23 Aug 2010

“Spending $572B inTwo Years Stimulates an Economy, But Spending $554B Over Six Years Ruins One?”

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On the occasion of the notional end of the War in Iraq, Randall Hoven examines the popular liberal talking point that it was the Bush deficits incurred because of the Iraq War that wrecked the economy.

It was under Mr Bush that the deficit spiralled out of control as we fought an unnecessary and endless $3,000bn war in Iraq…”
– James Carville, the Financial Times.

“The Iraq adventure has seriously weakened the U.S. economy, whose woes now go far beyond loose mortgage lending. You can’t spend $3 trillion — yes, $3 trillion — on a failed war abroad and not feel the pain at home.”
– Linda J. Bilmes and Joseph E. Stiglitz, The Washington Post.

The correct [figure], according to the Congressional Budget Office, is $709 billion. The Iraq War cost $709 billion. Why Carville, Bilmes, and Nobel-winning economist Stiglitz thought the answer was $3 trillion is anybody’s guess. But what’s a 323% error among friends?

The CBO breaks that cost down over the eight calendar years of 2003-2010. [Above] is a picture of federal deficits over those years with and without Iraq War spending. …

No one will say that $709 billion is not a lot of money. But first, that was spread over eight years. Secondly, let’s put that in some perspective. Below are some figures for those eight years, 2003 through 2010.

* Total federal outlays: $22,296 billion.
* Cumulative deficit: $4,731 billion.
* Medicare spending: $2,932 billion.
* Iraq War spending: $709 billion.
* The Obama stimulus: $572 billion.

There is an important note to go along with that Obama stimulus number: the stimulus did not even start until 2009. By 2019, the CBO estimates the stimulus will have cost $814 billion.

If we look only at the Iraq War years in which Bush was President (2003-2008), spending on the war was $554B. Federal spending on education over that same time period was $574B.

So the following are facts, based on the government’s own figures.

* Obama’s stimulus, passed in his first month in office, will cost more than the entire Iraq War — more than $100 billion
(15%) more.

* Just the first two years of Obama’s stimulus cost more than the entire cost of the Iraq War under President Bush, or six years of that war.

* Iraq War spending accounted for just 3.2% of all federal spending while it lasted.

* Iraq War spending was not even one quarter of what we spent on Medicare in the same time frame.

* Iraq War spending was not even 15% of the total deficit spending in that time frame. The cumulative deficit, 2003-2010, would have been four-point-something trillion dollars with or without the Iraq War.

* The Iraq War accounts for less than 8% of the federal debt held by the public at the end of 2010 ($9.031 trillion).

* During Bush’s Iraq years, 2003-2008, the federal government spent more on education that it did on the Iraq War. (State
and local governments spent about ten times more.)

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