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Evaluating the Costs and Benefits of the US War on Terror


  • Gold, David


In October of 2003, then Defense Secretary Donald Rumsfeld wrote a memo to his top advisers asking how we would know whether the US was winning the Global War on Terror. This question may have been mis-timed but it was perfectly appropriate. In this paper, I use the framework of cost-benefit analysis to identify some of the issues that would need to be addressed in order to answer Rumsfeld’s question. The most difficult issue is that there is no accepted definition as to what constitutes victory, or success, so there is no way to identify the ultimate benefits. Available evidence does suggest that while there are numerous identifiable sources of costs, it is far less clear where the benefits are located. The conclusion, necessarily qualitative in nature, is that the costs have been many and the benefits few.

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  • Gold, David, 2007. "Evaluating the Costs and Benefits of the US War on Terror," MPRA Paper 6932, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:6932

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    References listed on IDEAS

    1. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2007. "Calculating Tragedy: Assessing The Costs Of Terrorism," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 1-24, February.
    2. Ohanian, Lee E, 1997. "The Macroeconomic Effects of War Finance in the United States: World War II and the Korean War," American Economic Review, American Economic Association, vol. 87(1), pages 23-40, March.
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    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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