Global Policy Forum

By Siobhan McDonough

In the worst case, a war with Iraq could cost the United States almost as much as the government spent in the last budget year -- nearly $2 trillion, according to new projections.

Researchers concluded in a study released Thursday that war with Iraq could cost the United States from $99 billion to more than $1.9 trillion over a decade.

The lower figure assumes a successful military, diplomatic and nation-building campaign; the higher figure assumes a prolonged war with a disruption of oil markets and a U.S. recession, the authors say in a study by the American Academy of Arts and Sciences.

Both figures assume a U.S. involvement in the country for 10 years. White House spokesman Gordon Johndroe said it was premature to comment on cost estimates.

"War is the last resort," he said. "We're hoping for a peaceful solution" The 1991 Persian Gulf War cost America an estimated $61 billion, but allies reimbursed all but about $7 billion. By some accounting methods, the United States may have even made a profit.

Direct military spending could range from $50 billion in a short campaign to $140 billion in a prolonged war with Iraq, said the study titled, "War With Iraq: Costs, Consequences and Alternatives." The study was done by the academy's Committee on International Security Studies.

The report cautioned that aside from the estimates of direct military costs, all the numbers should be "regarded as informed conjecture."

Occupation and peacekeeping costs could be $75 billion in the best case to $500 billion in the worst, the study said. Reconstruction and nation-building costs are estimated at $30 billion to $105 billion, and humanitarian aid at $1 billion to $10 billion.

Economic ripples of war with Iraq are likely to spread beyond budgetary costs, with the prospect of raising the cost of imported oil, slowing productivity growth and possibly triggering a recession, the report said.

A prolonged disruption of world oil markets could cost the U.S. economy up to $778 billion, the researchers estimated. On the other hand, Iraq's huge oil resources could satisfy U.S. needs for imported oil at current levels for almost a century and otherwise benefit the economy by $40 billion.

A short war could actually benefit the United States in terms of its macroeconomic impact, which includes employment, by $17 billion. A long war, in contrast, could have a $391 billion negative effect.

The American Academy of Arts and Sciences, founded in 1780 and based in Cambridge, Mass., is an international society of scientists, scholars, artists, business people and political leaders.

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