Whatever the merits—on strategic and political grounds—of the US military operations in Iraq and Afghanistan, the direct financial costs will be high. The war in Iraq, alone, has already cost the US more in real (inflation-adjusted dollars) than the 1991 Gulf War and the Korean War, and it will almost certainly surpass the cost of the Vietnam War by the end of next year. The 1991 Gulf War cost about $88 billion (FY 2008 dollars) and was paid for largely through contributions from US friends and allies (altogether these contributions offset nearly 90 percent of US costs), while the Korean and Vietnam Wars cost the United States some $456 billion and $518 billion, respectively. Combined, the wars in Iraq and Afghanistan have already cost more than any of these three previous wars. On the other hand, the financial burden posed by these ongoing military operations is substantially lower when measured as a share of the economy—since today’s economy is much larger than that existing at the time of the Korean or Vietnam Wars. For 2008, funding for national defense is projected to absorb about 4.2 percent of gross domestic product (GDP). By comparison, at the peaks of the Korean and Vietnam Wars, defense absorbed, respectively, some 14.2 percent and 9.4 percent of GDP.
The article leaves me with a few thoughts. First, 4.2% of the GDP for national defense including the war. Does that strike anyone else as remarkably... low?
Second, it is noteworthy the US is spending big money to insure remarkably low casualties for troops engaged on the front lines. I do not believe most nations in the world would take this approach, in fact I am not certain Britain has taken this approach.
With all the talk of an unstable US economy, I wonder how confident countries really are to put their money into the Euro, knowing Europe probably can't defend its currency without the US military, and in some cases, already isn't. For the first time in awhile, that last comment does not apply to France.
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