Bin Laden bled US for a cool trillion

PUBLISHED : Tuesday, 10 May, 2011, 12:00am
UPDATED : Tuesday, 10 May, 2011, 12:00am


How much did it cost the United States to finally find and kill Osama bin Laden? The simple answer is months of careful planning, a brave decision by President Barack Obama, a lot of military skill and guts by the US Navy Seals and a few million dollars for equipment, fuel and the write-off of a helicopter. The political bill, in relations with Pakistan, may take longer to come in.

However, the alarming longer answer is that it has cost more than US$1 trillion, and maybe as much as US$3 to US$5 trillion if all the costs of the 'war on terrorism' are properly accounted for. Bin Laden is dead, but those costs continue and raise huge questions about the financial and economic competence of the US government.

The very size of the sums takes - or should have taken - the discussion out of the philosophy or political science classes and into the real realm of congressional and parliamentary finance and budget committee debates, and active business forums. After all, this is real spending of real taxpayer dollars and real changes in business and lifestyle behaviours of Americans and those they deal with.

Sadly, much of the decision-making and the spending has been hushed up under the guise of national security, meaning that money gets spent without proper questioning, let alone the sort of cost-benefit analysis that other government departments and all respectable businesses are regularly expected to do.

Governments strictly speaking do not go bankrupt, least of all that of the United States. Nevertheless, the US is bleeding and is spending its money unwisely.

Economists including former World Bank vice-president Joe Stiglitz have questioned the massive spending on the Iraq and Afghanistan wars, claiming controversially that their cost will be US$3 trillion when everything is added up.

It has taken longer to get an accounting of the costs of the war on terror. Now two university professors - John Mueller, a national-security expert at Ohio State University, and Mark Stewart, a civil engineering and infrastructure expert at the University of Newcastle in Australia - have added up the sums and calculated the increased security bill at US$1.1 trillion from 2002 to this year.

More seriously, they claim that by the standards of risk assessment and cost-benefit analyses, standard practice in business for decades, these massive sums represent money thrown away. Pointedly, they omit from their accounting the costs of the wars in Iraq and Afghanistan - so throw in another trillion dollars or so if you believe that these wars are terror-related. They also exclude a long string of costs, such as the extra fuel cost to airlines because of heavier protected flight deck doors and having to give free seats to federal air marshals, and others such as crime facilitated by a police preoccupation with terrorism, effects on tourism and property values, and cutbacks to medical care, education and social security because of mushrooming domestic security budgets.

Mueller and Stewart estimate that the enhanced direct expenditures in the 10 years come to US$690 billion, of which the US Department of Homeland Security contributed US$360 billion. Another US$417 billion comes from what they call opportunity costs, including US$40 billion in terrorism risk-insurance premiums, and US$100 billion in passenger delays caused by airport screening.

It is easy to quibble with some of the figures. But the value of the work by the professors is that they raise the important question of whether the increased expenditure on security is worth it. Their conclusion is that no self-respecting company would spend so heavily without conducting a proper analysis of the costs and benefits of the spending.

Yet by 2006, when the Department of Homeland Security had already become the largest non-military bureaucracy in the US, one of its senior economists admitted: 'We really don't know a whole lot about the overall costs and benefits of homeland security.'

James Thomson, the president of the Rand Corporation, claimed that top department officials 'manage by in-box with little or no evaluation' of their performance or effectiveness. In other words, if a problem or new security scare arises, throw more money at it in the form of new measures in the name of security. One of the latest was the deployment at US airports of full-body scanners at a cost of US$1.2 billion a year, but with no estimate of any benefit.

Mueller and Stewart comment that they can find only a single published reference to a numerical estimate of risk reduction, and can 'find no reference whatever to the likelihood of a terrorist attack beyond rather vague references such as 'high', 'imminent' and 'dynamic'.'

Politicians and security bosses tend to inflate the risks of terror attacks in the face of the evidence. The director of the FBI, Robert Mueller, ominously said in 2005 when failing to unearth an al-Qaeda cell in the US: 'I remain very concerned about what we are not seeing.'

Of leading American politicians, only New York mayor Michael Bloomberg, who is of course a highly successful businessman, dared to challenge the prevailing wisdom when in 2007 he advised that people should 'get a life' since they had a greater chance of being struck by lightning than by a terrorist.

When the so-called underwear bomber failed in December 2009, there had been one incident involving terrorists for every 16.5 million flights. In the years since September 11, 2001, people killed by Muslim extremists outside of war zones numbered between 200 and 300 a year. The figure includes atrocities committed by al-Qaeda, its imitators, enthusiasts, look-alikes, wannabes and those with no connection with it. During the same period, 320 people a year drowned in bathtubs in the US.

Mueller and Stewart claim enhanced security expenditures have been 'excessive: to be deemed cost-effective they would have to deter, prevent, foil or protect against 1,667 otherwise successful Times Square attacks per year, or more than four a day'. The Times Square bomber drove an SUV packed with explosives into New York City in May of last year.

Osama bin Laden must be laughing from his watery grave. In announcing a new policy of 'bleeding America to the point of bankruptcy', in a 2004 video he mockingly declared: 'It is easy for us to provoke and bait. All that we have to do is to send two mujahideen to raise a piece of cloth on which is written 'al-Qaeda', in order to make the generals race there to cause America to suffer human, economic and political losses.' Whether his death will cause the United States to think again about spending wisely is more than a US$1 trillion question.

Spending spree

The US has been accused of throwing money at domestic security

With no cost-return analysis, full-body airport screening has been deployed at an annual cost, in US dollars, of: $1.2b