The Cost of Bin Laden: $3 Trillion Over 15 Years

As we mark Osama bin Laden’s death, what’s striking is how much he cost our nation–and how little we’ve gained from our fight against him.

What dumbassess we were to follow Bush into this war.

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The most expensive public enemy in American history died Sunday from two bullets.

As we mark Osama bin Laden’s death, what’s striking is how much he cost our nation–and how little we’ve gained from our fight against him. By conservative estimates, bin Laden cost the United States at least $3 trillion over the past 15 years, counting the disruptions he wrought on the domestic economy, the wars and heightened security triggered by the terrorist attacks he engineered, and the direct efforts to hunt him down.

What do we have
to show for that tab? Two wars that continue to occupy 150,000 troops
and tie up a quarter of our defense budget; a bloated homeland-security
apparatus that has at times pushed the bounds of civil liberty; soaring
oil prices partially attributable to the global war on bin Laden’s
terrorist network; and a chunk of our mounting national debt, which
threatens to hobble the economy unless lawmakers compromise on an
unprecedented deficit-reduction deal.

Osama Bin Laden
All of that has not given us, at least not yet, anything close to
the social or economic advancements produced by the battles against
America’s costliest past enemies. Defeating the Confederate army
brought the end of slavery and a wave of standardization–in railroad
gauges and shoe sizes, for example–that paved the way for a truly
national economy. Vanquishing Adolf Hitler ended the Great Depression
and ushered in a period of booming prosperity and hegemony. Even the
massive military escalation that marked the Cold War standoff against
Joseph Stalin and his Russian successors produced landmark
technological breakthroughs that revolutionized the economy.

Perhaps the biggest economic silver lining from our bin Laden
spending, if there is one, is the accelerated development of unmanned
aircraft. That’s our $3 trillion windfall, so far: Predator drones. “We
have spent a huge amount of money which has not had much effect on the
strengthening of our military, and has had a very weak impact on our
economy,” says Linda Bilmes, a lecturer at Harvard University’s John F.
Kennedy School of Government who coauthored a book on the costs of the
Iraq and Afghanistan wars with Nobel Prize-winning economist Joseph

Certainly, in the course of the fight against bin Laden, the United
States escaped another truly catastrophic attack on our soil. Al-Qaida,
though not destroyed, has been badly hobbled. “We proved that we value
our security enough to incur some pretty substantial economic costs en
route to protecting it,” says Michael O’Hanlon, a national-security
analyst at the Brookings Institution.

But that willingness may have given bin Laden exactly what he
wanted. While the terrorist leader began his war against the United
States believing it to be a “paper tiger” that would not fight, by 2004
he had already shifted his strategic aims, explicitly comparing the
U.S. fight to the Afghan incursion that helped bankrupt the Soviet
Union during the Cold War. “We are continuing this policy in bleeding
America to the point of bankruptcy,” bin Laden said in a taped
statement. Only the smallest sign of al-Qaida would “make generals race
there to cause America to suffer human, economic, and political losses
without their achieving anything of note other than some benefits for
their private corporations.” Considering that we’ve spent one-fifth of
a year’s gross domestic product–more than the entire 2008 budget of
the United States government–responding to his 2001 attacks, he may
have been onto something.


Other enemies throughout history have extracted higher gross costs,
in blood and in treasure, from the United States. The Civil War and
World War II produced higher casualties and consumed larger shares of
our economic output. As an economic burden, the Civil War was America’s
worst cataclysm relative to the size of the economy. The nonpartisan
Congressional Research Service estimates that the Union and Confederate
armies combined to spend $80 million, in today’s dollars, fighting each
other. That number might seem low, but economic historians who study
the war say the total financial cost was exponentially higher: more
like $280 billion in today’s dollars when you factor in disruptions to
trade and capital flows, along with the killing of 3 to 4 percent of
the population. The war “cost about double the gross national product
of the United States in 1860,” says John Majewski, who chairs the
history department at the University of California (Santa Barbara).
“From that perspective, the war on terror isn’t going to compare.”

On the other hand, these earlier conflicts–for all their human
cost–also furnished major benefits to the U.S. economy. After entering
the Civil War as a loose collection of regional economies, America
emerged with the foundation for truly national commerce; the first
standardized railroad system sprouted from coast to coast, carrying
goods across the union; and textile mills began migrating from the
Northeast to the South in search of cheaper labor, including former
slaves who had joined the workforce. The fighting itself sped up the
mechanization of American agriculture: As farmers flocked to the
battlefield, the workers left behind adopted new technologies to keep
harvests rolling in with less labor.

War II defense spending cost $4.4 trillion. At its peak, it sucked up
nearly 40 percent of GDP, according to the Congressional Research
Service. It was an unprecedented national mobilization, says Chris
Hellman, a defense budget analyst at the National Priorities Project.
One in 10 Americans–some 12 million people–donned a uniform during
the war.

