A second US war against Iraq could cost $100-billion to $200-billion, up to four times the Pentagon estimate, the White House said, according to a news report on Monday.
The financial burden of toppling Saddam Hussein’s regime would probably not trigger a US recession or a sustained period of inflation, President George Bush’s chief economic advisor Lawrence Lindsey told the Wall Street Journal.
War would drive up global oil prices in the short term. But in the long term, Lindsey said, the world economy would receive a boost from the additional oil freed up in Iraq, which has the world’s second-largest reserves after Saudi Arabia.
”When there is a regime change in Iraq, you could add three million to five million barrels (a day) of production to world supply,” he told the Journal. ”The successful prosecution of the war would be good for the economy.”
Democrats have accused Bush of timing his war threats against Baghdad to distract voters from the ailing US economy and a wave of corporate governance scandals that have rattled Wall Street in the lead-up to midterm elections on November 5.
”It’s hard not to notice that the sudden urgency of war with Iraq has coincided precisely with the emergence of the corporate scandal story” and slipping political support, Jim Jordan, head of the Democrats’ Senate campaign committee, told the Washington Post.
”It’s absolutely clear that the administration has timed the Iraq public relations campaign to influence the midterm elections … and to distract the voting public from a failing economy and an unpopular Republican domestic agenda.”
Bush on Monday urged Senate Democrats to rein in spending and pass the fiscal 2003 budget plan to help the economy.
”My message to the Congress is: don’t forget there are still some people trying to find work,” he said, speaking in the political swing state of Iowa.
The Pentagon had previously told Congress that an attack on Iraq would cost about $50-billion – less than the $58-billion cost of the first Persian Gulf War, $48-billion of which was paid for by the United States’ allies.
Lindsey did not specify whether his figure of one to two percent of US gross domestic product included subsequent troop deployment and reconstruction costs in post-war Iraq, the report said.
In Afghanistan, US military officials have said, they expect a US troop presence for years to come. But a conflict is raging within the Bush administration on how much to spend on recovery efforts, the Wall Street Journal reported on Monday.
While the State Department and CIA had pushed for increased financial support for Kabul, the Office of Management and Budget had resisted and helped wipe out $134-million in disaster and refugee aid agreed by Congress this summer, said the report. – Sapa-DPA