Months ago, President Trump warned North Korea that the U.S. would counter any more threats “with fire and fury like the world has never seen.” While tensions remain elevated, President Trump’s words have become much softer, and recent events have helped to pull both powers back from the brink of war.
According to Bloomberg, when asked at a news conference about the possibility of armed conflict, Trump dismissed talks of war with North Korea saying, “A lot of good talks are going on now. A lot of good energy. Hopefully, a lot of good things are going to work out.”
Click through to see if the country is destined for war, and whether it will have the same financial consequences as previous wars.
North and South Korea Ease Tensions Ahead of Winter Olympics
On Tuesday, Jan. 9, North Korea and South Korea held their first face-to-face talks since 2015 to discuss the upcoming Winter Olympics in Pyeongchang. As a result of the talks, North Korea agreed to send representatives to the competition, including their competing athletes as well as supporting groups like press corps and cheering squad, according to CNN. The two countries also agreed to carry on further diplomatic discussions, a significant step in easing the tense coexistence on the Korean Peninsula.
Although the U.S. and South Korea have been staging military drills close to home, North Korean leader Kim Jong Un remains defiant. On Wednesday, Jan. 10, North Korean state media reported that Kim told scientists to “frequently send big and small ‘gift packages’ to the Yankees,” and has vowed to continue development of stronger weapons. Meanwhile, despite its technological advantages, the U.S. missile defense system has been spotty in its ability to intercept enemy missiles in recent tests, according to CBS News.
With no resolution in sight, the crisis is drawing in major powers like China and Japan to exert influence, which is making things more complicated. Is the U.S. facing a lot of hot air, or is it marching down the road toward a third World War?
Along with South Korea, see who are America’s most valuable allies around the world.
Potential Cost of War With North Korea
How much would World War III with North Korea cost the U.S.? First off, it would entail enormous indirect costs beyond direct military expenditures, the most severe being the economic losses and disruption due to South Korea waging war against its neighbor.
South Korea is one of the largest producers of electronics goods in the world. If the country had to shift its economy toward war — and away from electronics production — many companies would be forced to find alternative suppliers, which are few.
One result would be more expensive smartphones, tablets and other devices as companies roll back manufacturing in response to the electronics shortage. More broadly, war against North Korea would destabilize global trade as South Korea is home to major container ports and manufacturing industries on which much of the world is dependent.
A quick war could limit the amount of economic disruption the U.S. would face, but that doesn’t mean war with North Korea would be cheap. Based on military budgets, expenditures and costs of previous conflicts, the cost of a war with North Korea could be the most expensive war in U.S. history.
In theory, war with North Korea should be similar to war in Iraq, since the U.S. would be fighting a nation-state with a professional army. And like Iraq, when the army is defeated, the population might still resist. The war in Iraq exceeded $800 billion, while total post-9/11 operations cost more than $1 trillion.
If war were contained to North Korea, the cost of war between the U.S. and North Korea might fall between $800 billion and $1 trillion. If war spreads beyond North Korea, it could easily escalate into the trillions — and significantly add to America’s staggering national debt.
Cost of Past U.S. Wars and Military Campaigns
It is difficult to overstate the economic cost of the Sept. 11 attacks and subsequent War on Terror. The Department of Defense (DoD)’s requested budget for 2017 is just under $600 billion, but its request for 2010 — during the middle of the War on Terror — was $784 billion. That amount is higher than defense spending under President Ronald Reagan during the feverish final years of the Cold War.
According to a December 2014 report from the Congressional Research Service, Congress approved a total of $1.6 trillion for war operations since the Sept. 11 terrorist attacks. The cost breakdown is as follows:
War in Afghanistan: $686 billion (43 percent) for Operation Enduring Freedom (OEF) for Afghanistan and other counterterror operations received
War in Iraq: $815 billion (51 percent) for Operation Iraqi Freedom (OIF)/Operation New Dawn (OND)
Operation Noble Eagle (ONE): $27 billion (2 percent) for providing enhanced security at military bases
Other: $81 billion (5 percent) for war-designated funding not considered directly related to the Afghanistan or Iraq wars
But to really grasp how expensive war is for the U.S., just look at what it costs to fund the average soldier. According to the Fiscal Year (FY) 2014 Defense Budget from the Center for Strategic and Budgetary Assessments (CSBA), the cost per single service member deployed to Afghanistan was $2.1 million. A report by Harvard University’s Kennedy School of Government calculated that the wars in Iraq and Afghanistan have cost every American household roughly $75,000 each.
