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University of Michigan economist Justin Wolfers has recently started a Substack called Platypus Economics. I've been listening, and he has a real talent for explaining complex economic concepts in an understandable way. Today's post was about the cost of the war.

The Pentagon's estimate for the war as of a couple of weeks ago was $25 billion. But that's just the direct costs of ammunition used and equipment lost or damaged. It doesn't measure the loss to the economy, like the spike in oil prices or the fed's decision not to cut interest rates this year as it had planned. He took a crack at estimating the total cost to the country of the war so far, using a couple of methods. One was the fed's decision to cancel planned interest rate cuts: $200 billion. A second was a change in what's called the Geopolitical Risk Index: also $200 billion. A third was the loss in total US stock market value from oil price increases: $3 trillion. A fourth used Goldman Sachs' downgrade in projected growth of GDP: $400 billion. The final was the requested increase in the defense budget of $600 billion. As increasing the defense budget is a one-way ratchet, that's easily $3-4 trillion over the next decade (I'm assuming he discounted to present value).

The point of the exercise was not to figure out the correct number. It was to do what economists attempt to do: get an order of magnitude estimate of the actual cost using available information. The $25 million number is a nice, round number easily repeatable by the media and memorable to Americans. But it is an order of magnitude or two lower than the real cost to the American economy. That's what we have sacrificed as a country to have this war against Iran.

https://newsletter.platypuseconomics.co ... bal-search

Res Ipsa wrote: ↑

Wed May 13, 2026 6:28 pm

That's what we have sacrificed as a country to have this war against Iran.

An illegal, unapproved war, no less.

Res Ipsa wrote: ↑

Wed May 13, 2026 6:28 pm

[...] Geopolitical Risk Index: also $200 billion. [...]

I fear that once all is said and done, and there's a "peace deal," the only thing that will have been ultimately accomplished is Iran having a solidified resolve to obtain a nuclear deterrent.

Before Trump torched the effective deal brokered by the international community, Iran had little incentive to risk developing a nuclear deterrent. The moment Trump, in his never-ceasing incompetent petulance, tossed the deal into the garbage bin, Iran suddenly had an increased incentive to have nuclear weapons. After all, they learned that all it takes is one voting cycle in America for any type of treaty to become obsolete, no matter how much every other party had been adhering to it. It showed them, that at the very least, they needed refined nuclear material to act as a bargaining chip.

Now, Iran not only has the previously inspired incentive (which to a small extent was tempered) because of MAGA electing malignant geopolitical and economic cancers, but they now know that at any moment, another Trump god-emperor might come along and either attack them again on some manufactured pretense, or back another nation in attacking them.

Their only logical course of action, directly because of Trump and his ilk, is to obtain nuclear weapons as soon as possible.

Some Schmo wrote: ↑

Wed May 13, 2026 6:33 pm

Res Ipsa wrote: ↑

Wed May 13, 2026 6:28 pm

That's what we have sacrificed as a country to have this war against Iran.

An illegal, unapproved war, no less.

Hasn't every war since World War II been illegal and unapproved?

Dr. Shades wrote: ↑

Wed May 13, 2026 10:39 pm

Some Schmo wrote: ↑

Wed May 13, 2026 6:33 pm

An illegal, unapproved war, no less.

Hasn't every war since World War II been illegal and unapproved?

Not in the context in which I was using those words, no.

Dr. Shades wrote: ↑

Wed May 13, 2026 10:39 pm

Some Schmo wrote: ↑

Wed May 13, 2026 6:33 pm

An illegal, unapproved war, no less.

Hasn't every war since World War II been illegal and unapproved?

No. Çongress authorized use of military force in Vietnam in 1964. Congress authorized use of military force against the perpetrators of 9-11. Congress also authorized use of military force for the invasion of Iraq.

Doctor Steuss wrote: ↑

Wed May 13, 2026 8:38 pm

Their only logical course of action, directly because of Trump and his ilk, is to obtain nuclear weapons as soon as possible.

The incredible stupidity of Trump's actions is flabbergasting! Barack Obama succeeded in negotiating a deal with Iran to forego developing nuclear power for military purposes. Trump has undone that accomplishment out of vindictive, jealous spite to undermine or destroy any good accomplishment for which Obama could legitimately claim credit. His cancellation of that deal and doubling down on punitive economic sanctions against Iran, and then initiating his idiotic, illegal military actions against them has only caused them to resolve more strongly than ever to accelerate their acquisition of nuclear weapons, making us and the rest of the world more unsafe and accelerating the inflation rate Trump promised to reduce or end.

Anyone who still can't see what a disaster Trump is to our democracy is a flaming idiot! If this government were fully sane and just, he would already have been impeached, convicted and imprisoned for the rest of his remaining life, for numerous, clearly obvious reasons!

Gunnar wrote: ↑

Thu May 14, 2026 2:34 am

If this government were fully sane and just, he would already have been impeached, convicted and imprisoned for the rest of his remaining life, for numerous, clearly obvious reasons!

This is the thing that I think likely causes the greatest despair. It's so obvious what should be done right now, but nobody has both the political appetite and power to make it happen. It's like we have a nest of cockroaches in the White House that are impervious to extermination.

The cost of the war in Iran is a drop in the bucket compared to the social welfare state. And unlike the social welfare state, the war offers enormous benefits in safety, security, and American global and economic dominance that serves an incalculable long term benefit to working Americans.

ajax18 wrote: ↑

Thu May 14, 2026 8:46 pm

... the war offers enormous benefits in safety, security, and American global and economic dominance that serves an incalculable long term benefit to working Americans.

Really? It looks like all those things to you?

Maybe it's all in the word "offers". The question is whether Trump's way of conducting this war is remotely likely to deliver those benefits. At the moment, the war as Trump is conducting it seems to be having opposite effects to those you mention.