The “peace dividend” is a lie, say Joseph Stiglitz and Linda Bilmes:

Today, as the country considers how to improve its balance sheet, it could have been hoped that the ending of the wars would provide a large peace dividend, such as the one resulting from the end of the cold war that helped us to invest more in butter and less in guns. Instead, the legacy of poor decision-making from the expensive wars in Afghanistan and Iraq will live on in a continued drain on our economy – long after the last troop returns to American soil.

The essay reveals the president’s popular, ceaselessly-repeated line about it being time to start “nation building at home” to be nothing but gauzy campaign rhetoric, ignorant of the lingering costs of our adventures in Iraq and Afghanistan.

It’s a dangerous idea in the first place that the money spent on waging war should just be shunted over to domestic projects, which is what Obama’s “nation-building” formulation seems to suggest. That wouldn’t really be a peace dividend at all, but rather a sort of post-war Keynesian bonanza. Rightly conceived, the “peace dividend” is what results when taxpayers are no longer burdened by wartime levels of taxation.

But, as Stiglitz and Bilmes note, both wars were paid for largely with borrowed money. Moreover, it’s not even clear that defense spending itself will go down much once the Afghan withdrawal is finished, due largely to the military’s commitments to veterans. No matter how badly the president wants to cut the Pentagon–and Chuck Hagel’s nomination suggests he’s serious about that–there are certain things that are too politically toxic (veteran’s benefits) or too diplomatically necessary (military and non-military aid to Afghanistan and elsewhere) to touch.

If nothing else, the article puts George Will’s ridiculous question about aircraft carriers into perspective.