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Judge for yourself in this Q&A with the two authors of the book "The Three Trillion Dollar War"
A couple of choice ones:
Q: How much money could we have saved if we did not have "contractors" doing the jobs that used to be done by our military? (i.e. security, food & laundry services, construction, etc.) A: It is hard to get a precise number. It appears that, at least in many case, using contractors at least doubles the cost. Part of the reason that it is difficult to get a precise number is explained in the book: the government appears to be financing both the insurance premia for death and disability and much of the benefits (as strange as that may seem.) There is no full accounting. The overall cost of using the contractors is, however, far greater. We have created competition for our military--contractors doing the same work as soldiers are paid far more. This is bad for morale, but it also means that when their service time is over, many leave to work for the better paying contractors. In response, the military is forced to pay big re-enlistment bonuses. But the contractors have cost us in other ways: they focus on minimizing costs and maximizing profits, and those objectives are often not consistent with our broader strategic objectives, as we explain in our book.
A couple of choice ones:
Q: How much money could we have saved if we did not have "contractors" doing the jobs that used to be done by our military? (i.e. security, food & laundry services, construction, etc.) A: It is hard to get a precise number. It appears that, at least in many case, using contractors at least doubles the cost. Part of the reason that it is difficult to get a precise number is explained in the book: the government appears to be financing both the insurance premia for death and disability and much of the benefits (as strange as that may seem.) There is no full accounting. The overall cost of using the contractors is, however, far greater. We have created competition for our military--contractors doing the same work as soldiers are paid far more. This is bad for morale, but it also means that when their service time is over, many leave to work for the better paying contractors. In response, the military is forced to pay big re-enlistment bonuses. But the contractors have cost us in other ways: they focus on minimizing costs and maximizing profits, and those objectives are often not consistent with our broader strategic objectives, as we explain in our book.
Q: The Iraq War has removed a significant amount of oil from the world market. How much has the absence of this oil contributed to the rise in prices? How great is the negative impact of the oil price increase on the American economy, especially now that we are in a recession.
A: In response to several earlier questions, I explained how the war contributed to the rising oil prices. In our book, we attributed only $5 to $10 of the $75 to $85 rise in the price of oil to the war, but I actually think the war was responsible for a far larger part of the increase in the price of oil. As we explain in the book, the high oil prices have had a very, very negative effect on the economy--the effects of which were covered up by the Fed. Money spent on Saudi Arabian or Kuwait oil (or oil purchased from any other oil exporter) is money that is not available to be spent here at home. That means the economy is weaker than it otherwise would be. As I mentioned, the Fed covered up these effects through a flood of liquidity and lax regulations. It fueled a housing bubble and a consumption boom. But it can't do it any more. So in the coming years, we'll be feeling the bite of the high oil prices much more.
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