It is officially unclear as to how much the United States government spends annually on its foreign policy, whether it’s military, bases, bribing rebel groups, arming terrorist organizations and anything else you read about in a Tom Clancy novel. But a new study has found how much the wars in Afghanistan and Iraq will cost the taxpayers in the long-term: $6 trillion.
Harvard University scholar Linda Bilmes released a report Thursday that concluded the U.S. will cost the U.S. taxpayers between $4 trillion and $6 trillion over a long period of time, which will put an even dire strain on the federal budget. The U.S. has already spent approximately $2 trillion for the two wars initiated by former President George W. Bush.
“As a consequence of these wartime spending choices, the United States will face constraints in funding investments in personnel and diplomacy, research and development and new military initiatives,” the report stated. “In short, there will be no peace dividend, and the legacy of Iraq and Afghanistan wars will be costs that persist for decades.”
The largest costs the taxpayers will have to bear are medical care and disability benefits. According to the study, more than half of the 1.56 million U.S. soldiers have already been granted lifetime benefits, which will increase the costs over several decades. For instance, the costs of World War I peaked in 1969 when the veterans became elderly.
“The magnitude of future expenditures will be even higher for the current conflicts, which have been characterized by much higher survival rates, more generous benefits and new, expensive medical treatments,” the report added.
Social costs were also examined in the report because families will have to suffer with the deaths of their loved ones.
Another important factor is the debt issue because the government went to war while lowering taxes – perhaps the Revolutionary War is the only exception with a war without an increase in taxes. This led to substantial increases in the national debt and budget deficits
The U.S. military still maintains a presence in both Afghanistan and Iraq. Although President Barack Obama has stated that the U.S. will exit Afghanistan next year, there have been previous instances when the withdrawal date has been pushed back – the U.S. will remain a significant presence in both nations.
When the U.S. first went to war with Iraq, then-Defense Secretary Donald Rumsfeld and other administration officials suggested it would only cost $50 billion and the rest of the expenditures would be paid for with oil.
Reuters reported Monday that David Stockman, former budget chief in the President Ronald Reagan administration, and Peter Orszag, former budget director in the Obama administration, said the U.S. spends too much money on defense. The two men made the comments during a Thomas Reuters Newsmaker event.
However, what should be pointed out is that there is a difference between defense spending and military spending. The present U.S. foreign policy is an initiative of militarism – wars, military bases, building embassies overseas and intervening in the internal affairs of other nations. The Pentagon has not been practicing any defence – protecting the borders, establishing military bases at home and keeping members of the armed forces at home.
This was an important issue during the 2012 Republican presidential primaries when candidate Ron Paul attempted to distinguish the two. But as viewers could tell (see video below), the debate moderators couldn’t understand why the two matters are different.
Furthermore, there is another notion put forward by Keynesians and neo-conservatives that war overseas creates prosperity at home. This is another failed concept that has been refuted by Frederic Bastiat’s Broken Window Fallacy.
It has been believed for quite some time that World War II got the U.S. out of the Great Depression because it created jobs and vast amounts of wealth. However, the Second World War generated massive shortages at home, it benefited a few (military-industrial complex) and many lived without.
Destruction does not produce jobs or wealth, but rather the opposite. Destroying factories, burning homes and shooting up cars is not a practice of economic growth. Instead, it forces people and entities to allocate their sources to something else.
An article by author Robert Higgs is the closest estimate of how bloated spending is when it comes to foreign policy. According to the author of “Against Leviathan,” the U.S. spends roughly $1 trillion a year on its foreign policy. That’s a lot of money taken out of the hands of taxpayers.
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