This article originally appeared on Dean Baker’s Patreon. It is reprinted here with permission.

Our Secretary of Defense (or War) Pete Hegseth seems to be having a really great time killing people in Iran, but his live action video games come at a big cost, not just in lives, but in budget dollars. To be clear, the main reason to be opposed to this pointless war is its impact on the people of Iran and elsewhere in the region. But it also has a huge economic cost that is seriously underappreciated.

The short-term cost is the shortage of oil, natural gas, fertilizers, and other items that would ordinarily travel through the Straits of Hormuz. This shortage has already sent prices of many items soaring. The impact is not just on the goods themselves, but there is a large secondary impact due to higher shipping costs, and if fertilizer supplies are not resumed soon, higher food prices, due to lower crop yields. This is a big hit to people in wealthy countries, but it is life-threatening to people living on the edge in Sub-Saharan Africa and South Asia.

But in addition to the short-term cost, there is also a longer-term cost insofar as we are making new enemies and therefore will have higher bills for military spending long into the future. We already got the first taste of this as the Trump administration floated the idea of a $200 billion special appropriation to cover the cost of the war.

The Military is Really Big Bucks

There is remarkably little appreciation of how much money is at stake with wars and the military. This is because the media have a deliberate policy of uninformative budget reporting. They just write huge numbers in the millions or billions, knowing they are completely meaningless to almost everyone who sees them.

It would be virtually costless to provide some context for these numbers, for example, expressing them as a percentage of the budget. That would take any competent reporter ten seconds and add maybe ten words to a news article. This would tell you that the $200 billion (2.7% of the budget) Trump wants for his Iran war is a relatively big deal, while the $550 million (0.008% of the budget) Trump saved us by defunding public broadcasting was not.  

It is striking to see that Congress might be willing to quickly cough up this money when it has refused far smaller sums that could have made a huge difference in the lives of tens of millions of people. For example, the extension of the Covid relief enhancement of the Earned Income Tax Credit would have cost around $40 billion (0.6% of the budget) annually. Extending the more generous Obamacare subsidies would have cost $27 billion (0.4% of the budget) annually.  

And it is important to remember that these increased costs are not likely to be just a one-year expenditure. The military budget was 3.0% of GDP in 2001, before the war in Afghanistan, and projected to fall to 2.7% over the next several years. Instead, we got the Afghan War followed by the invasion of Iraq. By 2010, spending was up to 4.6% of GDP. The difference between actual and projected spending comes to almost 2.0% of GDP, or more than $600 billion annually in today’s economy.

The Peace Dividend

In contrast to the Trump administration’s efforts to seek enemies, in the 1980s and 1990s, the United States looked to diffuse tensions with the Soviet Union and saved a huge amount of money on military spending as a result. Military spending hit a post-Vietnam War peak of 6.1% of GDP in 1986. It then fell sharply as Presidents Reagan and Bush I negotiated arms control agreements with the Soviet Union. It was down to 4.7% of GDP in fiscal 1992, when the Soviet Union collapsed. It continued to fall through the 1990s, when the United States faced no major enemies.

At that point, Russia was actually a limited ally. There were many people in the foreign policy establishment who wanted to keep it that way, looking to accommodate post-Soviet Russia in a post-Cold War world.

Instead, we took the direction of expanding NATO eastward, incorporating the former East Bloc countries into NATO, starting with Hungary. Eventually, all the former East Bloc countries were added to NATO, and then former Soviet republics such as Estonia, Latvia, and Lithuania were added. In 2008, George W. Bush pushed for the addition of Ukraine and Georgia as well.

It is worth noting that it was not pre-ordained that NATO would be expanded eastward. NATO was formed as an anti-Soviet alliance. With the Soviet Union out of business, it was reasonable to think that NATO would be disbanded.

This was not just the dream of fringe peaceniks; many fully credentialled cold warriors also argued against expanding NATO eastward. This list includes Jack Matlock and Richard Pipes, both of whom held high-level positions under Reagan. It also included George Kennan, the godfather of the Cold War doctrine of containment. Even Henry Kissinger opposed including Ukraine in NATO.

It’s not clear whether Russia would have developed into a hostile state and potential enemy if NATO had not continued to exist and expand Eastward. We can all share our speculations on that counterfactual, but one thing that is not debatable is that having a major enemy is costly.

The Iran Nuclear Deal and Trump’s War

President Obama negotiated an agreement to restrain Iran from developing nuclear weapons in 2015. While there were issued raised with the monitoring of the deal, rather than trying to work through these problems, Trump withdrew from the deal in 2018. That decision, along with Biden’s failure to restore the agreement, created the conditions under which a second Trump administration, could be push by Benjamin Netanyahu into this war. The war has already proved incredibly costly for the country and the world, and the costs could well go far higher.

But apart from this war, Trump seems determined to raise military spending even further. He has said he wants the country to spend 5 percent of GDP, or $1.5 trillion a year, on the military. This comes to $12,000 per household. That’s real money.   

That is a lot of money to spend for no obvious reason. It means less money for healthcare, childcare, education, and many other items that people care about.

