For the first time in U.S. history, America is fighting wars — in Iraq, Afghanistan, and Pakistan —  funded almost entirely by U.S. government borrowing. This is according to Catherine Lutz, Professor of Anthropology and International Studies at Brown University, and author of a new study on the $4 trillion cost of the war on terror.

While there were many other huge federal expenses – the largest of these probably the nearly $1 trillion Obama stimulus package — this massive borrowing is one of the main reasons for the tremendous budget gaps and the congressional battles over the federal debt cap and how America should close its annual deficits as the next decade passes. It is certain that if the military expenses accumulated since the attack on the World Trade Center in 2001 had not cost America so much, deficits over the last decade would have been smaller. The present threats to federal government programs, including Medicare, can be partially blamed on the decision by the U.S. to react to terrorism primarily by sending hundreds of thousands of troops abroad.

• Read The Eight Outrageous Costs Of The War On Terror

When “The Costs of War Since 2001: Iraq, Afghanistan, and Pakistan” from the Eisenhower Study Group was published by Brown University two weeks ago, the report was headline news around the country. While Americans had some sense of how much the wars, including the U.S.’s “war on terror,” had cost, the figures of $3.2 trillion to $4 trillion still came as a shock. These sums include money appropriated to the Pentagon to fight the wars, additional money given to the Pentagon as a result of the wars, medical and disability costs for veterans, and homeland security costs.

Many people did not find the report entirely credible, particularly because of the $800 billion spread between the study’s “moderate” and “conservative” cases. The authors did make the point that some of the actual costs could not be determined, either because of the lack of government data about expenses or because the wars were so complex that even experts could not exhume some of the data necessary for detailed conclusions. The authors conceded that “many of the wars’ costs are invisible to Americans.” They seem to have been invisible to the research team as well.

24/7 Wall St. did an extensive analysis of “The Costs of War Since 2001: Iraq, Afghanistan, and Pakistan” — most of it research on the largest categories of costs. We interviewed people associated with the work as well as others who have reviewed it. After a careful study of the report, we found its conclusions even harder to decipher. The results may be correct, but they are based on assumptions that are often hard to justify. That makes the analysis by 24/7 Wall St. important. It also shows the extent to which researchers relied on estimates.

These are the eight outrageous costs of the War on Terror.

1. Congressional War Appropriations to Pentagon
> Conservative estimate: $1.31 trillion
> Moderate estimate: $1.31 trillion
> Major costs: Military Equipment, Operation & Maintenance, Military Personnel

Due to a number of transparency and accountability issues within the Department of Defense, it is impossible to tell how much money has actually been spent on the post-9/11 wars, which include Iraq and Afghanistan. According to the Congressional Research Service, however, $1.31 trillion has been appropriated to the DOD between 2001 and 2011 to fight the wars in Afghanistan, Iraq, and elsewhere. The greatest amount of this money is used on military operations and maintenance, which, according to a CRS definition, includes “funds to transport troops and their equipment to Iraq and Afghanistan, conduct military operations, provide in-country support at bases, and repairing war-worn equipment.” The second largest portion is spent on procurement of military equipment, including vehicles and weapons.

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2. Additions to the Pentagon Base Budget
> Conservative estimate: $326.2 billion
> Moderate estimate: $652.4 billion
> Major costs: Research and development of weapons systems, maintenance of army

In peace time, the Pentagon is given an annual amount to cover its costs, known as the base budget. During times of war, additions are made to the Pentagon’s base budget. Of the $5.2 trillion given to the Pentagon as a base budget between 2001 and 2011, $652.4 billion was appropriated as a consequence of the war — a number calculated by following the patterns in DOD budget growth before the 9/11 attacks. According to Winslow Wheeler, Director of the Straus Military Reform Project of the Center for Defense Information, the amount appropriated by the DOD for non-war purposes, is the result of a political, “support the troops” mentality which caused the defense budget to become off limits in congress.

3. Interest on Pentagon War Appropriations
> Conservative estimate: $185.4 billion
> Moderate estimate: $185.4 billion
> Major costs: Higher interest rates, higher national debt

Current war spending is primarily funded by borrowing money. As a result, the wars increase the nation’s indebtedness. The amount of debt held by the public has almost doubled since 2007, reaching approximately 70 percent of GDP. According to Ryan Edwards, a faculty research fellow with the National Bureau of Economic Research, war spending “may be responsible for … between one quarter and one third of the increase.” In a recent statement Edwards explains that “on a per-person basis, the additional debt associated with war spending to date, which each living American owes to creditors, is about $4,000.” Deficit-funded war spending has had even more tangible effects on people’s wallets. In 2010, the average homeowner paid an extra $600 in mortgage payments due to rising interest rates, according to calculations by Edwards, an amount included in the estimate.

