The typical critic of the war in Iraq will eventually drag economics into the argument by making some vague reference to how “costly” it has been not only in casualties, but also in economic terms.
The truly significant cost of the Iraq War is measured in human lives, over 2,000 of which have been lost so far. The wisdom of that sacrifice will be debated for years to come, but there should be no debate about the monetary aspects of the war. The $251 billion spent so far on the invasion and reconstruction of Iraq is only about 2% of one year’s U.S. wealth creation. That is simply not enough to help or hurt an economy that creates roughly a third of the world’s wealth.
Historically, wars have cost Americans a great deal more in monetary terms than Iraq. Prof. Robert Whaples, an economist at Wake Forest University, has measured the cost of every major American war through the First Gulf War. We compared the cost of the Iraq War to Dr. Whaples’ historical analysis and found that this war consumed a smaller percentage of GDP than any other war except the First Gulf War, which absorbed just 1% of GDP.
The Vietnam War, by contrast, consumed 12% of GDP at the time. World War II required a staggering 130%.
The real debate should be over the loss of life, and comparison with casualties in other wars is in order. But those who condemn the war because of its economic impact should consider what the data really show.