Murphy's Law: Why America Always Has To Pay

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July 17, 2011: France recently announced that it has been spending about $2.5 million a day for operations in Libya. France and Britain are the largest contributors, in terms of warplanes, to the Libya operation. But the U.S. is still contributing most of the aircraft, except that most of these are support (intelligence, electronic warfare, refueling and transport). Feeling that this was something the Europeans should take care of, the U.S. sharply reduced its efforts in Libya after the first three weeks. U.S. operations in Libya had cost about $35 million a day for the first 17 days. The next 30 days saw that decline to $5 million a day. But that began to edge up in May and June, as the European NATO nations called on the U.S. for resources not available in Europe (special types of intelligence and electronic warfare planes, plus more aerial tankers, plus resupply of exhausted smart bomb inventories). Thus the U.S. daily cost crept up towards $10 million a day. The U.S. has withdrawn most of its combat aircraft, but is still providing electronic warfare (and monitoring) aircraft, aerial tankers and Predator UAVs. There are also several warships offshore and an undisclosed number of special operations troops inside Libya. The United States has told the European and Arab countries to take care of this one, as it is in their back yards and is more their problem. But the local NATO members just have not got the stuff, and it’s hard to say no to allies when there is a war, no matter how small, going on (in Libya).

Meanwhile, the United States continues to carry most of the load in Afghanistan (and other war on terror operations), where daily costs have averaged close to $100 million. The daily cost in Iraq was about three times that, but the U.S. effort there is rapidly winding down. Ever since World War II, American allies have become accustomed to seeing the U.S. pick up most of the tab for military expenses that benefit all. That attitude comes from the fact that over a century ago, the U.S. became the largest economy on the planet. In 1945, the U.S. accounted for half the world’s GDP. That has since come down to 25 percent, but American allies still feel that the rich guy should pick up most of the tab.

Meanwhile, as a percentage of GDP, American military spending continues a decline that has been going on since the 1960s (when, because of the Vietnam war, defense spending was 10.7 percent of GDP). That went down to 5.9 percent of GDP in the 1970s and, despite a much heralded defense buildup in the 1980s, still declined in the 1980s (to 5.8 percent.) With the end of the Cold War, spending dropped sharply again in the 1990s, to 4.1 percent. For the first decade of the 21st century, defense spending is expected to average 3.5 percent of GDP. Most of the current defense budget is being spent on personnel (payroll and benefits), and buying new equipment to replace the Cold War era stuff that is wearing out and to pay for operations in Iraq and Afghanistan. This trend is all because of the industrial revolution of the 19th century, which created a lot more money, much of which nations promptly squandered on wars they could not have afforded earlier.

U.S. military operations in Iraq, Afghanistan and elsewhere have, since September 11, 2001, cost about $1.2 trillion. That seems like a lot, and it is. But it's not a lot like it used to be. For example, World War II cost, at the time (in current dollars) $4.1 trillion dollars. That amounted to over 33 percent of U.S. GDP. The current war on terror is costing about one percent of GDP. So while war may appear to be getting more expensive, relative to the amount of money available, it's actually getting cheaper.

The initial cost of World War II, and most wars that came after it, will eventually double because of the cost of taking care of the veterans. There were over a million casualties in World War II, many of them serious, with long range effects. The long range health problems were not anticipated, nor were the more expensive treatments. You have to pay. The vets are owned a debt that cannot be avoided.

The United States has always been enthusiastic about spending enormous amounts on weapons, ammunition, supplies and equipment for the troops, with the idea of keeping U.S. casualties down while still winning the war. Thus during World War II, U.S. combat deaths were 300,000 (plus 100,000 non-combat dead). The Soviet Union, on the other end of this scale, lost 10.7 million dead in combat (including 4.4 million captured and missing), and nearly 20 million civilians killed as well. Of all the major combatants in World War II, the U.S. had the lowest casualty rate (about 2 percent). Russia lost about 15 percent of its entire population during the war.

The U.S. kept its losses down partly because of the amount of money spent per person in the military (over $250,000). The current fatality rate is a third of what it was during World War II, and the amount spent per person has more than tripled (exact comparison is tricky, as all military expenses were counted during World War II, while the current war is being fought with only a small portion of American military might, and the navy and air force continue to take care of many non-war-on-terror responsibilities.) American allies expect the U.S. to come in with all their specialized systems whenever there is a war, because no other nations maintain much, if any, of this life-saving gear.

 


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