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Source link: http://archive.mises.org/18307/the-cost-of-war-%e2%80%93-2011-edition/

The Cost of War – 2011 Edition

September 3, 2011 by

Thanks to Bob Wenzel and his smart and spunky (and thoroughly Austrian) EconomicPolicyJournal for sharing an excerpt from Joseph Stiglitz’s recent commentary updating his and Linda Bilmes’ research on the full costs of the wars in Iraq and Afghanistan. Stiglitz writes:

Indeed, when Linda Bilmes and I calculated America’s war costs three years ago, the conservative tally was $3-5 trillion. Since then, the costs have mounted further. With almost 50% of returning troops eligible to receive some level of disability payment, and more than 600,000 treated so far in veterans’ medical facilities, we now estimate that future disability payments and health-care costs will total $600-900 billion. But the social costs, reflected in veteran suicides (which have topped 18 per day in recent years) and family breakups, are incalculable.

I would add that in my reading Stiglitz on this issue, he believes that the wars would have been somewhat more acceptable if only Bush was a slightly more effective redistributionist. So he writes:

Even if Bush could be forgiven for taking America, and much of the rest of the world, to war on false pretenses, and for misrepresenting the cost of the venture, there is no excuse for how he chose to finance it. His was the first war in history paid for entirely on credit. As America went into battle, with deficits already soaring from his 2001 tax cut, Bush decided to plunge ahead with yet another round of tax “relief” for the wealthy.

To be sure, wars would be much less likely, to say nothing of military-industrial complexes, if they had to be funded out of current savings by current generations. The political support for the last decade’s wars would have been much reduced if voters saw capital that would otherwise have been mixed with labor to produce jobs at home instead sent to wreak havoc in faraway places such as Fallujah, Basra, Kandahar, and Jalalabad. It’s not clear if that’s Stiglitz’ point.

Nonetheless, Stiglitz on war is well worth reading. His entire commentary is here. If Stiglitz was consistent, he’d note that arguments for expansion of the welfare state are at least as duplicitous as those for expanding the warfare state. I blogged on the Bilmes-Stiglitz research here. Bob Wenzel’s full post is here.

{ 2 comments }

Walt D. September 3, 2011 at 12:24 pm

Stiglitz should read Krugman – wars stimulate the economy! Under GW, the GDP grew from $10 trillion to $14 trillion. GW raised taxes from $2.1 trillion to $2.4.
It is amazing that so-called top economists are jail-house bitches to the democratic/socialist agenda.

dennis the menace September 4, 2011 at 12:55 pm

I would say that the notion that intervention in the affairs of other nations is some how going to create benifits has been proven false time and time again. For that nation involved in the intervention the consequences are likly to be disaterous.

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