Reuters reported on the US budget situation, stating that the country’s federal budget deficit reached $432 billion in July 2026, the highest figure ever recorded for that month. This figure brought the cumulative deficit for fiscal year 2026 to around $1.8 trillion, a level reached while two months still remain until the end of the fiscal year. Reuters also reported that government spending in July increased 22% compared with the previous year, reaching $766 billion. Even after adjusting for the timing shift of certain payments, the monthly deficit stood at around $333 billion, still 18% higher than the previous year.
The significance of these figures becomes clearer when viewed alongside the trajectory of US debt interest costs. Official estimates from the Congressional Budget Office (CBO) show that net interest payments on federal debt will exceed $1 trillion in 2026 and continue to rise due to the growing volume of debt and higher interest rates. The CBO has warned that rising interest costs will limit the government’s room for maneuver in responding to unforeseen crises, strengthening national defense or stimulating the economy.
This financial picture differs significantly, at least at the level of government finances, from Donald Trump’s economic narrative, in which he portrays the US economy as being in an exceptionally strong position and achieving unprecedented economic gains. Of course, the US economy cannot be measured solely by the budget balance; stock markets remain at record levels, and some production and employment indicators continue to point to the economy’s strong capacity. However, this very contrast makes the issue more complicated: an economy that appears powerful in some market indicators is facing deficits, debt and rising financing costs on the government balance sheet. The Associated Press has also recently stressed, in examining Trump’s economic claims, that parts of his narrative do not align with the more complex realities of the US economy, while public satisfaction with the government’s economic management remains low.
The importance of this situation becomes even greater when viewed alongside the Iran file. The US is now not merely facing a financial challenge or a separate geopolitical crisis; rather, it is confronting the intersection of financial pressure with a costly and uncertain war.
Trump began the war with Iran based on the assumption that military pressure could force Tehran to accept Washington’s maximum demands and ultimately provide the president with a political achievement that could be presented domestically, particularly ahead of the congressional elections. However, Iran’s continued resistance and its ability to maintain retaliatory capabilities have changed the equation. Reports published about the war indicate that the direct cost of US operations had reached $37.5 billion by late July, while pressure on US resources and weapons stockpiles has also increased. Reuters has also reported on Pentagon concerns regarding the depletion of military resources and its impact on force readiness.
Under these circumstances, Washington faces a strategic contradiction: military tools have so far been insufficient to impose the desired political outcome, yet a broader use of those same tools would require the acceptance of significantly greater costs.
From this perspective, Trump’s repeated threats to launch a larger war should not be analyzed solely within the framework of US military power. The more important question is whether the US economy and budget have the capacity to sustain a war whose swift and low-cost conclusion is not guaranteed.
The US may be able to finance a major military operation, but the issue is the opportunity cost and financial sustainability of war.
A high-intensity war with Iran is not limited to the cost of airstrikes and military operations. Replacing spent missiles and ammunition, deploying forces, defending regional bases, protecting shipping routes, supporting allies, compensating for equipment losses and dealing with the consequences of disruptions in energy markets would all create additional costs. If the conflict were prolonged, these expenses could become a sustained budgetary burden.
At the same time, a war with Iran could directly harm the very economy that Trump describes as being in its strongest position in history. Rising energy prices, inflationary pressures and disruptions to global trade routes could increase the domestic costs of war for American consumers. The Associated Press has also reported that US inflation remains above the Federal Reserve’s target and that the Iran war and energy prices are contributing to continued price pressures.
Therefore, the main issue for Trump is no longer simply: “Can he launch a high-intensity and large-scale war?” The question is: “Can he launch a war whose costs he would have to bear for an indefinite period?”
This is where America’s financial situation becomes a deterrent factor in war calculations. A monthly deficit of $432 billion, a cumulative deficit approaching $1.8 trillion, interest costs exceeding $1 trillion and rising military expenditures alongside a war of attrition have severely limited Washington’s strategic room for maneuver and made many options increasingly difficult.
Under such circumstances, threats of war can still serve as a political pressure tool; however, turning those threats into a large-scale conflict is an entirely different calculation. Perhaps the real weakness of the US in facing Iran is not a lack of destructive power, but rather the limits of its ability to absorb the costs of a confrontation that Iran could transform from a short operation into a costly and prolonged conflict.
This is where the central contradiction becomes clear: If the US economy is truly in the “best condition in history,” why must the federal government, while facing one of its largest financial challenges, spend resources on a war that has yet to produce a political achievement proportionate to Washington’s stated objectives?
Perhaps the issue for Trump is not the ability to start a war, but the ability to end one at an acceptable cost; and when it comes to Iran, these two are not the same.