War Costs

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WAR COSTS. Any estimate of war costs must be based on arbitrary assumptions as to the nature of those expenses that are properly chargeable to war. Granting that wartime military expenditures by the government are a basic element, it has been questioned whether or not the normal peacetime operating costs of the military establishment should also be included. It is also arguable that both the prewar buildup of military expenditures in anticipation of hostilities and the postwar tapering off of such expenditures should be included. The question has also been raised concerning the deduction of the costs of feeding, clothing, and housing military personnel from military appropriations, considering, on the one hand, that the personnel would have had to be provided for anyway and, on the other, that they would have been productively occupied. Property damage, the lost economic value of people killed or disabled in war, the costs of wartime economic disruption, and, conversely, the "negative" costs—that is, economic gain—of a wartime boom are also factors to consider in determining war costs. Part of the costs is transferred to future generations in the form of interest charges on war debts, and these charges usually continue long after the debts themselves have lost their identity in the total national debt. In a similar category are the costs of veterans' pensions and bonuses and medical and hospital care.

For the revolutionary war the estimates include the specie value of Treasury expenditures and certificates of indebtedness for the years 1775–1783, foreign loans, and state war debts assumed by the federal government. The estimate of war costs of the Confederacy is based solely on military appropriations by the Confederate congress; since no effort has been made to estimate other categories of loss to the Confederacy, no valid figure for total Civil War costs can be arrived at. Allied war debts in World War I ($7.4 billion) and lend-lease transfers in World War II ($50.2 billion), both reduced by postwar repayments, have been included in the net military costs. Costs for both world wars have been reduced by the value of surplus assets of the armed services; they also include expenditures by certain nonmilitary agencies. Allowance has also been made for recoveries of excess profits under the World War II renegotiation process.

The Korean War poses a special problem. It is virtually impossible to separate the costs growing out of operations in Korea from those of the mobilization and expansion of military forces during the same period resulting from the expectation of new Communist aggressions in Europe and elsewhere. Defense expenditures following the war, moreover, continued at a high level, clearly as a consequence of that expectation. In the interests of consistency with other war cost figures, net military expenditures for the Korean War have been limited to the war period, reduced by estimated normal peacetime costs as for the other wars.

For the war in Southeast Asia, net military costs are official Defense Department data defined as "the net difference between wartime and peacetime needs"—that is, substantially the same kinds of costs as shown for the other wars. They include expenditures for operations and maintenance of all U.S. forces in Southeast Asia and off-sore in support of South Vietnam from fiscal year 1965 through fiscal year 1975. Military and economic assistance in Southeast Asia and Korea is not shown in the table; in the war in Southeast Asia military and economic assistance went to the three countries of Indochina (Vietnam, Laos, Cambodia), as well as to Thailand and South Korea, for those countries' contributions in forces, bases, and facilities. The bulk of military assistance expenditures

Table 1

Costs of U.S. Wars
1. Not including debt interest or veteran's benefits.
2. Allied paid the United States approximately 88% of this amount.
Military Costs 1
(in millions of dollars)
Revolutionary War101
War of 181290
Mexican-American War71
Civil War 
Spanish-American War283
World War I31,627
World War II316,227
Korean War54,000
Southeast Asia War111,400
Persian Gulf War61,0002

is included in net military costs; for the Southeast Asia conflict such service-funded military assistance to Indochina, Thailand, and South Korea came to more than $17 billion. Aggregate economic and military aid to Indochina and Thailand since 1950 totals more than $30 billion; to South Korea more than $12 billion.

The Persian Gulf War of 1991 was one of the least expensive of America's twentieth-century wars. Its allies paid most of its $61 billion price tag, leaving only $8 billion to be paid by American taxpayers. During the 1990s, the U.S. became entangled in several war-like operations in response to a United Nations resolution (like its humanitarian intervention in Somalia in 1993) or as part of a NATO coalition (as with the air campaign against Yugoslavia in 1999). It is difficult to quantify the cost of these increasingly frequent peacekeeping missions. At the beginning of the new millenium, however, it was clear that the terrorist attacks of 2001 and the subsequent "war on terrorism" threatened to reverse the post–Cold War decline in American military spending relative to overall government expenditures.


Gilbert, Charles. American Financing of World War I. Westport, Conn.: Greenwood Press, 1970.

Murphy, Henry C. The National Debt in War and Transition. New York: McGraw-Hill, 1950.

Weidenbaum, Murray L. Small Wars, Big Defense: Paying for the Military after the Cold War. New York: Oxford University Press, 1992.

Richard M.Leighton/a. r.

See alsoCivil War ; Korean War ; Mexican-American War ; Persian Gulf War of 1991 ; Revolution, American: Military History ; Spanish-American War ; Vietnam War ; War of 1812 ; World War I ; World War II .

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