$1tn cost of longest US war hastens retreat from military intervention

The Afghanistan war, the longest overseas conflict in American history, has cost the US taxpayer nearly $1tn and will require spending several hundred billion dollars more after it officially ends this month, according to Financial Times calculations and independent researchers.

Around 80 percent of that spending on the Afghanistan conflict has taken place during the presidency of Barack Obama, who sharply increased the US military presence in the country after taking office in 2009.

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US Marines board a transport aircraft headed to Kandahar, Afghanistan
Wakil Kohsar | AFP | Getty Images
US Marines board a transport aircraft headed to Kandahar, Afghanistan

The enormous bill for the 13-year conflict, which has never been detailed by the government, will add to the pervasive scepticism about the war in the US, where opinion polls show a majority of Americans believe it was a bad idea.

With the Iraq war having already cost the US $1.7tn, according to one study, the bill from the Afghanistan conflict is an important factor in the broader reluctance among the American public and the Obama administration to intervene militarily in other parts of the world — including sending troops back to Iraq.

John Sopko, the government's special inspector-general for Afghanistan, whose organisation monitors the more than $100bn that has been spent on reconstruction projects in the country, said that "billions of dollars" of those funds had been wasted or stolen on projects that often made little sense for the conditions in Afghanistan."We simply cannot lose this amount of money again," he said. "The American people will not put up with it."

Adjusted for inflation, Mr Sopko said the amount the US had spent on reconstruction in Afghanistan was more than the cost of the Marshall Plan to rebuild western Europe.

"Time and again, I am running into people from USAID, State and the Pentagon who think they are in Kansas [not Afghanistan]," he said. "My auditors tell me things [about spending plans] and I say, 'you have to be making this up, this is Alice in Wonderland'."

The Nato military operation in Afghanistan, which started shortly after the 9/11 attacks in 2001 and which has been spearheaded by the US, will come to a melancholy close at the end of December with the Taliban insurgency still strong, although it does not hold any major cities.

Under current plans, about 10,000 US troops will remain in the country until 2016, although the administration is under growing pressure to extend their presence because of worries about a Taliban resurgence once the US departs.

Since 2001, the government has appropriated $765bn for the war in Afghanistan, the vast bulk for the defence department but also including some spending at the state department.

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The money to finance both the Iraq and Afghan wars was borrowed and, according to Ryan Edwards at City University of New York, the US has already paid interest of $260bn on that war debt. Under FT calculations based on funds appropriated, $125bn of those interest costs have been allocated to the Afghan conflict.

On top of that there are medical costs already incurred for soldiers who have left the military. Linda Bilmes, a Harvard economist who has done extensive research on the war costs, estimates that medical spending on veterans from both Iraq and Afghanistan has so far reached $134bn.

However, she said it was impossible to assess how much of that spending was related only to Afghanistan because a third of soldiers served in both conflicts and because medical issues such as post-traumatic stress disorder were usually the cumulative result of a series of events rather than one incident.

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Cost of the Afghanistan war

The Afghan conflict has led to other increases in public spending that are significant but difficult to isolate. As well as the separate war funding it has received since 2001, the Pentagon's "base" budget, which covers all its other costs, has also seen a dramatic increase, with the wars in Afghanistan and Iraq one of the main factors.

Given the political pressures surrounding the wars, military healthcare premiums paid by serving military members have been kept low, prompting a surge in healthcare spending by the Pentagon, while salaries have risen above inflation. Since 2001, the defence department's base budget has increased by $1.3tn more than its own pre-9/11 forecasts.

The future bill from the Afghan war is likely to run into hundreds of billions of dollars more. The Pentagon has indicated it wants funding of $120bn for 2016-19 for operations in Afghanistan, although the eventual cost will depend on the future mission that the White House decides on.

As well as further interest payments, the health bills will start to rise dramatically, especially once veterans from the war reach their 60s and begin to use more medical services.

Prof Bilmes forecasts future medical and disability costs for veterans from both Iraq and Afghanistan will reach $836bn over the coming decades. The two wars have also added to the Pentagon's fast-growing pension bill: the military pension system has an unfunded liability of $1.27tn, which is expected to rise to $2.72tn by 2034.

"The dirty secret about this war is that the Pentagon or anyone else in the government cannot tell you how much it has actually cost us," says an administration official.