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The Financial Legacy of Iraq and Afghanistan: How Wartime Spending Decisions Will Constrain Future National Security Budgets

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  • Bilmes, Linda J.

    (Harvard University)

Abstract

The Iraq and Afghanistan conflicts, taken together, will be the most expensive wars in US history--totaling somewhere between $4 to $6 trillion. This includes long-term medical care and disability compensation for service members, veterans and families, military replenishment and social and economic costs. The largest portion of that bill is yet to be paid. Since 2001, the US has expanded the quality, quantity, availability and eligibility of benefits for military personnel and veterans. This has led to unprecedented growth in the Department of Veterans Affairs and the Department of Defense budgets. These benefits will increase further over the next 40 years. Additional funds are committed to replacing large quantities of basic equipment used in the wars and to support ongoing diplomatic presence and military assistance in the Iraq and Afghanistan region. The large sums borrowed to finance operations in Iraq and Afghanistan will also impose substantial long-term debt servicing costs. As a consequence of these wartime spending choices, the United States will face constraints in funding investments in personnel and diplomacy, research and development and new military initiatives. The legacy of decisions taken during the Iraq and Afghanistan wars will dominate future federal budgets for decades to come.

Suggested Citation

  • Bilmes, Linda J., 2013. "The Financial Legacy of Iraq and Afghanistan: How Wartime Spending Decisions Will Constrain Future National Security Budgets," Working Paper Series rwp13-006, Harvard University, John F. Kennedy School of Government.
    • Handle: RePEc:ecl:harjfk:rwp13-006
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    Cited by:

    1. Bove Vincenzo & Elia Leandro, 2014. "The impact of American and British involvement in Afghanistan and Iraq on health spending, military spending and economic growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 14(1), pages 1-15, January.
    2. James M. Cypher, 2015. "The origins and evolution of military Keynesianism in the United States," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 38(3), pages 449-476, October.
    3. Alicia Sasser Modestino & Daniel Shoag & Joshua Ballance, 2020. "Upskilling: Do Employers Demand Greater Skill When Workers Are Plentiful?," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 793-805, October.
    4. David Aebischer & John Vatterott & Michael Grimes & Andrew Vatterott & Roderick Jordan & Carlo Reinoso & Bradford Alex Baker & William D. Aldrich & Luis Reinoso & Rodolfo Villalba & Michael Johnson & , 2017. "Bayesian Networks for Combat Equipment Diagnostics," Interfaces, INFORMS, vol. 47(1), pages 85-105, February.
    5. Gustavo A. Flores-Macías & Sarah E. Kreps, 2017. "Borrowing Support for War: The Effect of War Finance on Public Attitudes toward Conflict," Journal of Conflict Resolution, Peace Science Society (International), vol. 61(5), pages 997-1020, May.
    6. Clifford J. Shultz, 2015. "The ethical imperative of constructive engagement in a world confounded by the commons dilemma, social traps and geopolitical conflicts," Chapters, in: Handbook on Ethics and Marketing, chapter 10, pages 188-219, Edward Elgar Publishing.

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