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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Personal Finance / Macroeconomic Trends & Risks
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Author: OrmontUS ✭✹  😊 😞
Number: of 4581 
Subject: Unintended consequence
Date: 08/07/26 5:56 PM
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edition.cnn.com - Iran war trump

Saudi Arabia, Pakistan and Turkey signed a mutual defense agreement on Friday, as Riyadh faces escalating attacks from Yemen’s Iran-backed Houthi rebels in recent days.

The agreement, signed in Mecca, sees Saudi Arabia draw two of the Muslim world’s most formidable military powers to its defense, transforming their longstanding security ties into a collective-defense alliance. The pact stipulates that it would treat an attack on any of the countries as an attack on all – similar to NATO’s Article 5 principle.

It comes as the Houthis on Friday carried out an attack on Saudi forces at a base in eastern Yemen, according to the group’s spokesperson.

Jeff's note:

This draws into question the requirement for the US to station troops in the Middle East. It also reduces the requirement for Saudi Arabia to be muscled into joining the "Abraham Accords". In fact, it acts as a counter-balance to some of Israel's current administration's expansionist flexibility. It also places new pressure on India and may be an opening for China to get into the mix.

The recent actions of the US in Iran has reduced our ability to militarily hold up our end of our current agreements and have limited our options significantly.

It has also bee an additional financial blow to an economy already buried in debt (from Gemini):

To calculate the cost per U.S. resident, we can divide the estimated cost of U.S. military operations against Iran by the current U.S. population (~349 million people).

Because official estimates vary depending on the timeframe and what categories of spending are included (e.g., direct operational costs vs. long-term replacement/rebuilding costs), the calculation yields a few different totals:

1. Department of Defense Operational Base Estimate (~$37.5 Billion)

Cost: ~$37.5 billion (official Department of Defense operational estimate provided to Congress)

Calculation: $37,500,000,000÷349,000,000

Cost Per Capita: ~$107.45 per person

2. Independent Tracking / Comprehensive Direct Cost Estimates (~$113.3 Billion)

Cost: ~$113.3 billion (bottom-up tracking covering 108 days of operations, including naval deployments, air operations, and expended munitions)

Calculation: $113,300,000,000÷349,000,000

Cost Per Capita: ~$324.64 per person

3. Long-Term / Full Economic Impact Projections ($200 Billion – $1 Trillion)

$200 Billion (Emergency Supplemental Request): ~$573.07 per person

$1 Trillion (Long-term comprehensive estimate by defense economists, including long-term equipment replacements, contract expansions, and veteran care): ~$2,865.33 per person

Jeff
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