Mr. Rumsfeld’s Burn Rate
Afghanistan
First I want to give a different number than I gave earlier. I’m told now that the $700 million a month burn rate on Afghanistan is low, that it’s actually probably $900 to $950 [million a month]. I suppose if we wait another hour, we might get a still different number, but that’s the trouble with trying to do things in real time.
Donald Rumsfeld to the Senate Armed Services Committee, 9 July 2003, Department of Defense transcript here.
Iraq
Let me tell you what the estimates were [in March 2003]. If I’m not mistaken, the estimates were that [the war in Iraq] would cost $1.9 billion to $2 billion [a month] as a burn rate right then—not that that burn rate would be projected over the next one, two, three, four years. I was asked before the Senate [on 9 July 2003] what it is costing. I said it’s currently about $3.9 billion to $4 billion [a month], I believe. That’s the current burn rate.
Donald Rumsfeld to George Stephanopoulos, ABC This Week, 13 July 2003, Department of Defense transcript here.
Definitions
The burn rate is the rate at which a new company is spending its capital while waiting for profitable operation. Typically, a new company . . . expects in its early stages to spend money faster than it can take in revenue. The term is often seen in financial reviews . . . where the question is whether revenue will begin to flow in sufficient amounts before the invested capital plus revenue is “burnt up.”
Burn rate is the amount of cash a money-losing company’s operations are using up over a certain period of time, usually a month or a quarter.
Computer jargon has crept its way into civilized society for years . . . but now the obscuring euphemisms of the dot-bombs are worming in. The one that piques me lately is “burn rate,” which refers to how fast the up-front money weaseled from the venture capitalists and IPO investors is being spent. The thinking was that if the burn rate was low enough (or the money high enough) that you had a profitable product before all the capital was exhausted [then] this was a winner of a business plan. When did this change to “burn rate” from “losses”?
Cliff Feldwick, Burned by the “Burn Rate”
