Obama: 'Iraq Costs American Families $100 Bucks per Month'

They gave me the keys to PEEK this week, so you might notice a bit of a different mix. I'll grab your favorites as usual, but I've also got some fresh blogger blood lined up to introduce to AlterNet readers this week. Feedback's always welcome, in the comments or straight at me @ joshua dot holland at alternet dot org.

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The St. Petersberg Times, like a lot of papers, has a political "fact-checker" column, which last week took a look at one of Obama's staple claims on the stump:

SUMMARY: Sen. Barack Obama says the war costs each household about $100 per month. We do the math and find he's right.

We asked the Obama campaign about the source of the $100 figure and were told it came from The Three Trillion Dollar War, a new book by Joseph E. Stiglitz, a Nobel Prize-winning economist, and Linda J. Bilmes, a former Commerce Department official from the Clinton administration who is now a professor at Harvard University's Kennedy School of Government.

There was no footnote for the $100 estimate, so we called Bilmes to ask how she had calculated it. She said they took the Bush administration's 2008 request for war funding - $196-billion - and divided it by 12 to get a monthly cost. That works out to $16-billlion for both wars and about $12-billion just for the Iraq portion.

Then, she and Stiglitz divided those figures by the number of U.S. households and came up with $138 for both wars and slightly more than $100 for Iraq alone, she said.

We double-checked the authors' sources and math, and found they were right.

This is smart.Numbers like $196 billion, much less a trillion dollars are meaningless -- who can picture a trillion dollars worth of cheeseburgers? Saying that the average household peels off five $20-bills and slaps them on the table each and every month to pay for the occupation of some far-off land is something people can wrap their heads around.

The problem is that it underestimates the actual costs to taxpayers by a very significant degree -- it's an extremely conservative number. It's based on the defense supplementals with which Bush has financed his wars, but that calculation just scratches the surface.

Stiglitz and Bilmes got to $3 trillion by factoring the long-term costs of the war -- veterans care, replacing damaged weapons systems, interest payments on the debt we're racking up, etc.

Which doesn't include the increases in the Pentagon's base budget -- now about 170 billion dollars per year higher than when Bush took office, much of which is justified directly or indirectly with our engagements in Iraq and Afghanistan.

And it included only a small portion of the "risk premium" on crude oil that we all pay every time we fill the tank, a fee for destabilizing much of the oil-producing world. That premium's estimated at $20-25 per barrel (crude's up over $105 per barrel right now). That's not all from Bush setting the Middle East on fire with his blundering wars, but it's a significant factor.

In an article I'll be running tomorrow in our Iraq special coverage area (you can sign up for our weekly newsletter here), Stiglitz and Bilmes say that their estimate was probably way too low:

In adding up the quantifiable costs of the war, it is hard not to come up with a number in excess of $3 trillion. In putting a $3 trillion price tag on the war, we believe we have been excessively conservative - a $4 or $5 trillion tag would be more reasonable. And remember - this is just the cost for America.

Immorality aside, these occupations are going a long way toward breaking our economy, and they'll continue to do so long after we bring them to an end.