The Lost Decade Of War

Gregg Easterbrook entertains a counterfactual:

Add war costs back into  the economy and the U.S. GDP would be around $16 trillion today, an annualized growth rate of roughly 3 percent for the last decade. At that level of growth, unemployment would be lower, deficits would be lower and the national mood brighter.

China? Doesn't seem to have these problems.