How Much Is the War with Iran Costing Americans?

What was supposed to be a short military operation is becoming a serious problem for President Donald Trump, as Americans increasingly feel the war with Iran in everyday spending, from groceries to fuel.

At the end of the war’s sixth month, the U.S. economy has held up better than expected. Most economists do not predict a recession, and unemployment remains low. But the conflict is imposing costs that small businesses are already struggling to absorb.

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Both trucks use generators to keep the food and drinks cold. And they consume a lot of fuel. I have to pass some of the additional costs on to customers.

Adji Navarro, who owns two food trucks in Sacramento, said both vehicles rely on generators to keep food and drinks cold. “Both trucks use generators to keep the food and drinks cold. And they consume a lot of fuel. I have to pass some of the additional costs on to customers,” Navarro said.

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High prices are a consequence of the war with Iran and the disruption in the Strait of Hormuz.

Energy prices have risen sharply because fighting and a blockade in the Strait of Hormuz have disrupted a major route for transporting energy. Former George W. Bush energy adviser Bob McNally said the high prices resulted from the war and the disruption in the strait. Commodity-market specialist Alema Croft of RBC Capital Markets said diesel prices had reached record levels, increasing the costs of freight, food and travel.

The war is also becoming more expensive for the government. Gabe Murphy of Taxpayers for Common Sense said direct costs to taxpayers had already exceeded $100 billion by the end of June, with the total rising since then. He said consumer costs must be added to that figure. One analysis put the cost to U.S. households at about $1,000 per family, meaning Americans are paying through both higher living expenses and the federal budget. Much of the military spending is financed through new borrowing, which will add future interest costs.

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Diesel prices have reached record levels.

Military companies and parts of the energy sector are among the few beneficiaries. Economists see a greater risk of inflation remaining high for longer than of a serious economic crisis. That could keep the Federal Reserve’s interest rates elevated. Sean Bennett, filling his old car with fuel, said he had previously driven a car bought without a loan, but the cost of buying a replacement had become a concern.

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According to the most comprehensive estimates, direct costs to taxpayers have already exceeded $100 billion.