Harvard professor on the ‘credit card wars’ and the mounting prices of treatment for publish-9/11 veterans

Dr. Linda Bilmes, Daniel Patrick Moynihan Chair in Public Policy and Public Finance at the Harvard Kennedy College, joined Yahoo Finance’s A Time for Transform to examine her recently published analyze on the lengthy-phrase expenses linked with caring for veterans of America’s submit-9/11 conflicts, and how taxpayers will be footing the bill for decades to arrive.

Movie Transcript


SIBILE MARCELLUS: Welcome to “A Time for Change.” I’m Sibile Marcellus right here with Alexis Christoforous. All eyes are on Afghanistan right now. As evacuations carry on, President Biden is contemplating regardless of whether or not he is likely to adhere to his August 31 deadline for the withdrawal of US troops. He’s predicted to make an announcement about that nowadays. But even when the very last soldier comes dwelling, the value of war will proceed for a long time to occur.

ALEXIS CHRISTOFOUROS: And in accordance to a modern research, by the 12 months 2050, the cost of caring for write-up-9/11 veterans will attain additional than $2 trillion. Our initial guest is the writer of that review. Dr. Linda Bilmes is the Daniel Patrick Moynihan senior lecturer in public coverage at the Harvard Kennedy Faculty. And Dr. Bilmes, it can be excellent to have you listed here on the display. Thanks so much for becoming with us.

I know that one particular of the points you appeared at in this analyze is the ability of the US governing administration to make superior on its economic promises to these veterans. What did your research expose?

ALEXIS CHRISTOFOUROS: Nicely, I assume it’s crucial to observe that the US fighting in Afghanistan may possibly be in excess of, but having to pay for veterans’ treatment is just commencing. There’s usually a prolonged tail of expenses following a war is about. So for instance, the peak year of paying veterans positive aspects for Entire world War II veterans was in 1986. And we haven’t nevertheless achieved the peak, paying incapacity benefits for Vietnam veterans.

But this time, it really is likely to be a much even larger, extended, thicker tale due to the fact we currently have 1.8 million veterans from the publish-9/11 wars who are previously awarded life time incapacity benefits and treatment. And their needs are going to increase, as they normally do, as they get older and have far more troubles from what ever incapacity or injury they have had. I can chat about this at size.



SIBILE MARCELLUS: We will certainly get into it. But I required to check with, how a lot of trillions of dollars could the US be saving by withdrawing US troops in the place?

LINDA BILMES: You’re asking a really great issue. Permit me set this in context. These are what I phone the credit card wars. These are the to start with wars the US has fought wherever we have not basically paid out anything at all for the wars still.

So heading back again in historical past in the course of Vietnam, during Korea, throughout Globe War I, Globe War II, back again to the Spanish-American War, War of 1812, taxes ended up often lifted to pay for these wars, and sometimes a whole lot. So in the course of the Korean War, President Truman raised taxes, prime marginal rates, to 92% to spend for all those wars, to pay out as you go, as he place it. And President Johnson elevated best prices in excess of 75% during the Vietnam War.

Now of study course, in the course of these wars, taxes have been cut a few occasions, in 2001, 2003, and 2017. So we haven’t still paid out for something for these wars. So we now have a large amount of money of personal debt. So the problem is not only how substantially money it expenditures yr on calendar year but also how we fork out for the wars.

ALEXIS CHRISTOFOUROS: Particularly. Yeah, Physician, I don’t necessarily mean to slice you off. But I was heading to inquire, I necessarily mean, does this then established up the US governing administration to probably have to renege on these guarantees that it designed to these veterans, which, let us confess, is a substantial incentive for a lot of these veterans, the gains that they are likely to get from the US governing administration? Did your review reveal that it is a real probability that the govt may well not be equipped to reside up to individuals promises?

LINDA BILMES: I am concerned that the authorities might renege on its claims to this era of veterans because of the simple fact that we already owe numerous, quite a few, quite a few trillions of for the war, the credit card wars. And I have proposed a veterans’ believe in fund, which is an accounting mechanism. But it is a way that the govt begins to set aside some funding precisely for a particular purpose and requires that the governing administration has a functionality to retain observe of and to keep an eye on the prolonged-expression obligations to this team of veterans.

The federal government correct now has been increasing veterans’ care. The Department of Veterans Affairs has normally executed ever more well, notably on the professional medical side, above the last 20 yrs. It has expanded care into communities. It has expanded treatment for mental overall health care, for women’s treatment. It has expanded a broad selection of kinds of care. And of course, clinical care in basic has improved but become a lot more intricate.

But this technology of veterans coming residence has various ailments. They were uncovered to a lot more beat, on normal, than prior generations of veterans due to the way that these wars have been fought with a little, all-volunteer drive supplemented with contractors. So there is the problem of how sustainable is it to continue on shelling out a extremely growing, swiftly increasing Section of Veterans Affairs if we did not set apart any funding for veterans beforehand. And I believe that that we should really begin carrying out so.