But the payoff was immense. The war machine that revved up to defeat
Germany and Japan powered the U.S. out of the Great Depression and into
an unparalleled stretch of postwar growth. Jet engines and nuclear
power spread into everyday lives. A new global economic order–forged
at Bretton Woods, N.H., by the Allies in the waning days of the
war–opened a floodgate of benefits through international trade.
Returning soldiers dramatically improved the nation’s skills and
education level, thanks to the GI Bill, and they produced a baby boom
that would vastly expand the workforce.

U.S. military spending totaled nearly $19 trillion throughout the
four-plus decades of Cold War that ensued, as the nation escalated an
arms race with the Soviet Union. Such a huge infusion of cash for
weapons research spilled over to revolutionize civilian life, yielding
quantum leaps in supercomputing and satellite technology, not to
mention the advent of the Internet.

Unlike any of those conflicts, the wars we are fighting today were
kick-started by a single man. While it is hard to imagine World War II
without Hitler, that conflict pitted nations against each other.
(Anyway, much of the cost to the United States came from the war in the
Pacific.) And it’s absurd to pin the Civil War, World War I, or the
Cold War on any single individual. Bin Laden’s mystique (and his place
on the FBI’s most-wanted list) made him–and the wars he drew us


By any measure, bin Laden inflicted a steep toll on America. His
1998 bombing of U.S. embassies in Africa caused Washington to quadruple
spending on diplomatic security worldwide the following year–and to
expand it from $172 million to $2.2 billion over the next decade. The
2000 bombing of the USS Cole caused $250 million in damages.

Al-Qaida’s assault against the United States on September 11, 2001,
was the highest-priced disaster in U.S. history. Economists estimate
that the combined attacks cost the economy $50 billion to $100 billion
in lost activity and growth, or about 0.5 percent to 1 percent of GDP,
and caused about $25 billion in property damage. The stock market
plunged and was still down nearly 13 percentage points a year later,
although it has more than made up the value since.

The greater expense we can attribute to bin Laden comes from
policymakers’ response to 9/11. The invasion of Afghanistan was clearly
a reaction to al-Qaida’s attacks. It is unlikely that the Bush
administration would have invaded Iraq if 9/11 had not ushered in a
debate about Islamic extremism and weapons of mass destruction. Those
two wars grew into a comprehensive counterinsurgency campaign that cost
$1.4 trillion in the past decade–and will cost hundreds of billions
more. The government borrowed the money for those wars, adding hundreds
of billions in interest charges to the U.S. debt.

Spending on Iraq and Afghanistan peaked at 4.8 percent of GDP in
2008, nowhere near the level of economic mobilization in some past
conflicts but still more than the entire federal deficit that year.
“It’s a much more verdant, prosperous, peaceful world than it was 60
years ago,” and nations spend proportionally far less on their
militaries today, says S. Brock Blomberg, a professor at Claremont
McKenna College in California who specializes in the economics of
terrorism. “So as bad as bin Laden is, he’s not nearly as bad as
Hitler, Mussolini, [and] the rest of them.”

Yet bin Laden produced a ripple effect. The Iraq and Afghanistan
wars have created a world in which even non-war-related defense
spending has grown by 50 percent since 2001. As the U.S. military
adopted counterinsurgency doctrine to fight guerrilla wars, it also
continued to increase its ability to fight conventional battles,
boosting spending for weapons from national-missile defense and fighter
jets to tanks and long-range bombers. Then there were large spending
increases following the overhaul of America’s intelligence agencies and
homeland-security programs. Those transformations cost at least another
$1 trillion, if not more, budget analysts say, though the exact cost is
still unknown. Because much of that spending is classified or spread
among agencies with multiple missions, a breakdown is nearly impossible.

It’s similarly difficult to assess the opportunity cost of the
post-9/11 wars–the kinds of productive investments of fiscal and human
resources that we might have made had we not been focused on combating
terrorism through counterinsurgency. Blomberg says that the response to
the attacks has essentially wiped out the “peace dividend” that the
United States began to reap when the Cold War ended. After a decade of
buying fewer guns and more butter, we suddenly ramped up our gun
spending again, with borrowed money.

price of the war-fighting and security responses to bin Laden account
for more than 15 percent of the national debt incurred in the last
decade–a debt that is changing the way our military leaders perceive
risk. “Our national debt is our biggest national-security threat,” Adm.
Mike Mullen, chairman of the Joint Chiefs of Staff, told reporters last

All of those costs, totaled together, reach at least $3 trillion.
And that’s just the cautious estimate. Stiglitz and Bilmes believe that
the Iraq conflict alone cost that much. They peg the total economic
costs of both wars at $4 trillion to $6 trillion, Bilmes says. That
includes fallout from the sharp increase in oil prices since 2003,
which is largely attributable to growing demand from developing
countries and current unrest in the Middle East but was also spurred in
some part by the Iraq and Afghanistan conflicts. Bilmes and Stiglitz
also count part of the 2008 financial crisis among the costs,
theorizing that oil price hikes injected liquidity in global economies
battling slowdowns in growth–and that helped push up housing prices
and contributed to the bubble.

