Support: War On Terror Is Expensive and Cheap


March 23, 2007: The war on terror has cost $510 billion so far. General counter-terror and security operations have accounted for six percent of that, Afghanistan operations another twenty percent, and Iraq the rest. Iraq operations are costing about $100 billion a year, while Afghanistan costs about a fifth of that. The Department of Defense spends about 93 percent of this money.

Most of the costs go to construction, transportation and hiring of civilian contractors (mainly for support jobs, but also for security work.) Putting reservists on full time duty status has also been expensive, but not as much as the higher paid civilians.

About fifteen percent of the money goes to buying and repairing equipment and weapons. The war effort is building lots of spiffy new bases, especially in Iraq, but it is also enabling the army and marines to upgrade their weapons and equipment, while, at the same time, making sure that new stuff works in combat. The army and marines are quite happy with this, but keeping quiet about how they are, in the process, obtaining new stuff they didn't expect to see for another decade. Compared to past wars, not a lot of ammunition has been used, and this accounts for less than one percent of all costs.

Even after adjusting for inflation, the war on terror has cost more than the Korean or Vietnam War. However, World War II is still Americas most expensive war, at over two trillion dollars. But because the U.S. economy is so much larger, the war has been a much smaller burden on the economy. War costs are currently about one percent of GDP a year, compared to 14 percent during the peak years of the Vietnam war, nine percent during the Korean war, and nearly fifty percent during World War II.

In the long run, however, the costs of veterans care will add another 20-30 percent to the cost of the war. Veterans costs will be lower for the war on terror, than for earlier wars, because far fewer troops are involved, and casualty rates are much lower than previous wars. Ignoring Saddam Hussein, and leaving him in power, would have continued to cost about $15 billion a year to maintain the no-fly zone. A lot cheaper than current costs for dealing with Iraq. But Saddam, based on past performance, was very likely to cause major trouble again, and there would then have been an expensive war anyway. No one knows for sure, because accurate, or at least generally agreed on, predictions the future are currently not available for any price.




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