Category Archives: Military expenditure

26/12/17: U.S. Wars Budgets: More Lessons Never Learned


An interesting report on the official accounts for war-related spending in the U.S. is available here: http://www.ibtimes.com/political-capital/defense-department-war-terror-has-cost-250-million-day-16-years-2608639. Which is, of course, a massive under-estimate of the full cost of 2001-2017 wars to the U.S. taxpayers.

It is worth remembering that war-related expenditures are outside discretionary budgetary allocations (follow links here: http://trueeconomics.blogspot.com/2017/12/231217-bloomberg-view-on-asymmetric.html). And you can read more here: http://trueeconomics.blogspot.com/2017/11/201117-tallying-costs-us-wars-in-iraq.html.

The problem, as I repeatedly pointed out, is that no one can tell us what exactly - aside from misery, failed states, collapsed economies, piles of dead bodies etc - did these expenditures achieve, or for that matter what did all the adventurous entanglements the U.S. got into in recent year deliver?  In Afghanistan, Libya, Yemen and Syria, in Pakistan and  Sudan, in Ukraine, in Somalia and Egypt. The sole bright spot on the U.S. 'policy horizon' is Kurdistan. But the problem is, the U.S. has been quietly undermining its main ally in the Syria-Iraq-Turkey sub-region in recent years. In South China Seas, Beijing is fully running the show, as multi-billion U.S. hardware bobbles up and down the waves to no effect. In North Korea, a villain with a bucket of uranium is in charge, and Iran is standing strong. In its historical backyard of Latin America, the U.S. is now confronting growing Chinese influence, while losing allies.

Yes, many of the above problems are down to the lack of long-term consistent strategy for soft diplomacy. And many are down to the fact that the world is multipolar, despite the U.S. strategy still pivoting around the hegemonic doctrine of single superpower-driven politics. But many are also down to the simple and brutal fact of military ineffectiveness and over-reliance on force (or threat of such) as a key lever for geopolitical engagement.

It is time to awaken to the fact that the world is not the imaginary stage for Fox News broadcasts about the U.S. military greatness. The world has moved on. Military can swiftly dismantle the existent order. But it cannot bring resolution to the roots of the crisis. And the combination of these two realities yields mostly chaos.

26/12/17: U.S. Wars Budgets: More Lessons Never Learned


An interesting report on the official accounts for war-related spending in the U.S. is available here: http://www.ibtimes.com/political-capital/defense-department-war-terror-has-cost-250-million-day-16-years-2608639. Which is, of course, a massive under-estimate of the full cost of 2001-2017 wars to the U.S. taxpayers.

It is worth remembering that war-related expenditures are outside discretionary budgetary allocations (follow links here: http://trueeconomics.blogspot.com/2017/12/231217-bloomberg-view-on-asymmetric.html). And you can read more here: http://trueeconomics.blogspot.com/2017/11/201117-tallying-costs-us-wars-in-iraq.html.

The problem, as I repeatedly pointed out, is that no one can tell us what exactly - aside from misery, failed states, collapsed economies, piles of dead bodies etc - did these expenditures achieve, or for that matter what did all the adventurous entanglements the U.S. got into in recent year deliver?  In Afghanistan, Libya, Yemen and Syria, in Pakistan and  Sudan, in Ukraine, in Somalia and Egypt. The sole bright spot on the U.S. 'policy horizon' is Kurdistan. But the problem is, the U.S. has been quietly undermining its main ally in the Syria-Iraq-Turkey sub-region in recent years. In South China Seas, Beijing is fully running the show, as multi-billion U.S. hardware bobbles up and down the waves to no effect. In North Korea, a villain with a bucket of uranium is in charge, and Iran is standing strong. In its historical backyard of Latin America, the U.S. is now confronting growing Chinese influence, while losing allies.

Yes, many of the above problems are down to the lack of long-term consistent strategy for soft diplomacy. And many are down to the fact that the world is multipolar, despite the U.S. strategy still pivoting around the hegemonic doctrine of single superpower-driven politics. But many are also down to the simple and brutal fact of military ineffectiveness and over-reliance on force (or threat of such) as a key lever for geopolitical engagement.

It is time to awaken to the fact that the world is not the imaginary stage for Fox News broadcasts about the U.S. military greatness. The world has moved on. Military can swiftly dismantle the existent order. But it cannot bring resolution to the roots of the crisis. And the combination of these two realities yields mostly chaos.

23/12/17: Bloomberg View on Asymmetric Military Budgets: Russia v U.S.


I have written before about asymmetric conflicts and power balances in the context, among other bilateral comparatives, the U.S.-Russia military spending: http://trueeconomics.blogspot.com/2017/09/12917-asymmetric-conflicts-and-us.html. And the latest budgetary appropriations from the U.S. for 2018 are suggesting that Washington has a serious problem learning any lessons - whether these are lessons from being punched around repeatedly in the Afghanistan, or being derailed in Iraq, being made irrelevant in Syria and so on.

