A Benefit of the Mechanization of War: Savings on Veterans’ Benefits

The most overt costs of war, including military spending and the destruction of capital, are of relatively short duration, but the costs borne by combatants, caretakers, and society last for many years. Thus, committing troops to a war zone has lasting implications for fiscal policy: Depending on the scope of the conflict, the government’s obligation to pay veterans’ benefits can run as high as 50% of the nation’s prewar GDP, according to a study of U.S. wars by Ryan D. Edwards of the City University of New York. Even an expensive mechanized war, with the loss of large amounts of costly equipment, may be not only far preferable in terms of reduced loss of life and limb but may be far cheaper in the long run if it conserves future veterans’ benefits, Edwards suggests in the Journal of Public Economics.

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