Wednesday, September 1, 2010

The Costs of War, Continued

Copyright, The New York Times Company
I explained last week why the United States Treasury would be spending billions of dollars on the Iraq war even after it ended. Today I attempt to quantify those costs, with the help of a recent study by Prof. Ryan Edwards at Queens College.

The Congressional Budget Office has estimated that the Treasury spent about $700 billion on military operations in Iraq, and an additional $400 billion on Afghanistan, between 2003 and 2010. That total includes some — but, as noted last week, not all — of the human costs imposed on our troops because, among other things, much of the salary and benefits for our all-volunteer military has yet to be paid.

Professor Edwards has studied current and historical military conflicts and quantified Treasury expenditures on veterans’ benefits compared with direct expenditures during the war years. The chart below shows some of his findings for the seven major wars since the American Civil War.


The vertical axis in the chart measures the fraction of (at present value) Treasury expenditures on each war that provided for veterans’ benefits rather than direct expenditures. The horizontal axis measures the duration of the war, in days.

For example, the first Gulf war lasted less than 100 days, and 80 percent of Treasury expenditures on that war are expected to be in the form of veterans’ benefits (many of those veterans still have a long time to live) rather than direct costs. For the purposes of making the chart, I assumed that the Iraq and Afghanistan wars would last until June 1, 2011. To the extent that they last longer, that point should be moved to the right in the chart.

The chart suggests a negative relationship between duration of the war and the share of costs that are on veterans’ benefits. That does not mean that expected benefits fall as the war gets longer, just that expected benefits rise less with duration than the direct costs do.

The Afghanistan conflict is already our longest war and is continuing. So its costs will continue to rise, and veterans’ benefits are expected to be significant. But perhaps Iraq and Afghanistan will be on the low end in terms of the share of Treasury spending that goes to veterans’ benefits.

The Iraq war was more expensive than the expenses so far tabulated by the Congressional Budget Office. Every dollar we continue to spend on those wars will be associated about another 30 cents of future benefits to veterans.

3 comments:

Aso said...

isn't there also a paper by prof. Murphy on the cost of Iraq war?

http://www.aei.org/docLib/20060221_davisPaper060215.pdf

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