Wednesday, January 31, 2007

A trillion here, a trillion there--its some real money 

1.2 Trillion dollars is a lot of money. A whole lot of money.
As David Leonhardt pointed out in the NYT last week(subscription required, full column is below), it can buy you a lot of things--health care for everyone, curing all kinds of disease, rebuilding New Orleans, school all around. Not just one or two of these things, but all of them, and for quite a long time.

Or, you could have the war in Iraq. 1.2 Trillion dollars.

There have been many studies of how much the war on terrorism and the war in Iraq cost the US (like this, this, this or this). While they each vary in particulars of method and final estimate, they seem to all agree that the cost is in the trillion dollar range.

What really strikes me is the fact that a) what other country on earth has 1.2 trillion dollars to spend on anything and b) how, over the past 4-5 years, the US could have spent 1.2 trillion dollars on a war with so little perceived damage to the US economy and economic standing in the world. Now, part of the answer to this second question is that a significant part of the US economy is based on Government, specifically DoD, contracting, meaning much of that money is plowed right back into US companies like Haliburton or Blackwater or SAIC or Lockheed-Martin.

Its the first issue that I find more interesting--who in the world could even muster that kind of investment for what is a regional war? Moreover, who could afford to pay for such a large investment without planning ahead (remember, the original public Bush estimates were that the war would cost less than a hundred billion, and when a White House economic adviser ventured a figure north of $200 billion he was fired) and yet still show few ill effects of it within the global economy?

After all, 1.2 trillion starts to become some serious money.

(oh, and there is absolutely no coincidence that Leonhardt was on Colbert last night and I'm writing this post today.... none, not one.)

Since the entire column rests behind the subscription wall, I've cut and pasted it here for your reading pleasure.

ECONOMIX; What $1.2 Trillion Can Buy

Published: January 17, 2007

The human mind isn't very well equipped to make sense of a figure like $1.2 trillion. We don't deal with a trillion of anything in our daily lives, and so when we come across such a big number, it is hard to distinguish it from any other big number. Millions, billions, a trillion -- they all start to sound the same.

The way to come to grips with $1.2 trillion is to forget about the number itself and think instead about what you could buy with the money. When you do that, a trillion stops sounding anything like millions or billions.

For starters, $1.2 trillion would pay for an unprecedented public health campaign -- a doubling of cancer research funding, treatment for every American whose diabetes or heart disease is now going unmanaged and a global immunization campaign to save millions of children's lives.

Combined, the cost of running those programs for a decade wouldn't use up even half our money pot. So we could then turn to poverty and education, starting with universal preschool for every 3- and 4-year-old child across the country. The city of New Orleans could also receive a huge increase in reconstruction funds.

The final big chunk of the money could go to national security. The recommendations of the 9/11 Commission that have not been put in place -- better baggage and cargo screening, stronger measures against nuclear proliferation -- could be enacted. Financing for the war in Afghanistan could be increased to beat back the Taliban's recent gains, and a peacekeeping force could put a stop to the genocide in Darfur.

All that would be one way to spend $1.2 trillion. Here would be another:

The war in Iraq.

In the days before the war almost five years ago, the Pentagon estimated that it would cost about $50 billion. Democratic staff members in Congress largely agreed.

Lawrence Lindsey, a White House economic adviser, was a bit more realistic, predicting that the cost could go as high as $200 billion, but President Bush fired him in part for saying so.

These estimates probably would have turned out to be too optimistic even if the war had gone well. Throughout history, people have typically underestimated the cost of war, as William Nordhaus, a Yale economist, has pointed out.

But the deteriorating situation in Iraq has caused the initial predictions to be off the mark by a scale that is difficult to fathom. The operation itself -- the helicopters, the tanks, the fuel needed to run them, the combat pay for enlisted troops, the salaries of reservists and contractors, the rebuilding of Iraq -- is costing more than $300 million a day, estimates Scott Wallsten, an economist in Washington.

That translates into a couple of billion dollars a week and, over the full course of the war, an eventual total of $700 billion in direct spending.

The two best-known analyses of the war's costs agree on this figure, but they diverge from there. Linda Bilmes, at the Kennedy School of Government at Harvard, and Joseph Stiglitz, a Nobel laureate and former Clinton administration adviser, put a total price tag of more than $2 trillion on the war. They include a number of indirect costs, like the economic stimulus that the war funds would have provided if they had been spent in this country.

Mr. Wallsten, who worked with Katrina Kosec, another economist, argues for a figure closer to $1 trillion in today's dollars. My own estimate falls on the conservative side, largely because it focuses on the actual money that Americans would have been able to spend in the absence of a war. I didn't even attempt to put a monetary value on the more than 3,000 American deaths in the war.

