Making Globalization Work and Globalization | Joseph Stiglitz | Talks at Google

TL;DR

The Iraq War cost trillions of dollars, had a significant impact on the economy, and was not justified by the Bush administration.

Transcript

I'm Hal Varian Google's Chief Economist and I'm here to introduce Joe stiglets this is a great pleasure because 42 years ago Joe taught me microeconomics I did that calculation several times because I couldn't quite believe it was 42 years I think I think it's explained by the fact that Joe was a child prodigy he was 11 then and I was nine at least... Read More

Key Insights

• 🫱 The Iraq War was one of the most expensive wars in U.S. history and had a significant impact on the economy.
• 🫱 The Bush administration tried to hide the true cost of the war using accounting gimmicks and misleading claims.
• 😮 The war contributed to the rise of oil prices, which had negative economic effects.
• 🥺 The privatization of the war increased costs and led to issues with contractor accountability.
• 😑 The war had both micro and macroeconomic costs and diverted resources from other pressing economic issues.
• 🇨🇷 The true cost of the war includes not only the direct military expenditures but also future disability and health care costs for injured soldiers.
• 🫱 The war had a negative impact on the economy, including increasing the national deficit and contributing to the economic downturn.

Questions & Answers

Q: What were some of the accounting gimmicks used by the Bush administration to hide the true cost of the Iraq War?

The Bush administration used cash accounting, which only accounted for upfront cash expenditures and hid future costs. This allowed them to present a lower cost to the American people initially, but increased the long-term cost of the war. They also used emergency appropriations to fund the war, bypassing regular budget scrutiny.

Q: How did the war contribute to the economic problems faced by the United States?

The war led to a large increase in the national deficit and indebtedness, making it more difficult to address economic challenges. Additionally, the war contributed to the rise of oil prices, which had a negative impact on the economy. The war also diverted resources and attention away from other pressing economic issues.

Q: How did the privatization of the war contribute to its high cost?

The use of private contractors increased the cost of the war. Contractors, particularly security firms like Blackwater, were paid significantly higher wages than regular troops, and their mission and objectives were not necessarily aligned with those of the U.S. military. Contractors also contributed to the insurgent problem by importing cheap labor from other countries, creating resentment among unemployed Iraqis.

Q: What were some of the other costs of the war beyond the direct military expenditures?

The war had significant microeconomic costs, such as the loss of productivity due to death and disability of soldiers, as well as the strain on families and communities. The war also had macroeconomic costs, such as increasing the national deficit and contributing to the economic downturn. There were also hidden costs, like the failure to invest in infrastructure and education, which would have long-term economic benefits.

Summary & Key Takeaways

• The Iraq War cost trillions of dollars, making it the second most expensive war in U.S. history after World War II.

• The war had both direct military expenditures and indirect costs such as increased military recruitment spending and future disability and health care costs for injured soldiers.

• The war played a role in the rise of oil prices, contributing to economic turmoil.