Why are Wars so Expensive?
Why are Wars so Expensive?
This year in 2022, Russia invades Ukraine and starts a war.
However, Russia’s Ukraine Invasion Will Cost the West, but It Will Cost Russia More.The trouble with this theory is that Russia’s overall economy was declining before all these interventions.
The country had a much worse Great Recession than the European Union, and a shakier recovery through the mid-teens.
So maybe it’s a declining economy that bestirs the Russian bear?
Except the Russian economy is doing pretty well right now, with 4.7 percent gross domestic product growth in 2021.
Neither does the United States.
Wars start because somebody feels like starting one.
Economists don’t get a vote.
They just come around afterward to tally the cost.
The cost this time will be worsening inflation.
Biden acknowledged that Tuesday when he said that although his administration “is using every tool at our disposal to protect American businesses and consumers from rising prices at the pump … defending freedom will have costs.” The first round of U.S. sanctions targets two financial institutions in Russia, including VEB, the state development corporation.
In addition, both the U.S. and the European Union will block Russian access to Western capital markets.
Russia may retaliate by limiting oil and gas exports to the EU.
Or possibly the EU will put its own limits on Russian energy imports if Russian forces press further into Ukraine.
In the end, war is costly; just look at what is happening in Ukraine right now; both the oppressor and the oppressed are losing a lot of money; Ukraine has buildings, vehicles, highways, and constructions on fire, while Russia is putting resources into setting fire to Kyiv and other cities in Ukraine.
Russia is invading Ukraine with far more than is necessary, including tens of thousands of tanks, missiles, aircraft, and other military supplies, all of which consume fuel and require manpower.
Nonetheless, human lives are the most expensive of all these resources; how many people will die in battle, both civilians and army personnel?
