Customer Reviews

The Real Price of War: How You Pay for the War on Terror

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Professor Goldstein has done a wonderful job of presenting a complex subject in terms that we all can understand. I wish this book had been published years ago and that more people had read it, maybe things would be different today.
The book explains in no uncertain terms why we cannot wage a war and cut taxes at the same time, it uncovers all the hidden costs of war and shows how we cannot possibly afford those costs without increased revenue. Goldstein has shown here that we are incurring debt that we, and our children and grandchildren, will be strapped with for many years. If we are to believe that a war on terror is in our best interests than we need to make some hard choices on how we pay for that war. This is a book that the current administration should be required to read.

This is both a great and a frustrating book. The title and the heroic effort the author took to make it "readable to the common man" are astounding. The topic list is very nearly complete. It needs a companion book on "How to win such (and I guess all) wars." that is the main missing element; but, the author honestly tells us he is not going there. The frustrating parts for me were the number of the author's "shoulds" which come from nowhere we can read about in his book or its references, and that he didn't/couldn't go deeper. It's my lifetime pick for required reading for all of us, so we can get the rest of the job done, eventually!!!!

Joshua Goldstein is a political scientist with a special interest in war and international relationships. In this modest volume he itemizes the economic costs of war in general and historically and shows specifically how much the average household in America is paying for the war on terror. (That would be $500 a month according to a "bill" he presents to "The Smith Household" on page 16.)

His position is nonpartisan and his tone is measured, factual and amazingly calm. It's apparent that he didn't think the war in Iraq was necessary, and it is clear that he thinks the Bush tax cuts put too much of the financial burden for the war on terror onto the shoulders of Americans of modest means. He shows that historically the rich have paid a larger portion of the cost of war than they are paying for the current war. This would only seem right since they have more to lose financially speaking. He also thinks we ought to pay for the war as the expenses arise and not put off the cost by borrowing or through deficient spending as the Bush administration has done. That way just increases the total cost of the war because we have to pay interest on the money borrowed.

Regardless of how the war is financed Goldstein shows that there will be an additional cost in terms of inflation. He sees inflation as one of the "hidden" costs of war, and relates a "History of War-Induced Inflation" on pages 76-81, and then asks, "Will the War on Terror Trigger Inflation?" His answer is most likely. However, it will not be as bad as the inflation that began during and following the Civil War, World Wars I & II, and the Vietnam War, mainly because the cost of the war on terror is nowhere near as great in terms of total GDP. As an example of the kind of inflation we have experienced in the past, Goldstein points out that the dollar was worth $18.19 in today's terms in 1915 before WW I began and worth only $9.18 in 1920, two years after the war was over. ( p. 79)

Goldstein believes "Americans are in denial about the substantial war costs we face." (p. 161) He would like to see us get over the denial and to urge our government to spend more money on the war on terror so that it might be won more quickly and in the long run cost us less. To this end he recommends increasing expenditures so that the average household would pay another $100 a month so that the "bill" would be $600 a month. (p. 196) Goldstein believes there is no such thing as "a war without sacrifice" and wants the Bush administration to be more open about that fact and to become more Churchhillian (if you will) in asking the America people to make the necessary sacrifices. Obviously, by detailing the costs of the war on terror and making that cost personal with his "bill" to the average American household, Goldstein is attempting to do this himself. I think it's a good idea; however, if the average American household had to write a check for $600 a month to the government rather than having that money just disappear from their living standard (either today or down the road) I think Mr. and Mrs. Average American would balk. One wonders if that is not Goldstein's veiled point, although his expression would deny that.

Of course the real "real" cost of war goes much deeper than the economic. The lives lost, the injured and maimed, the waste of human effort and the displacement of energies from something productive and life-affirming are most significant. Goldstein is not to be faulted for leaving these out since such matters are not part of his thesis, and that is fine since every book should have an end as well as a beginning. However, I cannot read about the subject of war without thinking about its "real" significance in human affairs beyond not only the economic and the personal costs, but the species-wide costs as well. And I would ask not just "what price war?" but what can we do about it? As an instrument of the tribal structure, has war insured that those tribes that committed themselves to its unrestricted use are the ones that have survived (and are "us") or is it the case that those tribes that survived are guaranteed to eventually go the way of the swordsman?

It's certainly true that War has a cost. And the analysis given here by Mr. Goldstein is probably not far off, especially as we see each new special appropriation that gets submitted to Congress.

He goes into quite a few of the indirect expenses that don't show up in the regular budgets, things like Veterans expenses. He aludes to some expenses that are real but harder to measure, things like the slow down in air travel after 9/11 that affects not only the airlines, but the rest of the travel industry from hotels to Boeing.

The second point worth noting is that his solution is typical of Massachusetts Democrats, raise the taxes on the wealthy. After the least election, I don't see this happening.

Goldstein begins by pointing out that the total cost of the War on Terror includes money spent through government, private and indirect costs, and added costs that we may pay in the future. Goldstein then comes up with a current cost total of about $500/month/household, which includes funds for the Defense Dept, Energy Dept. for nuclear weapons, Homeland Security, Other agencies, Veterans Affairs, servicing past military debt, and the Iraq War itself. And then there are the "costs" of the over 2,100 American lives lost so far, and the tens of thousands of Iraqis and Afghans.

In addition, there are costs for added corporate security (eg. chemical plants, large office buildings), delays and added costs in receiving goods from overseas, etc. However, no credible estimate of these costs was given.

Finally Goldstein suggests that additional funds will be needed to win over other nations - for improved education, healthcare, military arms, and general economic aid. Again no credible estimate of these costs.

The "real" issue, which Goldstein fails to realize, is that it is economically and operationally impossible to realistically defend against all credible terrorist threats. Thus, the only feasible solution is to think of how we can stop generating terrorists - eg. rethink our policies towards Israel, Iraq, cheap oil, dictating to the rest of the world.

Meanwhile, a paper was recently presented at the American Economic Association meeting estimating that the war is costing far more than estimated - close to $4 billion/week, when one includes the long-term costs of injuries and deaths.

Bottom Line: Goldstein quotes bin Laden, as follows - "It is very important to concentrate on hitting the U.S. economy through all possible means." However, he fails to realize that given all the added cost to-date, our continuing self-defeating policies that generate more terrorists, and the impossibility of "terror-proofing" the U.S., Osama is winning.