Most important, the fight against bin Laden has not produced the
benefits that accompanied previous conflicts. The military escalation
of the past 10 years did not stimulate the economy as the war effort
did in the 1940s–with the exception of a few large defense
contractors–in large part because today’s operations spend far less on
soldiers and far more on fuel. Meanwhile, our national-security
spending no longer drives innovation. The experts who spoke with National Journal
could name only a few advancements spawned by the fight against bin
Laden, including Predator drones and improved backup systems to protect
information technology from a terrorist attack or other disaster. “The
spin-off effects of military technology were demonstrably more apparent
in the ’40s and ’50s and ’60s,” says Gordon Adams, a national-security
expert at American Univeristy.

Another reason that so little economic benefit has come from this
war is that it has produced less–not more–stability around the world.
Stable countries, with functioning markets governed by the rule of law,
make better trading partners; it’s easier to start a business, or tap
national resources, or develop new products in times of tranquility
than in times of strife. “If you can successfully pursue a military
campaign and bring stability at the end of it, there is an economic
benefit,” says economic historian Joshua Goldstein of the University of
Massachusetts. “If we stabilized Libya, that would have an economic

Even the psychological boost from bin Laden’s death seems muted by
historical standards. Imagine the emancipation of the slaves. Victory
over the Axis powers gave Americans a sense of euphoria and limitless
possibility. O’Hanlon says, “I take no great satisfaction in his death
because I’m still amazed at the devastation and how high a burden he
placed on us.” It is “more like a relief than a joy that I feel.”
Majewski adds, “Even in a conflict like the Civil War or World War II,
there’s a sense of tragedy but of triumph, too. But the war on terror
… it’s hard to see what we get out of it, technologically or


What we are left with, after bin Laden, is a lingering bill that was
exacerbated by decisions made in a decade-long campaign against him. We
borrowed money to finance the war on terrorism rather than diverting
other national-security funding or raising taxes. We expanded combat
operations to Iraq before stabilizing Afghanistan, which in turn led to
the recent reescalation of the American commitment there. We tolerated
an unsupervised national-security apparatus, allowing it to grow so
inefficient that, as The Washington Post reported in a major
investigation last year, 1,271 different government institutions are
charged with counterterrorism missions (51 alone track terrorism
financing), which produce some 50,000 intelligence reports each year,
many of which are simply not read.

We have also shelled out billions of dollars in reconstruction
funding and walking-around money for soldiers, with little idea of
whether it has even helped foreigners, much less the United States;
independent investigations suggest as much as $23 billion is
unaccounted for in Iraq alone. “We can’t account for where any of it
goes–that’s the great tragedy in all of this,” Hellman says. “The
Pentagon cannot now and has never passed an audit–and, to me, that’s
just criminal.”

It’s worth repeating that the actual cost of bin Laden’s September
11 attacks was between $50 billion and $100 billion. That number could
have been higher, says Adam Rose, coordinator for economics at the
University of Southern California’s National Center for Risk and
Economic Analysis of Terrorism Events, but for the resilience of the
U.S. economy and the quick response of policymakers to inject liquidity
and stimulate consumer spending. But the cost could also have been much
lower, he says, if consumers hadn’t paid a fear premium–shying away
from air travel and tourism in the aftermath of the attacks.
“Ironically,” he says, “we as Americans had more to do with the
bottom-line outcome than the terrorist attack itself, on both the
positive side and the negative side.”

The same is true of the nation’s decision, for so many reasons, to
spend at least $3 trillion responding to bin Laden’s attacks. More than
actual security, we bought a sense of action in the face of what felt
like an existential threat. We staved off another attack on domestic
soil. Our debt load was creeping up already, thanks to the early waves
stages of baby-boomer retirements, but we also hastened a fiscal mess
that has begun, in time, to fulfill bin Laden’s vision of a bankrupt
America. If left unchecked, our current rate of deficit spending would
add $9 trillion to the national debt over the next decade. That’s three
Osamas, right there.

Although Bin Laden is buried in the sea, other Islamist extremists
are already vying to take his place. In time, new enemies, foreign and
domestic, will rise to challenge America. What they will cost us, far
more than we realize, is our choice.




About stephenbishop

Just an ordinary guy trying to make it in this crazy world.
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