November 26, 2005
-- by Gary Boatwright
This month's issue of The Atlantic has a short side bar article on the economic cost of natural and man made disasters. Disasters And The Deficit by Linda Bilmes. (subscription only)
Bottom line? Even if we pull out tomorrow the cost will exceed one trillion dollars.
This year's hurricane disasters, coupled with extremely high military spending in Iraq and Afghanistan, are likely to prolong and worsen U.S. budget deficits for the next twenty years. The bill for Katrina reconstruction will reach $250 billion if legislation introduced by Louisiana's two senators is enacted. Expect it to go higher as we undertake the complex work of cleaning up environmental hazards, building new housing, rebuilding oil infrastructure, and repairing ports, bridges, tunnels, roads, and thousands of water and sewer systems. The actual costs of disasters have a way of creeping well beyond initial estimates.
That has certainly been the case in Iraq. So far the United States has spent $275 billion on military operations in Iraq and Afghanistan. But this is just the tip of a very large iceberg. The costs of continuing operations run at $100 billion a year. When one adds in the long-term costs, including interest payments on war debt and disability benefits that we will owe to veterans for decades, the total cost of the war will exceed $1.3 trillion.
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