Cost of War in Iraq, a new paper from Linda Bilmes and Joseph Stiglitz, has already been discussed, at least superficially, on a large number of blogs. Comments at Marginal Revolution helpfully cite a number of related papers.
Bilmes and Stiglitz conservatively project that the total economic costs for the U.S. jurisdiction at $1 to $2 trillion. Direct budgetary costs are projected to be $750 billion to $1.2 billion. I have only skimmed the paper, which looks interesting enough, but nothing really new.
I won’t bother to explain the fraud this time, read the past posts. Hint: it involves repeatability.
One thing I’m struck by, skimming comments contesting Bilmes and Stiglitz (the political ones, not the technical ones concerning borrowing costs should be included, though they overlap) is that after the fact, I think many people would claim that the invasion was justified, economically and otherwise, regardless of the final cost. $5 trillion? (NB, that is a hypothetical, not a prediction!) It was worth getting rid of Hussein and deterring would-be Husseins. $10 trillion? Just goes to show how nasty “our” opponents are. $100 trillion? Civilization must be destroyed to save civilization!
All the more reason to be cognizant of probable costs before going to war. There’s not really a need for prediction markets here. Just multiply proponents’ estimates by ten. However, people stupidly believe words that come out of politicians’ mouths. Prediction market estimates could, ironically, provide a countervailing authority.
A better way? See Wright, Scheer, Zakaria, Hardar, Tierney, and Pape.