Thursday, July 23, 2009

Inflation: US Civil War ($) = 67 Iraq Wars ($)

Ouch; a nice breakdown of the various measures of inflation with this:

The Civil War was one of the most devastating events in the history of the United States. It lasted from 1861 to 1865 and has been estimated to have direct cost about $6.7 billion valued in 1860 dollars. If this number were evaluated in dollars of today using the GDP deflator it would be $139 billion, less that one year of the cost of the current war in Iraq. This would be inappropriate, as would be using the wage or income indexes. The only measure that makes sense for an expenditure of this size is to use the share of GDP, as the four year cost of the war was more that the entire output of the country. Thus the relative value of $6.7 billion of 1860 would be $21 trillion today, or about 145% of our current GDP. The $6.7 billion does not take into account that the war disrupted the economy and had an impact of lower production into the future. Some economic historians have estimated this additional, or indirect cost, to be another $7.3 billion measured on 1860 dollars. This means the cost of the war (as a share of the output of the economy) was nearly $45 trillion as measured in current dollars.

According to, the total cost of the Iraq War to date (a few minutes before I posted this) was $667 billion. That's about 1/67 of the Civil War in 2009 inflation adjusted dollars. Fuck.

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