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The most expensive wars in U.S. history

Declared an official holiday in 1971, Memorial Day honors those who have given their lives in service to the United States. While the human toll is always great, wars also cost treasure as well as blood.

Many factors can affect the cost of waging war. Using a report from the Congressional Research Service, 24/7 Wall St. reviewed the most expensive wars in U.S. history. While the Mexican-American War cost just $2.4 billion, or 1.4% of GDP in 1847, spending on World War II accounted for nearly 36% of GDP in 1945, or $4.1 trillion. These are the most expensive wars in U.S. history.

Many early wars in U.S. history resulted in the acquisition of land. The Mexican-American War in the 1840s yielded much of the territory that makes up the present-day Southwest. Similarly, the Spanish-American War prior to the start of the 20th Century ended with U.S. control of Guam, Puerto Rico, and the Philippines.

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 U.S. spent 1.1% of GDP in 1899 to fight the Spanish-American War, and just 1.5% of GDP was spent on total defense spending.

That trend largely changed at the start of the Cold War. The persistent threat of military conflict ensured that the U.S. would be ready for war at any time, as the Space Race and nuclear armament became national priorities in both the U.S. and the Soviet Union. As a result, wartime spending and defense spending began to diverge. During the Korean War, for example, war costs accounted for just 4.2% of GDP in 1952, while total defense spending represented more than 13% of GDP in the same year.

Comparing war costs over a 235-year period can be difficult. While the report attempted to correct for inflation by calculating each war’s cost in fiscal year 2011 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 cost of technology increased.

To determine the most expensive wars in U.S. history, 24/7 Wall St. used a 2010 report from the Congressional Research Service titled “Costs of Major U.S. Wars.” The report does not include veterans’ benefits, interest on loans used to finance the war, and assistance to allies. Additionally, the report attempts to capture the increase in military expenditures during wartime and does not include the costs of maintaining a standing army in peacetime. The report also presents both military costs and defense spending as percentages of GDP in the year of peak war spending. War cost figures for the War on Terror were updated to reflect expenditure after 2010.

1. World War II

Once the U.S. emerged from its isolationist shell, it spent more than $4 trillion fighting in World War II and lost more than 400,000 troops. U.S. involvement officially began on December 8, 1941, the day after the Japanese bombed Pearl Harbor. America officially declared war against Germany and Italy three days later. After conquering a number of European countries, Germany focused its attention on the Soviet Union. By 1944, Soviet forces were successfully driving German troops west. On June 6, 1944, Allied forces landed on the beaches of Normandy, pushing east into Europe, and splitting the Germans along two fronts.

In the Pacific, U.S. military experts estimated that an invasion of Japan would likely result in much greater casualties. President Harry Truman ordered an atomic bomb be dropped on Hiroshima on August 6, 1945. Months earlier, at the Yalta Conference in 1945, Stalin had promised to enter the Pacific front within three months of the war’s end in Europe. If the Soviets were involved in Japan’s defeat, they would likely insist on reparations. To prevent a Soviet claim to Japanese assets, assert U.S.-dominance over Stalin, and secure a Japanese surrender, Truman ordered a second atomic bomb dropped on Nagasaki on August 9, the day after the Soviet Union declared war on Japan. By the end of the war, more than 50 million soldiers and civilians had given their lives, according to conservative estimates.

2. War on terror
Conflicts in Iraq and Afghanistan following September 11, 2001 — collectively known as the War on Terror — cost the U.S. more than $1.6 trillion through 2010. The U.S. entered Afghanistan in October 2001, to search for Osama bin Laden, the mastermind behind the terrorist attacks in New York and Washington D.C., and to overthrow the Taliban government, which was long suspected of harboring terrorists. U.S. troops invaded Iraq and overthrew Saddam Hussein in 2003 operating on the belief that he had weapons of mass destruction. Elections in both Iraq and Afghanistan, as well as training military personnel in each country to help stabilize the region, are both heralded as successes. Despite these successes, both countries continue to be marred by conflict.

3. Vietnam War
The war in Vietnam cost the U.S. $738 billion, or just 2.3% of GDP in 1968. By the end of the conflict, the names of more than 58,000 dead soldiers were recorded on the Vietnam Veterans Memorial in Washington, D.C. After North Vietnamese troops drove the French out of the region in 1954, ending a brutal era of colonialism, the Geneva Accords stipulated that elections in the South be scheduled for the following year. Determined not to let communism spread, the U.S. lent its support to Ngo Dinh Diem, a French-educated, Catholic politician in South Vietnam. By the time the U.S. committed troops in 1965, Diem had been assassinated and Vietnamese support for the new military-led South Vietnamese government had faded. With supplies from China and the Soviet Union, North Vietnam primarily used guerilla tactics to attack U.S. troops and bases, often by surprise. By the late 1960s, public support for the war in the U.S. was fading. American troops officially withdrew from the region in 1973 and South Vietnam fell to communism in 1975.


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