REVEALED: The INSANE Money Spent On War Contractors | Harry Berger & William Hartung
- Wolfgang Lieberknecht
- 8. Apr.
- 12 Min. Lesezeit
As the US provides Israel with billions of dollars and deploys its military in Yemen on behalf of that foreign government, the total cost of supporting Israel continues to rise. But how much have Americans forked over to that foreign government so far? At the same time, the Trump administration has promised to use DOGE to take on government spending, of which military expenditures represent 60%. Last month, Trump said that he would cut the Pentagon budget in half. But has that really happened? To help answer these questions, independent journalist Harrison Berger is joined by the Quincy Institute for Responsible Statecraft's William Hartung. Check out the cost of war project: https://watson.brown.edu/costsofwar/c...
Economic Costs
Through Fiscal Year 2022, the United States federal government has spent and obligated $8 trillion dollars on the post-9/11 wars in Afghanistan, Pakistan, Iraq and elsewhere. This figure includes: direct Congressional war appropriations; war-related increases to the Pentagon base budget; veterans care and disability; increases in the homeland security budget; interest payments on direct war borrowing; foreign assistance spending; and estimated future obligations for veterans’ care.
This total omits many other expenses, such as the macroeconomic costs to the US economy; the opportunity costs of not investing war dollars in alternative sectors; future interest on war borrowing; and local government and private war costs.
Public access to budget information about the post-9/11 is imperfect and incomplete. The scale of spending alone makes it hard to grasp. Public understanding of the budgetary costs of war is further limited by secrecy, faulty accounting and the deferral of current costs.
The current wars have been paid for almost entirely by borrowing. This borrowing has raised the U.S. budget deficit, increased the national debt and had other macroeconomic effects, such as raising consumer interest rates. Unless the U.S. immediately repays the money borrowed for war, there will also be future interest payments. We estimate that interest payments could total over $6.5 trillion by the 2050s.
Spending on the wars has involved opportunity costs for the U.S. economy. Although military spending does produce jobs, spending in other areas such as health care could produce more jobs. Additionally, investment in nonmilitary public infrastructure such as roads and schools has not grown at the same rate as investment in military infrastructure.
Finally, in addition to federal war costs, the post-9/11 wars have cost billions of dollars of state, municipal and private funds, including dollars spent on services for returned veterans and their families and local homeland security efforts.
(Page updated as of September 2021)
The Iraq and Afghanistan wars have contributed to significant economic setbacks in the United States, through lost opportunities for investment in public infrastructure and services and higher borrowing rates. Contrary to the widespread belief that war is a particularly effective way to create jobs, U.S. federal spending on the current wars would have led to at least 1.4 million more jobs had the money been invested instead in education, health care or green energy.
Similarly, the hundreds of billions of dollars invested in military assets such as ships and aircraft during the first decade of the wars would have led to larger capital improvements had these dollars instead been invested in core public economic infrastructure, such as roads and water systems.
The wars have also impacted interest rates charged to borrowers by banks and other creditors. This is the result of war spending financed entirely by debt, which has contributed to a higher ratio of national debt to Gross Domestic Product (GDP) and subsequent rising long-term interest rates.
Each of these issues can be counted as a significant cost of the post-9/11 wars.
Economic Costs
Through Fiscal Year 2022, the United States federal government has spent and obligated $8 trillion dollars on the post-9/11 wars in Afghanistan, Pakistan, Iraq and elsewhere. This figure includes: direct Congressional war appropriations; war-related increases to the Pentagon base budget; veterans care and disability; increases in the homeland security budget; interest payments on direct war borrowing; foreign assistance spending; and estimated future obligations for veterans’ care.
This total omits many other expenses, such as the macroeconomic costs to the US economy; the opportunity costs of not investing war dollars in alternative sectors; future interest on war borrowing; and local government and private war costs.
Public access to budget information about the post-9/11 is imperfect and incomplete. The scale of spending alone makes it hard to grasp. Public understanding of the budgetary costs of war is further limited by secrecy, faulty accounting and the deferral of current costs.
The current wars have been paid for almost entirely by borrowing. This borrowing has raised the U.S. budget deficit, increased the national debt and had other macroeconomic effects, such as raising consumer interest rates. Unless the U.S. immediately repays the money borrowed for war, there will also be future interest payments. We estimate that interest payments could total over $6.5 trillion by the 2050s.
Spending on the wars has involved opportunity costs for the U.S. economy. Although military spending does produce jobs, spending in other areas such as health care could produce more jobs. Additionally, investment in nonmilitary public infrastructure such as roads and schools has not grown at the same rate as investment in military infrastructure.
Finally, in addition to federal war costs, the post-9/11 wars have cost billions of dollars of state, municipal and private funds, including dollars spent on services for returned veterans and their families and local homeland security efforts.
(Page updated as of September 2021)
The Iraq and Afghanistan wars have contributed to significant economic setbacks in the United States, through lost opportunities for investment in public infrastructure and services and higher borrowing rates. Contrary to the widespread belief that war is a particularly effective way to create jobs, U.S. federal spending on the current wars would have led to at least 1.4 million more jobs had the money been invested instead in education, health care or green energy.
