As tensions escalate between Israel and Iran, the United States edges closer to direct military involvement. While media coverage has extensively debated whether military intervention could successfully destroy Iran’s nuclear facilities or facilitate regime change, a critical US war affordability crisis remains largely unexamined. Can America actually afford another war?
The US war affordability crisis manifests in three crucial dimensions that demand urgent attention:
- The federal government lacks sufficient financial resources
- The broader US economy cannot withstand additional external shocks
- America’s strategic capacity is already stretched thin across multiple global conflicts
The Devastating Federal Budget Reality
The United States currently operates with a staggering $2 trillion budget deficit—over 6% of GDP. This represents the largest deficit in the OECD apart from Israel, approximately double the EU average and triple the advanced economy average. According to the nonpartisan Committee for a Responsible Federal Budget, Trump’s “one big beautiful bill” is expected to add at least $3.1 trillion to the national debt over the next decade.
The Congressional Budget Office projects this legislation will push the deficit beyond 7% of GDP, with America’s overall debt burden surpassing its World War II peak by 2029—a clear indicator of the worsening US war affordability crisis.
The Astronomical Cost of Modern Warfare
Historical War Expenditures
Wars demand enormous financial resources, creating significant strain on already precarious economic situations. Consider these sobering figures:
- The Iraq and Syria conflicts cost American taxpayers nearly $3 trillion
- The Afghanistan war required approximately $2.3 trillion over 20 years, according to the Watson Institute for International and Public Affairs
- Even limited military operations typically expand beyond initial projections
While a targeted bombing campaign against Iranian nuclear facilities might seem relatively affordable, history demonstrates that Middle Eastern conflicts frequently evolve into protracted, costly engagements—further exacerbating the US war affordability crisis.
America’s Eroding Financial Safe Haven Status
Traditionally, the United States has benefited from investors’ “flight to safety” during geopolitical turmoil, as money shifts from riskier assets like stocks to safer options like American government bonds. This pattern historically made war financing more manageable.
However, recent tariff policies have significantly eroded America’s status as a financial safe haven, evidenced by:
- Steady decline in dollar value
- Rising American borrowing costs
- Reduced international confidence in US fiscal stability
These factors compound the US war affordability crisis by making it more difficult and expensive for the government to finance military operations through debt.
Economic Vulnerability and External Shocks
The Federal Reserve’s Precarious Position
The Federal Reserve’s current chair, Jerome Powell, has signaled reluctance to cut interest rates without absolute certainty that inflation remains controlled. Despite inflation coming in below forecasts for two consecutive months, uncertainty about tariff impacts has prompted a cautious approach.
A war with Iran would introduce additional economic variables, likely causing Powell to further delay rate cuts. This creates a dangerous scenario where the administration might be tempted to:
- Replace Powell with a more compliant Fed chair
- Force interest rate cuts despite economic indicators
- Potentially restart quantitative easing to finance war efforts
Such measures would undermine the dollar’s reserve status and potentially reignite inflation, deepening the US war affordability crisis.

The Oil Market Vulnerability
Even limited strikes on Iranian nuclear facilities would likely prompt retaliatory measures targeting global oil markets—Iran’s most effective means of inflicting economic pain on the United States. Potential Iranian responses include:
- Attacks on Middle Eastern oil facilities (as occurred in 2019)
- Closure of the Strait of Hormuz, through which approximately 20% of global oil passes
- Coordination with allied groups to disrupt regional energy infrastructure
JP Morgan estimates such actions could drive oil prices to $130 per barrel—exceeding the 2022 peak and potentially triggering catastrophic economic consequences. The previous energy price spike pushed US inflation to nearly 10%, and a similar scenario would devastate American economic stability.
Explore how global economic volatility affects job markets worldwide
Hiring During Global Uncertainty?
Post jobs with WhatJobs – Connect with qualified candidates despite economic volatility
Strategic Overextension: The Hidden Cost
America’s Three-Front Challenge
The final dimension of the US war affordability crisis is strategic rather than purely economic. With finite military resources and attention, America faces unprecedented challenges on multiple fronts:
- Ongoing support for Ukraine against Russian aggression
- Potential new conflict with Iran in the Middle East
- The need to counter China’s growing influence in the Indo-Pacific
Elbridge Colby, currently serving as Trump’s Under Secretary of Defense for Policy, has consistently argued that China represents America’s primary geopolitical threat. He advocates for concentrating US strategic focus on the Indo-Pacific while withdrawing from European and Middle Eastern commitments.
The Strategic Dilemma
Despite Colby’s position within the administration, the US remains deeply involved in Ukraine while simultaneously preparing for potential strikes against Iran. This strategic overextension raises critical questions about America’s ability to effectively address what many in Washington consider the most significant long-term challenge—China’s growing global influence.
If the United States cannot simultaneously manage confrontations with Russia, Iran, and China, a protracted Middle Eastern conflict could severely undermine America’s strategic position in the Indo-Pacific, creating long-term consequences that extend far beyond the immediate US war affordability crisis.
Find stability in uncertain economic times with resilient career options
Need Career Advice?
Navigate economic uncertainty with expert guidance on recession-proof career paths
FAQ About the US War Affordability Crisis
What exactly is the US war affordability crisis?
The US war affordability crisis refers to America’s diminishing ability to finance new military conflicts due to existing budget deficits, economic vulnerabilities, and strategic overextension. With federal debt already projected to exceed World War II levels by 2029 and the economy vulnerable to inflation shocks, the United States faces unprecedented financial constraints on its military options.
How would a war with Iran impact US inflation?
A war with Iran would likely trigger significant inflation through disruption of global oil markets. Iran could attack regional oil facilities or attempt to close the Strait of Hormuz, potentially driving oil prices to $130 per barrel according to JP Morgan estimates. Combined with delayed inflationary effects from recent tariffs, this could create a “triple whammy” of inflation pressures on the US economy, worsening the US war affordability crisis.
Can the US simultaneously manage conflicts with Russia, Iran, and China?
Many strategic experts, including current Under Secretary of Defense for Policy Elbridge Colby, argue that the US lacks sufficient resources to effectively confront all three challenges simultaneously. The US war affordability crisis reflects not just financial limitations but strategic constraints that force difficult choices about where to allocate America’s finite military attention and capabilities.
How does the federal deficit impact America’s ability to finance a war?
America’s $2 trillion federal deficit (over 6% of GDP) severely restricts financial flexibility for new military operations. Unlike previous conflicts where the US could easily borrow due to its “safe haven” status, recent economic policies have eroded investor confidence in US debt, making war financing more difficult and potentially forcing problematic measures like monetary expansion that could trigger inflation. This is a central component of the US war affordability crisis.