Washington’s ‘fuzzy math’ impacts inflation and your wallet
Dumping war costs on the nation’s credit card puts taxpayers on the hook — not only for the conflict’s principal amount but the interest on it.
U.S. Defense Secretary Pete Hegseth and acting DOD Comptroller Jules Hurst III recently told Congress that the Iran war has cost the U.S. $29 billion. Less than two weeks earlier, they said the war had cost $25 billion. Before that, Hegseth and Hurst refused to provide a cost estimate at all.
Testifying at a hearing before the House Appropriations Subcommittee on Defense, Hegseth was asked: “When can you share more formal accounting on the cost of the war with Congress and with this committee?” Hegseth replied: “Um, we’ll share what we can. I think we’ve updated on that number this morning. But when it’s relevant and required, we will share it.”
An astonishing response, for two reasons. First, the subcommittee before which Hegseth appeared writes the Pentagon’s annual budget, and Hegseth was there mainly to justify President Donald Trump’s record military budget request.
Second, Hegseth and Hurst made next to no effort to explain how they arrived at $29 billion — an impossibly low figure next to independent war-cost estimates of $1 billion per day.
I conducted one such estimate. In a post on the Popular Information report on Substack, I assessed the Iran war’s cost at $71.8 billion through 60 days. This includes $15.8 billion for operations, $41.2 billion for munitions, $11.9 billion for damaged or destroyed military assets, and $2.9 billion in war-related arms transfers to Israel. Hurst later conceded in a Senate hearing that damage to U.S. military bases was not part of the $29 billion estimate, and he could not confirm whether military aid to other countries was included either.
The remaining discrepancy likely comes down mostly to the Pentagon’s method for tracking munition expenditures, which is based on how much munitions cost in the past rather than what they’ll cost in the future. This accounting method can lead to vast undercounts when a rapidly consumed munition will be replaced by a much more expensive variant.
For example, each time a SM-2 interceptor (interceptors are missiles designed to shoot down other missiles) is fired in the ongoing war, the Pentagon’s accounting system registers a cost closer to the interceptor’s $1.2 million unit cost from 2010, rather than the $6.3 million unit cost of the SM-6, the more advanced and expensive successor that will replace it. The cost to fire 200 SM-2s isn’t $240 million — it’s nearly $1.3 billion.
The expenses that Pentagon officials cited in congressional testimony and that then were parroted in media coverage are much lower than the costs the U.S. public will be forced to pay.
Cutting taxes during wars and financing them with debt is a post-9/11 invention, unique to U.S. wars in Afghanistan, Iraq and now Iran.
How are Trump and congressional Republicans paying for the Iran war? With the national debt. “War is never paid for when you fight it,” House Appropriations Committee Chair Rep. Tom Cole, an Oklahoma Republican, said in a March interview. “We didn’t pay for World War II or Korea or World War I … so I don’t think [the cost of the Iran war] should be offset.”
There are two problems with Cole’s perspective.
First, it’s wrong on a factual level. Taxes were levied in 1914, 1916, 1917 and 1919 to fund World War I; in 1940, 1941, 1942 and 1944 for World War II; and in 1950 and 1951 for the Korean War. Cutting taxes during wars and financing them with debt is a post-9/11 invention, unique to U.S. wars in Afghanistan, Iraq and now Iran.
Second, dumping war costs on the nation’s credit card puts taxpayers on the hook not only for the conflict’s principal amount but the interest on it too. Based on a $72 billion Iran war cost through the first 60 days, Taxpayers for Common Sense recently estimated that the U.S. public could face $2.4 billion in additional interest payments over the next year, or $26.9 billion over the next decade.
Veterans care is another indirect, long-term cost. As recently noted by Harvard University professor and public-finance expert Linda Bilmes, “37% of the veterans from the first Gulf War in 1991 receive lifetime disability benefits. If even one-third of the 55,000 troops deployed today claim benefits, then we are committing ourselves to tens or hundreds of billions of dollars in disability and medical-care costs.”
In other words, $72 billion is just the direct, upfront cost. Additional costs are being kicked to the next generation.
Americans aren’t just paying for the Iran war as taxpayers; they’re paying for it as consumers too.
Americans aren’t just paying for the Iran war as taxpayers; they’re paying for it as consumers too. The war has propelled U.S. inflation to its highest point since mid-2023.
Wages aren’t keeping up with surging prices. The U.S. Labor Department recently reported a 0.5% drop in “real” (inflation-adjusted) average hourly earnings last month and a 0.3% drop over the past year. This has led to predictable consequences: middle- and lower-income consumers are increasingly turning to debt to finance purchases.
U.S. credit-card debt was already at a record high before the war, totaling $1.277 trillion by the end of last year. While this total dropped to $1.252 trillion in the first quarter of 2026, this shouldn’t be mistaken for an improvement in consumer health.
Rather, the $25 billion decrease is consistent with seasonal trends. Compared to the first quarter of 2025, credit-card debt has grown by 5.9% — 3.2% faster than inflation. The share of credit-card debt 90 or more days delinquent in the first quarter of 2026 was the highest in 15 years. Carrying credit-card debt remains historically expensive; APRs have been north of 20% since the fourth quarter of 2022, increasing from less than 16% in the first quarter of 2021.
The most popular counterargument is that the cost of the war — and the accompanying deterioration in Americans’ economic security — is worth preventing a nuclear Iran. That reasoning demands an unquestioning belief that the war won’t actually make that nuclear outcome more likely, and that war is the only guarantor of nuclear nonproliferation. Many Americans cannot afford to take that leap of faith.
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