War cost takes toll at home: Indiana, Fort Wayne have paid share of price, group maintains.

Mar 19, 2008 (The News-Sentinel - McClatchy-Tribune Information Services via COMTEX) -- NO MATCHES FOUND. | news | PowerRating | PR Charts -- "Every gun that is made, every warship launched, every rocket fired, signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. The world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children." -- President Dwight D. Eisenhower, "The Chance For Peace" speech to the American Society of Newspaper Editors, April 16, 1953

Five years after the war in Iraq began, nearly 4,000 American soldiers and hundreds of thousands of Iraqis have paid the ultimate price in blood. Other costs are harder to measure.

The $526 billion spent on the war represents money otherwise unavailable to communities like Fort Wayne, argues the National Priorities Project, a liberal, nonprofit group that analyzes the local, state and national impact of federal spending and policies. Crunching numbers from the Congressional Research Service and the IRS, the group estimated Indiana has paid $8 billion for the war, including $236.5 million by Fort Wayne residents.

Project members argue that, to pay for the war, Congress cuts spending in other areas. U.S. Rep. Mark Souder, R-3rd District, doesn't buy it. "You can argue morally about the war, but this cost question, in my opinion, is fairly bogus," he said.

However, project members said the local tab for the war could have covered a variety of initiatives including 2,476 affordable housing units, health care for 111,985 children or 31,700 college scholarships. Other tradeoffs include money for schools and teachers. They are usually paid for with local, rather than federal taxpayer money, but project spokeswoman Pamela Schwartz contends the comparison is valid as a way to make astronomical costs comprehensible.

"When you start to hear something like ($526) billion, it's so difficult to grasp," Schwartz said. "It's a values question. It raises the question of how we want to spend our money."

Souder said soldiers fighting the war have paid a terrible cost, but he argued that Fort Wayne companies belonging to the military-industrial complex are dependent on it. "If these war funds were suddenly cut off, our unemployment rate would soar," he said.

Schwartz acknowledged the military-industrial complex has a huge role in the economy. "The question is ... do we keep feeding it or do we work on directions that address the need for good-quality, decent-paying jobs without requiring war," she said. "It just raises the question of what kind of economy we want to be."

Souder said money for things like road and bridge repairs and Pell Grants comes from a different funding stream than military spending, but project members argue that war costs have led the Bush administration to propose reductions in the next fiscal year for community development block grants, energy assistance to the poor and housing vouchers that would hurt communities like Fort Wayne. If Congress approves President Bush's request for an additional $139 billion for the war in the next fiscal year, Indiana's share will be $2.1 billion, according to the project.

While Souder said the war has helped the economy, Nobel Prize-winning economist Joseph Stiglitz said it has reduced Iraqi oil input and driven up oil prices, adding to the economic downturn. Stiglitz, who co-authored "The Three Trillion Dollar War" with Harvard economist Linda Bilmes, noted that unlike other wars, taxes haven't been raised and the war has been deficit-financed.

"Deficit spending gives the illusion that the laws of economics can be repealed, that we can have both guns and butter," Stiglitz wrote in a Feb. 23 op-ed piece in The Times of London. "The costs of the war are real even if they have been deferred, possibly to another generation."

Stiglitz accused the Bush administration of low-balling the cost of the war before the invasion, singling out the $50 billion to $60 billion dollar estimate by Gov. Mitch Daniels, then director of the Office of Management and Budget. In 2002, Daniels said a $200 billion estimate by then-White House economic adviser Lawrence Lindsey was "very, very high."

On Tuesday, Daniels spokeswoman Jane Jankowski said Daniels' estimate was only for the cost of one year. "He didn't try to extrapolate any future figures," she said.

Jankowski said Indiana had a $1 billion surplus at the end of the last fiscal year and had no comment on what effect, if any, the cost of the war has had on Indiana.

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