It was supposed to be a quick war and a cheap one. Five years later, 160,000 U.S. troops are still in Iraq. And the costs keep piling up - $12 billion every month - putting a strain on an already faltering economy.

The United States has poured more than $500 billion into Iraq, mostly for military operations. But that figure is just a small piece of the much larger bill that taxpayers will pay in the future.

Because the money for the war is being borrowed, interest payments could add another $615 billion. A heavily depleted military will have to be rebuilt at a cost of $280 billion. Disability benefits and health care for Iraq war veterans, many of them severely injured, could add another half-trillion dollars over their lifetime.

Nobel laureate economist Joseph Stiglitz and Harvard University public finance Professor Laura Bilmes, both of whom served in the Clinton administration, have included those calculations in a new study of the war's long-term costs. Their estimate of the war's price tag: $3 trillion.

"We are a rich country, and we can, in some sense, afford it. It's not going to bankrupt us," said Stiglitz, a Columbia University professor, who published the findings in a new book, "The Three Trillion Dollar War."

But Stiglitz said the war has contributed to a weakening economy - partly by feeding the instability that has sent oil prices to record highs - and has saddled the country with debts that will make it harder to respond to a recession, fix Social Security or meet other future needs.

"The best way to think about it is: What could we have done with $3 trillion?" he said. "What is the best way to spend the money, either for security or for our national needs in the long run? The stronger the American economy, the more prepared we are to meet any threat. If we weaken the American economy, we are less prepared."

The White House has not disputed the analysis by Stiglitz and Bilmes but instead has attacked the idea that the escalating costs are a reason to withdraw.

"We have to ask ourselves what the cost would be of doing nothing, or of ratcheting back when we're not ready to ratchet back, in terms of making sure that Iraq does not become a safe haven for al Qaeda, making sure that Afghanistan doesn't fall back into the hands of the Taliban," said White House spokeswoman Dana Perino.

The government's own figures show the war's costs are rising. The Congressional Research Service estimates that $526 billion has been spent in Iraq since 2003. The Congressional Budget Office calculates that spending on Iraq and Afghanistan combined will cost $1.2 trillion to $1.7 trillion by 2017.

War cost in perspective

In historical perspective, the Iraq conflict is already one of the most expensive conflicts in U.S. history.

The price tag in Iraq now is more than double the cost of the Korean War and a third more expensive than the Vietnam War, which lasted 12 years. Stiglitz and Bilmes calculate that it will be at least 10 times as costly as the 1991 Gulf War and twice the cost of World War I.

Only World War II was more expensive. That four-year war - in which 16 million U.S. troops were deployed on two fronts, fighting against Germany and Japan - cost about $5 trillion in inflation-adjusted dollars.

The latest numbers are a far cry from the cost estimates made by war supporters in the run-up to the March 2003 invasion.

In September 2002, White House economic adviser Larry Lindsey told the Wall Street Journal the war would cost between $100 billion and $200 billion. He was immediately excoriated by others in the administration. White House budget director Mitch Daniels called the estimate "very, very high." Defense Secretary Donald Rumsfeld called it "baloney."

Estimate revised down

The White House and Pentagon came back in January 2003 with a number that was more palatable - $50 billion to $60 billion. Rumsfeld's deputy, Paul Wolfowitz, boasted that Iraq would pay for its own reconstruction with increased oil revenues.

Economists say the trouble with the early estimates was they focused only on the cost of invading Iraq and then bringing the troops home. No one budgeted for a long occupation.

"It's quite apparent in hindsight the reason the war has been so expensive is because we have now maintained well over 100,000 and maybe closer to 200,000 troops in theater for five years," said Steven Davis, a professor of economics at the University of Chicago Graduate School of Business, who co-authored a 2003 paper comparing the cost of invading Iraq with the cost of containing former Iraqi dictator Saddam Hussein.

"There was an active resistance in the administration to thinking about the long-term cost impacts of this decision," said Davis, who's now advising Republican presidential candidate Sen. John McCain on economic issues.

"And it's not just the administration. The Congress didn't do its job. I don't think most of the media did a good job. That period in 2002, early 2003, was not one of the best examples of American democracy in action. There's a lot of blame to go around."

What war cost?

Stiglitz, who opposes the war, sees a more concerted effort to hide the costs from the American people. Unlike previous wars - where taxes were raised to pay for the conflict - President Bush and a then-Republican Congress cut taxes. That led the public to believe they would not have to sacrifice, he said.

"They wanted to keep the costs away from the American people," Stiglitz said. "They realized this was a war of choice and if they told people, 'We want to go to war and the price tag is going to be $8 trillion or $2 trillion' - they might have said, 'No, thank you.' "

The costs of veterans' benefits alone could be staggering. More than 1.6 million soldiers already have been deployed to Iraq and Afghanistan, nearly 4,000 have been killed and almost 30,000 have been injured. By December, 224,000 had applied for disability benefits because of health issues, and 260,000 had been treated at veterans' medical facilities.

Improved battlefield medicine and better body armor have helped many Iraq veterans survive attacks that would have killed soldiers in past wars. But they are often left with multiple serious injuries.

"It means more expensive care and more long-term care," said Joe Violante, national legislative director of Disabled American Veterans, which represents 1.2 million veterans. "You have individuals with severe traumatic brain injuries that are going to need a lot of assistance for the rest of their lives. Whether that's inpatient or whether it's outpatient, it's going to be very costly over their lifetime."

Toll on the military

The war also has taken its toll on the military itself. About 40 percent of the Army and Marine Corps' equipment - tanks, helicopters, humvees - is in Iraq, and it's wearing out at six times the peacetime rate. Defense analysts say it could take 20 years to "reset" the armed forces. Gov. Arnold Schwarzenegger, in Washington last month, said that about half of the California National Guard's equipment is in Iraq or Afghanistan. The Pentagon has not said when it will be returned or replaced.

"It's not fair to the states," Schwarzenegger said.

Economists have been alarmed at the growing pile of debt to pay for the war, 40 percent of which is held by foreign interests. Robert Hormats, vice chairman of Goldman Sachs, warned Congress last month against continuing to pass on the war's costs to future generations. He cited a recent Senate committee report showing that the cost of servicing the Iraq war debt will exceed federal spending on education and health research next year.

"The point is that there are major trade-offs here," Hormats testified. "Is the continued cost of the Iraq war worth the commitment of resources that potentially could be used otherwise?"

Fatal blast: A bombing kills 43 people near a shrine in the Shiite holy city of Karbala inside one of the most secure perimeters in Iraq. A14