Source: U.S. Navy | Flickr
The Iran war could end up costing U.S. taxpayers far more than official figures suggest, according to the analysis of one Harvard academic.
The first 6 days of the the joint U.S.-Israeli operation against the Islamic Republic, beginning February 28, racked up costs of $11.3 billion, according to the Pentagon’s briefing to Congress.
While a fragile ceasefire is still in place, efforts to reach a lasting settlement have so far proved elusive, with U.S. forces starting a blockade of Iranian ports on Monday after peace talks over the weekend failed.
“I am certain we will reach $1 trillion for the Iran war,” said Professor Linda Bilmes, public policy expert at the Harvard Kennedy School, in an internal interview.
Her research, published two days before the temporary ceasefire announcement on April 8, identified several reasons why this military operation could have catastrophic consequences for the U.S. national debt well into the future.
She estimates the short-term, upfront costs as totaling around $2 billion per day during the 40 days of live conflict. This includes the price of munitions, troops, and damage to military assets — such as the shooting down of three F-15 fighter jets due to friendly fire from Kuwait.
Bilmes believes the short-term costs are higher than they appear on paper, as the Pentagon reports figures based on the historical value of inventory, rather than the actual price of replacing those assets today — which is typically far higher.
“These gaps are one reason why the reported $11.3 billion is closer to $16 billion, and they reflect a persistent gap between what the Pentagon reports in real time and what the war actually costs,” she said.
Bilmes added that large, multi-year contracts with Lockheed Martin and Boeing for interceptors and missiles mean the cost of replenishment to the U.S. will be far higher — at $4 million per interceptor — than the cost of drones fired from Iran, which can be produced for just $30,000 each.
Down the road
In the long run, the cost of the war is ramped up by the reconstruction of damaged facilities and inventory — not only to U.S. military assets in the region, but also to the infrastructure of its allies in the Gulf.
Add that the cost of potential lifetime disability benefits for the roughly 55,000 troops deployed in the region who have been exposed to toxins and environmental hazards, said Bilmes, then further strain is put on the taxpayer.
Meanwhile, the White House has asked Congress to boost the US defense budget to $1.5 trillion, which would mean the largest expansion in military spending since World War Two.
And the figure doesn’t include $200 billion that the Pentagon has asked to be put aside for the war in Iran.
“Even if Congress does not agree to approve the full increase, it is highly likely that at least $100 billion per year will be added to the base defense budget that would not have been approved in the absence of this war,” Bilmes added.
Such outlays will weigh heavily on the proliferating U.S. fiscal deficit.
When compared with the Iraq war, which cost $2 trillion in total, debt held by the public during that period was under $4 trillion. Today, it is over $31 trillion, and much of that stems from the previous wars in Iraq and Afghanistan, according to Bilmes.
“We are borrowing to finance this war at higher rates, on top of a much larger debt base,” she added.
“The result is that the interest costs alone will add billions of dollars to the total cost of this war. And unlike the upfront costs, these are costs we are explicitly passing on to the next generation.”