**Pentagon’s Iran Campaign Could Cost U

Pentagon's Iran Campaign Could Cost U.S. Economy Up to $210 Billion, Budget Expert Warns

The U.S. military strikes on Iran, now in their fourth day under Operation Epic Fury, could impose an economic cost of as much as $210 billion, according to Kent Smetters, director of the Penn Wharton Budget Model and a leading fiscal analyst.

Smetters told Fortune the direct budgetary cost ranges from $40 billion to $95 billion, with $65 billion as the likely figure for military operations, equipment replacement, and munitions. That estimate assumes the campaign lasts roughly two months; costs would escalate if operations extend beyond that window.

The PWBM director, who previously served as an economist at the Congressional Budget Office and Deputy Assistant Secretary for Economic Policy at the Treasury Department, cautioned that traditional cost-of-war calculations often overlook critical variables. "One problem I have with cost-of-war calculations is that they really do ignore the counterfactual," Smetters said.

For CFOs and finance teams, the implications are significant: sustained military operations could pressure federal spending, potentially affecting interest rates, inflation expectations, and corporate planning assumptions. The full economic impact—beyond direct defense spending—remains uncertain as the operation continues.