Michael Hudson : May 1 2026 : We Need a Guns and Butter debate over the costs of the Iran War

For Counterpunch 

Sixty years ago opposition to America’s war in Vietnam, a major attack concerned the costs of diverting U.S. resources away from social spending to the military – what was called Guns and Butter.

I was the junior member of the Columbia University triumvirate headed by Seymour Melman and Terence McCarthy. We lectured widely, wrote in magazines such as Ramparts and newspapers. The New York Tribune still existed as an alternative to The New York Times, and regularly published our critiques in its interviews and on its editorial pages.

Those mid-1960s were the days! The antiwar movement had enough momentum to bring down Robert McNamara and Lyndon Johnson in 1968!

Alas, that epoch seems long gone. There seems little hope that changing the party in power will change much. Neither feels much pressure to end the long-term strategy of war with Russia, China and Iran.

I have not seen any media critique, for instance, of Treasury Secretary Bessent’s statement to Congress on Tuesday, April 28, that America’s war in Iran so far has cost $25 billion. Some critics have commented that this seems to be a big number. But it is only the equivalent of 50 or 60 White House ballrooms that Donald Trump has proposed. It pales in comparison to the $1.5 trillion US military budget.It is a deceptively tiny number intended to distract attention from the actual costs of America’s war in Iran.

The Iraq war, for instance, has been calculated to have cost $3 trillion according to Joe Stiglitz in 2008. His estimate took into account the fact that the Iraq war was responsible for most of the U.S. budget deficit – financed by interest-bearing securities at interest rates that were rising. Also taken into account were the costs by the Veterans Administration of the injured U.S. soldiers incurred and payments to surviving relatives of those who were killed.

Instead of taking such long-term costs into account. Sec. Bessent’s $25 billion only cites the out-of-pocket costs of the Iran war. There is no calculation of what it would cost to actually replace the enormous inventory of U.S. missiles, aircraft, guns and other armaments that have been used up in the U.S. wars against Russia in Ukraine and against Iran.

Where is today’s public discussion is how much the U.S. economy will have to pay to re-build an even vaster military-industrial complex to restock the missiles that Trump has used up. I’m not sure that there’s much intention of paying the Military Industrial Complex with weapons that have failed in practice. But no doubt there will have to be new research on what kind of weapons will work against the war that is promised against China in a few years. Raw materials and labor for such new weaponry will be much more expensive now. It will all be added to the U.S. GDP, but will not be “real” production for the economy at large.

Keynesian militarism has become a burden on the economy instead of a way of increasing industrial production and prosperity as was claimed back in the 1960s. How much more will the U.S. economy have to pay for energy at the high distress prices that Trump’s closure of the Strait of Hormuz has cost? How much will the deficit spending of $1.5 trillion cost each year at, say, 4% interest? The tentative answer is $60 billion per year – year after year. And that’s just for this year’s military budget.

This cost is in the trillions of dollars for the world economy, which is being pushed into what threatens to be a great depression. The damage should include the cost of bankruptcies, insolvencies, a crash of U.S. stock and bond prices, a destruction of foreign imports from the United States apart from oil and LNG.

If voters, politicians and their business campaign contributors are to be mobilized to end this war spending, we need a new discussion along these lines comparable to that which led to such public opposition back in the 1960s. As I said, those were the days!