Similarly, the hundreds of billions of dollars invested in military assets such as ships and aircraft during the first decade of the wars would have led to larger capital improvements had these dollars instead been invested in core public economic infrastructure, such as roads and water systems.
The wars have also impacted interest rates charged to borrowers by banks and other creditors. This is the result of war spending financed entirely by debt, which has contributed to a higher ratio of national debt to Gross Domestic Product (GDP) and subsequent rising long-term interest rates.
Each of these issues can be counted as a significant cost of the post-9/11 wars.
Key Findings
War spending created fewer jobs than similar spending investment in clean energy, public education and health care.
Federal investment in military assets during the wars made for a lost opportunity to significantly boost capital improvements in core infrastructure such as roads and public transit.
War spending financed entirely by debt has contributed to higher interest rates charged to borrowers such as new homeowners.
(Page updated as of September 2023)
Military spending by the federal government is often considered a vital support to employment and economic recovery.
However, military spending creates fewer jobs than the same amount of money would have, if invested in other sectors. Clean energy and health care spending create 50% more jobs than the equivalent amount of spending on the military. Education spending creates more than twice as many jobs.
There are three reasons why this is the case. Industries such as education and clean energy are more labor-intensive. For a given level of spending, more of those dollars go toward hiring workers and less on equipment and materials. Also, a greater percentage of spending in education, health care and clean energy construction stays within the U.S., creating more domestic jobs. Military personnel spend more of their earnings abroad and foreign contractors and employees get some portion of Pentagon spending. Finally, since wages and benefits are lower in those sectors than they are for military contractors and personnel on average, the same amount of money hires more people in those non-military sectors.
As a result, if over the years 2001-2019 the U.S. had not been at war but instead had channeled resources into expanding the clean energy industry, broadening health care coverage, and increasing educational opportunities, between 1.4 and 3 million more jobs would have been created, reducing unemployment significantly.
Key Findings
$1 billion in military spending creates approximately 11,200 jobs, compared with 26,700 in education, 16,800 in clean energy and 17,200 in health care.
The same amount of spending generates more jobs in certain non-military sectors because of differences in labor intensity, domestic investment and wage levels.
(Page updated as of September 2023)
Since late 2001, the United States has appropriated and is obligated to spend an estimated $8 trillion through Fiscal Year 2022 in budgetary costs related to and caused by the post-9/11 wars — an estimated $5.8 trillion in appropriations in current dollars and an additional minimum of $2.2 trillion for U.S. obligations to care for the veterans of these wars through the next several decades.
Of the $8 trillion total, about $2.3 trillion have been spent on what used to be called the “Global War on Terror” and is now referred to as “Overseas Contingency Operations.” Over $1 trillion has been spent on interest payments to pay for the post-9/11 wars, since these have been funded entirely through debt. The base budget of the Pentagon has increased by about $900 billion above what it would have been in the absence of war; Homeland Security spending on preventing and countering terrorism has totaled over $1.1 trillion since the inception of the Department of Homeland Security in 2002; and current and future costs for veterans has added nearly $2.2 trillion to the costs of war and that figure will continue to grow.
An important macroeconomic impact of federal spending on the Iraq and Afghanistan wars has been to raise the nation’s indebtedness. The increased military spending following 9/11 was financed almost entirely by borrowing. Rising deficits have resulted in higher debt, a higher debt-to-GDP ratio and higher interest rates.
Since the post-9/11 wars have been funded almost entirely by debt, and the U.S. public debt continues to grow, the costs of interest payments continue to accumulate. Even as the wars cease, interest will continue to accumulate and will reach several trillions of dollars over the next several decades. The effect of rising debt and growing interest payments is not only the increase in interest rates, which affects both the public and private sectors, but also constrains future spending decisions. The Congressional Budget Office estimates that net interest payments are currently about 1.4 percent of the GDP and are expected to rise to 2.4 percent by 2031 and 8.6 percent by 2051. As interest payments account for a greater share of the federal budget, opportunities to spend federal dollars on productive investments — clean energy, infrastructure, education, and so on — are constrained. Rising debt and interest costs also contribute to generational inequality, as they are burdens passed along to future taxpayers.
The costs of the post-9/11 wars, as well as the increase in payments to military contractors, have both increased federal spending on defense. Defense spending accounts for more than half of all discretionary spending; the total is closer to 2/3 once the Department of Homeland Security and Veterans Affairs are included. And of defense spending, more than one half is channeled to contractors. Costs of War analysis finds that this raises costs, rather than reducing them, as contractors often have monopoly-like conditions or contract specifications that minimize cost savings and increase profits at the taxpayers’ expense.
Key Findings
The post-9/11 wars have cost the U.S. at least $8 trillion and rising since 2001.
War spending has been funded almost entirely through debt, which increases the debt/GDP ratio and the interest rate.
Interest costs of the post-9/11 wars now surpass $1 trillion and will reach several trillion more over the coming decades.
Rising interest payments crowd out future opportunities for federal spending and increase the debt and tax burden for future generations.
Over half of discretionary spending is for the Department of Defense, and over half of that spending has in recent years been for contractor.
