A co-worker recently complained to me about the tremendous cost of the Iraq war. I pointed out that, as far as I was aware, social spending vastly dwarfed military spending. He objected, citing recent news reports about the 2008 war costs which seemed to give a contrary impression. I tentatively conceded I might be in error, and promised to look into it it more.

How much does the war in Iraq cost, on an annual basis, compared to other things? I'm going to make my initial estimate as generous towards his position as possible by making a number of charitable assumptions. The first being that there is no US social spending outside the Federal budget (which is far from true -- most education, for example, is paid for at the local level).

That said, examine next year's Federal budget and notice that the total is $2.9 trillion. My second charitable assumption will be to ignore interest on the debt (which would make the percentage smaller) and look only at current costs -- leaving us with $2.64 trillion. I'm also going to pretend that every single dollar spent on Veterans has to do with Iraq. And I'm also going to pretend that without the wars in Iraq and Afghanistan, the Defense Department would cost us exactly zero dollars. Thus, adding up the Global War on Terror, Department of Defense, and Veterans, we account for $666 billion, or 25.2% of the Federal budget, so far.

But there's more: Notice that at the bottom, there's a little note which says "The Iraq war and the Afghanistan war are not part of the defense budget; they are appropriations." So my next major charitable assumption will be to assume they are the only appropriations in the budget.

So what is the annual cost of these wars? The extremely-liberal New York Times gives an estimate of $200 billion annually. (Which, for comparison, is about 1/3rd of social security (which, we were told recently, is definitely NOT a spending crisis), and far less than Medicare, Medicaid, or unemployment alone -- much less considered in aggregate.) Also notice that according to the Times own fine print, this estimate not only includes current military expenses (and thus was partially already counted in the Defense Department budget) but also includes a number of guesstimates of future costs.

Blithely adding these numbers in to those above, we get $866 billion of a $2.84 trillion dollar pie, or about 30.4% of the budget. Certainly, that's a large chunk of change (nothing to sneer at), but it's still less than we spend on Social Security and unemployment (much less all the other social programs), which was my original point.

Of course, in reality, I have made a lot of charitable (and quite unreasonable) assumptions. We ARE paying interest on the national debt. There ARE scores of other appropriations I haven't counted (higher education grants, environmental spending, highway spending, "empowerment zones" for senior citizens...). Who knows how much these other costs add to the total.

Also, I AM double-counting many war costs by using the Times net estimate -- and by doing so I AM also counting future costs of the war (such as interest on war debt) without counting similar non-military budget costs (such as leveraged social spending). (In contrast, a recent USA Today article puts the total costs so far of BOTH wars at $604 billion. Averaged over the last five years, that's about $120 annually.)

I'm also pretending that all social spending happens at the Federal level. In fact, in many areas, there's much more spending at a state and local level. Consider this breakdown for 2008, where a full 53.1% of government spending on a wide range of areas is estimated to happen at the state and local level.

Add the easily-quantifiable portions of these estimates in, and we arrive at $5.6 trillion dollars in government spending, of which the Iraq and Afghanistan wars together (at $120 billion annually) account for about 2%.

If you believe these figures to be wrong in some way, please inform me.
For an estimate of lives saved by this war, see here.