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The Iraq and Afghanistan Wars Mutilated Our Economy

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$1,000,000,000,000.00

As of today, that's how much we've spent just in direct costs so far on the stupid wars in Iraq and Afghanistan.

One trillion dollars, gone. And we're just getting warmed up...there are trillions more in future direct and indirect costs coming.

These two wars mutilated our economy. There's no other way to say it. We've taken huge sums of wealth out of the economy and done things with it that further damaged the economy. People are out of work and hurting today because we chose to launch two wars that aren't worth the cost.

The most glaring example of this dynamic is the use of hundreds of billions of taxpayer money to invade and occupy Iraq, which led to higher oil prices, which hit taxpayers again in their pocketbooks.

Many other examples exist: We pay to train American kids to kill in Afghanistan. We pay to ship them overseas where they die or get injured. We pay for medical care for the survivors. Their families lose both the wounded's income and often lose additional income when loved ones reduce work hours to stay home and care for the wounded.

The list of these vicious cycles goes on and on. In all cases, our government actually charges us for the privilege of having an even harder time making it in this tough economy.

Actually, it's worse than that. The government charges us for the privilege of having a tough economy in the first place.

According to the Center for Economic and Policy Research's (CEPR) Dean Baker:

"In standard economic models, defense spending is a direct drain on the economy, reducing efficiency, slowing growth and costing jobs. ...[S]tandard economic models...project that the increase in defense spending since 2000 will cost the economy close to two million jobs in the long run."

Baker's point in his article was that groups that scream about potential "job loss" from government "interference" never put that "loss" in any context. Government spending does stimulate economic activity during a downturn. The question is, how stimulative is one type of spending versus another? So let's make sure we're playing fair and put this in some perspective in terms of job creation.

It turns out that, excluding tax cuts for consumption, war spending is the least stimulative type of government spending.

An October 2007 study by the Political Economy Research Institute (PERI) found that per $1 billion invested in the following fields, you create wildly different numbers of jobs:

  • Defense: 8,555 jobs
  • Construction for home weatherization/infrastructure: 12,804 jobs
  • Health care: 12,883 jobs
  • Education: 17,687 jobs
  • Mass transit: 19,795 jobs

So if you take $1 billion in taxpayer dollars and spend it on war versus on building energy efficient homes and other infrastructure, the opportunity cost for that spending is 4,249 potential jobs. Spending it on war versus mass transit costs you 11,240 potential jobs.

Now consider that $1 trillion is one thousand billion. Because we're spending so many billions--now trillions--of dollars on these two wars, we're losing hundreds of thousands, possibly millions, of potential jobs.

PERI concludes that:

...[B]y addressing social needs in the areas of health care, education, education, mass transit, home weatherization and infrastructure repairs, we would also create more jobs and, depending on the specifics of how such a reallocation is pursued, both an overall higher level of compensation for working people in the U.S. and a better average quality of jobs.

These lost potential jobs aren't even the whole picture. We also lose the fruits of spending that money in more productive ways, which, according to the National Priorities Project, include: