Trump's forever war has entered a 'scary' new phase: Nobel economist

U.S. President Donald Trump points his finger as he participates in a bilateral meeting with Iraqi Prime Minister Ali al-Zaidi (not pictured) in the Oval Office at the White House in Washington, D.C., U.S., July 14, 2026.

As President Donald Trump’s war with Iran ramps back up, Nobel Prize-winning economist Paul Krugman warns that the conflict has entered a “very scary phase” in which the danger extends beyond “bombs and drones.” As the war spirals out, says Krugman, Trump may bring the fighting back home.

“The U.S. position has been wildly erratic,” wrote Krugman on Wednesday. “First, Trump said he was going to impose a 20 percent toll on all shipping, basically turning the Strait of Hormuz into a U.S. toll booth, which would have been wildly illegal and irresponsible, aside from being impossible. Now he says, no, he’s going to demand that countries invest in the United States, which is also actually wildly illegal. But in any case, it’s never going to happen.”

“And yet,” he continues, “this is extremely scary. The reason to be afraid is not that I think the war is going to come to America. It’s not even that I think the United States is going to seriously try to occupy Iran. We don’t have the troops. We don’t have the missiles. Trump depleted a large share of our weaponry in the course of his failed war so far.”

Krugman explains that he’s most worried because it increasingly looks “as if Trump has given up on trying to extract something that looks like victory.” Just a few day ago, it appeared “that Trump was going to de facto pull out, give up on the project, take advantage of falling oil prices because the strait was sort of kind of open — and try to spin the story about how this was actually an American victory and the economy is great and look at the stock market.”

This plan, asserts Krugman, was both “stupid and doomed,” and was “also kind of amazing because a serious attempt to end the conflict would have required facing up to reality, saying, OK, this war didn’t go well, but America remains great. Sorry about that.” But Krugman says Trump is not “emotionally” capable of admitting such a failure.

Instead, Trump has pivoted back to open conflict and bumbled attempts at extracting concessions, a decision Krugman says is “ominous” in light of the fast-approaching midterms. The return to war means further disruptions, and that Trump can’t rely on short memories and easing gas prices to reduce the headwinds Republicans face heading into the elections.

According to Krugman, “I don’t think it’s a coincidence that just as Trump essentially gives up, not gives up in the sense of abandoning his war, but gives up on trying to achieve anything he can even spin as a positive outcome, that we now have an announcement that this Thursday he’s going to have a primetime speech, which reports say is going to be about election fraud in 2020. Some reports hinting that he might try to declare the two Democratic senators from Georgia somehow illegitimate.”

Krugman says that while no one will believe him, “what is happening is that effectively he’s setting up the pretext, the groundwork for massive interference in the vote this November. That we’re basically seeing the stage set for some kind of attempt to block fair elections, maybe block elections entirely.”

“The fact that Trump is back to bombing Iran is really bad news,” Krugman concludes, “not because I have any real fear that America is going to be at risk from a foreign power, but because I think it signals an enormous risk to us from our own president, our own government. Be afraid, be very afraid.”

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