CoRev on Iraq War Costs and Policies

admin | February 21, 2008 11:53 am

This one is by CoRev…

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Menzie Chinn, over at econbrowser has an article up discussing GW’s comment that the war costs have helped create demand and lessening the economic impacts of the collapsing housing bubble.

He is not convinced. Moreover being a left of center economist, and apparently somewhat anti-war. In the comments he had this to say:

I think most reasonable people believe the benefit/cost ratio for things like port security exceed one. But spending $120 billion per year in Iraq has diverted resources from stabilizing Afghanistan, securing chemical plants, and so forth. So the real issue centers on, as I’ve said before, opportunity cost [1], [2].

I responded with the following policy discussion.

Port Security? And then, bridge, overpass, rail, refinery, nuclear power plant, Mall, school, Govt Building, public building, hospital, until we secure each and every US citizen in and out of the US. From an economic stand point we w/could convert our economy to a single product – safety from Jihadist attacks for each US citizen.

Face one fact. We are a target rich environment because of our freedoms. Three policies are in discussion to protect that target rich environment. 1) Go on the offensive. 2) Rely on defensive measures. And 3) the reality, do some of both.

Option 1) can happen if we are attacked again and many thousands of Americans are killed. It will not be pretty in some parts of the world.

Option 2) is just too costly and an impossibility to achieve optimum results. Results that preclude the “attacked again and many thousands of Americans are killed.”

Option 3) has now a history of nearly seven years and the results are measurable. We have not been “attacked again and many thousands of Americans are killed.”

Since this is an economics blog I would recommend option 3) is the most reasonable policy, economically, politically, and militarily.

Gripe about its costs if you will, but which option is the least costly and shows a (maybe the best) return on investment?