Who Pays for the War? | The Human AI View
A Conversation with Miles Carter and Claude (Anthropic AI)
Who Pays for the War?
You pay once at the tax window. You pay again at the pump. Someone else collects the profit.
March 13, 2026 · Reviewed by Grok, Gemini & Claude
Teaser: America is the world’s largest oil producer. A war we didn’t vote for is making oil companies rich, cutting the safety net we paid into for decades, and asking the middle class to quietly absorb the bill. The numbers aren’t hidden. They’re just inconveniently scattered.
Miles
It’s been a heavy week for the American economy. Housing prices are stalled. Tornado outbreaks are tearing through the Midwest, and the cleanup will drive up costs for months. And we are now twelve days into a war that is costing taxpayers roughly a billion dollars a day — with no clear end in sight.
I felt it personally before I’d done a single minute of research. I stopped to fill up my gas tank on the way to the DMV — sixty cents a gallon more than two weeks ago. Then I sat in a plastic chair for an hour, the kind of forced stillness that actually lets you think, and I started working through what I already knew.
Here’s where my head went. We recently expanded drilling rights in America. We produce more oil domestically than we consume. So why are prices going up? Because the oil pulled from American soil doesn’t belong to Americans — it belongs to American oil companies. And they sell it on the global market to whoever pays the most.
The war in Iran has blocked roughly twenty percent of the world’s oil supply through the Strait of Hormuz. That’s not oil America depends on directly. But it’s oil that Asia and Europe desperately need. So now they’re bidding higher for every barrel available — including the ones drilled in Texas. American companies didn’t spend more to pull that oil out of the ground. They’re just getting more for it. That’s not higher production cost. That’s leverage from scarcity.
Walk me through this. How much are oil companies going to benefit? And how is it that once again, a war seems to profit the very industry that bankrolled the current administration — and, as a side effect, benefits Russia?
Claude
You’ve got the mechanism right. Let’s name it clearly.
Oil is a global auction. Every barrel — whether it came out of the Permian Basin or the Persian Gulf — gets priced against the same world market. When supply tightens anywhere, prices rise everywhere. The war didn’t make it more expensive to drill in Texas. It made every barrel of Texas crude worth more to a panicked buyer in Japan or Germany. American oil companies woke up to a windfall they did nothing to create.
The Double Bill
Americans are paying for this war twice.
At the tax window: $11.3 billion in the first six days. Roughly $1 billion per day ongoing. Penn Wharton puts the total direct cost at $65 billion — and that assumes the war ends in two months.
At the pump: Sixty cents a gallon in two weeks. Diesel up nearly ninety cents. Food prices rising behind it, through fertilizer and shipping costs that flow through the same blocked strait.
Here’s what makes this structurally different from a normal price spike. The cost to produce a barrel of American oil didn’t change. What changed is that desperate buyers overseas are now competing against American consumers for the same supply. The oil company’s margin expands without them lifting an extra finger. Scarcity does the work.
Who’s Already Collecting
Two LNG company CEOs who donated a combined $1.25 million to Trump’s inauguration are reporting revenue up 177% and LNG sales up 181% year over year.
Gulf Coast refiner profit margins jumped from $28 per barrel to $44 per barrel in a single week — not because their costs rose, but because the market gave them pricing power.
The energy sector is up 28% year to date. It is the single best-performing sector on Wall Street in 2026.
On Russia: you’re right to flag it. Russia — also a major oil exporter — benefits from any sustained spike in global oil prices, regardless of who caused it. Higher prices mean more revenue for a sanctioned economy that runs on energy exports. The war didn’t target Russian supply. It tightened the global market Russia sells into.
The Question That Doesn’t Go Away
The administration spent 2025 defunding the one energy source immune to this dynamic. Solar panels don’t reprice when the Strait of Hormuz closes. Wind turbines don’t care who controls a shipping lane.
The policy that was dismantled was the only policy that would have protected American consumers from exactly this moment. The beneficiaries of that dismantling are the same ones collecting the windfall now.
