It is hard not to think Osama bin Laden was not shaking his head in pleased disbelief at the American reaction to his low budget, low casualty attack.  Direct costs related to the two wars is $2.2 trillion and climbing.  When you factor in indirect costs including veterans benefits, homeland security, interest on the debt and related foreign aid, noted economist Joseph Stieglitz estimates that costs most likely exceed $5 trillion.   The House Budget Committee issued a report that said procurement costs alone rose “seven-fold” from $7.2 billion in fiscal year 2004 to $61.5 billion in fiscal year 2008, when procurement spending peaked.  As a share of appropriations, it grew from 10 percent to 34 percent of the entire Department of Defense budget.

Since FY2003,” the report continues, “DOD has received about $214.5 billion in war related procurement funds—equal to about 2 and ½ times DOD’s average peacetime procurement budgets in those years. Other investment costs – Research, Development, Test & Evaluation (RDT&E) and Military Construction have also grown rapidly though they generally account for about $2 billion in war funding.”

 

The Economist estimates that not only has enhanced homeland security costs since 9/11  topped $690 billion, we have foregone another $417 billion in opportunity costs – the growth we would have enjoyed if the funds had been expended in more economically productive ways like education and infrastructure.