The U.S.-Iran conflict is a windfall for pro-war hardliners, arms manufacturers, and the Russian oil industry. The masses pay the tab, and the impact of higher oil prices is already rippling through the global economy.

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In Europe, officials have warned that if energy prices remain elevated, inflation could climb back toward 3% while growth weakens. In the U.S., core PCE inflation (the Fed’s preferred gauge) is likely to rise from its current rate of 3.1%, already well above the Fed’s 2% target.

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Rising inflation is particularly problematic given the U.S. economy already appears vulnerable: weakening consumer sentiment, an increasingly K-shaped economy, and persistently large fiscal deficits fuelling ever-higher levels of debt.

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Debt for which U.S. citizens will ultimately be accountable.

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Here is a sobering statistic: the Congressional Budget Office projects debt held by the public rising from 101% of GDP in 2026 to 120% by 2036. By 2056, the CBO projects this figure will reach 175%... roughly in line with Greece’s debt-to-GDP ratio in 2012, when it embarked on the largest sovereign debt restructuring in history.

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However, the difference is scale: the current stock of U.S. debt outstanding is more than 100 times larger than Greece’s was when it was forced to restructure.

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Furthermore, those projections assume inflation trends down toward 2% and remains there. If higher energy prices act as the catalyst for inflation to reaccelerate, the outlook worsens materially. In that world, slower growth, higher taxes, and some form of financial repression become increasingly likely.

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Here’s hoping for swift de-escalation. Wars benefit hardliners and arms makers, but for the vast majority they mean inflation, human suffering, instability, and a larger tax bill.