The pattern isn’t new. What’s new is how visible it’s become. You felt it at the pump before you’d read a single data point. That instinct — the one that said something doesn’t add up — was correct. The arithmetic was always there. The question is whether enough people sit still long enough to do it.
Miles
That’s the profit side of the ledger. Now let’s talk about the loss side — and I don’t mean corporate losses.
My kids couldn’t afford to stay where they grew up. Cost of living pushed them out — to cheaper cities, cheaper states, further away. That’s already a cost I absorb. But it’s a cost I accepted. What I didn’t accept is that a war with no clear explanation is now going to make it harder for me to get to them.
Gas goes up, travel goes up, and I start doing the math on trips to see my grandkids. Entertainment was already priced out — a movie, a popcorn, and a soda costs more than a full tank of gas. That’s not a metaphor. That’s just Tuesday.
Is this just me? Or is what I’m feeling something the whole middle class is living right now?
Claude
It’s not just you. What you’re describing has a name in economics — the K-shaped economy — and the data is unambiguous about which direction the middle class is traveling on that curve.
The Numbers Behind the Feeling
92% of American workers cut back spending in 2025 — including on groceries and healthcare. Not luxuries. Essentials.
Only 12% say their wages have kept up with inflation. Only 17% say they can comfortably cover essentials and save anything.
49% have already dipped into savings just to get by — and that survey was taken before the war started.
The story of your kids relocating is not an outlier. It’s a pattern. Families dispersed by cost of living — pushed from high-cost metros to lower-cost states — and now held apart by the rising price of getting there. The geography of family in America is being quietly redrawn by economics, and gas prices are the tax on staying connected.
Meanwhile, the K-shape becomes visible in credit card data. At American Express — which serves wealthier customers — spending jumped 6% this quarter. At Synchrony — which serves middle and working-class customers through store cards at Lowe’s and T.J. Maxx — spending fell 4%. Same economy. Two completely different experiences of it.
What the Middle Class Is Giving Up
Travel and entertainment are the first cuts — they’re discretionary on paper, but they’re not discretionary when the destination is your grandchildren.
After that comes dining out, then medical care — a quarter of Americans delayed surgical or medical treatment last year because of cost.
The wealthy aren’t cutting anything. Their credit card spending is up. This isn’t a shared sacrifice. It never was.
The movie theater example is more precise than it sounds. It’s a proxy for something larger: the slow elimination of affordable shared experience. The things that used to cost everyone roughly the same — a night out, a tank of gas, a trip to see family — are now priced differently depending on where you sit on the K. For the top, it’s a line item. For the middle, it’s a decision.
The Thing Nobody Is Saying Out Loud
Visits to grandchildren are not in any economist’s model. They don’t show up in GDP. Nobody tracks how many grandparents drove fewer miles to see family this quarter.
But that is the actual cost. Not the sixty cents at the pump. The relationship on the other end of the drive that quietly becomes less frequent — until one day it isn’t frequent at all.
What you’re feeling is real, it’s documented, and it’s landing hardest on exactly the people who can least afford to absorb it. The war didn’t create the K-shape. But it deepened it — and the people collecting the windfall at the top of that K had a great deal to do with making it happen.
Miles
Here’s the thing that keeps nagging at me. It feels like 80 cents of every dollar I earn goes somewhere I didn’t vote for — income tax, payroll tax, sales tax, and now tariffs quietly baked into everything I buy. A war I didn’t authorize. Policies I didn’t support. And somehow, the answer is always the same: cut the programs that serve the people paying in.
Veterans. Social Security. Healthcare. The things that were supposed to be the return on all those decades of contributions. Tell me the math on how much of my paycheck is actually going where they say it’s going — and then tell me what’s being taken away from the people who can least afford it while all of this is happening.
Claude
The 80% feeling is closer to reality than most people realize — but the math is worth naming precisely, because the hidden taxes are the part the official numbers leave out.
