Cost benefit calculations

Bilmes and Stiglitz has tried to estimate the cost of the war in Iraq. From Harvard Magazine

Before the United States invaded Iraq in 2003, Secretary of Defense Donald Rumsfeld and then-director of the Office of Management and Budget Mitchell Daniels (now governor of Indiana) put the likely costs at between $50 billion and $60 billion. Former undersecretary of defense Paul Wolfowitz (now president of the World Bank Group) claimed that increased Iraqi oil revenues would pay for the war. When President Bush’s economic adviser Lawrence Lindsey suggested that the actual costs might be closer to $100 billion or even $200 billion, the White House called those figures grossly exaggerated and swiftly fired him.

Those estimates now look Lilliputian. The Congressional Budget Office (CBO) currently projects past and future Iraq-related expenditures to surpass $500 billion, and even that figure severely underestimates the full outlay, according to Bilmes and Stiglitz, whose paper indicates that the war will eventually cost Americans in excess of $2 trillion. (A trillion is a thousand billions.) Speaking of those in Congress who agreed early on to appropriate $87 billion to finance the war, Bilmes says, “Every time someone casts a vote, they implicitly make a cost-benefit analysis. Would they have voted the same way if they knew the costs were 10 times as much as advertised?”