United States cost of military force projection in the Persian Gulf, 1976–2007

This paper presents the first estimate of United States military cost for Persian Gulf force (CPGfp) derived entirely by a quantitative method. An activity-based cost (ABC) model uses geographic distribution of aircraft carriers as a proxy allocator of Department of Defense (DoD) baseline cost to regional operations. Allocation follows simply from DoD data that since 1990 no less than one aircraft carrier has been continuously on-station in the Persian Gulf; that eight are required to keep one on-station there; that the Navy has had eleven–fifteen carriers since 1990; and that Army and Air Force units are virtually never deployed to combat operations without Navy units. For 1976–2007 CPGfp is estimated to be $6.8×1012 and for 2007 $0.5×1012 (2008$). This substantial military investment is not a remedy for the market failure at the heart of regional security problem, which is oil market power. When CPGfp is added to economic losses attributed to market power in another recent study (Greene, 2010), the severity of this market failure becomes more apparent.