How it affected the United States

This was a unique war in American history in terms of its effect on the budget and the economy, both because it was fought out of inventories and because America's allies paid for the war, at least in the short run. Indeed, the United States made a "profit" on the war during the fiscal year 1991, which ends on Oct. 1. The Congressional Budget Office estimates that United States incremental costs for Operations Desert Shield and Desert Storm came to $15 billion. Hence, with cash receipts expected to total $48 billion this year, it says the United States will have received $33 billion more than the incremental costs of the war this year.

One issue is how much lost equipment should be replaced, given American plans to scale back military expenditures. The inflow of foreign capital not only offset America's budget costs but also helped reduce the United States balance-of-payments deficits. America's foreign balance swung from a $23.4 billion deficit in the fourth quarter of 1990 to a $10.2 billion surplus in the first quarter of 1991