A war no fiscal conservative could endorse
Posted by BrianRegardless of opinion on the moral or political merits of the war on terror one thing is clear: it is a financial disaster. The latest estimate pegs the total cost of the Iraq and Afghanistan wars to reach $2.4 TRILLION by 2017.
Let’s put that number into perspective…
There are 5,844 days between 9/11/2001 and 9/11/2017. That is equivalent to:
- 140,256 hours
- 8,415,360 minutes
- 504,921,600 seconds
Seeing “$2.4 trillion” seems like a lot, but it really hits home to write it out: $2,400,000,000,000. Put another way, this country will spend $4,753 every second of the day for 16 years to finance the wars. Oh, and its being put on the proverbial credit card and interest payments could reach $705 billion.
Given that the government can only tax so much wealth from private citizens before causing economic slowdown and accompanying drops in tax revenue this smells an awful lot like a recipe for bankruptcy.
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October 25th, 2007 at 9:56 am
Yes, wars are costly - but so was the negative economic impact of 9/11. I’m surprised at you for focusing on the $2.4t ‘estimate’ without considering just what the number comprises (or who generated the number - Congressional Budget Office).
The ‘estimate’ includes sunk costs of $600b plus the $700b interest that you note is also included in the $2.4t number.
And then there’s the issue of the company you’re keeping:
[QUOTE]“To put it all on our credit cards with no accountability, with no plan to pay for it, I think is the height of irresponsibility,” said Rep. James McGovern, a Massachusetts Democrat who serves on the budget panel and is an outspoken war critic. “It will be just one more toxic legacy of this disastrous war we will have to leave our kids to clean up.”
With national elections about a year away and public discontent with the Iraq war running deep, Democrats are highlighting the huge costs of the Iraq war as they seek $22 billion more than Bush wants for domestic social programs such as health care and education.[/QUOTE]
http://news.yahoo.com/s/nm/20071024/pl_nm/iraq_usa_funding_dc
October 25th, 2007 at 10:08 am
Even a blind squirrel can find a nut every now and then. Although McGovern could easily be labeled as a nut or a blind squirrel, I agree with him on this matter. It is just as financially irresponsible as handing out copious entitlement program dollars on the credit card.
I did take into account the sunk costs by covering the entire 16 year timeline. Even if the CBO’s estimate is high by a factor of two the resulting cost is still too high. I also assure you that there is no way that the economic impact of 9/11 approached $2.4 trillion.
We’re going to feel pretty damn silly after spending so much money only to get attacked on our on soil again – especially if we realize too late that the extensive war efforts precipitated the attack rather than preventing it.
October 25th, 2007 at 11:13 am
IIRC the stock market dropped over $1 trillion in the week following 9/11. Add other damages, consider time value over comparable time periods, actuals vs forward estimates, &c: pretty soon you’re talking real money.
Precipitate vs prevent: valid point - but unknowable.
October 25th, 2007 at 8:49 pm
You are correct - the stock market did drop $1.2 trillion in the first week after 9/11. Fortunately the stock market, or at least the Dow Jones, was back to the pre-9/11 level in about two years.
October 26th, 2007 at 8:00 am
So, you’re telling me that we’re getting a deal… it takes us two years to recover $1.2 trillion and we’re paying out $2.4 trillion over 16 years to prevent another catastrophic loss.
I could probably come up with a spreadsheet showing how the war pays for itself
October 26th, 2007 at 8:04 am
PS - would you now agree that the “economic impact of 9/11 approached $2.4 trillion”?
October 26th, 2007 at 8:10 am
Sorry for the triple post
If you remember discussing MD for NYC, I mentioned to you that no matter how expensive the system - it would always be a no-brainer. The negative economic impact would be so massive that a few billion spent here or there wouldn’t matter. Of course, we were modeling a nuke strike…
October 27th, 2007 at 5:09 am
#6: I agree with a caveat. I don’t have the luxury of time to type out my full explanation. Suffice it to say that the market drop was something of an aberration due to uncertainty (the market hates surprises) and that a couple of years of calm erased the speculative losses. Even if I’m wrong (always an option) at least free enterprise has the ability to generate wealth unlike government.
Here is my big picture point. I don’t like deficit spending. It is necessary to be able to go in the red to deal with unexpected events (like wars), but should be avoided as much as possible. The war we’re in now is no longer a surprise – it is a predictable cost that can be projected years in advance and should be paid for in such a manner. Same for entitlements. My rationale for being a deficit hawk is that the government sets a very bad example for Americans, one that most are all too eager to follow. I don’t like indebtedness and my wife and I make sacrifices to pay off debt we’ve incurred as quickly as possible. I expect the same from my government , but all I’m getting is reckless spending.