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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Mary Cluney who wrote (68045)	5/23/2008 5:40:45 PM
From: TimF	Read Replies (1) \| Respond to of 543161

While I would like to see more transparency, I don't think spending (at least the big items) is as hidden as you seem to think. As much as I might enjoy this type of accounting causing pressure to reduce areas of government spending, I don't think its really reasonable to count very indirect and/or long term costs that haven't actually been spent or have been spent by someone other than government as part of the official federal budget amounts. 2. Add operational expenditures hidden elsewhere in the defense budget. Between 2002 and 2007 the military budget outside of spending for Iraq and Afghanistan has grown by some $500 billion, cumulatively. This is faster than the rate at which defense spending has risen over the past 40 years. In terms of absolute dollars sure its a faster increase. Your increasing off a larger base. In percentage terms? I have my doubts. That's about one years with of extra spending over 5 years. That's strong growth but its not explosive growth. Working from discussions with defense analysts, we estimate that at least one-quarter of the additional money has been devoted in one way or another to fighting the wars in Iraq and Afghanistan. About $110 billion of this Pentagon spending over the past five years should be assigned to the Iraq conflict alone. Some of it can clearly be tied to Afghanistan or Iraq, but When people talk about the cost of the war, they are usually talking about Iraq alone (since Afghanistan is much less controversial, and also less expensive). More importantly a large part of that spending is less clearly tied to one place. If we start up a new type of training or build a new type of weapon because of our experiences with Iraq, those weapons or that training can be applied elsewhere. If we use up a weapon system in Iraq, how do you budget its cost? Do you take the amount we originally spent on it? That amount adjusted for inflation? The depreciated cost of the weapon or weapons system? Or do you take the replacement cost? The last would be the most expensive but your often talking about replacing with a better weapon, and a new weapons system can easily last well beyond the war. The way you do all these types of calculations can mean you get widely different cost totals. We estimate that the net cost of restoring the U.S. military, including all reserve forces and the National Guard, to its pre-war strength will reach $280 billion. Apparently they are talking about new equipment, if so a bran new piece of equipment will often be more capable, and even if it is the same will have more life left in it, than the old equipment. They are right that there is a cost here that isn't part of the budgeted spending, but it should be based on a depreciated value for the equipment that was used up. 8. Add interest. The U.S. has borrowed most of the funds used to wage the Iraq war. We will have to repay this debt with interest. If we include in our tally the interest payable on what we are borrowing over only the next 10 years, this adds another $615 billion to the price tag If we treat all spending the same, as you say we should, than we have to look at the total percentage of federal spending that is borrowed money, and apply this percentage to the Iraq spending. So maybe 10% of the spending represents borrowing. So you add something like $61.5 bil rather than $615bil. OTOH we keep rolling over the debt, if you count the interest out forever the total cost can be astronomical, but it probably doesn't make sense to do this. Otherwise you start talking about costs for major government programs that are well in to the quadrillions range, or even higher. Estimate the cost to the economy. / Estimate the macro-economic impact. That's almost impossible to do with any serious degree of confidence. If you accept lower levels of confidence you can get some sort of estimate, but the estimates can vary widely. Also if you apply that to other spending and regulatory activities of the government the $3tril cost figure doesn't really stand out, esp. if your talking long term costs, like this $3tril estimate.