Tag Archives: spending

The War on Terror: A Case Study of Increasing Efficiency in War?

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The large force occupation portion of the War on Terror is winding down.  The last of the U.S. troops leaving Iraq and the government announced the drawdown of troops from Afghanistan by the end of 2012, we decided to have a look at U.S. wars through a different lens—efficiency. We know that technology improves efficiency and cuts costs.  We wondered if this was true in war also.  The conventional wisdom is that the War on Terror, which has largely been fought in Iraq and Afghanistan, has been the longest, costliest, and deadliest war in recent American history. As is often the case with conventional wisdom, however, the actual evidence shows a different picture.

At ten years and counting, the War on Terror is, in fact, the longest lasting war in US history (tied with the Vietnam War).  But perhaps surprisingly, the number of deaths and the cost of the wars in Iraq and Afghanistan are far lower than one would expect from listening to politicians and the media.

To analyze the death toll of the wars in Iraq and Afghanistan compared to other recent wars (going back to World War I), we first looked at the sheer number of military, civilian, and total deaths, and then examined those numbers as a percentage of the United States population during each war. As the following figure shows, the deaths as a percentage of the US population in the War on Terror is much smaller than one would expect:

Sources: US Census Bureau Population Estimates (http://www.census.gov/popest/estimates.html); Department of Defense Personnel and Procurement Statistics (http://siadapp.dmdc.osd.mil/personnel/CASUALTY/castop.htm)

Similarly, we also looked at the cost of each war as measured in 2011 dollars. As with the number of deaths, World War II is also the costliest, in financial terms, of all recent US wars. While not insignificant, the cost of the War on Terror—at approximately 1.3 trillion dollars—falls significantly below that of World War II, the Vietnam War, and Korean conflict.

Source: US Army Center of Military History (http://www.history.army.mil); Encyclopaedia Brittanica (http://www.britannica.com/EBchecked/topic/291225/international-relations/32820/World-War-I-1914-18)

In short, World War II remains the deadliest and costliest war in recent U.S. history, killing about one-third of one percent of the U.S. population (primarily members of the military) and costing nearly $4.5 trillion in today’s dollars.  In contrast, although it will be the longest war the United States has ever engaged in, the Iraq- and Afghanistan-based War on Terror has killed less than one percent of the people killed in World War II and has cost about one third of what the Vietnam War cost in today’s dollars. In fact, the War on Terror is second to last in terms of total deaths (the Gulf War is lower) and behind World War II, the Vietnam War, and the Korean Conflict in terms of cost.

 

Campaign Spending in the 2012 Elections: Who is getting the Most Value for Their Campaign Dollars?

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Reports indicate that the 2012 Presidential election is well on its way to becoming the most expensive election in history. With almost 10 months to go, the 5 major candidates (including President Obama) have already amassed more than $207 million, of which they’ve spent around $118 million. Given the rapidly increasing cost of this election, we decided to look at how much each currently active candidate has spent per delegate.

The following charts compare the five candidates on the total amount of money raised/spent as of January 31, 2012. It must be noted that this does not include spending by Super PACs on behalf of the candidates, which has been substantial.

 

Candidate

Money Raised

Money Spent

Delegates

Overall Cost per Delegate
Republicans
Newt Gingrich

$2,900,000

$2,600,000

23

$113,043
Ron Paul

$12,800,000

$9,100,000

3

$3,033,333
Mitt Romney

$32,600,000

$18,000,000

71

$253,521
Rick Santorum

$1,300,000

$1,100,000

13

$84,615
Democrats
Barrack Obama

$157,300,000*

$87,600,000

123**

$712,195
* Amounts for President Obama also include money raised by the Democratic National Committee.
**Democrats have 5,555 delegates compared to 2,286 so we weighted Barrack Obama’s Cost per delegate as if there were 2,286 at stake. Of course, since President Obama does not face opposition, the costs are most likely lower than they would otherwise be in a contested race.

