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  • Iraq’s Oil Surplus Outpaces US Investment Dollars

Iraq’s Oil Surplus Outpaces US Investment Dollars

Kelly Phillips ErbAugust 6, 2008

It turns out that while the US has been facing record budget deficits, Iraq has been doing pretty well. US auditors have predicted a budget surplus of $80 billion in Iraq: 94% of that revenue comes from oil.

It’s not surprising. Oil revenues are at their highest point in years while the costs to Iraq are fairly small: the US is, of course, paying the costs of the infrastructure and other countries have forgiven the Iraqi debt. Good news for the wealthiest Iraqis, perhaps, but bad news for our Congressional officials. US taxpayers are understandably ticked off about the latest news – especially as oil prices in this country remain high.

Senator Carl Levin (D-MI), the Chair of the Senate Armed Services Committee, shares this outrage:

We should not be paying for Iraqi projects while Iraqi oil revenues continue to pile up in the bank, including outrageous profits from $4-a-gallon gas prices in the US. We should require that U.S. taxpayers be reimbursed for the cost of large projects.

A nice thought, but it won’t happen. In fact, I predict the opposite: US tax dollars will continue to pour into Baghdad despite the fact that Iraq has shown a surplus for the last four years.

And how much of that is due to US taxpayers? Not counting costs directly associated with the military, taxpayers have paid $48 billion in reconstruction costs since 2003 invasion of Iraq. Approximately half of those costs were spent on the oil and electricity industries, water systems and security. Iraq ponied up a scant $3.9 billion for those costs, despite Bush’s pre-war assurances that Iraqi oil money would pay for reconstruction. In fact, in 2003, then-Deputy Secretary of Defense Paul Wolfowitz told Congress: “We’re dealing with a country that can really finance its own reconstruction, and relatively soon.”

Hmm. Really?

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Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
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2 thoughts on “Iraq’s Oil Surplus Outpaces US Investment Dollars”

  1. j vercellone says:
    May 2, 2009 at 10:00 am

    the usa only spends 30per cent of its iraque budget on the usa military there in iraque of the 80billion that is spent yearly since 2003.the other 70per cent igoes to usa contractors and iraque elite

    Reply
  2. john vercellone says:
    May 2, 2009 at 12:04 pm

    this makes it possible for the twinkey salesman in Boston to fly to Atlanta to write up a 200dollar twinkie order when he could make a 50cent call or an 5cent email..there is and haas been too much waste of energy for decades most of it for screwoffing,this has made opec rich and they just getting more.they will become an economic,political and military threat if they havent alread. it has gotten to a point that the arabs own 5per cent of america and growing.

    Reply

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