The war on terror — the first war in history paid for entirely on credit

The economist, Joseph E. Stiglitz, writes:

The Sept. 11, 2001, terror attacks by al-Qaida were meant to harm the United States, and they did, but in ways that Osama Bin Laden probably never imagined. President George W. Bush’s response to the attacks compromised America’s basic principles, undermined its economy, and weakened its security.

The attack on Afghanistan that followed the 9/11 attacks was understandable, but the subsequent invasion of Iraq was entirely unconnected to al-Qaida—as much as Bush tried to establish a link. That war of choice quickly became very expensive—orders of magnitude beyond the $60 billion claimed at the beginning—as colossal incompetence met dishonest misrepresentation.

Indeed, when Linda Bilmes and I calculated America’s war costs three years ago, the conservative tally was $3 trillion to $5 trillion. Since then, the costs have mounted further. With almost 50 percent of returning troops eligible to receive some level of disability payment, and more than 600,000 treated so far in veterans’ medical facilities, we now estimate that future disability payments and health care costs will total $600 billion to $900 billion. The social costs, reflected in veteran suicides (which have topped 18 per day in recent years) and family breakups, are incalculable.

Even if Bush could be forgiven for taking America, and much of the rest of the world, to war on false pretenses, and for misrepresenting the cost of the venture, there is no excuse for how he chose to finance it. His was the first war in history paid for entirely on credit. As America went into battle, with deficits already soaring from his 2001 tax cut, Bush decided to plunge ahead with yet another round of tax “relief” for the wealthy.

Today, America is focused on unemployment and the deficit. Both threats to America’s future can, in no small measure, be traced to the wars in Afghanistan and Iraq. Increased defense spending, together with the Bush tax cuts, is a key reason why America went from a fiscal surplus of 2 percent of GDP when Bush was elected to its parlous deficit and debt position today. Direct government spending on those wars so far amounts to roughly $2 trillion—$17,000 for every U.S. household—with bills yet to be received increasing this amount by more than 50 percent.

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2 thoughts on “The war on terror — the first war in history paid for entirely on credit

  1. Norman

    This is the result of having people who have never had military experience in power. They are like the players of video games, it’s only real on the monitor. As far as the Military veterans who have turned to politics, well the fact that they are politicians tells the tale right there. The sad part, is all the lives & treasure spent on these so called adults folly, as well as there being no accountability. This attitude sure has opened up the stampede to get what ever they can before there isn’t anything left.

  2. BillVZ

    “The Sept. 11, 2001, terror attacks by al-Qaida were meant to harm the United States, and they did, but in ways that Osama Bin Laden probably never imagined.”

    If my memory serves me, looking back a Bin Laden’s message regarding 911, besides the punishment due for American Troops in Saudi- the very things that Mr. Stiglitz attributes to GW’s actions were already expressed regarding his intent. Could it be that Osama Bin Laden and the al-Qaida movement from insightful knowledge of the politics of the congress, the Bush administration and especially of George W Bush himself and his family, actually anticipated such a response?
    I like to think so; it seems to me that they are the ones that could have rightfully hung out the “Mission Accomplished “sign.

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