Paying a war

About this episode

The episode discusses the implications of US defense spending and its impact on domestic manufacturing and resource security.

Phil points out that the US is likely to spend $1.5 trilion on defense/offense spending this year. Acknowledging that sovereign currencies can essentially create money to fund defense, doesn’t there get a point where too much is just too much? A significant portion of this expenditure flows to major defense contractors like Lockheed Martin and Northrop Grumman, often resulting in "corporate welfare" where increased military budgets are prioritized over social welfare. Steve says that while money creation is theoretically limitless for the US, the real-world constraint lies in physical production capabilities and the availability of essential materials like rare earth elements, which are largely refined in China. This strategic dependence on foreign resources, combined with the inflationary pressures that can arise from massive government spending, suggests that a nation's ability to sustain a war is ultimately determined more by its domestic manufacturing capacity and resource security than by its purely financial reserves. Hosted on Acast. See acast.com/privacy for more information.

People in this episode

Host: Phil Dobbie

Guest: Steve Keen

Topics covered

• defense spending
• sovereign currency
• corporate welfare
• military budgets
• resource security
• inflation

Keywords

• defense spending
• sovereign currency
• corporate welfare
• military budgets
• inflation
• resource security
• Lockheed Martin
• Northrop Grumman

Mentioned in this episode

Organizations: Lockheed Martin, Northrop Grumman

Places: US, China

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