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Costs of Wars Often Underestimated

Aired February 26, 2003 - 13:08   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ANDERSON COOPER, CNN ANCHOR: New information today on Iraqi weapons. Among them, two bombs. One of those possibly containing a biological agent. CNN's Nic Robertson is live in Baghdad -- Nic, what is the latest?
NIC ROBERTSON, CNN CORRESPONDENT: Anderson, a team of inspectors out at one of those sites that Iraqi officials have just declared to the U.N. weapons inspectors. A site where Iraqi officials say they unilaterally destroyed some chemical -- rather, some biological bombs, bombs that contained biological agents. They say they destroyed these bombs back in 1991. They've begun to excavate the site there. U.N. inspectors spent a third day there looking at that excavation process going on. Iraqi officials have so far come up with bomb fragments. U.N. inspectors have not made a determination -- they will be joined this weekend, we are told, by a team of experts who will be able to better analyze what it is that Iraq disposed of there, what biological agents, how much, and how many bombs if bombs were, in fact, involved.

Also, we understand that Demetrius Perricos, Hans Blix, U.N. weapons chief's most senior deputy is heading to Baghdad. He is bringing with him a senior U.N. inspector who, we are told, would be overseeing Iraq's destruction of its Al Samoud 2 missiles, if that happens. We've been told not to read too much into this movement, because there's no indication yet, we are told from U.N. officials here that Iraq has agreed to begin destroying those missiles.

In an interview just two days ago with CBS anchor Dan Rather, President Saddam Hussein, when he was asked, would he destroy the Al Samoud 2 missiles? Initially said that Iraq was complying with the U.N. inspection program, that they had done in the past, and they would do in the future. When pushed on that issue by Mr. Rather, who asked again, will you destroy the Al Samoud 2 missiles by -- beginning the Saturday deadline, the Iraqi leader then said that Iraq had no missiles that went beyond the proscribed range of 93 miles. He said any that they had had had been destroyed. Not clear here if he was referring to those Scud missiles that the U.N. inspectors and Iraqi officials disposed of in the 1990s -- Anderson.

COOPER: All right. Nic Robertson, live from Baghdad, thanks very much.

Well, we want to take a look at what a war with Iraq could cost the country in dollars. The bottom line: money. The fact is, no one really knows, but nearly everyone accepts it would not be cheap.

CNN's Kathleen Hays has looked into the matter. She joins us now live from New York to tell us what she has learned -- Kathleen. KATHLEEN HAYS, CNN CORRESPONDENT: Hi there, Anderson. We know this is a topic that, as we get closer to war, of course, is gaining a lot more interest, maybe even urgency.

It's very interesting that back in September, then White House economic adviser Larry Lindsey said, I think it's going to cost about $100 billion to $200 billion. The very next day, the head of the budget office for the White House said, Oh, no, no, no. We don't think so. The next thing we knew in the big cabinet shakeup, Larry Lindsey is one of the guys who lost his job.

Interesting now, the latest figures emerging from the administration are that they are going to probably ask for about $95 billion to fight the war. So the estimates have definitely come up. It's clear, though, if you look back at history, the cost of war is often underestimated. This was pointed out quite dramatically in a study by William Nordhaus. It's a study on the cost of war that everybody has been looking at, talking about.

He points out that the cost of the Civil War was initially estimated at only $240 million. In the end, that war cost $3.2 billion. The cost of the Vietnam War was underestimated by some 90 percent. So you can see the kind of dangerous road we may be treading down here. What Nordhaus, what most everyone who looks at this says is the real difference here -- is the war short or long?

The optimists, of course, are looking for a war that lasts maybe a couple of months, involves troops of about 250,000, which would cost maybe $40 or $50 billion.

The question is, though, will it be a short war? Will the conflict get worse? Will we see protracted fighting, urban conflict? Then, of course, there's the cost of reconstructing, keeping the peace. In Nordhaus's study, the figures that are so dramatic are that the short, favorable outcome would cost about $99 billion, but the long outcome could get up around $1.9 trillion. We're talking about the difference of something that would be maybe 1 percent or 2 percent of our nation's gross domestic product, versus something that would get up closer to 20 percent. So it makes a big, big difference.

Now, you ask yourself, why is the cost being underestimated? It may be partly, some say, because the Bush administration fears that if they talk too candidly about the possible high cost, that maybe they'll be less public support for the war. This is a time when they are trying to push through a big package that includes big tax cuts. And that would -- if the war is going to cost more, the question is, gee, can you still afford to pay for the tax cuts? So there's a lot of questions here, not too many solid answers, and again, Anderson, in the end, it's going to determine -- be determined by the -- how the actual military conflict goes. And no one at this point knows the outcome there.

