Can a nation calculate the true price of armed conflict while combat is still underway? When U.S. Defense Secretary Pete Hegseth told lawmakers in July 2026 that fighting in Iran cost $37.5 billion (accounting for personnel pay and operational expenses through September 30), budget analyst Linda Bilmes dismissed the figure as incomplete. Bilmes, a senior public policy lecturer at Harvard Kennedy School, calculated that the immediate fiscal obligation alone will surpass $100 billion. [1]
Why Official War Budgets Fall Short
Defense budgets presented to lawmakers routinely mimic simple household balancing ledgers. In congressional testimony, administrations tally visible outlays: training recruits, transporting sailors, refortifying forward posts, and replacing expended missile stockpiles. Accounting conventions in federal defense reporting disguise long-term commitments as temporary operating expenses. Bilmes argues that treating modern combat as a straightforward transaction ignores a spreading Amazon of future liabilities. Once fired, an advanced interceptor cannot simply be erased from the ledger; replacing munitions requires repurchase contracts at inflated future market prices. Military hardware depreciates rapidly in combat. [1]
The tendency to minimize initial war projections represents an enduring political reflex. In November 2002, Defense Secretary Donald Rumsfeld projected that the invasion of Iraq would cost under $50 billion, dismissing higher independent assessments as baloney. Yale economist William Nordhaus countered that even under optimistic conditions the operation would require $100 billion, with prolonged resistance driving outlays toward $1.9 trillion. Nordhaus, who subsequently received the 2018 Nobel Memorial Prize in Economic Sciences, urged Bilmes to track escalating commitments as combat expanded across the Middle East. [1, 4]
Premature war cost estimates consistently mislead legislators and citizens alike. Without accounting for compounding future liabilities, initial budget projections obscure the enduring fiscal consequences of military mobilization. [1]
How Linda Bilmes Tallies Long-Term War Debt
The concept of off-budget wartime finance forms the theoretical core of Bilmes’ upcoming volume, The Ghost Budget: Paying for America’s Wars, scheduled for release in fall 2026 [1, 3]. Bilmes, who completed her doctoral dissertation at Oxford on post-9/11 war financing, coined the term ghost budget to designate the opaque mechanisms used to fund military operations outside standard budgetary trade-offs [1, 6]. By financing overseas deployments through emergency supplementals and continuing resolutions, administrations evade statutory caps and prevent citizens from scrutinizing national defense obligations [3, 6]. Off-ledger war financing systematically conceals long-term liabilities from public debate. This practice encourages fiscal opacity. Former Defense Secretary Robert Gates cautioned that emergency funding created a culture of endless money, allowing the Pentagon to maintain 400 overseas bases without routine fiscal discipline. [3]
The Pentagon flunks its comprehensive financial audit year after year. In private industry, such persistent accounting failure would trigger immediate regulatory shutdown. [1]
Can defense procurement achieve genuine accountability without independent oversight? For decades, weapons acquisition programs have buried contractor payments deep within classified annexes. The research of Linda Bilmes establishes that uncounted military commitments inevitably distort federal strategic planning, resulting in pervasive waste and unmonitored contractual overhead across major combat theaters. [1, 3]
Long-Term Care and Compounded Interest
The publication of The Three Trillion Dollar War in 2008 demonstrated that the financial impact of the Iraq conflict exceeded initial official predictions by a factor of 60,000. Co-authored with Nobel laureate Joseph Stiglitz, the bestseller quantified ignored costs, including deferred equipment replacements, economic disruption, and specialized medical care [1, 7]. Modern military engagements generate decades of escalating healthcare liabilities for wounded veterans. Battlefield medical advances ensure far higher survival rates for service members facing severe trauma, while public health institutions demonstrate greater recognition of post-traumatic stress disorder and chronic disabilities. Expanding eligibility significantly elevates long-term obligations of the Department of Veterans Affairs. [1, 6]
Past administrations met military emergencies through deliberate domestic sacrifice. During the First World War and the Second World War, Woodrow Wilson and Harry Truman enacted tax increases and spending reductions to fund mobilization [1, 3]. Upper-income earners paid higher tax rates at the conclusion of conflict than at its onset. Unfunded military deployments shift immense financial obligations onto future generations. Successive post-2001 administrations slashed marginal taxes while initiating expansive military deployments, shifting war costs onto future generations through long-term debt financing [1]. Today, public debt exceeds $31 trillion, with 14% of taxpayer dollars expended exclusively on servicing debt interest. [3]
Wartime borrowing compounds across generations, shifting trillions in deferred liabilities onto taxpayers who were not yet born when hostilities commenced. [1, 3]
Dysfunction from the 1974 Congressional Reforms
Federal budgeting gridlock is neither accidental nor novel. Since the Second World War, the federal government has achieved an annual budget surplus on only two occasions. The first surplus arrived in 1969, the inaugural year of Richard Nixon’s presidency. The second occurred as a four-year surplus during the second administration of Bill Clinton, driven by the post-Cold War peace dividend and revenue growth during the dot-com expansion. During that surplus period, Linda Bilmes served as Assistant Secretary and Chief Financial Officer of the Department of Commerce [2, 3]. Balancing the ledger proved an exceptional historical anomaly rather than standard operating practice. [3]
