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The United States went to war without a clear understanding of the costs to the budget or to the economy. Today we have a better view of both the benefits and the costs.

The benefits of war center on the paloma picasso jewelry of additional security obtained by the war. This is a subject on which reasonable people may disagree, since it requires assumptions (typically unverifiable) about what would have happened in the absence of the conflict. But even in this area, basic analytic principles can be of help, especially as we confront the challenge of the global war on terrorism, a security threat that is markedly different from earlier wars such as World War I and II, where our main objective was the defeat of a particular government. The wars in Iraq and Afghanistan are different. For instance, securing a particular piece of territory--ensuring that it cannot be used, for instance, for training of terrorists--may have little value, since training and terrorist activity can easily shift. We return to tiffany jewelry to have a global perspective. We have seen this as Al Qaeda tiffany 1837 jewelry shifted from Afghanistan, to Iraq, to Pakistan, and to Yemen. Secondly, victory in this war, like all such insurgencies, entails winning hearts and minds--killing innocent victims, even if only as collateral damage, is a sure way to lose this battle. The supply of insurgents can increase even as we succeed in killing thousands of the enemy. (Economists say that the supply of insurgents and more broadly the strength of the opposition are endogenous.) Thirdly, mistakes made at one point can have long lasting consequences, some more so than others.

Economists and physicists refer to this under the name hysteresis; historians by the term path dependence. We cannot go back to the world as it was, or as it would have been, if we had conducted the tiffany somerset jewelry in Afghanistan differently, and had not become embroiled in the war in Iraq. But the consequences of some actions are more irreversible than others, and it is in those areas that we have to be particularly careful not to make mistakes.

Estimating the cost of the war is more straightforward. There is no doubt that wars use up resources. The question is how to estimate the full magnitude of those resources used and assign values to them.

The taxonomy of costs centers on (i) resources spent to date; (ii) resources expected to be spent in the future; (iii) budgetary costs to the government; and (iv) costs borne by the rest of the tiffany jewelry on sale. These latter costs are very real, even if the government does not pay them, and are referred to as the economic as opposed to the budgetary costs of the conflict. In terms of the economic costs, there are microeconomic costs--costs borne by particular individual