According to calculations by the Wharton Budget Model at the University of Pennsylvania and the Committee for Responsible Federal Budget, U.S. military action in Iran could increase the national debt by approximately $65 billion in just 60 days, with an additional $1.4 billion in interest expenses. At the same time, reduced tariff revenue will further widen the federal deficit, projected to create a $74 billion shortfall annually, exacerbating the already staggering $1.85 trillion deficit problem.
Kent Smetters, head of the Wharton Budget Model at the University of Pennsylvania, pointed out that while daily spending may decrease after the initial "shock and awe" operations, the cumulative cost will push the fiscal 2026 deficit to $1.853 trillion, equivalent to 6.0% of GDP.
Daily Spending as High as $800 Million to $1 Billion
Tariff Revenue Losses Worsen Fiscal Woes
The Congressional Budget Office (CBO)'s 10-year outlook report forecasts that U.S. debt will reach 120% of GDP by 2035, with interest expenses already accounting for one-fifth of total federal spending.
Hayes: Fed May Print Money to Fund Iran War, Good for Bitcoin
Arthur Hayes, co-founder of BitMEX, believes that the fiscal pressure from the war will force the Federal Reserve to restart quantitative easing (QE), which he sees as a positive for Bitcoin. Hayes recalled three historical precedents: the 1990 Gulf War, the post-9/11 counter-terrorism operations, and the 2009 troop surge in Afghanistan, all of which were followed by Fed rate cuts or monetary expansion.
He maintained his $250,000 price target for Bitcoin in 2026 and is betting that governments facing fiscal pressure will resort to monetary expansion.
President Trump told reporters on March 9 that the U.S. military objectives in Iran were “largely complete” and that the war should end “soon.” Influenced by these remarks, the dollar index fell to 98.5, briefly helping Bitcoin break through $71,000 before falling back to around $70,300.