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Fallout: The Financial Crisis

The economic impact of the Afghanistan troop drawdown

Marketplace Staff Jun 23, 2011

Kai Ryssdal: The president spoke for about 15 minutes At the White House this evening. It’s the beginning — but not the end — of winding down the war in Afghanistan, he said. Our Washington bureau chief John Dimsdale’s covering the speech. Hey John.

John Dimsdale: Hello Kai.

Ryssdal: So how fast are people going to start coming home, John?

Dimsdale: Starting next month, 10,000 troops will be brought home, that’s through the end of this year. And the drawdowns are going to continue through next summer for a total of 33,000 fewer troops. That’s the same number for the surge the president ordered a year and a half ago.

Ryssdal: Is there a way for us to figure out how much money this might save?

Dimsdale: In general, it costs $1.2 million a year to maintain one U.S. soldier in Afghanistan. So you do the math, and that should save around $12 billion next year, which is a significant step toward bringing down the cost of borrowing.

Ryssdal: Yeah, it is. But you know, he didn’t get to the financial part of this thing ’til the 17th paragraph, not that I was counting. He didn’t actually mention a dollar amount, did he?

Dimsdale: Nope, not specifically. But he did say that winding down the war offers an opportunity to concentrate on other things.

President Barack Obama: Over the last decade, we have spent a trillion dollars on war at a time or rising debt and hard economic times. Now, we must invest in America’s great resource: our people.

So he says that now, the country can rebuild its infrastructure and find cleaner energy. So he’s got his eye on ways to redirect that savings.

Ryssdal: Talk to me though, John, about this thing that we all talked about at the end of the Cold War in the ’90s — the peace dividend. Are we going to get one of those?

Dimsdale: Well, we shouldn’t be too quick to count on it. For one thing, there are lingering costs once all the troops come home, supposedly by 2014. There are the long-term health care effects for the injured for both wars in Iraq and Afghanistan. And most analysts say there still has to be troops on the ground in Afghanistan just to protect the construction projects there. And besides, all this money was borrowed to begin with, so it probably should be set aside for deficit reduction.

Ryssdal: Very quickly, before I let you go John, any way to figure out what Congress might think of this? I mean, they’ve had some differing opinions the past couple of days.

Dimsdale: It will be attacked from both sides — folks who want it to be faster and folks who want it to be slower. So it looks like the president will be right in the middle.

Ryssdal: Marketplace’s John Dimsdale talking about the president’s speech tonight. Some people start coming home next month, and the answer is: no, we don’t know how much money it’s going to save.

Dimsdale: Thank you, Kai.

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