Special Report

Most Expensive Wars in US History

Detailed Findings & Methodology

World War II is by far the costliest conflict in American history, accounting for nearly 36% of the country’s gross domestic product in 1945, or $4.1 trillion, based on inflation-adjusted constant dollars. The wars in Iraq and Afghanistan, which the CRS counts as one conflict, War on Terror, remain unresolved. Together they account for the second-most expensive conflict in American history at $1.59 trillion.

Many early wars in U.S. history resulted in the United States gaining more land and territories. The Mexican-American War in the 1840s yielded much of the territory that makes up the present-day Southwest. Similarly, the Spanish-American War at the end of the 19th century ended with the U.S. controlling the Pacific island of Guam, Puerto Rico, and the Philippines.

In every conflict before World War II, nearly all of the country’s defense budget was spent on direct conflict — classified as wartime spending. For example, the United States spent 1.1% of its GDP in 1899 to fight the Spanish-American War, nearly its entire defense budget of 1.5% of GDP.

That trend largely changed at the start of the Cold War. Because of the persistent threat of military conflict, the United States had to be ready for war at any time. This led to the space race and nuclear armament becoming national priorities. As a result, wartime spending and defense spending began to diverge. During the Korean War, for example, war spending accounted for 4.2% of GDP in 1952, while total defense spending accounted for more than 13% of GDP.

Comparing war costs over a 243-year period can be difficult. While the report attempts to correct for inflation by calculating each war’s cost in fiscal year 2011 dollars, inflation adjustments do not account for advances in technology. It is entirely possible that wars also became more expensive over time as the sophistication and use of technology increased.

To determine the most expensive wars in U.S. history, 24/7 Wall St. used a 2010 report from the Congressional Research Service titled, “Costs of Major U.S. Wars.” The report does not include veterans’ benefits, interest on loans used to finance the war, and assistance to allies. Spending figures were inflation-adjusted to 2011 dollars.

Additionally, the report attempts to capture the increase in military expenditures during wartime and does not include the costs of maintaining a standing army in peacetime. The report presents both military costs and defense spending as percentages of GDP in the year of peak war spending. Cost figures for the War on Terror were updated to reflect expenditures after 2010. The CRS also separates the cost of the Civil War into Union costs and Confederate costs.