Today, America is focused on unemployment and the deficit. Both threats to America's future can, in no small measure, be traced to the wars in Afghanistan and Iraq. Increased defense spending, together with the Bush tax cuts, is a key reason why America went from a fiscal surplus of 2 percent of GDP when Bush was elected to its parlous deficit and debt position today. Direct government spending on those wars so far amounts to roughly $2 trillion—$17,000 for every U.S. household—with bills yet to be received increasing this amount by more than 50 percent.
Moreover, as Bilmes and I argued in our book The Three Trillion Dollar War, the wars contributed to America's macroeconomic weaknesses, which exacerbated its deficits and debt burden. Then, as now, disruption in the Middle East led to higher oil prices, forcing Americans to spend money on oil imports that they otherwise could have spent buying goods produced in the U.S. The Federal Reserve hid these weaknesses by engineering a housing bubble that led to a consumption boom. It will take years to overcome the excessive indebtedness and real-estate overhang that resulted.
Ironically, the wars have undermined America's (and the world's) security, again in ways that Osama Bin Laden could not have imagined. An unpopular war would have made military recruitment difficult in any circumstances. But, as Bush tried to deceive America about the wars' costs, he underfunded the troops, refusing even basic expenditures—say, for armored and mine-resistant vehicles needed to protect American lives or for adequate health care for returning veterans.
Military overreach has predictably led to nervousness about using military power, and others' knowledge of this threatens to weaken America's security as well. But America's real strength, more than its military and economic power, is its "soft power," its moral authority. And this, too, was weakened: As the U.S. violated basic human rights like habeas corpus and the right not to be tortured, its longstanding commitment to international law was called into question.
