The War in Libya and the Deficit at Home

The suggestion that wars are bad for the deficit sounds unfeeling. The benefits of liberal democracies in Africa and the Middle East cannot be captured in deficits and bond yields. But still, it cannot be said enough: Wars cost real money, too.

Unlike human liberty, dollars in an austere country are zero sum. A dollar we spend on a bomb in Tripoli is a dollar that didn't go to food stamps, or highway reconstruction, or tax credits to the middle class. The Tomahawk missiles falling on Libya, for example, cost about $700,000 each. The United States fired 110 of those missiles on Saturday, totaling $81 million. "That's about 33 times the amount of money National Public Radio receives in grants each year from the Corporation for Public Broadcasting, which the House of Representatives also wants to de-fund in the name of austerity measures," Abu Muqawama writes. The initial stages of the war could cost the U.S. between $400 million and $800 million, according to the Center for Strategic and Budgetary Assessments. That's almost half the controversial cuts to heating subsidies for low-income families.

The non-budget impact of the war could be very real, as well. Crude oil jumped $2 a day after the bombing started. There is an economic belief that a $10 bump in oil prices slows GDP growth by half a percentage point in two years. Now, there is no clear evidence that U.S. intervention in Libya is fundamentally guiding oil prices, or that oil prices wouldn't have moved without the Libya war, or that oil barrel price fluctuations will have tangible effects on U.S. growth. I'm not blaming the president for gas prices. I'm saying: Even justifiable wars have known costs and unknown costs.

Can we "afford" the war in Libya? Of course we can. Bunker-busting bombs won't blow open our bond yields. But at a time when we won't allow additional spending to help an unemployed population the size of Florida, I'd hope to see Washington as stingy about money spent on Tripoli as it is about money spent on Trenton.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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