Tag Archives: Government Spending

	The Pentagon, headquarters of the Department of Defense.  DoD photo by Master Sgt. Ken Hammond, U.S. Air Force.

Will Policymakers Ever Stop Underestimating the True Cost of War?

On April 6, the hundred year anniversary of the United States’ entrance into World War I, President Trump ordered 59 Tomahawk cruise missiles to be fired at Syria’s Al Shayrat airfield. The strike came after Syrian President Assad’s most recent use of chemical weapons against rebel units and citizens living in opposition-controlled areas. Although officials claim this strike is a “one-off,” as we look back at another war –– one that may seem distant –– many parallels emerge to our current War on Terror, and warn of the danger of sending additional forces into Syria. Americans would do well to remember that wars usually cost more than assumed and that they invariably erode the domestic freedoms that the fighting is supposed to protect.

As any good student of history or economics will tell you, wars are expensive and have long-lasting consequences for decades or even a century. Yet, the start of a conflict is often greeted with a bizarre degree of enthusiasm, only for voters and governments to later realize the terrible price. In 1914, crowds cheered in every European capital as politicians predicted glorious victory that would see the boys home “before the leaves fall.” The war would last until 1918 and cause 41 million military and civilian casualties, about 20 million killed and 21 million injured. Moreover, the financial burden was billions of dollars, leaving the major European powers weakened and in debt. The Great War also hit Americans with a bill that would amount to $334 billion in 2014 dollars. This pattern of underestimating the price of war has repeated itself in subsequent conflicts, including our present day ones.

When the U.S. invaded Iraq in 2003, officials said the war would be short and estimated the cost at no more than $200 billion. Yet mission creep, the phenomenon when military and political objectives of using force keep expanding, set in. With a vaguely-worded authorization for the use of military force passed by Congress, soon the goals and enemies multiplied as the conflict spread across the globe. Including U.S. military involvement in at least five wars: Iraq, Afghanistan, Yemen, Somalia, and Pakistan. The combined War on Terror has cost at least $3.6 trillion. That rises to $4.79 trillion when requested spending and projected costs are taken into account.

Spending an amount similar to World War II would be alarming enough on its own, but borrowing at such a level when combined with ongoing U.S. entitlement costs is unsustainable. One fact many hawks on the left and right keep ignoring is that the national debt is now greater than America’s GDP and is about to hit $20 trillion.

Continue reading at RealClearDefense 

Black Monday

Black Monday Pops the State’s Infrastructure Bubble

The global economy is in free fall. Markets worldwide are down dramatically, and officials around the globe are scrambling for answers. “What’s happening? How can we stop the bleeding?” The coming days and weeks will see millions of words written over the cause and cure for what has happened these past few days.

We don’t know much, but one thing is certain: it is clearly tied to the inefficient spending of Chinese companies and local governments, leading to overcapacity in specific economic sectors, one of those being physical infrastructure, as famed economist Tyler Cowen has noted.

While it may not be the root cause of the crisis, the “infrastructure issue” is certainly a major part of it. The fact is, not all new roads are worth building. Neither are all new ports, airports, power lines, water mains, telephone cables, or any of the other myriad pieces of physical infrastructure that people use in their everyday lives.

Each type of infrastructure is just like any other good. They are produced by producers, and consumed by consumers. Supply and demand, straight out of Economics 101. Sometimes, producers make too much of a product for the available demand, sometimes too little.

Read the rest on the PanAm Post here.