 

 


 

As these charts show, Ron Paul has spent by far the most per delegate ($3,033,333 for each of his three delegates), while Rick Santorum has spent the least ($84,615 for each of his 13 delegates). Among the top three presidential candidates—Barrack Obama, Mitt Romney and Newt Gingrich—, Obama’s $712,195 per delegate far exceeds that of both Romney ($253,521 per delegate) and Gingrich ($113,043); a result that is somewhat surprising, given that Obama effectively has no competition for the Democratic nomination.

 

With nine months still remaining before delegates meet at their respective national conventions, these figures will certainly be in flux. But at the very least, it suggests that money—while important—is not everything.

Foreign Aid on the Cheap: U.S. Spending on Foreign Assistance among the Lowest in the OECD

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Since the 2010 elections, the issue that has most dominated political discourse is that of government spending. Although it is well-established that the $15 trillion and growing federal debt is primarily attributable to tax cuts (both the original 2001/2003 Bush tax cuts and the 2010 extension) and increased spending  on big-ticket items (i.e., wars in Iraq/Afghanistan, Medicare Part D, TARP, and the 2009 stimulus), politicians have given a disproportionate amount of attention to programs that consume a very small amount of the federal budget. For this article, we turn to just one of these programs—spending on foreign development aid—to better understand the trends in spending and how it fits into the rest of the federal budget.

Among the Republican candidates seeking the presidency, almost all have been on the record as being in favor of cutting foreign aid, arguing that reducing foreign aid expenditures would go a long way in helping solve our debt problems. And politicians aren’t alone: most Americans also believe these expenditures should be axed to improve our budgetary problems. But could we really balance the budget by cutting foreign aid?

The following chart looks at the trends in net spending (in current US dollars) on foreign development aid from 1960 to 2010. (To be able to make international comparisons, this chart uses figures compiled by the OECD using their own methodology; that said, USAID data show similar trends). In isolation, the chart seems to support the argument that spending on foreign aid is out of control: from 2000 to 2010, spending more than tripled from around $10 billion dollars to $30 billion dollars.

Based on aid numbers in current U.S. dollars, as reported by the OECD

Source: OECD Query Wizard for International Development Statistics (http://stats.oecd.org/qwids)

 

However, taking net foreign aid as a percentage of GDP shows a different story. The next chart shows a much smaller increase (of about 0.1 percent) in spending over the same 10-year span.

Based on aid numbers in current U.S. dollars, as reported by the OECD

Source: OECD Query Wizard for International Development Statistics (http://stats.oecd.org/qwids)

 

Finally, we wanted to look at U.S. spending compared to other developed countries. The final chart shows that US spending—at 0.21 percent of GDP—is among the lowest in the entire OECD, and far below the average of 0.49 percent across all of these countries.

 

Based on aid numbers in current U.S. dollars, as reported by the OECD

Source: OECD Query Wizard for International Development Statistics (http://stats.oecd.org/qwids)

 

We Support Our Troops, but We Support Our Defense Contractors More

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The picture below is a graphic depiction of President Obama’s 2012 Budget Proposal.   While this picture tells an interesting story overall, in this post we focus on National Defense and Veteran’s benefits.

Overall, National Defense is responsible for about 19.27% of the  $3.7 trillion budget  (the percentage is even higher when self-funding programs like Social Security and Medicare are removed from the budget) and Veteran’s benefits accounts for about 3.26% of the budget.

To calculate our support for our troops, we add the share of the budget spent on military personnel (4.16%) and on veteran’s benefits (3.26%), giving us a total of about 7.42% of the budget going to support our active military, their families and veterans and their families.  In dollar terms, this amounts to approximately $275 billion a year.

The remainder of the $834 billion defense budget—approximately $560 billion—goes primarily to defense contractors.  For example, in just three days in November 2011 (November 7, 2011,  November 8, 2011, and November 9, 2011), the Department of Defense awarded  $2,416,797,736 in contracts, including a $1.1 trillion contract with Lockheed Martin,  and $245 million with Kellogg Brown and Root. Of course, these contracts, like support for the troops and Veterans are multiyear, nevertheless, in the span of 3 days the DoD signed contracts worth about $156.5 million dollars more than it would cost to support all of the military personnel, veterans, their benefits, and their families during that three-day period.