Burning borrowed money in America’s wars
— Bernd Debusmann is a Reuters columnist. The opinions expressed are his own. —
The Pentagon has an evocative term for the level of spending on a war: burn rate. In Afghanistan, it has been running at around $5 million every hour for much of the year. The burn rate will begin going up next week when the first of an additional 30,000 U.S. troops arrive.
Once they are all in place, the burn rate is estimated to exceed $10 million an hour, or more than $8 billion a month. Much of that is literally burned — in the engines of American jeeps, trucks, tanks, aircraft and power generators. On average, each of the 183,000 soldiers currently deployed in Afghanistan and Iraq requires 22 gallons of fuel a day, according to a study by the international accounting firm Deloitte.
Because of a difficult and dangerous supply line that runs more than 1,200 miles through Pakistan, fuel for the troops in Afghanistan is considerably more expensive than for those in Iraq: an average of $48 per gallon counting the cost of transport and protection. Flown by helicopter to positions on remote Afghan front lines, the cost can reach $400 per gallon.
Which helps explain why Afghanistan “is one of the most expensive, perhaps the most expensive, war in U.S. history on a per troop basis,” says Todd Harrison of the Center for Strategic and Budgetary Assessments, a Washington think tank. His estimate of the cost per year of a soldier deployed in Afghanistan this year matches the number used by the White House – around $1 million. (The Pentagon says is it is less.)
In comparison, a soldier in Iraq costs less than half. Again in comparison, an Afghan soldier costs $12,500 a year, a recent congressional hearing was told.
The staggering cost of the war highlights an aspect of asymmetric warfare which is worth noting: the insurgent has a huge advantage on the financial front. While a Marine Corps combat brigade, for example, burns up around 500,000 gallons of fuel a day (or $24 million, at an average of $48 per gallon), the marines’ insurgent enemies use a tiny fraction of that. They ride around in pickup trucks, or walk. They do not move in Humvees that average four miles per gallon.
The cost-benefit advantage the insurgents enjoy in combat occasionally features on jihadist websites. One video clip makes the point that an improvised explosives device that costs $30 to make can knock out a $3.2 million Bradley Armored Fighting Vehicle.
Both the wars in Iraq and Afghanistan have so far been financed with borrowed money that makes up part of the country’s deficit. The 2009 budget year, which ended in September, set an all-time high with $1.42 trillion. In 2010, it is expected to reach close to $1.5 trillion.
OVERSTRETCH AND INDEBTEDNESS
When President Barack Obama announced on December 1 that he would be sending an additional 30,000 troops to Afghanistan, swelling the strength of the U.S. forces to more than 100,000, he said: “All told, by the time I took office the cost of the wars in Afghanistan and Iraq approached a trillion dollars. Going forward, I am committed to addressing these costs openly and honestly.”
His Secretary of State, Hillary Clinton, said in mid-December that the cost of the Afghanistan escalation would be part of the administration’s regular budget request for 2011, a departure from the practice of the Bush administration to request emergency funds in “supplemental” bills.
One way or the other, it’s difficult to see how the administration could balance the books in the absence of a war tax – an idea pushed by several influential Democrats – or painful cuts elsewhere at a time of high unemployment (10 percent) and economic hardship for millions of Americans.
Does that mean the United States is drawing closer to a tipping point, a level of military overstretch and indebtedness that sapped empires in the past?
In an essay at the beginning of the year, a few days before Obama took office, the Harvard historian Paul Kennedy, author of The Rise and Fall of the Great Powers, commented that no country on earth had “anywhere like the staggering array of overseas military commitments and deployments” as the U.S.
That is more true today than it was at the beginning of the year. Along with more troops, there is more reason to wonder how right Kennedy was in saying in his essay that U.S. dependency on foreign investors resembled “more and more that state of international indebtedness we historians associate with the reigns of Philip II of Spain and Louis XIV of France…”
If Obama read that, he should have been worried. Under the reign of Philip II from 1556 to 1598, Spain reached the peak of its power, a global empire controlling territories from Europe and the Americas to Asia. It sank to second-rate status through a combination of factors that included wars and massive foreign debt. Louis XIV was involved in four big wars and on his death in 1715, left France deep in debt.