6.2 percent of your income is going to Iraq and Afghanistan

U.S. Library of Congress

A new report, "Hidden Costs of the Iraq War," by the Democratic staff of Congress's Joint Economic Committee, estimates that the costs of the war in Iraq and Afghanistan from 2002 through 2008 will total $1.6 trillion. That includes "hidden costs," such as the amount of interest on money borrowed to pay for the war, the cost of long-term health care for veterans, and how much disruptions to the oil markets are costing. It's twice the amount that the Bush administration has requested.

How much of that burden is being borne by U.S. taxpayers? According to the report, the cost averages out to $20,900 for every family of four. Using a very rough formula, let's take the current median household income of $48,201 and multiply it by the seven years covered in the report for a total of $337,407. Then take that $20,900 of war costs per household and divide it by that $337,407. (Hair-splitters, we don't need to hear from you on this one. No parsing of changing incomes over time, definition of a household, and other details. This is blog math, not an econ exam.)

The result? If you're a U.S. citizen, more than 6 percent of your income—6.2 percent, to be unduly precise—has gone toward this war since 2002. Naturally, your reaction to this news may depend on whether you thought we should be involved in Iraq in the first place. But it adds further food for thought, especially if you read Alasdair Roberts's cover story, "The War We Deserve," in the current issue of FP, in which Roberts argues, "Americans now ask more of their government but sacrifice less than ever before." Is 6.2 percent of your income a sufficient sacrifice? What do you think?


How beer defies the laws of supply and demand

It may not taste like it, but your beer is in peril.

As Prerna pointed out earlier this year, the popularity of corn-based ethanol has already caused a tight market for malt, one of beer's three critical ingredients, as farmers increasingly forgo the barley crops used to make it in favor of more profitable corn. Now the fickle commodities trading market and bad weather in Europe have converged to trigger a worldwide shortage in hops. The other key ingredient in beer (along with water), hops is a flower that gives beer flavor and aroma. The shortage comes after a decade-long surplus discouraged farmers from planting the crop, which grows on trestles and can take years to mature. Since 1994, the amount of farm acreage planted in hops worldwide has declined by about half. The shortage was also triggered by hail and flooding in Europe in recent months. Together, the two mean the beer industry now faces a 10 to 15 percent shortage.

For beer drinkers, it means only one thing: bigger tabs at the bar. Well, for some beer drinkers anyway. Mega-brewers such as Anhueser-Busch negotiate their hop contracts years in advance and will be unaffected by the shortage. But smaller, so-called "craft" breweries aren't so lucky. A variety of hops known as Cascade, for instance, the most popular among craft brewers, has more than tripled in price in the last two months, jumping from $4.10 per pound to around $12.35 per pound. Boston Beer, which brews Samuel Adams, says it will raise its prices by 5 percent as a result of increased costs. Other mid-sized and small brewers are almost certain to follow suit.

The irony is that, even as the supply of hops and malt are severely low, demand is at an all-time high, at least in the United States. Craft beers now make up 17 percent of the U.S. market and retailers depend upon them to boost profits. Are the commodities markets drunk?