|Tracking the exact cost of the Korean War is an impossibility. In 1950-53 the United States
government did not have an accounting system that accurately documented war expenditures.
- Many of the government systems for accounting, documentation and procedures in use
today did not exist in the early 1950s.
- Rearmament and mobilization for the Korean War was done simultaneously and
concurrently with general rearmament and mobilization of the US for the heightened Cold War threat that
- Looking at just the DoD spending yields an incomplete picture as to the true
totality of economic impact.
Best Source on Cost of War
The Korean War Educator believes that the best source available to understand the financial aspect of the
Korean War is a book entitled, Funding Extended Conflicts: Korea, Vietnam, and the War on Terror.
If KWE readers have trouble finding the book on the market, it can probably be ordered through inter-library
loan from your local library. Authored by Richard M. Miller, Jr., it was published by Praeger Security
International in 2007.
The book covers the fundamentals of financing war and budgeting for war. Chapter Three of the book
is entitled, "Korean War: Fiscal Years 1951-1953." Pages 10 through 41 provide a detailed cost and
budgeting overview and takes a look at the government's fiscal year 1951, 1952, and 1953 war costs. If
ever an author did the "impossible" with regards to researching Korean War costs, it was Richard Miller.
His Korean War chapter text is backed with 72 footnotes that explain from where he derived his information.
Miller discusses incremental cost estimates, supplemental appropriations, and additional manpower costs.
Miller states on page 39:
Using the categories of direct Korea, mixed, and indirect costs, a rough approximation of the
incremental costs can be made. From FY51-53, the incremental costs in today's dollars were $678
- Directly linked to Korea: $390 billion
- Mixed costs (Korea & the general defense buildup): $216 billion
- Indirect/Related Costs: $72 billion
But even those costs were not the end cost of the Korean War. Miller noted that there are three
other considerations to take into account when estimating the total cost of the Korean War. They are
excess manpower (excess end strength drafted for the Korean War that extended slightly beyond FY53 before
demobilization), debt serving (war costs not covered by increased tax revenues), and long-term Veterans
Administration compensation and pension payments directly attributable to Korean War veterans and their
dependents. According to Miller these were:
- Excess Manpower: $156 billion
- Debt Servicing: $19 billion
- Veterans Compensation & Pensions: $148 billion (through 2000)
The total cost of the Korean War throughout Fiscal Years 1951-1953 as calculated by Commander Richard
Miller was $678 billion. Miller calculated the total cost of the Korean War throughout Fiscal Years
1951-2000 as $1,001 billion. As the author so aptly pointed out in the summary pages of his book,
"Every war has its own unique conditions. For better or for worse, war serves as catalyst for many
changes, including funding and economic challenges, with fiscal impacts that resonate far beyond the
fighting. Korea began in a time of readjustment from total war, international uncertainty, and a
desire to focus on domestic concerns."
About the Author
At the time the book was published, Miller was a serving officer in the United States Navy. He had
extensive background in budget issues, and had worked as a Congressional Analyst for the chairman of the
Joint Chiefs of Staff. A distinguished graduate of the National War College and the Naval War College,
Miller is a winner of the B. Franklin Reinauer Defense Economics Prize. In addition, he was a Federal
Executive Fellow in the Institute for the Study of Conflict, Ideology, and Policy at Boston University.