Cost Confusion: U.S government fails Accounting 101

NPR reports that no one has any idea how much money we are spending fighting the war in Afghanistan. Senator John Kerry, Chair of the Foreign Relations Committee, has put the tab at $243 billion. The Congressional Research Service has put the figure at $227 billion, while the Pentagon, not surprisingly, has argued it has only cost $156 billion (though these are the people who according to their own admission do not know how many contractors they have on the payroll).

The former Pentagon Chief Financial Officer, Dov Zakheim, suggests it's easier to measure by cost per soldier, which he pits at $1 million per year, on top of salary and existing inventory. Such a cost, accepted by the Obama administration, puts a price tag on the McChrystal plan at an additional $40 billion per year.

In calculating the true costs of the war, however, Joseph Stiglitz and Linda Bilmes point out that future costs, especially medical and mental health treatment for veterans, are never included in war budget planning. That is the basis of their book, the Three Trillion Dollar War, which is largely about cost overruns in Iraq. It is also unhelpful to our calculations that the Pentagon auditor was recently sacked for serial incompetence. As long as we are following the 'out of crisis comes opportunity' meme, we might as well use the combination of an aimless war and a recession to start asking harder questions about how we are tracking spending for this quarter-trillion dollar conflict.