Primary Sources

Foreign Affairs The Cost of War Abraham Lincoln's Secretary of the Treasury, Salmon P. Chase, estimated the cost of the war to preserve the Union to be a thirteenth of what it eventually was. John Maynard Keynes's famous Economic Consequences of the Peace failed to predict the Great Depression looming in the aftermath of World War I.

In a report from the American Academy of Arts & Sciences, William Nordhaus, a professor of economics at Yale, cites these monuments of faulty economic forecasting. He nevertheless proceeds to give the clearest and most thorough prediction yet written of the economic consequences of war with Iraq. Nordhaus's high-range estimate for the cost of a war itself is $140 billion, around 1.5 percent of U.S. GDP—about half of what the United States spent during the Mexican or the Spanish-American War, and far less than expenditures during the Korean and Vietnam Wars. But peacekeeping, ...