This has been the deadliest year for U.S. soldiers in Iraq since the 2003 invasion toppled Saddam Hussein. So far in 2007, according to the Department of Defense, 857 American troops have been killed in Iraq. Thousands more have been badly injured in the fighting, which of course also has been disastrous for innocent Iraqis. Without diminishing the terrible toll in lives and limbs, there is another way to calculate the cost of the war. A new study puts the literal financial cost of the wars in Iraq and Afghanistan at $1.6 trillion. That is double what the Bush administration has requested, according to Congress’s Joint Economic Committee. The analysis considered “hidden” costs, like interest on funds borrowed to bankroll the wars, lost investment, expenses for long-term health care for injured veterans and the cost of oil market disruptions. To put it in more understandable terms, that translates into a cost of $20,900 for a family of four, the report said. For the Iraq war only, total economic costs were pegged at $1.3 trillion for the period from 2002 to 2008, or $16,500 for the family of four, the report added.

Another cost of the war has been the diversion of resources from important priorities here at home. For example, the funds requested for the wars through 2008 would have been sufficient to provide health insurance coverage to all of America’s uninsured for the 2003-2008 period, according to the Joint Economic Committee. Moreover, while President Bush pursues his war in Iraq, on Tuesday he vetoed a bill that passed with bipartisan support in Congress. The legislation Bush vetoed would make college more affordable, support life-saving medical research and provide relief for families struggling with rising home heating costs. The measure also would provide money for veterans’ employment programs, homeless veterans, and research to help those suffering from traumatic brain injuries.

Here is a summary of the Joint Economic Committee report:

Total Economic Costs 2002-08 (if the president’s supplemental is passed):

$1.3 trillion for Iraq alone $1.6 trillion for Iraq and Afghanistan

True Cost of the War has been Double the Administration’s Spending (through 2008):

• • To date, the president has requested $607 billion for the Iraq war alone since 2003, and a combined $804 billion including Afghanistan.
  • This is over ten times higher than the $50 to $60 billion estimated by the administration prior to the start of the war and costs have increased every year since 2003.
  • The funds requested for these wars through 2008 would have been sufficient to provide health insurance coverage to all of America’s uninsured for the 2003-2008 period. (There were approximately 45 million uninsured Americans at the start of the war and this number rose to 47 million by 2006, which is the latest figure available).

Total Economic Costs 2002-2017 (CBO’s considerable drawdown scenario)

$2.8 trillion for Iraq alone $3.5 trillion for Iraq and Afghanistan

The Cost of the War Could Balloon to $3.5 Trillion or More

The report forecasts a scenario, using the same CBO, 10-year window, corresponding to the recent statement by Secretary of Defense Robert Gates that a protracted “Korea-like” presence would be required in Iraq. This scenario involves a considerable drawdown in Iraq troop levels of 66 percent by the year 2013, and a smaller drawdown of 33 percent in Afghanistan forces. The scenario also assumes that some active conflict with insurgents continues over the period. These CBO estimates of $2.4 trillion are used as a base for the analysis in this report. The total economic cost of the wars in Iraq and Afghanistan rise by over $1 trillion to $3.5 trillion.

Costs could far exceed these projections if the significant drawdown assumed in this scenario does not materialize. This CBO budgetary scenario projects that appropriations for the Iraq war will begin to drop in 2009, and by FY 2013 Iraq appropriations are projected to be less than half FY 2007 levels. But historically appropriations for the Iraq war have increased every year since the invasion, by between 12 and 40 percent annually.

Maintaining post-surge troop levels in Iraq over the next 10 years would result in costs of $4.5 trillion. If a rapid withdrawal takes place, future costs of these wars to the U.S. economy over the next decade could be reduced by almost $2 trillion.