How much is the Iran war costing us? - The Indicator from Planet Money Recap
Podcast: The Indicator from Planet Money
Published: 2026-03-18
Duration: 8 min
Guests: Mark Gantzian, Linda Bilmes, Nita Crawford
What Happened
The daily financial toll of the U.S.-Israel war with Iran is challenging to calculate, with early estimates by the Center for Strategic and International Studies pegging costs at $900 million per day, while Pentagon officials later estimated the costs to be $1.9 billion per day. These initial numbers only scratch the surface of the true expenses involved.
Mark Gantzian, a retired U.S. Marine Colonel, notes that the munitions mix and base damage costs exceeded initial estimates. Additionally, the costs of bombs dropped are not covered by the current Department of Defense budget, necessitating additional Congressional funding. However, costs are expected to decrease as the U.S. establishes air superiority, allowing for the use of cheaper munitions.
Linda Bilmes, a finance professor at the Harvard Kennedy School, raises concerns about the long-term costs of the war, drawing parallels with post-9/11 conflicts that far exceeded initial budget estimates. The Bush administration's Iraq War estimate was $50 billion, but Nita Crawford's research suggests the real cost approached $3 trillion.
Veterans' care is highlighted as a significant long-term expense. Linda Bilmes cites a $7.3 trillion obligation in disability benefits alone, excluding healthcare costs. This burden extends for decades, adding to the war's financial legacy.
Nita Crawford also emphasizes the environmental costs of war, such as military emissions, which in 2024 were larger than many countries' annual emissions. Bombing oil facilities compounds environmental damage, with strikes in Iran and Saudi Arabia exacerbating the issue.
The financing of wars has shifted since 9/11 to rely heavily on debt instead of taxes or budget cuts. Linda Bilmes argues that financing through debt burdens future generations and changes public buy-in compared to tax-based funding, as demonstrated historically by leaders like President Truman.
Key Insights
- The U.S.-Israel war with Iran incurs significant daily costs, initially estimated at $900 million, later revised to $1.9 billion per day. These figures reflect only the immediate expenses and do not capture long-term financial impacts.
- Veterans' care represents a considerable portion of war expenses, with a $7.3 trillion commitment to disability benefits for those injured in service. This financial obligation extends well beyond the duration of the conflict.
- Environmental costs are a critical but often overlooked aspect of war, with military operations in 2024 emitting 47 million metric tons of CO2 equivalent. Bombing oil facilities further exacerbates environmental damage.
- Financing wars through debt rather than taxes shifts the financial burden to future generations. Linda Bilmes suggests this change diminishes public accountability and alters the societal perception of war costs.