U.S. war costs: Two parts temporary, one part permanent

• Published in: Journal of public economics Vol. 113; pp. 54 - 66
• Main Author: Edwards, Ryan D.
• Format: Journal Article
• Language: English
• Published: Netherlands Elsevier B.V 01.05.2014
• Subjects: Budget forecasts; Economic forecasts; Military expenditure; National security; Public economics; Public expenditure; Public finance; U.S.A; Value of life; J17; Budget forecasts; H56; Value of life; N41; H68; National security; N42
• ISSN: 0047-2727; 1879-2316
• DOI: 10.1016/j.jpubeco.2014.03.008

Military spending, fatalities, and the destruction of capital, all of which are immediately felt and are often large, are the most overt costs of war. They are also relatively short-lived. But the costs of war borne by combatants and their caretakers, which includes families, communities, and the modern welfare state, tend instead to be lifelong. In this paper I show that a significant component of the budgetary costs associated with U.S. wars is long-lived. One third to one half of the total present value of historical war costs are benefits distributed over the remaining life spans of veterans and their dependents. Even thirty years after the end of hostilities, typically half of all benefits remain to be paid. Estimates of the costs of injuries and deaths suggest that the private burden of war borne by survivors, namely the uncompensated costs of service-related injuries, are also large and long-lived. •I examine historical trends in U.S. veterans’ benefits paid to war cohorts•The budgetary costs of veterans’ benefits are small in any single year•Veterans’ benefits are long-lived, with only half paid 30 years after the conflict•Veterans’ benefits account for between one third and one half of total war spending