There is a very good op-ed from Bloomberg View by Leonid Bershidsky that is worth reading: https://www.bloomberg.com/view/articles/2017-12-14/russia-s-military-is-leaner-but-meaner. This too covers the same topic, albeit from a slightly different angle.

The article also cites our recent research on the causal relationship between the U.S. military budgets, war engagements and the valuations of the U.S. defense stocks (see here https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2975368).



20/11/17: Tallying the Costs: U.S. Wars in Iraq, Afghanistan & Pakistan


The folks at Brown University have carried out the most detailed assessment of the disastrous costs of the U.S. wars fought since 9/11. The details can be found here: http://watson.brown.edu/costsofwar/. These are a must read!  While Russia stands accused by the U.S. of triggering the humanitarian crisis through its intervention in Syria (the civil war that started with the U.S. support and blessing), here is Brown University's conclusion about the real refugees crisis:

Not to say that one wrong (U.S.) makes another wrong right (Russia), but 10.1 million estimated refugees caused by the U.S. wars? This got to stand out, folks.

The U.S. has spent estimated USD5.6 trillion from 9/11 through fiscal year 2018 according to the study.


Enough to buy healthcare for every American, or to pay all outstanding student debt. Hell, in fact, it would have allowed for both.


And the above costs and impacts do not account for Libya, Egypt, Yemen and other direct and indirect 'minor' conflicts the U.S. has been involved in. The statistics do not include Syria.

In a recent post, I mused about the asymmetric warfare and the fact that, seemingly, outspending the entire world in terms of defense expenditures, the U.S. appears incapable of achieving its core objectives (see the post here: http://trueeconomics.blogspot.com/2017/09/12917-asymmetric-conflicts-and-us.html).

There appears to be no learning curve from the past 16 years - neither in the public minds (who support increasing expenditure on military industrial complex) and in the mind of the Washington politicians (see http://www.tomdispatch.com/post/176335/tomgram%3A_andrew_bacevich%2C_how_we_learned_not_to_care_about_america%27s_wars/#more).

And there is neither an increase in transparency in the American policies post-9/11, nor an increase in scrutiny of choices made (see http://watson.brown.edu/costsofwar/files/cow/imce/papers/2017/Linda%20J%20Bilmes%20_Credit%20Card%20Wars%20FINAL.pdf):


As folks from Brown University project conclude: "The wars have been accompanied by violations of human rights and civil liberties, in the US and abroad. The wars did not result in inclusive, transparent, and democratic governments in Iraq or Afghanistan... The human and economic costs of these wars will continue for decades with some costs, such as the financial costs of US veterans’ care, not peaking until mid-century. US government funding of reconstruction efforts in Iraq and Afghanistan has totaled over $170 billion. Most of those funds have gone towards arming security forces in both countries. Much of the money allocated to humanitarian relief and rebuilding civil society has been lost to fraud, waste, and abuse."

This is genuinely frightening!

12/9/17: Asymmetric Conflicts and U.S. ‘Learning Curve’


'Asymmetric warfare' or more aptly, 'asymmetric conflict' involves a confrontation between two sets of agents in which one set possesses vastly greater resources. In more recent time, the notion of 'asymmetric conflicts' involved the less endowed agents winning against more endowed ones. And the degree of asymmetries has grown significantly over time:

  • In Vietnam War, vastly outgunned Vietnamese forces literally defeated vastly over-equipped French and U.S. military machines;
  • In the Cold War confrontation, significantly less resourced Warsaw Pact managed to sustain relative long-term parity with much more resourced Western counterparts (including Nato);
  • In post-USSR years, vastly under-resourced Russia, compared to vastly over-resourced U.S. has been able to achieve quite a few 'wins' in geopolitical arena; 
  • Isis - with barely any resources, has managed to achieve huge gains against a range of much better equipped counterparties;
  • In Afghanistan, Taliban - with military expenditure of just a few million per annum, is successfully holding the line against both the Afghan state and its backers; and of course,
  • The 'rust-bucket' North Korea has just outplayed the U.S. in its race for nukes as a deterrent.
In summary, thus: spending does not secure reduction of risks in the age of asymmetric conflicts.

Now, consider the two key sources of 'existential' threats to the U.S. geopolitical positioning in the world: Russia and China. Illustrating asymmetric conflict:


And despite this obvious lack of connection between volume of spend and outruns in terms of geopolitical achievements, the prevalent consensus in Washington remains the same: more funds for Pentagon is the only way to assure preservation of the U.S. geopolitical positioning. 

Learning, anyone?