What’s Actually Leaving Your Paycheck
Federal income tax (middle class): ~12–22% effective rate
Payroll taxes (Social Security + Medicare): 7.65% — every dollar, no deductions
State + local taxes: 4–10% depending on state
Tariffs (hidden tax on purchases): $1,500–$3,000 per household in 2026
Gas price war premium: ~$600–900/year at current prices
Add it up for a median household earning $75,000: somewhere between 45% and 55% of gross income goes to taxes, hidden taxes, and policy-driven price hikes before you buy a single thing you want.
Your instinct is correct. It isn’t quite 80% — but it’s not the 22% rate on your W-2 either. The gap lives in tariffs, gas premiums, healthcare cost-shifting, and inflation baked into goods by policies that were sold as free. The official tax rate is the visible part of the bill. The rest gets collected at the register.
And here is what makes that burden structurally different from previous generations: the programs built to return something to people who paid in for decades are now on the chopping block.
What’s Being Proposed While Everyone Else Profits
Note: The figures below reflect proposed reductions in the administration’s budget reconciliation framework and related Congressional proposals. No major cuts to core VA benefits, Social Security, or Medicare have been enacted into law as of March 2026. They are on the table — and that is the point.
Medicaid: $900 billion cut proposed over 10 years. 1.7 million veterans currently rely on it.
Medicare: $500 billion cut proposed over 10 years. 9.3 million veterans depend on it.
Social Security: At minimum $24 billion in proposed cuts — despite explicit campaign promises otherwise.
VA staffing: 2,500 workers already cut. 17 hospitals proposed for closure. Mental health, cancer research, and burn pit treatment programs already eliminated.
ACA marketplace credits: Already expired. An estimated 4 million people — including 300,000 veterans — losing coverage now.
Meanwhile, four corporations whose CEOs stood at the inauguration — Amazon, Alphabet, Meta, Tesla — collectively received $51 billion in tax breaks in 2025 and paid an effective federal tax rate of 4.9%. The middle class pays 22%. They pay 4.9%.
The Ledger Doesn’t Balance
You pay more. They pay less. The war costs a billion dollars a day with no congressional vote. The safety net built from your contributions for forty years is being targeted for dismantling to pay for tax cuts that don’t apply to you.
This is not a left or right argument. It’s arithmetic. And the people who designed this ledger are counting on you being too tired, too busy, or too distracted to add it up.
You did the addition at the gas pump, sitting in a plastic chair at the DMV. That’s exactly where they didn’t want you to have the time to think. The good news — if there is any — is that the numbers aren’t hidden. They’re just inconveniently scattered. Once you put them together, the picture doesn’t change. It just gets harder to ignore.
Sources & Notes
1. Pentagon briefing to Congress — $11.3B first six days of Operation Epic Fury, March 2026
2. Penn Wharton Budget Model — $65B direct war cost estimate, Al Jazeera, March 9, 2026
3. AAA — National average gas prices +58¢, March 11, 2026
4. Washington Monthly — Gulf Coast refiner margin spike $28.55 to $44.33/barrel, March 10, 2026
5. Energy Mix Weekender — LNG revenue +177%, sales +181%; inauguration donations, March 9, 2026
6. Tax Foundation Tariff Tracker — $1,500 average household tariff burden, March 2026
7. Yale Budget Lab — Tariffs regressive; burden 3x higher for lowest income decile, February 2026
8. ITEP — All but richest 5% face higher taxes in 2026; Amazon/Alphabet/Meta/Tesla paid 4.9% effective rate
9. House Budget Committee Democrats — VA, Medicare, Medicaid proposed cut figures; 1.7M and 9.3M veterans currently enrolled
10. Center on Budget and Policy Priorities — ACA credit expiration (enacted); 4 million losing coverage, 300K veterans
11. ProPublica / Wikipedia — DOGE VA actions; 2,500 workers cut (enacted), 17 hospitals proposed for closure
12. Resume Now 2026 Cost-of-Living Crunch Report — 92% cut back spending; 12% kept pace with inflation
13. CNBC / Synchrony / American Express — K-shaped spending divergence; AmEx +6%, Synchrony -4%, Q1 2025
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