Detailed Findings & Methodology
World War II remains as the costliest conflict in American history, accounting for nearly 36% of the country’s gross domestic product in 1945, or $4.7 trillion based on inflation-adjusted constant dollars. More recently, the wars in Iraq and Afghanistan rank as the second- and third- most expensive conflicts in American history, respectively. The war in Afghanistan is the longest in U.S. history, nearly 18 years and counting, though it is not among the longest wars in history.
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 United States controlling the Pacific island of Guam, Puerto Rico, and the Philippines. The results of these wars and others led to the United States establishing large military bases around the world.
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. At $649 billion in 2018, America spent the most on war of any country.
Comparing the costs of war over a period of almost 250 years can be difficult. While the report attempts to correct for inflation by calculating each war’s cost in fiscal year 2018 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. A byproduct of the production of war materials was the creation of commercial products invented by the military.
Spending on the war in Afghanistan has been updated through 2017. Because exact spending figures for each year following 2014 were not available but the total spending until 2017 was, we assumed equal spending on the war in the years 2015, 2016, and 2017, and adjusted each figure according to that year’s Defense Spending deflator that is pegged to 2019 dollars. Inflation price indexes used in this adjustment are from the U.S. Office of Management and Budget. The CRS report does not include veterans’ benefits, interest on loans used to finance the war, and assistance to allies.
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