The Cost of Bin Laden: $3 Trillion Over 15 Years

As we mark Osama bin Laden's death, what's striking is how much he cost our nation--and how little we've gained from our fight against him.

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The most expensive public enemy in American history died Sunday from two bullets.

 As we mark Osama bin Laden's death, what's striking is how much he cost our nation--and how little we've gained from our fight against him. By conservative estimates, bin Laden cost the United States at least $3 trillion over the past 15 years, counting the disruptions he wrought on the domestic economy, the wars and heightened security triggered by the terrorist attacks he engineered, and the direct efforts to hunt him down.

What do we have to show for that tab? Two wars that continue to occupy 150,000 troops and tie up a quarter of our defense budget; a bloated homeland-security apparatus that has at times pushed the bounds of civil liberty; soaring oil prices partially attributable to the global war on bin Laden's terrorist network; and a chunk of our mounting national debt, which threatens to hobble the economy unless lawmakers compromise on an unprecedented deficit-reduction deal.

Osama Bin LadenAll of that has not given us, at least not yet, anything close to the social or economic advancements produced by the battles against America's costliest past enemies. Defeating the Confederate army brought the end of slavery and a wave of standardization--in railroad gauges and shoe sizes, for example--that paved the way for a truly national economy. Vanquishing Adolf Hitler ended the Great Depression and ushered in a period of booming prosperity and hegemony. Even the massive military escalation that marked the Cold War standoff against Joseph Stalin and his Russian successors produced landmark technological breakthroughs that revolutionized the economy.

Perhaps the biggest economic silver lining from our bin Laden spending, if there is one, is the accelerated development of unmanned aircraft. That's our $3 trillion windfall, so far: Predator drones. "We have spent a huge amount of money which has not had much effect on the strengthening of our military, and has had a very weak impact on our economy," says Linda Bilmes, a lecturer at Harvard University's John F. Kennedy School of Government who coauthored a book on the costs of the Iraq and Afghanistan wars with Nobel Prize-winning economist Joseph Stiglitz.

Certainly, in the course of the fight against bin Laden, the United States escaped another truly catastrophic attack on our soil. Al-Qaida, though not destroyed, has been badly hobbled. "We proved that we value our security enough to incur some pretty substantial economic costs en route to protecting it," says Michael O'Hanlon, a national-security analyst at the Brookings Institution.

But that willingness may have given bin Laden exactly what he wanted. While the terrorist leader began his war against the United States believing it to be a "paper tiger" that would not fight, by 2004 he had already shifted his strategic aims, explicitly comparing the U.S. fight to the Afghan incursion that helped bankrupt the Soviet Union during the Cold War. "We are continuing this policy in bleeding America to the point of bankruptcy," bin Laden said in a taped statement. Only the smallest sign of al-Qaida would "make generals race there to cause America to suffer human, economic, and political losses without their achieving anything of note other than some benefits for their private corporations." Considering that we've spent one-fifth of a year's gross domestic product--more than the entire 2008 budget of the United States government--responding to his 2001 attacks, he may have been onto something.

THE SCORECARD

Other enemies throughout history have extracted higher gross costs, in blood and in treasure, from the United States. The Civil War and World War II produced higher casualties and consumed larger shares of our economic output. As an economic burden, the Civil War was America's worst cataclysm relative to the size of the economy. The nonpartisan Congressional Research Service estimates that the Union and Confederate armies combined to spend $80 million, in today's dollars, fighting each other. That number might seem low, but economic historians who study the war say the total financial cost was exponentially higher: more like $280 billion in today's dollars when you factor in disruptions to trade and capital flows, along with the killing of 3 to 4 percent of the population. The war "cost about double the gross national product of the United States in 1860," says John Majewski, who chairs the history department at the University of California (Santa Barbara). "From that perspective, the war on terror isn't going to compare."

On the other hand, these earlier conflicts--for all their human cost--also furnished major benefits to the U.S. economy. After entering the Civil War as a loose collection of regional economies, America emerged with the foundation for truly national commerce; the first standardized railroad system sprouted from coast to coast, carrying goods across the union; and textile mills began migrating from the Northeast to the South in search of cheaper labor, including former slaves who had joined the workforce. The fighting itself sped up the mechanization of American agriculture: As farmers flocked to the battlefield, the workers left behind adopted new technologies to keep harvests rolling in with less labor.

World War II defense spending cost $4.4 trillion. At its peak, it sucked up nearly 40 percent of GDP, according to the Congressional Research Service. It was an unprecedented national mobilization, says Chris Hellman, a defense budget analyst at the National Priorities Project. One in 10 Americans--some 12 million people--donned a uniform during the war.

Presented by

Tim Fernholz & Jim Tankersley

Tim Fernholz is the tax and budget correspondent for National Journal. Jim Tankersley is the economics correspondent at National Journal.

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