Transparency About the Costs of War Won’t Change Americans’ Minds
The United States has been at war for 16 years, yet few Americans have experienced firsthand the costs of war. For all the talk of “blood and treasure,” the majority of Americans have actually given little of either. New data compiled by the Department of Defense and Internal Revenue Service sheds some light on how much “treasure” individuals have given up for America’s wars. But this data alone is unlikely to demonstrate to the American people what their country’s wars have cost them. Nor is it likely to produce any sort of democratic accountability in the form of popular opposition to the continuation of current conflicts or future uses of military force. While transparency about the costs of war is nice, the American people still have not felt these faraway conflicts impact their personal finances. Until they do, they are unlikely to serve as a democratic check on their elected officials’ decisions to start conflicts around the world.
The Pentagon and IRS estimate that the wars in Afghanistan, Iraq, and Syria will cost more than $1.5 trillion through fiscal year 2018. The per-taxpayer cost of the wars is more than $7,700. The data is available thanks to a provision in last year’s National Defense Authorization Act, inserted by Rep. John Lewis (D-Ga.). He argued that highlighting the individual financial impact of the use of military force might lead the public to demand that their leaders stop getting the country involved in endless wars. Lewis said at the time:
It’s important for people to know how much we’re spending on wars. It’s my hope that people will make contact with their elected representatives and say we should spend more on peace, less on violence and war.
While the congressman is right that the American people need to know what their country is spending on its wars, there are at least four reasons why the Pentagon and IRS data will be insufficient to bring about the democratic accountability Lewis desires. The first two reasons have to do with the accuracy of the recently released information and the way voters incorporate new information when formulating their opinions on war and peace. The other two deal with how war financing actually affects the economic self-interest of average American voters.
First, the total amount spent on the post-9/11 wars is actually greater than the Pentagon and IRS reported. For example, the $1.5 trillion cited does not include ongoing medical care for veterans or covert operations by the intelligence community. Data on covert operations is unlikely to be available, but taking into account medical care, war-related spending at the Department of Homeland Security, and interest on the national debt, the Costs of War project at Brown University’s Watson Institute for International and Public Affairs estimated last year that the total cost of the wars was $4.79 trillion. Their estimate included $213 billion for veterans care, with long-term medical obligations projected to top $1 trillion.
Second, just because information is available about how much modern wars cost taxpayers, it does not mean the American public will seek it out. Voters tend to be rationally ignorant. For a given individual, the cost of obtaining information about a policy is often higher than the benefit this knowledge would provide. And even when voters are given information, they tend not to change their minds about a policy issue. For example, people with hostile attitudes toward immigrants overestimate the size of the immigrant population. Political scientists John Sides and Jack Citrin have found that providing information about the actual size of the foreign-born population had little effect on these attitudes. Moreover, on issues of war and peace, members of the public do not form opinions based on an informed, cost-benefit analysis. Rather, they follow elite cues that appeal to their partisan worldview. Without politicians from both parties connecting with voters about the costs of war, information alone is unlikely to be sufficient for democratic accountability.
As far as this new report is concerned, most people are unlikely to even know or care about the $7,700 bill for their portion of the wars. Moreover, though, in two important ways, American taxpayers did not actually incur these costs, blunting the potential effect of the figures as a tool for creating popular opposition.
First, even if the $7,700 figure is correct on paper, that doesn’t mean any taxpayers have actually seen that amount leave their bank accounts. America’s post-9/11 wars have been debt-financed. Since the first round of tax cuts during the George W. Bush Administration, federal revenue from taxes, excluding the payroll tax which is designed to fund mandatory entitlements, has been insufficient to cover federal discretionary spending. Expansions in this area of spending, including military conflicts, government bailouts, and stimulus spending, are thus financed by issuing increasingly greater amounts of debt.
Debt financing pushes the direct cost of the wars to future generations. In the last 75 years, the United States has only had two significant periods in which the outstanding stock of debt was retired and current tax revenues briefly paid for current expenditures The first was just after World War II, and the second was in the early 1990s. Given that track record, it is likely that many of today’s voters will no longer be working and paying taxes when the government begins to retire the debt accumulated from the wars in Afghanistan, Iraq, and Syria.
Second, even if Congress paid for today’s wars out of current taxes rather than debt financing, nearly half of Americans wouldn’t see their taxes go up because of the nature of the U.S. tax system. When not debt-financed, discretionary federal spending is paid for primarily by the income tax. Yet roughly 45 percent of American households have no income tax liability at all, because of progressive taxation and income inequality. Indeed, in 2014 the top 10 percent of American households in terms of income paid over 70 percent of all federal income taxes. The cost of today’s wars would not, as the Pentagon and IRS data suggests, be divided evenly among American taxpayers. Had the wars been paid for through taxes, the actual financial impact for most Americans would have been far less than $7,700.
As political scientist Jonathan Caverley has explained, income inequality and progressive taxation distribute the costs of war away from the average American. While there are very good reasons to favor a progressive tax system, there are costs as well. One of those is the insulation of the typical American household from the financial costs of military action. Even when paid for with taxes, the use of military force would not have a direct financial impact on much of American society.
A number of scholars have recently conducted research using experimental surveys that show that the way wars are financed has important implications for democratic accountability regarding war and peace. In one survey, when told wars would be paid for by taxation, support among respondents dropped. The taxation instrument matters, though. Regressive taxes were more likely to induce skepticism about a war because such broad-based taxes directly affect the economic self-interest of a larger portion of voters. This research suggests that a broad-based tax levied to pay specifically for the use of military force is likely to produce democratic opposition to ongoing or future wars by forcing more Americans to internalize the costs of war. A progressive tax, on the other hand, would distribute the cost to a smaller segment of the population, one that is better able to absorb the financial impact.
If war does not impact the American people in some tangible fashion, the public has little incentive to hold elected leaders accountable for recklessly initiating conflicts or for using military force counterproductively and inefficiently. Routine calls to reinstate the military draft are made based on the premise that if more Americans risked paying for the costs of war in blood, they might hold their elected leaders accountable. Research by political scientists Michael Horowitz and Matthew Levendusky has found that support for war drops among potential draftees and their families when the potential for conscription is introduced. However, modern military technology has rendered conscript armies anachronistic. A more plausible way to capture the public’s attention about America’s wars would be to help taxpayers internalize the costs of war in terms of treasure.
Lewis had the right idea in trying to inform American taxpayers about the financial costs of their country’s wars. But information is not enough. Future estimates of the per-taxpayer cost of military action need to provide a more accurate accounting of the true cost of America’s conflicts. More importantly, however, taxpayers need to experience the impact of these costs financially. Only when America’s conflicts affect the financial bottom line of individual Americans will the public hold their elected leaders accountable for these wars.
Matthew Fay is the director of defense and foreign policy studies at the Niskanen Center, a political science PhD student at George Mason University’s Schar School of Policy and Government, and a fellow with the school’s Center for Security Policy Studies. Dr. Karl Smith is the director of economic research at the Niskanen Center.