The cost of America’s global war on terror has yet to be reckoned with, and there’s a very good reason for that. By and large, the US has not been paying for all of these wars, but rather has been borrowing to pay for the conflict.
In the long run that’s going to be expensive. Paying off the war is going to mean not only paying the prices of the conflict but the massive interest accrued in borrowing the cost of those wars.
A new report suggests that just the interest on all that debt will, over the course of decades of servicing it, cost an estimated $8 trillion. So far, they say, the US has paid $534 billion in overseas contingency operations interest.
And that’s just the debt already accrued. America’s assorted wars show no sign of ending, and indeed the Pentagon has been pretty clear about the US deployment in Iraq being a permanent thing.
When the government talks about the “cost” of the terror war, they generally limit their reckoning to specific costs of overseas operations. Yet decades of veteran costs will doubtless dwarf that, and the interest on top of it will swell final costs to even higher levels.
The question of whether America can afford all of this, of course, was never addressed in the first place. Indeed, with so little of the cost being paid at all, the expectation seems to be that they’ll just keep borrowing.
42 thoughts on “Report: Post-9/11 War Debt Will Cost $8 Trillion in Interest”
Government finances don’t work like that. The Federal government is the issuer of $US.
It does expose the fallacy that expenditure on social programmes isn’t affordable though.
Medicare for all, full employment, free college education. All can be done if Americans stop voting for neoliberal austerity preachers.
Borrowing to fund social programs could have driven the debt just as high, and in the end destroyed the value of the dollar which would hurt the pensioners and the poor more than anyone. No, we can’t afford the wars, nor can we afford free everything to everybody. Both are government run illusions.
The issuer of the currency does not borrow to fund anything.
It does devalue the currency though. The latest military spending increase would pay for “free college”. That’s true enough, and I’m happy for the left to make political hay from the fact, but it’s not an argument for K-16 public education. Too many people waste too much of their lives in academies already. A freer market in education and employment would offer more apprenticeships and other on-the-job training.
No it doesn’t ‘devalue’ the currency.
It can devalue the currency (inflate prices) according Warren Mosler (Modern Monetary Theory) and other economists. Why do you say not?
Can is not the same as does. Any spending can be inflationary.
We’re discussing a monetary authority spending currency into circulation. This spending increases demand for resources without any corresponding production.
Why do you assume no new production? Is the economy at full capacity?
Of course not.
I don’t assume an economy at full capacity, but state spending is not equivalent to production. State spending may only create more demand for existing supply, raising prices. Modern monetary theory (which you’re discussing here) does not deny this. The Fed has an explicit inflation target. Inflation is a deliberate policy.
That’s it? You’re denying that the Fed has an explicit inflation target?
I’m not denying anything of the sort. Your entire comment is nonsense. And the Fed’s inflation target has nought to do with anything.
The inflation target is part of the entire comment. You can’t be more specific?
” State spending may only create more demand for existing supply, raising prices.”
Why on God’s green earth?
Because state spending need not, and typically does not, increase the supply of goods that the spending demands. Goods are highly heterogeneous, and even during a recession, when some resources are idle, state spending does not demand the same resources idled by the recession.
Your reply is completely vacuous.
You are very, very confused. You seem to have an ideological bias against state spending and are trying to mould some (anti-state) assertions around the bias rather than reality.
This reply is also vacuous. I can as easily accuse you of an ideological bias. You can always accuse anyone of ideological bias, so your reply doesn’t address the specific issue we’re discussing at all.
Justify your assertion that state spending is ipso facto different to private sector spending in supply side vs demand side terms then.
We’ll soon see vacuous.
State spending is not limited in the same way that private sector spending is limited, particularly when a state spends currency into circulation. You say yourself, above, “The issuer of the currency does not borrow to fund anything.” Since the state is the issuer of the currency and a private sector spender is not, state spending is ipso facto different.
Why is its effect different?
Why would state spending have a different effect than private spending of bank created money?
Printing more money and borrowing is what is happening and that is why Congress should be approving these wars. At the moment the only consultation is with the military equipment manufacturers and what profit margins they want who they send campaign contributions to.
Believe me many people are getting fabulously wealthy while American servicemen are fighting these futile wars.
Technically, Congress is approving these wars by the act of funding them. The Congress rarely questions the requests for war funding, direct or indirect. Thus, they approve.
… and we’re fighting the wrong enemy:
The enemy of my enemy, is my friend 🙂 Governments favorite saying.
Who knows what interest rates or timeline they are using for that calculation.
This is somewhat of a personal issue for me (in terms of money, not people).
The Senate is taking away State and local tax deductions and I live in one of those ‘high tax states’ because they are trying to keep within the $1.5T 10yr limit to make the corporate rate cut permanent. Hmm… where to get $500B or so over 10yrs to keep this deduction. We are adding over $100B to the defense budget in 1yr and removing caps, so that is $1T of increased defense spending but that’s a sacred cow. Can’t wait to read about the 3,000 F35’s needing to be fixed in the field.
Now’s the time to organize for you to get your State to lower the tax burden on you, so people in other States don’t have to keep paying for your State’s excessiveness.
The USA does not have a pot to pee in or a window to throw it out of. Face it the USA is BROKE! Why do you think they keep stealing from the taxpayers to pay for their corruption? The USA needs to look at our own government as the enemy of the people. This cannot stand. The USA will not make it to 2100, we will destroy ourselves, like we are already doing due to lack of education and investment in our infrastructure.
An obvious oversight in this article was its failure to mention the now infamous — and now permanent (they were supposed to be temporary) — George W. Bush tax cuts. Wars are historically financed through increases in taxation. Not with George W. Bush! Quite the opposite.
This is why the MIC and the evil banksters work hand in glove, and why to them there is no such thing as a bad war.
Eisenhower is alleged to have included Congress in the first draft of his speech about the dangers of the MIC, but was persuaded to take Congress out of the picture. http://www.washingtonsblog.com/2015/10/what-eisenhower-really-said-about-the-military-indutrial-complex.html
They will indeed just keep borrowing, until they can’t borrow anymore, and then we are all in BIG trouble.
That’s right. The Bankers will own the U.S. They don’t make loans with no collateral being put up.
I made a collection with over 100 articles/links on the topic of US creation/support for ISIS and al Qaeda. The “terror” in the War on Terror is our false flag operation.
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