$3 trillion
March 6th, 2008 by I.C.
A Nobel Price-winning economist estimates that the American war effort in Iraq will cost the United States at least $3 trillion and as much as $5 trillion.
United States GDP (the sum total of economic activity) in 2007 was an estimated $13 trillion dollars. $3 trillion is about 23% of $13 trillion.
It helps to put this figure into perspective by contemplating what it would take to pay this figure. Suppose Americans wanted to totally pay for the war this year. Assuming the same level of GDP as 2007, one in five Americans would have to dedicate their entire productive capacities towards payment of the war. No purchases of goods, no payments towards any other debts; their entire paycheck would go into a fund to pay back creditors who have financed the war.
Such people would wake up and devote their entire working day towards someone else’s interests. This is nothing short of indentured servitude, or slavery.
If Americans wanted to pay this war over ten years, or fifty years, then the net impact would be much less (the same way a huge student loan is less burdensome over a thirty year period). And if sane government is ever restored, America will no doubt have to enter into some type of arrangement with its foreign financiers to pay off this absurd figure.
It is bewildering to think that in five years, America has spent $3 trillion on a war effort with nothing to show for it. It is impossible to imagine any politician announcing an initiative to spend $3 trillion on education, or health care, or national infrastructure without being mocked. And yet this sum has been spent, and continues to be spent, towards the occupation of a foreign country.
It used to be the case that if a government wanted to go to war, it had to tax the people. War, according to the Founder Thomas Paine, “is the art of conquering at home; the object of it is an increase of revenue; and as revenue cannot be increased without taxes, a pretense must be made for expenditure. In reviewing the history of the English Government, its wars and its taxes, a bystander, not blinded by prejudice nor warped by interest, would declare that taxes were not raised to carry on wars, but that wars were raised to carry on taxes.”
The Founder James Madison, who was also America’s fourth President, wrote, “Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes. And armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few.”
He cautioned, “No nation could preserve its freedom in the midst of continual warfare.”
Today, with the invention of modern debt structures like the sub-prime mortgage and debt securitization, all sorts of things that used to require a cash payment can be paid for on credit. A mortgage, a car, even a foreign occupation — in principle, they can all be financed to hell and back. Politicians have turned into wizards and alchemists, capable of producing economic growth or a foreign war with the stroke of a pen. Something can be created from nothing. And because the people will not be taxed, at least directly, there will be less discontent with neverending warfare.
But as America is realizing with the crash of the housing market, the piper must be paid at some point. It turns out that in fact, something cannot be created from nothing. Prosperity must exist somewhere other than on paper, or it does not exist at all.
The fact that the American economy in the last few years was able to sustain a massive housing bubble while also expending trillions of dollars on a war effort says much about its resiliency. No other economy in the world could have done such a thing. There is so much power in American society, and yet it is directed towards nothing but waste. War, at heart, is a waste: a waste of natural resources, of production, of life. Over the last few years, so much money and energy has gone towards war.
And nothing will change so long as politicians — any politician, no matter how outwardly noble — have access to such power. Today, Americans accept the idea that their president, on a whim, can launch a foreign war that proceeds without end for years. How far they have strayed from their republican roots! The consequence of complacency but also affluence. For it was war that provided America with control over its land and over the oil that powers its way of life. And so long as Americans remain blind to the connection between their way of life and the blood that is necessary to fuel it, they will continue to elect leaders who see nothing wrong with the use of force in otherwise ordinary circumstances.
Change is coming. Americans must see the storm ahead and realize that choices must be made. They must take control over their destinies, or their destiny will be made for them, by people who claim allegiance to America’s finest values but who are nothing but parasites of power. As the economy crumbles, as rights are restricted, as politicians become corrupted by their grandeur, the illusions of the present will give way to the realities of the future. In this environment, confronting the grave dangers ahead with a brave courage, lies the only hope for a renewed America based on genuine democratic principles.
well said…