Is Operation Iraqi Freedom Too Much?

Which of the following U.S. military conflicts has the highest direct costs, measured as % of annual U.S. GDP during the period?

A. Korean War (1950-1953)
B. Vietnam War (1964-1972)
C. 10 times projected costs for Operation Iraqi Freedom (2003-2003?)
D. War of 1812 (1812-1815)

The correct answer is:
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***To give you a chance to take the quiz yourself, I edited this out. The quiz will give you the answer, and I'll post it later for those who don't take it (or the quiz is removed). Only 6% got it right so far!***

Economists commonly measure a war's direct cost as a proportion of overall GDP, which helps put a war's direct costs in the context of the economy's ability to absorb those costs.

For example, the Revolutionary War (1775-1783) is reported to have only cost 2.2 billion USD in constant 2002 dollars, yet it was more than half of the colonial economy at the time. By this measure, the most expensive conflict was easily World War II, at 130% of extant GDP. By this standard, the Bush Administration's March 2003 estimate of 75 billion USD for the direct costs for the war with Iraq ("Operation Iraqi Freedom") looks miniscule.1

War expenditures, of course, are difficult to predict. Economist William Nordhaus points out that the U.S. Civil War cost 13 times more than the Lincoln administration's initial estimate. Similarly, in 1966 Pentagon planners assumed the Vietnam war would end by 1967, and based their cost estimates accordingly. In fact, that conflict lasted through 1972.2

If you multiply the Bush Administration direct cost estimate by 10, however, it would still be less than 15% of (2002) GDP, which was the size of the Korean War's direct costs in relation to extant GDP. In the case of the war with Iraq, however, direct conflict costs could be dwarfed by macroeconomic effects from higher oil prices and the costs of occupation and peacekeeping.3

More on the war with Iraq and the economy:
• Forecasters Grapple with War's Many Variables - International Herald Tribune
• War in Iraq and the (World) Economy - BBC News Online
• Economic profile of Iraq - Yahoo! Finance International Finance Center

1 sources: U.S. Civil War Center's Statistical Summary of America's Major Wars, compiled by Al Nofi, reflated to 2002 dollars by Nordhaus, William, "The Economic Consequences of a War With Iraq", October 2002, in War with Iraq: Costs, Consequences, and Alternatives, American Academy of Arts & Sciences, Cambridge, MA, December 2002.
2 Nordhaus, op.cit., pps. 51-52.
3 Nordhaus, op.cit, p. 77.

The following is the truth, the whole truth and nothing but the truth. So help me God.

My girlfriend works for a local company that sells diabetic testing supplies, primarily to Medicare patients.

One of the products they sell (covered by Medicare if a physician prescribes it) is a hand pump device (for the penis) used as an aid for impotence in diabetic men.

The cost per unit, which all of us pay through our payroll taxes, is $639.00.

I am sick of hearing about how much a war to secure our life, liberty and pursuit of happiness is costing us, and whether we as a nation can afford it.

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