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

by Joshua Goldstein

Calculates and expounds on the costs to individual Americans of the War on Terror

Are Americans in denial about the costs of the War on Terror? In The Real Price of War, Joshua S. Goldstein argues that we need to face up to what the war costs the average American--both in taxes and in changes to our way of life. Goldstein contends that in order to protect the United States from future attacks, we must fight--and win--the War...

• Format: Hardcover
• Language: English
• ISBN: 0814731619
• ISBN13: 9780814731611
• Release Date: August 2004
• Publisher: New York University Press
• Length: 232 Pages
• Weight: 0.89 lbs.
• Dimensions: 0.8" x 5.8" x 8.5"

Customer Reviews

Hyper-Inflation case

1. War expenditures go beyond the costs of fighting in a particular place. War expenditures include peacetime military forces, training, equipment, supplies, veteran benefits, interest on past war debts, reconstruction of destroyed zones, rising national debt, and war induced inflation. "War is not an event that comes and goes but an ongoing process that ebbs and flows over the years." 2. A $50,000 to $100,000 household income will pay $500 a month to support the war, as a country that amounts $50 billion/month and $600 billion per year. Defense Department $300+Energy Department $15+Homeland Security $25+Other Agencies $10+Veterans Affairs $50+Servicing Past Military Debt $40+Iraq War $60=$500/month . 3. In 2003, the Iraq war was costing $5 billion per month. In 2004, Congress approved a $87 billion supplemental appropriation. 4. "Poor Americans have long fought our wars while rich Americans pay for them." The top 10 percent income earners paid 50 percent of the expense of the war and federal expenses. WWI top tax rates touched 70 percent for incomes above $1 million; WWI top tax rate approached 94 percent on income above $5 million; 92 percent for the Korean War; 77 percent for the Vietnam War. "War...has but one thing certain, and that is to increase taxes; 39 percent in 2001 for the Iraq war. Since the 1980, corporate taxes have been 10 percent and make up 80 percent of the revenue. The 30 to 10 percent reduction in corporate takes was to avoid double taxation of the same income and high taxes were bad for business. 5. Wartime conditions disrupt economic growth and affect financial markets, commodity prices, investment patterns, and unemployment in complex ways that are more negative than positive overall. 6. Costs of war are also passed along to the individual citizen who works harder and makes sacrifices without adequate compensation. 7. War creates inflation and lowers the standard of living. 8. As government prints or borrows extra money to pay for war, inflation picks up, usually peaking several years after the peak of fighting. 9. Hamilton wrote, "wars without taxation to cover the cost have been the principal causes of hyperinflation in industrial countries in the last two centuries." Inflation pays expensive debt with cheaper money and pays current bills. Interest rates and taxes rise during high inflation. Inflation reduces real wages. 10. Inflation hits the poor and middle class the hardest. 11. Wars are not about making money they are about spending money - down to the last dime and beyond. Inflation rose to 5 percent during the Vietnam War, climbed to 10 percent after the Arab oil embargo and Yom Kippur War in 1973 and again during the Iran revolution of 1979 to 1981, sustain between 3 to 6 percent between 1966 to 1991, and 2 to 3 percent by 2003. "Barring such a catastrophe, inflation resulting from the War on Terror should be small than inflation following the world wars." 12. The Fed has stated its role is

Required "Learning" Reading

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!!!!

The economic costs in detail and personalized

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 t

Good Analysis, Impractical Solution

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.

Required reading for Republicans

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.