Structural breakdown deepened following legislative overhaul. Prior to 1974, the executive branch formulated the budget, leaving Congress to review the White House proposal. The Congressional Budget and Impoundment Control Act of 1974 shifted formulation power from the president to 535 members of Congress, creating a splintered committee apparatus. The 1974 budgetary reforms dispersed fiscal power across hundreds of congressional committees. The regular budget process has operated according to statutory design only four times since those reforms took effect. Instead, federal agencies have endured 22 government shutdowns and over 200 stopgap continuing resolutions (temporary spending measures enacted to avert immediate agency closures). Preparation for funding lapses drains billions of dollars each year even when shutdowns are averted at the deadline. [3]
Political scientist V. O. Key Jr. famously asked on what basis dollars should be allocated to activity A instead of activity B. In contemporary Washington, that question remains unanswered, replaced by automatic incremental adjustments and lobbying from vested special interests. [3]
Lessons from Municipal Labs and National Parks
While federal fiscal mechanisms stagnate, municipal administrations frequently demonstrate robust budgetary discipline. Local governments separate infrastructure investments from operational expenses through capital budgeting (a distinct financing framework that amortizes durable assets over their multi-decade working lives). Cities plan water mains, transit corridors, and school facilities over five-to-ten-year horizons, funding construction through borrowing matched to asset life. Municipal governments distinguish everyday operational spending from multi-decade capital investments. By contrast, federal agencies finance a thirty-year hospital using the same annual appropriations mechanism employed to purchase office coffee. Local managers also apply cost accounting to determine precise per-unit expenditures for filling potholes, recruiting teachers, or clearing graffiti. [3]
Practical municipal reform formed a major chapter in the career of Linda Bilmes through the Greater Boston Applied Field Lab, established in 2005 [1, 2]. Initiated after Boston Mayor Thomas Menino connected Bilmes with Somerville Mayor Joe Curtatone, the field program invited students to overhaul municipal accounting without expensive external consultancies. Sixty-seven Kennedy School students volunteered to restructure Somerville’s operational ledgers, establishing an enduring partnership that later expanded across Bloomberg Cities programs. Bilmes also extended valuation methodology to public lands, serving on the National Parks Service Advisory Board for eight years and co-authoring Valuing the US National Parks and Programs: America’s Best Investment with John Loomis, which established a $92 billion baseline asset value for national parks [1, 2, 6]. Methodological precision reveals immense public assets. [1, 2]
PerEXP Teamworks also reports on cosmological modeling, including new explanations for the Hubble tension. In public finance, establishing rigorous baseline values similarly enables researchers to quantify assets that conventional market accounting neglects. [2, 6]
Translating Abstract Trillions into Public Accountability
Conveying astronomical sums to the voting public presents a persistent linguistic barrier. Because the words million, billion, and trillion rhyme in English, citizens easily conflate them as generic signifiers for large sums of money. To overcome that perceptual numbness, Bilmes presents students with temporal scale comparisons during early lectures. A million seconds represents roughly 11 days, while a billion seconds spans approximately 30 years (reaching back roughly to the theatrical release of The Lion King). By contrast, a trillion seconds ago woolly mammoths still roamed the earth. Temporal comparisons transform abstract federal trillions into tangible physical increments. Public finance education requires vivid communication. [1]
That instinct for public service reflects the background of Linda Bilmes and her Quaker faith, ratified in silent prayer where she embraced a calling to quantify hidden societal burdens. Beyond her research on war costs, Bilmes was featured in Charles Ferguson’s documentary No End in Sight and served on the United Nations Committee of Experts on Public Administration from 2017 to 2025 [1, 6]. She also serves on the board of the Institute for Veterans and Military Families at Syracuse University [2]. Her teaching shaped analysts like Philip Tizzani on the House Appropriations Committee [1]. Bilmes advocates for statutory commissions to overhaul the 1974 budget framework and simplify tax filing, drawing on twelve years living in the United Kingdom [2, 3]. Meaningful reform demands statutory restructuring. [3]
Separately, PerEXP Teamworks explores extreme astronomical systems in its account of gravitational waves from a mega black-hole collision. Whether tracking astrophysical phenomena or auditing military liabilities, empirical analysis requires rigorous observation. Whether Congress establishes a statutory commission to overhaul defense accounting remains an urgent test for democratic governance. [1, 3]
- ONLINE NEWS Larkin, M. (2026, September 16). Linda Bilmes is doing the math. The Harvard Gazette. [Article Link]
- WEBSITE Harvard Kennedy School. (2026). Linda Bilmes. [Article Link]
- ONLINE NEWS Ditta, T. (2026, March 30). Linda Bilmes takes on big budget questions. Reimagining the Economy, Harvard Kennedy School. [Article Link]
- ONLINE NEWS Scientific Today. (2026, September 16). Linda Bilmes is doing the math. [Article Link]
- WEBSITE Bilmes, L. (2012). Linda Bilmes. [Article Link]
- WEBSITE Wikipedia contributors. (2009). Linda Bilmes. Wikipedia. [Article Link]
- ACADEMIC JOURNAL Stiglitz, J. E., & Bilmes, L. J. (2012). Estimating the costs of war: Methodological issues, with applications to Iraq and Afghanistan. Oxford Handbooks Online. [Article Link]
APA 7: TWs Editor. (2026, September 17). Why Linda Bilmes rejects official numbers on the cost of war. PerEXP Teamworks. https://perexpteamworks.com/en/linda-bilmes-cost-of-war/
