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  • Putting A Number On The Cost Of War
    Posted by Jim Asker 6:18 PM on Jul 30, 2010

    How do you compare the costs of wars? A gross measure of the human impact can be had by comparing the numbers of combatants killed and wounded.  Estimating civilian casualties is notoriously difficult and contentious. 

    But what about the cost in national “treasure”? A recent report by the Congressional Research Service (CRS) attempts to put dollar figures, adjusted for inflation, on the costs of all U.S. wars from the American revolution to Iraq and Afghanistan. The paper was offered with caveats just short of a warning sticker cautioning readers not to put too fine a point on the numbers.

    “Comparisons of war costs over a 230-year period . . . are inherently problematic,” CRS defense analyst Stephen Daggett wrote in the summary. 

    First, you have to decide what to count.  CRS excludes veterans’ benefits, interest on war-related debt and assistance to allies, for example. Then there is the difficulty in separating war costs from what would have been normal operations and the costs of maintaining a military in peacetime. And finally, figuring price differences and thus inflation rates over two-plus centuries adds significantly to the error bar in the calculations. Obviously, the costs of weapons systems have changed dramatically over the generations. 

    So Daggett urges readers to take the numbers “not as truly comparable figures on a continuum but as snapshots of vastly different periods in U.S. history.”  He must have known that was a vain hope when he wrote those words.

    And, sure enough, the temptation to compare is irresistible.  Americans love precise numbers and “scientific” answers. So it was not surprising that New York Times columnist Nicholas D. Kristof wrote in a piece yesterday, “The war in Afghanistan will consume more money this year alone than we spent on the Revolutionary War, the War of 1812, the Mexican-American War, the Civil War and the Spanish-American War — combined.”

    The CRS numbers do back up Kristof. And, if you add Afghanistan and post-9/11 Iraq war costs together, GWOT, the “global war on terror,” has cost more so far -- $1.147 trillion in Fiscal 2011 dollars – than any other conflict except World War II ($4.104 trillion). 

    No serious student of history would argue that the cost to the U.S. of the war in Afghanistan is greater than that of the Civil War, though. Yet the accounting shows combined costs to the Union and the Confederacy just shy of $80 billion in today’s dollars, making it an order of magnitude less expensive than today’s wars. That does not seem right.

    However, the CRS offers another set of numbers that may get closer to the real economic impact. For each conflict, the congressional researchers estimate war costs as a fraction of the total economic output – gross domestic product, or GDP – in the peak year of the war. Civil War costs hit 11.3% of GDP in the North; Daggett gave up on trying to calculate the economic impact in the South. World War II topped out at a whopping 35.8% of GDP.

    By these measures, Iraq/Afghanistan is having about four economic times the impact of the Persian Gulf War – 1.2% of GDP versus 0.3%.  The peak for the combined on-going efforts was in 2008. 

    Historically, that puts the current war effort on a par with the Mexican War of 1846-49, or the Spanish-American War of 1898-99. Vietnam hit 2.3% of GDP in 1968.  Korea consumed 4.2% of GDP in 1952.
     The GDP metric makes more sense to me than the inflation-adjusted total costs. 

    What do you think?  Is there some other way to look at war costs?  Or, is this a pointless exercise of trying to calculate the incalculable?  Add a comment.  I'd love to know what you think.

    Tags: AWEIC, AR99

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