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$4 trillion: cost to US of the war on terror

By Rupert Cornwall

The total cost to the US for its wars in Iraq and Afghanistan, plus the related military operations in Pakistan, is set to exceed $4 trillion - more than three times the sum so far authorised by Congress in the decade since the 9/11 attacks.

This staggering sum emerges from a new study by academics at the Ivy League Brown University that reveals the $1.3tn officially appropriated on Capitol Hill is the tip of a spending iceberg. If other Pentagon outlays, interest payments on money borrowed to finance the wars, and the $400bn estimated to have been spent on the domestic 'war on terror', the total cost is already somewhere between $2.3 and $2.7tn.

And even though the wars are now winding down, add in future military spending, and above all the cost of looking after veterans, disabled and otherwise, and the total bill will be somewhere between $3.7tn and $4.4tn.

The report by Brown's Watson Institute for International Studies is not the first time such astronomical figures have been cited. A 2008 study co-authored by the Harvard economist Linda Bilmes and Joseph Stiglitz, a former Nobel economics laureate, reckoned the wars would end up costing over $3tn.

The difference is that America's financial position has worsened in the meantime, with a brutal recession and a federal budget deficit running at some $1.5tn annually, while healthcare and social security spending is to soar as the population ages and the baby boomer generation reaches retirement.

And unlike most of America's previous conflicts, Iraq and Afghanistan have been financed mostly by borrowed money.

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