ECONOMIC SCENE: Afghanistan will cost US more than Iraq

For the first time, the war in Afghanistan in the next budget year will cost Americans more than the war in Iraq. By the end of the next fiscal year, which starts Oct. 1, the total military budget costs for both wars will have exceeded $1 trillion.

That’s more than the cost of the Vietnam War, adjusting for inflation, or any other US war except World War II ($3.2 trillion in 2007 dollars).

A trillion dollars is hard to imagine. Think of it this way: If you had an expense account good for $1 million a day, it would take 2,935 years to spend $1.071 trillion, which is the actual estimate for the wars’ price tag by Travis Sharp of the Center for Arms Control and Non-Proliferation in Washington. He reckons the two conflicts will have cost the typical American family of four roughly $13,000 by next year.

Wars, even counterinsurgency conflicts, are expensive in lives and dollars.

Why is Afghanistan getting so expensive? The US is sending more troops, of course. It also costs about 50 percent more to keep a soldier in Afghanistan than in Iraq, says Linda Bilmes, a Harvard University economist. In sharp contrast to flat, urbanized Iraq, most of Afghanistan’s population lives in rural, mountainous terrain with few good roads to link them up.

Officially, Afghanistan war costs are budgeted at $65 billion for fiscal 2010, somewhat more than the $61 billion for the Iraq war.

The true total is probably closer to $85 billion or more, estimates Gordon Adams, a defense expert at American University’s School of International Service in Washington. He says the US is paying more than $500 million a year to counter the narcotics business there.

Further, there is foreign aid coming out of the State Department budget. To counter the Taliban from crossing the border into Afghanistan, Pakistan gets easily $1 billion in military and other foreign aid.

If one looks beyond immediate war costs, the price tag escalates dramatically. Factoring in outlays for such things as veterans’ health and other benefits, the replenishment of military hardware worn out or destroyed by war, a higher price for oil, and the interest on debt incurred by the war, the total cost of the two wars will be “significantly more” than $3 trillion, says Professor Bilmes.

Costs and utilization of healthcare and other veterans’ benefits are running about 30 percent higher than she and coauthor Joseph Stiglitz, a Columbia University Nobel Prize economist, estimated in their 2008 New York Times bestseller, “The Three Trillion Dollar War.” Adding in some social costs (such as families caring for the disabled and a diminished labor force), the two economists put a “moderate-realistic” price tag on the two wars of $5 trillion.

“It is absolutely sobering,” says Bilmes, who reckons a robust healthcare safety net for all Americans would cost less than the two wars.
How much wars cost depends in part on how long they last. An agreement with the Iraq government calls for full withdrawal of US forces there by the end of 2011. In Afghanistan, depending on the outcome, Mr. Adams sees the war running three to 10 years longer.

Going on eight years, the Afghanistan war already rivals the Revolutionary War as the second-longest US armed conflict (after Vietnam). If it drags on another four years, it will become America’s longest war.

It would also ensure that America keeps her rank as the world’s No. 1 military spender, representing up to half of what the world spends on defense.