4. Veterans’ Medical and Disability
> Conservative estimate: $32.6 billion
> Moderate estimate: $32.6 billion
> Major costs: Traumatic brain injury, post-traumatic stress disorder

Veterans from the wars in Iraq and Afghanistan are applying for disability benefits at much higher rates than veterans from previous wars. A staggering 650,000 U.S. veterans have been treated in the Department of Veterans Affairs medical facilities for injuries either sustained or made worse while serving in these countries — about 51% of all GWOT (Global War on Terror) veterans. Approximately 20% of discharged troops who have fought in these wars are estimated to be affected by traumatic brain injury. 177,149 veterans have been diagnosed with post-traumatic stress disorder. This is the most common mental health condition among GWOT soldiers, according to Linda Bilmes, Professor of Public Policy at Harvard Kennedy School. Bilmes also notes that those who are diagnosed with PTSD are often co-diagnosed with other ailments. The U.S. has already spent $32.6 billion providing medical treatment and benefits to discharged soldiers. However it should be noted that even more money has been spent than the reported amount, as this amount does not include medical care for soldiers who are currently serving.

5. War Related International Assistance (State Department/USAID)
> Conservative estimate: $74.2 billion
> Moderate estimate: $74.2 billion
> Major costs: Iraq Relief and Reconstruction and the Afghanistan Economic Support Fund

Since 2001, money has been given to Congress for “international assistance,” the majority of which is spent on Iraq, Afghanistan and Pakistan. According to Anita Dancs, Assistant Professor of Economics at Western New England College, in her report International Assistance Spending Due to War on Terror, there are two types of international assistance: “security,” which she describes as military assistance and “non-security,” which she describes as “typically humanitarian or economic aid.” Currently, over $74 billion in assistance has been spent. This excludes money that is not already included in the Pentagon’s budget for the military costs of war, although a large percentage of the money is administered by the DOD. The greatest portions of this amount have gone to “Iraq Relief and Reconstruction” (just under $21 billion) and the “Afghanistan Economic Support Fund” ($11 billion.)

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6. Additions to Homeland Security Spending for the War on Terror
> Conservative estimate: $401.2 billion
> Moderate estimate: $401.2 billion
> Major costs: US Customs and Border Protection

Homeland security is, of course, a central aspect of the War on Terror, and the one that many Americans have had first hand experience with. Spending in this category includes money spent on both preventative measures and responding to and recovery from incidents. By following the trends in pre-September 11 security spending growth, Dancs estimates that the amount actually spent on homeland security since 9/11, which is now just under $650 billion, has been over $400 billion more than it would have been had the wars not taken place. According to numbers from the Department of Homeland Security, the greatest amount of homeland security money in 2010 was spent on U.S. Customs and Border Protection, followed by the U.S. Coast Guard and the frequently unpopular Transportation Security Administration.

7. Projected Obligated Funds for Veterans’ Medical and Disability to 2051
> Conservative estimate: $589 billion
> Moderate estimate: $934 billion
> Major costs: future medical costs and benefits

Even if the U.S. were to exit the wars tomorrow, the nation’s fiscal commitment to veterans would continue for years to come. According to Bilmes, “service members who have been deployed to the Afghanistan and Iraq conflicts are entitled to receive free or subsidized medical treatment for the rest of their lives.” Veterans also receive additional benefits, such as housing and educational funding. History shows that veteran costs peak 30 to 40 years after a conflict. By looking at current costs for providing medical care and benefits for veterans, it has been estimated that provisions over the next 40 years will fall somewhere between $600 billion and $1 trillion.

8. Social Costs to Veterans and Military Families
> Conservative estimate: $295 billion
> Moderate estimate: $400 billion
> Major costs: Lost income of discharged soldiers

There are a number of costs, aside from those involved with government provisions, which directly affect veterans and their families. These costs include money lost by family members abandoning paying jobs to care for injured veterans, loss of income for discharged soldiers who cannot collect disability due to reasons such as self-employment, loss of productivity as a result of mental illness, and the affects of a long line of other social problems, including divorce, substance abuse and domestic abuse. Taking all of these scenarios into account, experts believe that additional social costs rooted in the service of veterans represent a fiscal burden of between $295 and $400 billion.

Douglas A. McIntyre and Charles B. Stockdale

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