Besides the direct military spending, I'm including the gas tax that the war has effectively imposed on American families (to the benefit of oil-producing countries like Iran, Russia and Saudi Arabia). At the start of 2003, a barrel of oil was selling for $30. Since then, the average price has been about $50. Attributing even $5 of this difference to the conflict adds another $150 billion to the war's price tag, Ms. Bilmes and Mr. Stiglitz say.

The war has also guaranteed some big future expenses. Replacing the hardware used in Iraq and otherwise getting the United States military back into its prewar fighting shape could cost $100 billion. And if this war's veterans receive disability payments and medical care at the same rate as veterans of the first gulf war, their health costs will add up to $250 billion. If the disability rate matches Vietnam's, the number climbs higher. Either way, Ms. Bilmes says, ''It's like a miniature Medicare.''

In economic terms, you can think of these medical costs as the difference between how productive the soldiers would have been as, say, computer programmers or firefighters and how productive they will be as wounded veterans. In human terms, you can think of soldiers like Jason Poole, a young corporal profiled in The New York Times last year. Before the war, he had planned to be a teacher. After being hit by a roadside bomb in 2004, he spent hundreds of hours learning to walk and talk again, and he now splits his time between a community college and a hospital in Northern California.

Whatever number you use for the war's total cost, it will tower over costs that normally seem prohibitive. Right now, including everything, the war is costing about $200 billion a year.

Treating heart disease and diabetes, by contrast, would probably cost about $50 billion a year. The remaining 9/11 Commission recommendations -- held up in Congress partly because of their cost -- might cost somewhat less. Universal preschool would be $35 billion. In Afghanistan, $10 billion could make a real difference. At the National Cancer Institute, annual budget is about $6 billion.

''This war has skewed our thinking about resources,'' said Mr. Wallsten, a senior fellow at the Progress and Freedom Foundation, a conservative-leaning research group. ''In the context of the war, $20 billion is nothing.''

As it happens, $20 billion is not a bad ballpark estimate for the added cost of Mr. Bush's planned surge in troops. By itself, of course, that price tag doesn't mean the surge is a bad idea. If it offers the best chance to stabilize Iraq, then it may well be the right option.

But the standard shouldn't simply be whether a surge is better than the most popular alternative -- a far-less-expensive political strategy that includes getting tough with the Iraqi government. The standard should be whether the surge would be better than the political strategy plus whatever else might be accomplished with the $20 billion.

This time, it would be nice to have that discussion before the troops reach Iraq.

Thursday, January 18, 2007

No Longer the Final Frontier 

There's nothing like the start of the semester, always a fun time on campus. A very exciting week indeed.

This semester, I'm rolling out a new course, Hegemony and US Foreign Policy, so over the next 15 weeks or so, you'll probably see my posting reflect that. As I read things, I'm looking at them from this perspective.

Case in point-- the NYT just reported that China tested an Anti-Satellite Weapon. This is a big deal in its own right, demonstrating the rapidly advancing capability of the Chinese military. From a US perspective, though, its a very direct signal directed from China to the USA.

Bary Posen has argued that the US hegemony is currently based on a military that allows it "Command of the Commons" (click for link to the full article). The core of his argument is that the US derives much of its hegemonic strength from its ability to exert military use and control over global commons--namely the high seas and outer space. While many nations have some space capability, the US and US military dominate space, and the Bush Administration's recent Space Strategy (to read click here) eschewed international governance of space to preserve US freedom of action in space. The military relies heavily on space-based assets to keep its dominant position: GPS, communications, intelligence, imaging, and more.

To give one example, the most popular bomb in both the Air Force and Navy arsenal is the JDAM, a kit that is added to a conventional "dumb" bomb and uses GPS information to guide it to the target. This allows the Air Force to use B-52's for close air support, as they did (and still do) in Afghanistan. Take out GPS with anti-sat weapons, and they are reduced to dropping dumb bombs, losing a key battlefield advantage.
(not to mention that no one in the military would know where on earth they were...)

So, how to read the anti-satellite weapon test? On one level, you can see it as a new weapon in the Chinese arsenal, allowing them greater capability. On a deeper level, its clearly a signal directed at the US--the current hegemon relying on military assets in space for terrestrial military dominance.

Sunday, January 14, 2007

Jack is Back! 

Previously on 24....

Yes, everyone's favorite special counter-terrorism agent is back for another season of 24. As many of you know, I am a big fan. Watched both of tonight's season premier episodes, and already we see that Jack Bauer is one bad-ass dude.

