Staggering amount Iran war could cost the US economy as Donald Trump estimates how long conflict will last
Niamh Shackleton
Featured Image Credit: Jim Lo Scalzo/EPA/Bloomberg via Getty Images
The war with Iran could cost America an eye-watering amount of money as President Trump warned that the conflict could go on 'far longer' that initial projections.
Less than a week after the first US-Israeli attack on Iran and the economical affects have already become clear.
As of March 4, gas prices in America had hiked by 20 to 30 cents per gallon, said USA Today – something which US citizens are understandably unhappy about.
Elsewhere, Goldman Sachs has estimated that inflation could rise to 2.7 percent by May. However, the inflation hike could be short lived on the basis that the war isn't prolonged, JPMorgan Chase Chairman & CEO Jamie Dimon told CNBC.
Advert
"If it’s not prolonged, it’s not going to be a major inflationary hit," he shared. "Again, if it went on for a long time, that would be different."
Trump himself has warned that it the conflict might go on for longer than expected. Initial projections suggested four to five weeks of combat, but now the president has said it might 'go far longer than that' as the US military has the 'capability' to do so.
While the US military are be able to do, the average US citizen might not be able to afford the cost of the war.
Speaking to Fortune, Kent Smetters, director of the Penn Wharton Budget Model (PWBM) and one of the nation’s foremost fiscal analysts, forecast that the cost of the war could reach sums of $210 billion.
For the smallest estimate of the direct budgetary cost, Smetters said that the conflict could cost American taxpayers $40 billion — but that figure also goes up to an eye-watering $95 billion.
The most likely expenditure, according to PWBM, is a $65 billion hit to taxpayers. This would cover the price of direct military operations as well as the replacement of equipment, munitions, and other supplies.
Smetters went on to warn that his figure will go up if the war lasts longer than two months.
On top of direct military expenditures, he forecast an additional economic loss to America alone of approximately $115 billion. This would come down to disruptions to trade, energy markets, and financial conditions that a sustained conflict in the Middle East typically triggers, Fortune writes.
As well as disruptions to the economy, the war has wreaked havoc on travel and many people have been left stranded in the Middle East.
Blogger Alyssa Ramos is currently stuck in Kuwait, which is one of the countries that the US Department of State has urged Americans to vacate.
Six US soldiers have died in the Iran conflict so far after an Iranian ‘unmanned aircraft system’ hit a US command centre in Port Shuaiba, Kuwait last Sunday (March 1).
A source told CNN the attack came with no warning or sirens around 9am local time.
Parts of the building continued to burn hours after the strike.
Yesterday, the Pentagon named four of the soldiers who were killed.
These are Capt Cody Khork, 35, Sgt Noah Tietjens, 42, Sgt Nicole Amor, 39, and Sgt Declan Coady, 20.
Lt. Gen. Robert Harter, Chief of Army Reserve and Commanding General U.S. Army Reserve Command, said: “On behalf of the Army Reserve, we express our heartfelt condolences to their families and loved ones.
“We remain steadfast in our commitment to honoring the legacy of our fallen and supporting their teammates and families during this difficult time.”