COOPER: Obviously, there's still so much unknown, what Donald Rumsfeld also often calls the unknown unknowns, things we don't even know we don't know at this point. Kathleen Hays, appreciate you joining us, thanks very much. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Aired February 26, 2003 - 13:08   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: New information today on Iraqi weapons. Among them, two bombs. One of those possibly containing a biological agent. CNN's Nic Robertson is live in Baghdad -- Nic, what is the latest?
NIC ROBERTSON, CNN CORRESPONDENT: Anderson, a team of inspectors out at one of those sites that Iraqi officials have just declared to the U.N. weapons inspectors. A site where Iraqi officials say they unilaterally destroyed some chemical -- rather, some biological bombs, bombs that contained biological agents. They say they destroyed these bombs back in 1991. They've begun to excavate the site there. U.N. inspectors spent a third day there looking at that excavation process going on. Iraqi officials have so far come up with bomb fragments. U.N. inspectors have not made a determination -- they will be joined this weekend, we are told, by a team of experts who will be able to better analyze what it is that Iraq disposed of there, what biological agents, how much, and how many bombs if bombs were, in fact, involved.

Also, we understand that Demetrius Perricos, Hans Blix, U.N. weapons chief's most senior deputy is heading to Baghdad. He is bringing with him a senior U.N. inspector who, we are told, would be overseeing Iraq's destruction of its Al Samoud 2 missiles, if that happens. We've been told not to read too much into this movement, because there's no indication yet, we are told from U.N. officials here that Iraq has agreed to begin destroying those missiles.

In an interview just two days ago with CBS anchor Dan Rather, President Saddam Hussein, when he was asked, would he destroy the Al Samoud 2 missiles? Initially said that Iraq was complying with the U.N. inspection program, that they had done in the past, and they would do in the future. When pushed on that issue by Mr. Rather, who asked again, will you destroy the Al Samoud 2 missiles by -- beginning the Saturday deadline, the Iraqi leader then said that Iraq had no missiles that went beyond the proscribed range of 93 miles. He said any that they had had had been destroyed. Not clear here if he was referring to those Scud missiles that the U.N. inspectors and Iraqi officials disposed of in the 1990s -- Anderson.

COOPER: All right. Nic Robertson, live from Baghdad, thanks very much.

Well, we want to take a look at what a war with Iraq could cost the country in dollars. The bottom line: money. The fact is, no one really knows, but nearly everyone accepts it would not be cheap.

CNN's Kathleen Hays has looked into the matter. She joins us now live from New York to tell us what she has learned -- Kathleen. KATHLEEN HAYS, CNN CORRESPONDENT: Hi there, Anderson. We know this is a topic that, as we get closer to war, of course, is gaining a lot more interest, maybe even urgency.

It's very interesting that back in September, then White House economic adviser Larry Lindsey said, I think it's going to cost about $100 billion to $200 billion. The very next day, the head of the budget office for the White House said, Oh, no, no, no. We don't think so. The next thing we knew in the big cabinet shakeup, Larry Lindsey is one of the guys who lost his job.

Interesting now, the latest figures emerging from the administration are that they are going to probably ask for about $95 billion to fight the war. So the estimates have definitely come up. It's clear, though, if you look back at history, the cost of war is often underestimated. This was pointed out quite dramatically in a study by William Nordhaus. It's a study on the cost of war that everybody has been looking at, talking about.

He points out that the cost of the Civil War was initially estimated at only $240 million. In the end, that war cost $3.2 billion. The cost of the Vietnam War was underestimated by some 90 percent. So you can see the kind of dangerous road we may be treading down here. What Nordhaus, what most everyone who looks at this says is the real difference here -- is the war short or long?

The optimists, of course, are looking for a war that lasts maybe a couple of months, involves troops of about 250,000, which would cost maybe $40 or $50 billion.

The question is, though, will it be a short war? Will the conflict get worse? Will we see protracted fighting, urban conflict? Then, of course, there's the cost of reconstructing, keeping the peace. In Nordhaus's study, the figures that are so dramatic are that the short, favorable outcome would cost about $99 billion, but the long outcome could get up around $1.9 trillion. We're talking about the difference of something that would be maybe 1 percent or 2 percent of our nation's gross domestic product, versus something that would get up closer to 20 percent. So it makes a big, big difference.

Now, you ask yourself, why is the cost being underestimated? It may be partly, some say, because the Bush administration fears that if they talk too candidly about the possible high cost, that maybe they'll be less public support for the war. This is a time when they are trying to push through a big package that includes big tax cuts. And that would -- if the war is going to cost more, the question is, gee, can you still afford to pay for the tax cuts? So there's a lot of questions here, not too many solid answers, and again, Anderson, in the end, it's going to determine -- be determined by the -- how the actual military conflict goes. And no one at this point knows the outcome there.

COOPER: Obviously, there's still so much unknown, what Donald Rumsfeld also often calls the unknown unknowns, things we don't even know we don't know at this point. Kathleen Hays, appreciate you joining us, thanks very much. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com