The Costs of War

July/​August 2008 • Policy Report

War is the health of the state, Randolph Bourne wrote in 1918. But James Madison had warned us of that as early as 1795: “Of all the enemies to public liberty, war is perhaps the most to be dreaded because it comprises and develops the germ of every other.”

It’s evidently a lesson that must be learned and relearned. We’re learning it again as the war in Iraq slogs into its sixth year. And we should keep it in mind as we consider new military interventions.

Even before the Iraq war began in March 2003, there was much discussion of its costs. President Bush’s economic adviser, Lawrence Lindsey, suggested that a war might cost $100 billion to $200 billion. He was fired. Defense Secretary Donald Rumsfeld, asked about outside estimates that the cost could reach $300 billion, responded, “Baloney.”

In fact, costs have far exceeded those estimates. The Congressional Research Service now estimates that we have spent about $656 billion on the Iraq war, and the Congressional Budget Office projects that funding for Iraq, Afghanistan, and the “Global War on Terror” could reach as much as $1.7 trillion for FY2001-FY2018, with the large majority of that for Iraq.

So the Bush administration made its case for the invasion on the basis of flawed claims about weapons of mass destruction and dramatically underestimated costs. That is a pattern of behavior in government that is hardly confined to military undertakings. The Bush administration threatened to fire the chief Medicare actuary if he released his findings on the cost of the prescription drug benefit before Congress voted on the bill. And of course the cost projections made when Congress created Medicare in 1965 were just as wrong; in 1994, the former chief actuary of Social Security found that Medicare had cost 165 percent more than estimated.

But the costs of war cannot be reckoned in dollars alone. There are also the deaths of more than 4,000 American soldiers, and a much larger number of Iraqis. Because our medical technology has dramatically improved, we save the lives of far more wounded soldiers, allowing them to return home severely disabled.

Moreover, as Robert Higgs wrote in Crisis and Leviathan, the scope and power of government tend to expand in times of war or other national “crises,” real or imagined. Government spending soars during wartime, then falls back, but never to a level as low as before the war. World War I gave us industrial planning, Prohibition, drug laws, and our first real taste of the federal income tax. Every war, including this one, brings a shift of power to the executive branch and restrictions on civil liberties.

Since September 11, we have been reminded of the dangers to liberty and limited government that accompany national emergencies. Just two weeks later, Justice Sandra Day O’Connor warned, “We’re likely to experience more restrictions on our personal freedom than has ever been the case in our country.” Within weeks Congress passed the USA Patriot Act, which was largely a law enforcement wish list that had been previously rejected by Congress, in some cases repeatedly. Dressed up as a patriotic response to a terrorist attack, it passed without any serious debate.

Not everyone was unhappy about the prospect of government growth. Sen. Charles Schumer (D-NY) declared that “the era of a shrinking federal government is over.… The American people are willing to cede more authority and dollars to Washington.”

And indeed President Bush declared in the months after 9/11 that the federal government would fund local police and fire departments and that farm subsidies were essential because “it’s in our national security interests that we be able to feed ourselves.” Everything from peanut subsidies to steel protectionism sailed through Congress in a frenzy of “emergency spending.” The federal budget began to soar, and most of the new spending was not for defense or homeland security.

More than seven years later we’re still at it. Brian Riedl of the Heritage Foundation reported in July that Congress had used yet another war emergency bill to create a permanent new entitlement for veterans, projected to cost $52 billion. Regardless of the entitlement’s merits, he noted, creating it within an emergency bill prevented congressional committees from properly scrutinizing the bill, led Congress to bypass its “pay as you go” rules, and prevented any direct vote on a major new policy.

When some people complained about the threats to civil liberties and limited government after 9/11, Attorney General John Ashcroft had a blunt response: “To those who scare peace‐​loving Americans with phantoms of lost liberty; my message is this: Your tactics only aid terrorists.” Most politicians fell into line.

These days, President Bush, Sen. John McCain, and Sen. Barack Obama are all insisting that it would be unacceptable for Iran to develop nuclear weapons. Terms like “all options are on the table,” “unacceptable,” and “everything in my power” are clearly intended to warn Iran of the possibility of a major military action. That would put U.S. troops into a continuous swath of territory from the Jordanian border to the Pakistani border—and maybe beyond.

Before we launch another large‐​scale military excursion, we should carefully ponder the costs: in blood and treasure, in surveillance and wiretapping, in higher taxes and bigger government, in yet more power for the imperial presidency.

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