The cost of the Iraq War and War in Afghanistan far outstrips the cost of most recent conflicts involving the U.S. Adjusting for inflation, only World War II exceeds the military expenditure of the War on Terror. Here’s a closer look at the military cost of America’s past wars in constant FY 2011 dollars:
American War of Independence: $2.407 billion
War of 1812: $1.553 billion
Mexican-American War: $2.376 billion
Civil War (Union): $59.631 billion
Civil War (Confederacy): $20.111 billion
Spanish-American War: $9.034 billion
World War I: $334 billion
World War II: $4.104 trillion
Korean War: $341 billion
Vietnam War: $738 billion
Persian Gulf War: $102 billion
Iraq War: $784 billion
War in Afghanistan and other: $321 billion
Total Post-9/11 Operations: $1.147 trillion
Cost of U.S. Defense Budget
The FY 2017 budget asks for a total of $590.5 billion for the DoD, including $523.9 billion for the base discretionary budget, $7.8 billion in mandatory spending and $58.8 billion in supplemental funding for ongoing Overseas Contingency Operations (OCO), according to CSBA FY 2017 Budget Analysis.
Click through to see how the defense budget breaks down by some of the major categories.
The base budget request for procurement funding — which consists of acquiring goods and services for the country’s three military branches — is $102.5 billion, with the total defense budget adding up to $112.1 billion. The OCO account requests $9.5 billion for procurement. Here’s the cost of procurement by military service branch:
Air Force: $43.9 billion
Army: $18.1 billion
Navy: $44.8 billion
Defense-wide: $5.3 billion
Research, Development, Test and Evaluation Funding
According to the CSBA FY 2017 defense budget, $71.8 billion has been requested for research, development, test and evaluation (RDT&E). Here’s a closer look at the cost breakdown:
Air Force: $28.1 billion
Army: $7.6 billion
Navy and Marine Corps: $17.3 billion
DoD-wide: $18.6 billion
Operation and Maintenance
Operation and maintenance costs constitute a large part of the U.S. defense budget. Over the years, operation and maintenance costs have grown, putting military services under budgetary pressure.
The base budget for operation and maintenance funding requested is $205.9 billion for FY 2017, while on top of that, OCO accounts for another $45 billion. Take a look at the operation and maintenance budget broken down by service branch:
Air Force: $57.2 billion
Army: $63.3 billion
Marine Corps: $7.5 billion
Navy: $47.6 billion
DoD-wide: $75.3 billion
Funding for operating forces — one of four activities that comprise operation and maintenance — makes up the greatest share of overall operation and maintenance funding requested for FY 2017. Operating forces includes funding for day-to-day ground, air and ship operations, combat installations, combat support elements and efforts to train and support the readiness of combat elements.
The FY 2017 budget requests $135.5 billion for discretionary funding for military personnel in the base budget. In terms of total defense budget, the military personnel budget is $138.8 billion. By service branch, the requested military personnel budget break down is:
Air Force: $35.2 billion
Army: $57.5 billion
Navy and Marine Corps: $46.1 billion
Military Construction and Family Housing
Another major defense expenditure, though far smaller, is the cost of military construction and family housing. The total amount requested for FY 2017 is $7.4 billion, made up of $6.1 billion for base budget military construction and $1.3 billion for family housing.
Cost of America’s Arsenal
The U.S. boasts the most advanced military in the world, and that means its arsenal is not cheap. Procurement of weapons, vehicles and other tools of war are major military expenditures.
The cost of combat aircraft constitutes the largest share of procurement spending, 13.24 percent, behind only classified programs at 14.9 percent. The cost of aircraft modification is a separate category and accounts for 7 percent, which is higher than the share of procurement spending set aside for missiles.
The Navy and the Air Force have the largest procurement budgets for aircraft. The Navy’s procurement request for aircraft is $77.3 billion, and the Air Force’s request is $78.1 billion. The aircraft procurement budget for the Army is much lower at $19.6 billion. However, it still accounts for more than a fifth of its procurement budget.
Learn More: The Cost to Operate and Maintain Air Force One
Ranking behind combat aircraft, warships account for the third-greatest share of procurement spending, roughly 12.5 percent.
According to Future Years Defense Program (FYDP) projections, the Navy intends to shell out more than $85 billion on shipbuilding in the coming years. Some of the biggest Navy shipbuilding projects include the Virginia-class submarine program ($28.6 billion), DDG-51 Arleigh Burke-class destroyer ($19.3 billion) and its carrier replacement program ($12.4 billion).
The Army’s budget for missile procurement is $8.8 billion, while the Air Force’s is $9 billion. Despite being in the billions, the cost of individual missiles isn’t too bad. However, when they are considered as part of a larger weapons system, the true cost becomes more apparent.
The days of massive tank battles might be something of the past, but the U.S. still employs various types of combat vehicles.
The Army’s procurement budget for wheeled and tracked combat vehicles is $14 billion. One of the Army’s biggest vehicle procurement programs is the Joint Light Tactical vehicle, intended to be the ultimate, all-terrain ground vehicle of the future. The budget for it is $3.9 billion, according to the FYDP.