SIBILE MARCELLUS: Much more than 40% of troops who served in Iraq, Afghanistan, or relevant places have by now been authorized for life span incapacity added benefits. Do you be expecting that even extra troops will qualify? Since even if the US withdraws troops on that August 31 deadline and the battling is more than, you will find even now the mental and actual physical ongoing impacts of war.

LINDA BILMES: That is definitely suitable. And of course, you have tens of millions of youthful guys and females who are however serving in the military, who have served in these wars, who have not yet turn out to be veterans. So that is proper.

But in common, you have a a lot– this is a very good factor, of study course. There is far better clinical treatment. There is a a lot bigger survival level amid this group of veterans. There is a lot much better conversation to veterans about what they are qualified for. There is much more outreach by the veterans companies and the Division of Veterans Affairs. There are a lot more generous veterans.

And so all of these factors necessarily mean that the cost totally will carry on to go up. And my determine of $2.2 to $2.5 trillion for the extensive-phrase price tag of veterans care, that is a incredibly conservative quantity.

ALEXIS CHRISTOFOUROS: Dr. Bilmes, I know that you say the government’s estimates of the economical expense of the publish-9/11 wars vastly underestimates the true total expenses of war. Can you sort of lay out for us how so? And in what means have they underestimated the prices?

LINDA BILMES: I to start with started out studying this in 2005. And my co-creator, Joe Stiglitz and I, wrote the reserve, “The $3 Trillion War” in 2008. And at that place, we estimated that that was the minimum that these wars could price. But the way that we have budgeted for these wars meant that the war investing was completed to begin with for a 10 years by unexpected emergency cash that won’t go through the standard checks and balances and oversight as regular authorities paying, and since then, via a system termed abroad contingency procedure funding, which again, goes by way of a to some degree individual procedure.

So there has been pretty minimal oversight on a good deal of the means that revenue has been put in. That signifies that we have almost certainly put in far additional than we certainly essential to. The ways that several contracts have been written for the military contractors that have been a important aspect of this conflict, the incentive structures in a lot of of individuals contracts have incentivized a larger than vital amount of investing. There have been in essence no limitations on how significantly could be used.

Now, that is all what has been expended, as I have mentioned. The war has not been compensated for at all still. This has all been paid out for on borrowed revenue, which is the very first time in US war background that we have ever paid for a war solely via credit card debt. This is really a new factor.

So we have the curiosity on the debt that demands even now to be paid. We have extended-phrase charge of using care of veterans. We have extensive-term price connected with replenishing gear, replenishing and what the military phone calls reset in phrases of the genuine armed forces forces, as perfectly as a whole sequence of expenditures related with depreciation of equipment and equipment and weaponry.

SIBILE MARCELLUS: However, we don’t have considerably time still left, but I do want to inquire you this. As the daughter of a Environment War II veteran, how have you recognized that it really is modified, the caring of veterans from publish-Entire world War II to put up-9/11 in conditions of fees?

LINDA BILMES: I believe that it really is important to recognize that the selection of veterans in the population has develop into a great deal smaller around the past 20 a long time. So 20 many years in the past when my father and lots of other Planet War II veterans ended up continue to alive, one in each four American men was a veteran. That amount is now one in 8. And in an additional 20 several years, it will be one particular in 12 or just one in 14. So issues have changed in phrases of the recognition of the price of the war, in terms of the speedy recognition of acquiring a household member who has served in the military. And I consider that the number of people today in the population who have lived with this is much smaller.

Permit me just mention one particular extra factor. 1 of the reasons that my figures are so conservative is due to the fact the US has not truly reckoned but with the cost of the publicity to burn off pits and other toxins that many hundreds of 1000’s of veterans in the first Gulf War as nicely as Afghanistan and Iraq have been exposed to.

The Department of Veterans Affairs has just built it a little little bit much easier for veterans to declare for respiratory ailments affiliated with exposures to burn off pits. But there are a entire range of ailments that have recently been the topic of healthcare analysis and will probably soon be qualified as currently being linked. And that will definitely grow and probably explosively increase the amount of veterans who are eligible for things that they know are not appropriate about themselves, but be in a position to extra conveniently declare benefits.

We have also not, as a place, dealt with the extensive-time period prices of all of the military services contractors who have served in these wars and who are not suitable for the identical added benefits but who will be paid for by backed overall health treatment and Medicare and who have also been exposed to burn pits and many other pitfalls and dangers.

ALEXIS CHRISTOFOUROS: Definitely. Well, these are intriguing insights and matters our federal government wants to deal with, for absolutely sure. Dr. Linda Bilmes at Harvard Kennedy School, many thanks so much for your time today.