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Estimates of Iraq war cost were not close to ballpark

By David M. Herszenhorn

New York Times News Service

WASHINGTON — At the outset of the Iraq war, the Bush administration predicted that it would cost $50 billion to $60 billion to oust Saddam Hussein, restore order and install a new government.

Five years in, the Pentagon tags the cost of the Iraq war at roughly $600 billion and counting. Joseph E. Stiglitz, a Nobel Prize-winning economist and critic of the war, pegs the long-term cost at more than $4 trillion. The Congressional Budget Office and other analysts say $1 trillion to $2 trillion is more realistic, depending on troop levels and on how long the American occupation continues.

Among economists and policymakers, the question of how to tally the cost of the war is a matter of hot dispute. And the costs continue to climb.

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Congressional Democrats fiercely criticize the White House over war expenditures. But it is virtually certain that the Democrats will provide tens of billions more in a military spending bill next month. All of the war-price tallies include operations in the war zone, supporting troops, repairing or replacing equipment, reservists’ salaries, special combat pay for regular forces and some care for injured veterans - expenses that typically fall outside the regular Defense Department or Veterans Affairs budgets.

The highest estimates often include projections for future operations, long-term healthcare and disability costs for veterans, a portion of the regular, annual defense budget, and, in some cases, wider economic effects, including a percentage of higher oil prices and the impact of raising the national debt to cover increased war spending.

The debate raging on Capitol Hill, on the presidential campaign trail, in research institutes and in academia touches on such esoteric factors as the right inflation index for veterans’ healthcare costs; the monetary value of nearly 4,000 soldiers killed; and what, if any, role the war has had in higher oil prices.

Some economists who track the war expenses say they worry that politicians are making mistakes similar to those made in 2002, by failing to fully come to grips with the short- and long-term financial costs that still lie ahead.

"The relevant question now is: what do we do now going forward? Because we can’t do anything about the costs that have already happened," said Scott Wallsten, an economist and vice president of research with iGrowthGlobal, a Washington research institute. "We still don’t hear people talking about that."

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