opinion/briefing/40617/briefing_the_iraq_money_pit.html
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