In an article in the Washington Post in September, Joseph Stiglitz, 2001 Nobel Prize winner in economics and Linda J. Bilmes, a Harvard University senior lecturer in public policy, wrote about the issue of defense spending coupled with cutting taxes. The pair also co-authored a book called The Three Trillion Dollar War: The True Cost of the Iraq Conflict. Stiglitz and Bilmes write:
There is no question that the Iraq war added substantially to the federal debt. This was the first time in American history that the government cut taxes as it went to war. The result: a war completely funded by borrowing. U.S. debt soared from $6.4 trillion in March 2003 to $10 trillion in 2008 (before the financial crisis); at least a quarter of that increase is directly attributable to the war. And that doesn’t include future health care and disability payments for veterans, which will add another half-trillion dollars to the debt.
As a result of two costly wars funded by debt, our fiscal house was in dismal shape even before the financial crisis — and those fiscal woes compounded the downturn.
While it’s yet to be determined if the amount of military spending is necessary or lavish, some analysts think it’s important to look at how short term costs affect the long run.
“I read that the cost to keep a soldier in Iraq or Afghanistan is huge. Are we going to get out of there or not, that’s the million dollar question,” Stevens said.