(Page updated as of September 2021)
Impact on Public Investment
Over one half of the federal government’s total assets — buildings, aircraft, ships, vehicles, computers, and weapons — are used for national defense. In 2000, the Pentagon’s total assets were valued at $1.1 trillion. Total Pentagon assets have steadily risen since then, amounting to $1.8 trillion in 2019.
Public investment in non-military assets — all the public buildings, roads, mass transit systems, water and sewer systems, public utilities, recreation facilities and so on — has held steady since the mid-1970s, but at about half the rate of accumulation of the 1950s and 1960s.
Investments in core infrastructure have a direct impact on the performance of the private economy. The private sector benefits from public investments in roads, water systems and other goods. Such benefits are in addition to the direct benefits that public investment confers to the population: roads help people get around and improve the efficiency of businesses.
While the private economy benefits from military spending on durable, physical assets (defense contractors being an obvious example), there are no “spill-over effects” in terms of the long-run productivity of the rest of the private sector.
In addition to productivity losses, over-investment in military assets has other opportunity costs, including lost environmental and employment opportunities. Federal funds could instead be channeled to green investments, including green manufacturing and upgrades of the electrical grid and other energy systems, which would create more jobs while lowering energy use and emissions.
Key Findings
While investment in military assets produces economic gains, investment in non-military assets stimulates comparatively more economic growth in the private sector.
If public investments in military assets had instead been made in public education, this would be enough to return the country’s schools to good condition.
A decrease in military investments would enable an increase in investments in infrastructure, including clean energy, water and sanitation and public transit.
(Page updated as of September 2023)
The U.S. budgetary costs of the war in Afghanistan from FY2001-FY2022 totaled over 2.3 trillion dollars. The estimated U.S. budgetary costs of the wars in Iraq and Syria from FY2003-FY2023 totaled 2.9 trillion dollars.
Federal budgetary expenditures for the post-9/11 wars include many expenses far beyond direct Congressional war appropriations. Congressional appropriations for “Overseas Contingency Operations” — which include combat in the post-9/11 war zones as well as international assistance through the State Department and USAID — are just the tip of an iceberg.
Other spending directly related to the War on Terror includes additions to the Pentagon “base” budget, about $900 billion through FY2022. And while the U.S. paid for past wars by raising taxes and selling war bonds, the current wars have been paid for almost entirely with borrowed money, on which interest has to be paid. Through FY2022, the U.S. government owes over $1 trillion in interest on these wars. Even if war spending spending ceased immediately, so that expenses for Overseas Contingency Operations and the Pentagon’s base budget went to zero, spending on interest would continue to accrue, reaching at least several trillion dollars in over the next few decades.
The federal government also has committed itself to a series of I.O.U.s – medical and disability payments for veterans and administrative overhead costs that will total another estimated $2.2-$2.5 trillion or more through from 2001 to 2050. Finally, among the costs of these wars are increases in Homeland Security spending, intended to avert the threat of a terrorist attack and respond to and recover from attacks. This spending totals over $1.1 trillion to date.
Totaling these expenses and Congressional requests through FY2022, the U.S. federal government has spent and obligated over $8 trillion on the post-9/11 wars.
Key Findings
Direct war appropriations, which policymakers often cite as the costs of the post-9/11 wars, account for less than one-third of total war costs.
Current and future veteran care, interest on war debt, Homeland Security spending and additions to the Pentagon base budget form the bulk of post-9/11 war expenses.
(Page updated as of September 2024)
The U.S. Department of Defense is the world’s single largest institutional consumer of oil – and as a result, one of the world’s top greenhouse gas emitters.
The wars in Iraq, Afghanistan, and Pakistan have had a serious impact on the natural environments of these countries. Military vehicles consume petroleum-based fuels at an extremely high rate, with the vehicles used in the war zones having produced many hundreds of thousands of tons of carbon monoxide, nitrogen oxides, hydrocarbons, and sulfur dioxide in addition to CO2. Air pollution from military vehicles and weaponry has adversely affected public health among civilians in the war zones and US service members.
Heavy military vehicles have raised more dust than usual, particularly in Iraq and Kuwait, and service members’ exposures to inhaled toxins from that dust have correlated with respiratory disorders that often prevent them from continuing to serve and performing everyday activities such as exercise.
The water supply in the war zones has been contaminated by oil from military vehicles and depleted uranium from ammunition. Along with the degradation of the natural resources in these countries and a radical destruction of forest cover, the animal and bird populations have also been adversely affected.
Iraqi medical doctors and health researchers have called for more research on war-related environmental pollution as a potential contributor to the country’s poor health conditions and high rates of infections and diseases.
Key Findings
The U.S. Department of Defense is the world’s single largest consumer of oil – and as a result, one of the world’s top greenhouse gas emitters.
Destruction of military base garbage in burn pits and other military operations have exposed soldiers and civilians to dangerous levels of pollutants.
Deforestation in Afghanistan as a result of illegal logging, particularly by warlords, has destroyed wildlife habitat.
In Iraq, increases in cancer, birth defects, and other conditions have been associated with war-related environmental damage and toxins.
(Page updated as of October 2024)
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