Cost of War
Opportunity cost means it is the forgone alternative of the choice made. War is usually a choice. Other than world war ll, the wars fought by the United States since 1900, have been entirely by choice. So what about opportunity cost of a war like the one in Iraq? Leading up to the war there were 250,000 personnel in the gulf with 150,000 additional troops deployed during the invasion. In terms of occupation, about 150,000 occupation troops were around through 2007. So let’s apply the notion of opportunity cost to this. First, what they have accomplished in their home bases had they not been in Iraq? Second, what would reservist have been able to accomplish in the private sector? Third, what about the increased cost of equipping and feeding troops when they’re deployed? Fourth, what about their unavailability to other crises? And fifth, what about the effect on deployed families? And what about live lost during war? Economists are called upon to estimate the value of human lives in wrongful death suits. So, we can use those principles here. These estimates are typically based on the present value of earnings calculation. So, since wrongful death compensation amount very but are usually in the range of 500,000 to 2 million dollars a person, we can use that to estimate the value of lost lives as a result of war. There are two different types of cost economic and accounting cost. Accounting cost are costs that must be explicitly paid. In a war includes personnel, equipment and munitions supplies, but also ignore the lost production in the private sector by reservists. And economic costs are all costs of a business. So basically it’s all cost associated with the forgone alternatives. The portion of personnel and supply costs that would have been spent anyway is not an economic cost of the war. The distinction between the two cost depends on how the war progresses. So had the war been short, the accounting cost...