The 11 September 2001 terror attacks by Al Qaeda were meant to harm the United States, and they did, but in ways that Osama bin Laden probably never imagined. President George W Bush's response to the attacks compromised America's basic principles, undermined its economy, and weakened its security.

The attack on Afghanistan that followed the 9/11 attacks was understandable, but the subsequent invasion of Iraq was entirely unconnected to Al Qaeda: as much as Bush tried to establish a link. That war of choice quickly became very expensive (orders of magnitude beyond the $60 billion claimed at the beginning) as colossal incompetence met dishonest misrepresentation.

A conservative tally of America's war cost was $3-5 trillion. Since then, the costs have mounted further. The social costs, reflected in veteran suicides (which have topped 18 per day in recent years) and family breakups, are incalculable.

Even if Bush could be forgiven for taking America, and much of the rest of the world, to war on false pretenses, and for misrepresenting the cost of the venture, there is no excuse for how he chose to finance it. His was the first war in history paid for entirely on credit. As America went into battle, with deficits already soaring from his 2001 tax cut, Bush decided to plunge ahead with yet another round of tax 'relief' for the wealthy.

Today, America is focused on unemployment and the deficit. Both threats to America's future can, in no small measure, be traced to the wars in Afghanistan and Iraq. Increased defense spending, together with the Bush tax cuts, is a key reason why America went from a fiscal surplus of 2 per cent of GDP when Bush was elected to its parlous deficit and debt position today.

The wars contributed to America's macroeconomic weaknesses, which exacerbated its deficits and debt burden. Then, as now, disruption in the Middle East led to higher oil prices, forcing Americans to spend money on oil imports that they otherwise could have spent buying goods produced in the US.

In Afghanistan and Iraq, the US and its allies knew that long-term victory required winning hearts and minds. But mistakes in the early years of those wars complicated that already-difficult battle. The wars' collateral damage has been massive: by some accounts, more than a million Iraqis have died, directly or indirectly, because of the war.

Not all of the consequences were disastrous. Al Qaeda, while not conquered, no longer appears to be the threat that loomed so large in the wake of the 9/11 attacks. But the price paid in getting to this point, in the US and elsewhere, has been enormous, and mostly avoidable. The legacy will be with us for a long time. It pays to think before acting.

Joseph E. Stiglitz is University Professor at Columbia University, a Nobel laureate in economics, and the author of Freefall: Free Markets and the Sinking of the Global Economy.

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