According to the estimations by UNN, based on information from Fortune, US military strikes on Iran could potentially set the American economy back by $210 billion. This hefty sum reflects a range of damages, as noted by Kent Smetters, director of the Penn Wharton Budget Model (PWBM) and a leading financial analyst.
Insights
Smetters articulates that the most optimistic estimate sees the damage at a mere $40 billion. This figure represents the lowest bound of direct budget expenditures, which could climb to $95 billion. However, when factoring in economic losses to the United States alone, we’re speaking of an additional cost of about $115 billion. It’s important to note the uncertainty here, with potential costs spanning from $50 billion to the staggering $210 billion.
Epic Fury Scenario
As Smetters elaborates, the Penn Wharton Budget Model envisions a scenario termed Epic Fury. In this situation, the outlook leans towards greater upside risk. Direct taxpayer costs are anticipated to be around $65 billion. This would encompass expenses for the military operations and the replacement of equipment and ammunition.
“Direct taxpayer costs of $65 billion are the likely cost of direct military operations, as well as equipment replacement, ammunition, and other materials.”
Additional Context
Further complications arise as tensions with Iran affect global oil prices. The Institute for the Study of War mentions Iran’s threats in the Strait of Hormuz. This has led to an increase in global oil prices, which might inadvertently boost Russia’s revenues. For example, on March 2, Brent crude oil prices climbed to $82.37 per barrel.
For more on the fluctuation of oil prices, you might consider visiting the Institute for the Study of War.
