The Real Cost of War

L. Randall Wray

Economics Policy Note Archive from Levy Economics Institute

Abstract: The press is full of stories on the cost of President Trump's war of choice against Iran--said to be running at $2 billion a day. With an on-again, off-again ceasefire, that cost may have declined at least temporarily. However, many reports suggest that America's inventory of firepower has been run down by the war in Ukraine plus this latest adventure. Each Tomahawk missile cost about $2 million dollars to make, but at today's costs, replenishing the stockpile could run closer to $4-5 million for each missile. The Patriot missile systems used to shoot down Iranian drones cost about $1 billion each. Typically, two or more missiles are used to take out each drone, so it costs "anywhere from $500,000 to $4 million" to dispatch a drone that cost $20,000 to $35,000--a daunting ratio (Silver 2026; Pow 2025).

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