A few facts about Jack Bauer that you might not have known:
When bad things happen to good people, its probably fate. When bad things happen to bad people, it’s probably Jack Bauer.

There have been no terrorist attacks in United States since Jack Bauer has appeared on television.

Lets get one thing straight, the only reason you are conscious right now is because Jack Bauer does not feel like carrying you.

On a high school math test, Jack Bauer put down "Violence" as every one of the answers. He got an A+ on the test because Jack Bauer solves all his problems with Violence.

So, I'm very excited for another season of 24. It promises 22 more hours of terrorism, torture, action, civil liberty debates, and a new President Palmer (because the old one has a new Unit and sells insurance). Plenty to discuss.

That, and hegemony. Maybe, if we're lucky, we'll even figure out how to combine the two.

Friday, January 05, 2007

Who's on First? 

Yesterday I wondered what was going on with the reports that Negroponte was leaving the DNI post to take over as Deputy SecState. Well, I awoke to NPR reporting that this is part of a much larger reshuffling of Bush's Iraq team--and yes, you really do need a program to keep up with who is going where.

Negroponte out at DNI, in as Deputy SecState, to handle Iraq issues
Mike McConnell to be nominated to be DNI
Khalilzad out as Ambassador to Iraq, in as UN Ambassador
Ryan Crocker to be nominated as new Ambassador to Iraq
Gen. Casey out as commander of troops in Iraq
Gen. David Petraeus in as commander of us troops in Iraq
Gen. Abizaid out as CENTCOM, Adm. William Fallon (from PACOM) in as CENTCOM
Harriet Miers out as White House counsel
And, lets not forget Rumsfeld out and Gates in as SecDef.

With the President set to announce a new Iraq policy this week, the Post reports that:
President Bush is overhauling his top diplomatic and military team in Iraq, as the White House scrambles to complete its new war policy package in time for the president to unveil it in a speech to the nation next week, officials said....

The White House declined to comment yesterday on its personnel moves, but a senior administration official said the changes are a precursor to revamping policy. "It is appropriate to have the people in place as soon as possible to implement the new policy," said the official, who declined to be identified because the president has not made his announcement.

Or, as the NYT reported it:
“The idea is to put the whole new team in at roughly the same time, and send some clear messages that we are trying a new approach,” a senior administration official said Thursday.

Beyond a "fresh start," the Administration also seems to be gearing up for a more substantial fight with the new Democratic Congress on issues across the board. The WP quotes:
Republican advisers have been telling the White House to be ready for war, and many cited Miers as the wrong general. "The White House knew they needed to get a tough street fighter -- that's what this is about," said one such adviser, who spoke on the condition of anonymity to preserve access to the White House.

As in the Congress will be issuing a lot of subpoenas and the Administration will need a better staff to deal with them.

Already, we're hearing a much tougher Congressional response to the personnel changes:
Top Congressional officials responded angrily to the news of Mr. Negroponte’s departure.

“I think he walked off the job, and I don’t like it,” said Senator John D. Rockefeller IV of West Virginia, the new chairman of the Senate Intelligence Committee.

Now, I don't see Senate Democrats blocking any of these moves (and all need confirmation, with the exception of the new WH Counsel), but I do see them asking a lot harder, deeper, more difficult questions and extracting a few promises in return for votes.

I also think that these moves signal the last act of the Bush Administration. Its rare, very rare, for senior officials to stay in any one job for a full 8 years. Usually the turn-over comes at the mid-point (and we saw it here, ie Powell out and Rice in), and in the final years, as the President becomes more of a lame-duck policy wise, turning to administrators and career folks to run things instead of the political policy drivers of the first years of the Administration.

When its all said and done, Bush will be remembered for two things-- Sept 11, 2001 and the war in Iraq. This is his last chance to have any impact on how those two policies / narratives / events play out, and we're seeing his big push to get both turned in a more positive direction with new people and maybe a slightly new policy direction.

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Thursday, January 04, 2007

AU Style 

Flipping around the channels on my Dish last night-- after a fascinating Military Channel program on the strategic bomber race-- I came across a fascinating little program on the Style Channel.

My Celebrity Home
Episode 203: Dolce

Several students over in Anderson contacted the show to come and remake their dorm lounge so that faculty resident and my current office neighbor, Prof. John Richardson (aka Dorm Grandpop), would have a top-quality space to cook his regular dinners for students.

The AU magazine has the full write up.

Quite honestly, the only reason I watched was because I had seen the article on-line and as I was flipping through the channels, I saw the episode and figured, hey, its AU, so lets check it out.

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