How able are Americans to bear the costs of war?
The Iraq war has cost taxpayers about $526 billion so far – and could reach $2 trillion by 2017, according to one congressional study.
War in Iraq presents a paradox on the American home front: The military effort has had little discernible impact on most Americans, but by some forecasts, the Iraq effort will end up costing more per citizen than many US wars with higher numbers of casualties – Korea, Vietnam, and the Civil War.Skip to next paragraph
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It might seem as if a $1 trillion-plus war tab doesn't matter: Most Americans have been working and spending just as usual. Financial headlines have focused on everything from mergers to mortgages, but rarely on issues related to national defense.
But the Iraq war has cost taxpayers about $526 billion so far – and could reach $2 trillion by 2017, according to one study by Congress's Joint Economic Committee. Chalk that up, in part, to interest on war debt and the likelihood that, even after a drawdown, many troops will remain in Iraq years.
The economy faces other war costs that will never show up in the federal budget. Consider the full long-term healthcare costs for those wounded, for example, and the lost productivity of family members who stay out of the workforce to care for them. These and other factors could bring the ultimate cost of the war as high as $3 trillion, according to a new book by economists Joseph Stiglitz and Linda Bilmes.
"As high as these financial costs are ... they don't really compare to the human costs," says Michael O'Hanlon, a defense policy expert at the Brookings Institution in Washington. In the decision whether to go to war, the budgetary costs remain subordinate to other factors, he says.
The Iraq costs add to the federal budget deficit, meaning America will be paying for it for years to come.
"It has weakened our fiscal position" for the long term, Mr. O'Hanlon says. "It hasn't really affected the economy too much otherwise."
To be sure, some pockets of America have felt a stimulus from the war.