The prevailing 30-second explanation of how the Cold War ended is that Ronald Reagan led an extensive, and expensive, military buildup in the 1980s, and the Soviet Union spent itself into bankruptcy trying to keep up. Reagan increased our military spending to 7% of gross domestic product (GDP). The Soviet Union, with its much smaller economy, had to push its defense spending to 27% of its GDP to keep up. It collapsed under the resulting debt and the unwillingness of its people to be frozen at 1980 consumption levels while the union's resources were diverted into the war machine. Leonid Brezhnev and his successors couldn't keep up.
Al-Qaeda spent a few hundred thousand dollars -- certainly less than $1 million -- to prepare for and carry out the attacks of September 11, 2001. In response the United States has spent more than $1 trillion on war costs (including an eight-year-old war on a nation that had nothing to do with September 11) and is likely to spend another $2 to $3 trillion to pay for the wars and their aftermath. The Bush Administration's initial estimate of the cost of the Iraq war was $60 billion.
Looked at purely as an economic conflict, al-Qaeda won. Our direct financial loss of the September 11 attacks was maybe $5 billion of property loss. The indirect cost, however, is the $1 trillion (that's $1,000,000,000,000) that we've borrowed, spent, and wasted in response, 200 times the direct loss and 1,000,000 times what al-Qaeda spent to carry out the attacks. From whatever perch Leonid Brezhnev may now be observing us, he's undoubtedly shaking his head in puzzlement that Osama bin Laden was able to do to the United States with less than $1 million what the Soviet Union couldn't do with $50 billion.
