Iran Sanctions Cost The U.S. Billions: Study

With the deadline looming in talks between the United States and Iran to reach a nuclear deal, an Iranian-American advocacy group has released a study that points out the downside to America of continuing economic sanctions against the Islamic republic -- the loss of billions of dollars in economic activity.

According to the study done by the National Iranian American Coalition:

The negative impact of sanctions to the U.S. economy has been staggering, between $134.7 and $175.3 billion, and continues to rise. The human cost has been even greater, with lost job opportunities reaching above 200,000 in some years. These are surprisingly high yet conservative estimates since neither secondary economic effects such as higher oil prices are captured by the model nor the reduction of Iranian imports as a consequence of sanctions hampering Iran’s GDP.

The analysis, which includes 1995 to 2012, suggests there is a significant economic upside for the U.S. and Iran to reach an agreement on how to manage Iran's nuclear ambitions.

The idea that sanctions cost the U.S. isn't especially controversial, said Barry Bosworth, a senior fellow in the Brookings Institution's Economic Studies Program.

"When we sanction them, American firms lose business. You see the argument recently with Russia. There's a lot of American firms involved in Russia, and they say, 'On no don't sanction, that's not the best thing to do,'" Bosworth said. "In this case, the idea is that you will lose exports."

Bosworth said he thought the magnitude of the loses claimed in the study are in the right ballpark. But he cautioned the estimate could be off, because the U.S., unlike other nations in the analysis, is the only one to keep sanctions in place continually. The losses are estimated through comparisons with other countries.

"The number cited for the United States is actually the magnitude by which U.S.-Iran trade fell short of the predicted magnitude relative to trade of other countries with Iran," Bosworth noted. "We do not know that it was the effect of the sanctions alone, because the U.S is also a bad exporter during that period. For other countries there are periods when the sanctions are on and when they were off, and the difference is a fair means to assess the effect of the sanctions. [The U.S. estimate] is a measure of the extent to which U.S. trade fell short of the level predicted, if it performed as well as other countries."

Of course, many would consider it beside the point whether the U.S. lost money on an effort to discourage Iran from pursuing its nuclear program. The study acknowledges this.

This report does not address the debate as to whether the sanctions policy was worth the cost or not. It only seeks to ensure that the cost of sanctions is recognized as America approaches the moment when it must decide whether to exchange the sanctions for nuclear concessions or continue the economic warfare. This debate will be incomplete at best and misleading at worst if it does not acknowledge the cost of sanctions.

Whether the report has any impact, of course, remains to be seen. Americans have been supportive of Iran sanctions, according to polls. But a Gallup survey released in February found that Iran no longer tops Americans' enemies list.