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Cost of U.S. Wars: $1 Trillion and Counting

By    |   Wednesday, 17 December 2008 09:20 PM

A new study shows that the costs to the U.S. of the wars in Iraq and Afghanistan could ring up an eye-popping final bill of $2.5 trillion.

Since 2001 the American taxpayer has provided about $904 billion for military operations, including $66 billion to cover war-related costs for the first part of 2009.

But the wars in Iraq and Afghanistan appear to be far from over and have huge hidden and future costs that make that $904 billion just the tip of an enormous iceberg, says Steven M. Kosiak of the Center for Strategic and Budgetary Assessments.

In his study, “Cost of the Wars in Iraq and Afghanistan, and Other Military Operations Through 2008 and Beyond,” Kosiak examines a set of illustrative scenarios developed by the Congressional Budget Office (CBO) that suggest that the direct budgetary costs of these continuing military operations could amount to an additional $416 billion to $817 billion through 2018.

This figure, notes Kosiak, assumes that the number of U.S. troops involved in the two conflicts is reduced from today’s level of about 200,000 to some 30,000-75,000 over the next several years.

This would bring the direct budgetary costs of these wars to a total of some $1.7 trillion.

But wait, there’s yet more cash flying out the door.

If it is assumed that borrowing has been and will continue to be used to finance about 10 percent of the cost of the wars in Iraq and Afghanistan, interest payments would be projected to add about $68-78 billion to their costs through 2018 -- bringing total war costs to somewhere between $1.4 trillion and $1.8 trillion.

On a big other hand, however, if it is assumed that these military operations have been and will continue to be financed entirely through borrowing, interest payments would be projected to add some $680-780 billion to their costs -- bringing the total cost of these wars to a staggering $2 trillion to $2.5 trillion.

“In real inflation-adjusted terms,” explains Kosiak, “the war in Iraq, alone, has already cost more than every past U.S. war but World War II.”

Combined, the wars in Iraq and Afghanistan have already exceeded the cost of the Vietnam War --the second most costly past U.S. war -- by about 50 percent.

Worth the Price Tag?

Many think yes.

The National Intelligence Council concluded in its five year review: “...Before 9/11, Iraq was a designated state sponsor of terrorism, ruled by a tyrant, believed to hold weapons of mass destruction and was in violation of United Nations resolutions and sanctions.

“Today, Iraq is off the state sponsors list, governed by a duly elected representative government, and working to be fully integrated with the international community and a partner in the United Nations....”

Gary J. Schmitt, PhD, Resident Scholar at the American Enterprise Institute, is unequivocal when he states: “…America and its allies are safer as a result of these achievements…

“Whether it is a question of WMDs or support for terrorism, Saddam’s Iraq was a ticking time bomb, and we are safer for having gotten rid of him. In fact, despite the very substantial difficulties we face today in Iraq, the question to be asked is not simply whether we are safer today for having removed Saddam Hussein from power, but just how safe would we have been in the future if we hadn’t?”

Christopher Hitchens, author of “A Long Short War: The Postponed Liberation of Iraq,” is equally straightforward: “You are safer for the disarmament of Iraq... Yes, you are safer, for the coming disarmament of Iran. Yes you are safer for the physical destruction of the Taliban-Bin Laden regime in Kabul. And yes you have President Bush to thank for it, and not President Clinton …”

More Hidden Costs?

If the $2.5 trillion figure is mind-boggling, some maintain that it is conservative.

As Kosiak notes, this group argues that U.S. spending on the wars in Iraq and Afghanistan has diverted dollars that would otherwise have been spent in more productive ways -- especially on private investment that would have helped grow the economy.

Indeed, a report by the U.S. Congress’ Joint Economic Committee suggests that these and other economic consequences have cost the U.S. economy at least an additional $1.1 trillion.

But no matter whose arithmetic you use, the Iraq War, alone, has ended up costing astronomically more than anticipated by the Bush Administration prior to its invasion of that country in March 2003.

At the end of 2002, Lawrence Lindsey, then director of the National Economic Council, speculated that the war might cost $100-200 billion. Then Secretary of Defense Donald Rumsfeld, however, stated that estimates that the Iraq war might cost hundreds of billions of dollars were “baloney.”

Similarly, Mitch Daniels, then director of the Office of Management and Budget (OMB), indicated that he believed Lindsey’s estimate was “very, very high” and suggested that the costs would be closer to $50-60 billion.

Compounding these really-off-the-mark cost projections, the report notes that the conduct of the current wars in Iraq and Afghanistan has cut a unique path in American history.

Rather than raising taxes, the administration has proposed, and Congress has implemented, significant tax cuts. “This marks the first time in American history that taxes have been cut while the country was involved in a major war.

“Nor have major reductions in spending been implemented in non-defense portions of the budget to help pay for the wars in Iraq and Afghanistan,” notes Kosiak.

The 108-page review examines the picture from both a micro and macro view.

Illustrative of the former, the report notes not only the social costs of the wear and tear on the men and women fighting the wars, but the grinding down of their equipment.

“Equipment has been used far more intensively in Iraq and Afghanistan than it is normally used during peacetime training. Measured in terms of miles driven, Army combat vehicles, for example, have been used some four to six times more intensively in these military operations than they are typically used in peacetime, while Army helicopters have been flown about two to three times more.

“This higher operational tempo (OPTEMPO) has necessitated much greater spending on fuel, spare parts and other “consumable” supplies.”

The United States has been at war since the end of 2001. In October of that year it began sending forces into Afghanistan. In March 2003, the United States invaded Iraq. Today, U.S. forces remain heavily engaged in both countries.

In the Fall of 2008, there were some 200,000 US troops in the region, of which about 150,000 were in Iraq and about 35,000 in Afghanistan. Since the terrorist attacks of September 11, 2001, the U.S. military has also been engaged in homeland security related operations.

To date, some 4,800 U.S. Service members have been killed in the wars in Iraq and Afghanistan, and about 33,000 wounded.

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A new study shows that the costs to the U.S. of the wars in Iraq and Afghanistan could ring up an eye-popping final bill of $2.5 trillion.Since 2001 the American taxpayer has provided about $904 billion for military operations, including $66 billion to cover war-related...
Wednesday, 17 December 2008 09:20 PM
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