Al-Qaida pulled-off the Sept. 11 attacks for approximately $500,000, according to the 9/11 Commission report. By the end of fiscal 2011 the U.S. will have spent $1.3 trillion, or 9% of the national debt, fighting the wars in Afghanistan and Iraq according to the Center for Defense Information.
But when it's all said and done the total cost of the wars will make Bin Laden's 2,514,000:1 return at the time of his death multiply dramatically. It has been projected by Nobel prize winning economist Joseph Stiglitz and others that the lifetime cost of the Iraq and Afghanistan wars will run to approximately $3 trillion, or over 20% of current federal public debt, when long-term medical care for the wounded and other costs are factored.
Bringing Bin Laden at long last to justice represents a real victory, and since 9/11 Al Qaeda has not executed a successful terrorist attack on American soil. However, in assessing the economic war Al Qaeda has conducted against the U.S. one can't help but conclude that Osama bin Laden has received fantastic bang-for-the-buck.
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“We, alongside the mujahedeen,” bin Laden was reported to have said in a speech delivered right before the 2004 presidential election, “bled Russia for 10 years until it went bankrupt and was forced to withdraw [from Afghanistan] in defeat. So we are continuing this policy in bleeding America to the point of bankruptcy.”
“Every dollar of al-Qaida defeated a million dollars, by the permission of Allah, besides the loss of a huge number of jobs,” he added.
How Do You Bring Down the Most Powerful Nation in History?
In his biographies of the Rothschild banking dynasty, as well as
The Cash Nexus and
The Ascent of Money, Harvard Professor Niall Ferguson makes a strong case that a nation's ability to borrow in the bond market is a reflection, and perhaps key wellspring, of the state's power.
For example, the British Empire's ability to borrow more, and at cheaper rates of interest, was key in its defeat of Napoleonic France. In contrast, her crippling post-WWII debt signaled the dawning of a new era for Britain which consisted of economic malaise, military impotency, and periods of currency instability which resulted in dramatic devaluations of pound sterling in both 1949 and 1967.
Today the U.S. Treasury market is the deepest, most liquid bond market in the world. It also serves as a cornerstone of the U.S. dollar's privileged reserve currency status. In times of panic, as we saw in the 2008 financial crisis, the world flees other assets for U.S. dollar denominated securities such as T-bills.
Whether or not the U.S.'s bond market is in fact the key pillar of American power is open to debate. What is irrefutable, however, is that displacing the dominant role played by the U.S. dollar and treasuries in the world's financial system would deal a huge, perhaps even mortal, blow to what remains of America's hegemonic power.
There are perhaps several different approaches, but one surefire way to weaken a nation state's currency and ability to borrow is for its government to run persistently large deficits, just as the U.S. has done for the past decade.
Whether Osama bin Laden's original aim for 9/11 was to entice America into engaging in protracted and costly Eurasian wars is revisionist history or fact is unclear. Regardless, Al Qaeda deserves at lease some of the credit for the U.S.'s large deficits, crippling debt load, and weakening currency.
In short, how the financial blow struck by Bin Laden and Al-Qaida will play out over the long-term for the U.S. remains to be seen.