The question people should be asking is who is this spending supposed to defend us against? Perhaps Trump has Russia in mind, but he is supposed to be good buddies with Putin. Besides, Russia’s GDP is less than a quarter the size of the U.S. economy. Do we really need to spend an amount that is more than 20% of Russia’s GDP to protect us against them? Can our military be that inefficient and corrupt?

Maybe Trump is thinking of China. That would be a problem, since China’s economy is already one-third larger than ours and growing far more rapidly. If Trump’s plan is to have a New Cold War with China, that is one we are likely to lose, especially since he just told all our allies to go to hell.

As with the Iran War, Trump’s push towards a newly militarized economy does not seem well-considered. Or at least it doesn’t seem well-considered as a defense strategy. If the point is to put taxpayer dollars into the pockets of his family and friends, it can work out just fine. Until there is evidence otherwise, we should assume this is Trump’s real agenda for his big military budget.

In addition to reducing our security and jeopardizing the well-being of people around the world, Donald Trump’s belligerence will cost us a huge amount of money. But at least his family and friends will get even richer. Who knows, maybe he will even get the Nobel Peace Prize this year.  

Cuba’s government has announced that it has run out of oil.

On Wednesday night, Cuba’s energy minister Vicente de La O Levy said that the country has completely run out of diesel and fuel oil, and that the national grid is in a “critical” state. He further described how in the capital city of Havana, “the blackouts today exceed 20 or 22 hours.”

“The situation is very tense, it’s becoming hotter,” he added, referring to the start of summer that brings a need for more energy.

At the start of January, Trump halted Venezuelan oil exports to Cuba, following the U.S.’s kidnapping of Venezuelan President Nicolás Maduro and de facto takeover of Venezuela’s oil industry. Later that month, Trump imposed a total oil blockade on Cuba, imposing tariffs on countries that supply oil to the country, pressuring Mexico to stop its oil shipments to Cuba, and seizing oil shipments traveling to the island country.

At the end of March, a Russian tanker arrived in Cuba carrying an estimated 730,000 barrels of crude oil, breaking the U.S. blockade and temporarily easing the crisis. The crude was refined in April and provided relief for a few weeks. But this fuel has run out, Cuban officials explained. This was the sole shipment of fuel allowed to enter Cuba in more than four months.

.Cuba began suffering from power cuts in 2019, after the first Trump administration imposed “maximum-pressure sanctions.” But since January, these have become more frequent and severe, at times lasting several days.

Trump’s blockade has decimated Cuba’s universal health care system, causing deaths and forcing hospitals to close. Schools and government offices have also been forced to close.

In February, the UN Human Rights Office warned that “Intensive care units and emergency rooms are compromised, as are the production, delivery, and storage of vaccines, blood products, and other temperature-sensitive medications.”

“In Cuba, more than 80 percent of water pumping equipment depends on electricity, and power cuts are undermining access to safe water, sanitation, and hygiene. The fuel shortage has disrupted the rationing system and the regulated basic food basket, and has affected social protection networks — school feeding, maternity homes, and nursing homes — with the most vulnerable groups being disproportionately impacted,” the statement went on.

On April 30, Rep. Rashida Tlaib (D-Michigan) wrote on X, “Cuba’s infant mortality has soared by 148% from the tightening of U.S. sanctions. This is every parent’s nightmare. I can’t fathom the heartbreak of the thousands of Cubans who have lost their babies because of a cruel and broken U.S. policy.”

“It’s time to end sanctions on Cuba,” she added.

UN human rights experts also condemned Trump’s blockade on Cuba as a “violation of international law” and an “extreme form of unilateral economic coercion.”

Trump has frequently threatened that Cuba will be “next” after Iran. In March, he said he expects to “have the honor of taking Cuba,” and that “Whether I free it, take it – think I could do anything I want with it.” On May 1, Trump again said the U.S. will be “taking over” Cuba “almost immediately.”

Republicans in the Senate have suggested that Trump focus on reopening the Strait of Hormuz. Many have expressed that they hope Cuba’s government will fall from the U.S.’s economic sanctions, rather than direct military intervention.

On Wednesday, The Guardian reported that more than 30 members of Congress sent a letter to Trump urging him against military intervention in Cuba, and to stop using the U.S. Navy base at Guantánamo Bay for detention of migrants. They warned that increased aggression on Cuba would lead to more migration from the island.

The Trump administration has hoped its pressure would force “regime change” on Cuba, but has also been concerned about a rise in migration from the country due to its aggressive policies.

On Thursday, Trump’s CIA director John Ratcliffe visited Havana, offering an aid package to help ease the effects of the blockade. Cuban President Miguel Diaz-Canel said that for conditions to improve, the U.S. should lift its blockade.

Earlier this month, Cuba’s President Miguel Diaz-Canel responded to Trump’s comments, saying, “When they say we are an extraordinary and unusual threat to the United States — and we are sure that is not how the American people feel, but rather how the U.S. government feels, or the pretext that the U.S. government uses to attack us — one has to ask: What is the threat? What is extraordinary about that threat? What is unusual about that threat, when Cuba is a country of peace?”