This week, I was listening to a Planet Money Podcast, and they said that America borrowed $80 million from its own people to finance the Revolutionary War. Obviously, that turned out to be a pretty good deal for everyone involved. This got me wondering how much we actually paid for America. It turns out, we got a really good deal.
We looked up all the major events that took place that involved land expansion in exchange for compensation and/or war in United States history. The Revolutionary war got it all started, and the total price of that one was $151 million in 1776 dollars. In today's dollars, that is $2.7 billion, or roughly what we spend on our defense budget in the US today in about a day and a half! Our defense budget today is almost $650 billion dollars, just for reference.
The next major addition was the Louisiana Purchase in 1803. This massive land grab covered about 830,000 square miles in the center of our country. France sold us this land for $15 million dollars, which today would be worth somewhere around $250 million. This works out to about $300 per acre at today's prices, which as it turns out, is pretty cheap. Undeveloped land in the US is estimated to be worth about $6500 per acre, or about 22 times what we paid to France.
The next one really hits home, because in 1819, Spain ceded Florida to the USA. In reality, they could no longer afford to support Florida, and wanted to get rid of it. In exchange, we gave back some land out west, and paid them $5,000,000. In today’s dollars, that is about $81 million dollars, or roughly the revenue generated by Disney in about 2 days in 2017. No, I’m not making this up.
In 1853, the Gadsden Purchase sent $18.25 million to Mexico in exchange for parts of southern Arizona and New Mexico. The real reason for this was that it contained land that was better suited to building a Southern east-west railway line, which was completed in 1883. In today’s dollars, that equates to $546 million, or about 2% of the GDP of the city of Tuscon, the largest city that falls within the boundaries of the purchase.
The last major land purchase was completed in 1867, when the US paid a whopping 2 cents an acre, or $7.2 million, for Alaska. In today's dollars, that is $128 million. Alaska now pays out about 10 times that, or $1.3 billion, annually to its residents from its oil royalty fund.
All in all, it cost about $196.5 million dollars to buy the United States, or $3.7 billion in today’s dollars. Considering that the US economy generates about $33 million per minute in income, it would take just under 2 hours, or 112 minutes, to generate enough money to purchase the entire USA. I would say we made a very good investment, wouldn’t you?