In recent months the undeclared war in Iraq seems not to have been on the minds of most Americans. News of the violence and deprivation which ordinary Iraqis are forced to deal with on a daily basis rarely makes it to the front pages. Instead, we read in the newspapers numerous slanted stories about the how the surge is succeeding and reducing violence. Never does anyone dare to discuss the costs of the war or its implications.

There are the direct costs of the war, the costs of maintaining bases, providing food, water, and supplies, which the administration vastly underestimated before embarking on their quest in Iraq. These costs run into the tens of billions of dollars per month, and I shudder to think what the total direct costs will add up to when we finally pull out.

Then there are the opportunity costs, those which decision makers in Washington almost never discuss. Imagine that the war in Iraq had never happened, and the hundreds of billions of dollars we have spent so far were still in the hands of taxpayers and businesses. How many jobs could have been created, how much money could have been saved, invested, and put to productive use?

Unfortunately, it appears too many policymakers in Washington still cling to the broken window fallacy, long since discredited by the 19th century French economist Frederic Bastiat, that destruction is a good thing because jobs are created to rebuild what is destroyed. This pernicious fallacy is unfortunately widespread in our society today because those in positions of power and influence only recognize what is seen, and ignore what is unseen.

Running a deficit of hundreds of billions of dollars per year in order to fund our misadventure is unsustainable. Eventually those debts must be repaid, but this country is in such poor financial shape that when our creditors come knocking, we will have little with which to pay them. Our imperial system of military bases set up in protectorate states around the world is completely dependent on the continuing willingness of foreigners to finance our deficits. When the credit dries up we will find ourselves in a dire situation. Americans will suffer under a combination of confiscatory taxation, double-digit inflation, and the sale of massive amounts of land and capital goods to our foreign creditors.

The continuation of the war in Iraq will end in disaster for this country. Parallels between the Roman Empire and our own are numerous, although our decline and fall will happen far quicker than that of Rome. The current financial crisis has awakened some to the perils that await us, but solutions that address the root of the problem and seek to fix it are nowhere to be found. There must be a sea change in the attitudes and thinking of Americans and their leaders. The welfare-warfare state must be abolished, respect for private property and individual liberties restored, and we must return to the limited-government ideals of our Founding Fathers. Any other course will doom our nation to the dustbin of history.

Taken from Rep. Paul’s testimony to the Joint Economic Committee Hearing, February 28, 2008.