Iran Strikes to Cost U.S. Economy $210-B

As the United States commenced Operation Epic Fury—its sweeping military campaign against Iran launched in partnership with Israel—the financial toll on American taxpayers is coming into focus for budget watchers in Washington and academia, Nick Lichtenberg reported for Fortune.

The lowest estimate one of the nation's foremost anaysts projected for the cost of Epic Fury was $40 billion(Photo: Mehr News Agency)

Kent Smetters, director of the Penn Wharton Budget Model (PWBM) and one of the nation’s foremost fiscal analysts, said the total economic cost of the strikes could reach as high as $210 billion.

Smetters, whose model is widely used in Washington, D.C., to analyze the fiscal and macroeconomic effects of federal policy, previously served as an economist at the Congressional Budget Office and as deputy assistant secretary for economic policy at the US Treasury.

He has advised Congress on dynamic scoring and consults with policymakers from both parties on major tax and spending legislation. Smetters has described PWBM as a “sandbox” for legislators to workshop economic policy ideas.

The lowest estimate he gave Fortune for the cost of Epic Fury was $40 billion, representing the smallest estimate of direct budgetary costs, within a range that goes up to $95 billion.

He said PWBM assumes more upside risk in the Epic Fury scenario, so a $65 billion direct hit to taxpayers is the likely cost for military operations as well as the replacement of equipment, munitions, and other supplies.

“If the war lasts more than two months, then this number goes up,” he added.