On the 2nd May 2011, and after one of the largest manhunts ever undertaken, America finally caught up with and killed the leader of Al Qaeda, Osama Bin Laden, in Abbottabad, Pakistan. After ten years of searching, they had found the man whose organisation was behind the attacks on America on September 11th 2001, which killed 2,977 people from over 90 countries. However, has the immense cost of the two wars in Afghanistan and Iraq, a result of the attacks on America, financially crippled both America and the west? Was the financial strain of the wars one of the causes of the financial crisis? Has Osama Bin Laden achieved what he set out to do and made America 'a shadow of itself', as he said in an interview with Robert Fisk of the Independent newspaper.
Well, the War on Terror, a phrase coined by former President George W Bush in a joint session of Congress on the 20th September 2001 and launched on the 7th October, was always going to be difficult for the United States. In the first instance, the phraseology is confusing: a war on 'terror' sets almost limitless perimeters, and, crucially, does not specify a set objective: therefore, how do you know if you are winning? Added to this, Clausewitz always emphasised that defense is stronger than attack, and America went on the offensive into territory with people who were likely to be sympathetic to Al Qaeda's aims.
The War against Islamic extremism and related terrorist groups has taken a massive toll, both in terms of human loss of life, and on finances. The current budget for defense and wars for the United States stands at $7bn, and is the third largest item of expenditure. The War in Iraq has cost about $802bn, and the War in Afghanistan has cost $455.4bn .Therefore, taking in a few other factors as well, the wars are expected to have cost the US treasury $1.27 trillion by the end of the 2011 financial year. They have massively inflated Government spending in the US: the budget for defense has more than doubled compared with before the attacks of September 2001. Therefore, they have led to extra borrowing, pushing the US into deficit: the United States went from surpluses under the Clinton administration to large deficits because of the wars.
The borrowing as a result of the two wars and the banking crisis edged US debt towards its constitutionally mandated limit of 14.3 tn. Fraught negotiations finally led to an agreement between President Obama and Republicans to raise the limit on the 1st August 2010, a day before the debt limit was to be breached, causing a US default and probable economic meltdown. Many countries in Nato that have been involved in Afghanistan and, in the case of Britain, Iraq as well, are now facing debt crisises exacerbated by their military involvement. China now holds $1.17 tn in US debt, and greater sway over world affairs, many Eurozone countries are struggling to make ends meet, and America is facing the prospect of decades of spending reductions to get back on a sustainable debt track. So, Osama Bin Laden may not have defeated America militarily, but, at least financially, he has delivered them a lasting debt legacy and a financial crisis. The conflict in Afghanistan sped up the decline of the USSR: could it now take its next victim?
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