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  1. Peace through Strength? Excessive US Military Spending Encourages More War

    The Russian invasion of Ukraine has brought America’s foreign policy interventions under the limelight once again. Ryan McMaken argues that the US administration’s claim that countries should not have the right to a sphere of influence, implicitly addressing Russia, is hypocritical. The US opposes a sphere of influence for Russia and other regional powers, while at the same time has steadily expanded its own global outreach. Among other, one can judge how true this is by looking at the amount of US military spending and size of its foreign military interventions.

    The USA not only spends a disproportionately high amount of money on military relative to the rest of the world, but has also continued doing so when the Cold War was over and it could have set in motion a virtuous cycle of international disarmament. The USA has also multiplied its foreign military actions and engaged in controversial and costly wars in Iraq and Afghanistan, harming both international peace and the global economy. From this point of view, Lew Rockwell’s scathing criticism of the US military interventions in Iraq and global hegemonic ambitions in general, appears still relevant after almost twenty-five years.

    US Military Spending in Perspective

    The US spends about 11 percent of its federal budget on defense, which is the third largest item after Social Security and Health, and costs almost twice as much as education. The US defense budget was $754 billion for the financial year 2022, before President Biden increased it by another $29 billion following the war in Ukraine.

    However, this is not the full picture, because other federal spending is also closely tied to defense. The budgets of Department of Veterans Affairs ($113 billion), Homeland Security ($55 billion), the State Department ($64 billion), and the FBI and Cybersecurity in the Department of Justice ($10 billion) add another $242 billion to the base budget of the Department of Defense (DoD). By adding it all up, defense spending is set to exceed $1 trillion in 2022—i.e., 14 percent of the federal budget and 4 percent of gross domestic product.1

    The US defense budget represents not only a significant burden on the domestic economy, but looks completely disproportionate relative to other countries’ military outlays. According to the Stockholm International Peace Research Institute (SIPRI) the US military spending is greater than those of the next ten largest military expenditures combined. At around $800 billion in 2021, the US military budget was almost three times higher than China's ($293 billion) and twelve times larger than Russia's ($66 billion).

    Except for China’s military budget which has increased about ten times over the last two decades, albeit from a very low level, the steady increase in the US military spending has widened the gap with the rest of the World (graph 1). Together with its allies in Western Europe, the US spent on military three times more than Russia and China combined in 2021. As the annual spending differential between the US and other countries took place over many years, it means that the United States’ overall military supremacy in terms of stock and quality of military equipment is undisputable.

    Graph 1: Annual military spending

    Source: SIPRI

    The key question is why the USA has not decreased dramatically its military spending when the Cold War was over and the main threat to its security disappeared. In the late 1980s, the Soviet Union’s military spending was very high at about $220 billion and almost in the same ballpark with the $300 billion spent by the US. However, when the Soviet Union disintegrated and its economy collapsed in the early 1990s, Russia’s military spending shrunk to a puny $10 billion on average during that decade. Yet, despite being a nuclear superpower, the US kept its military spending at the Cold War level of around $300 billion and later increased it exponentially during the War on Terror.

    Endless Foreign Military Interventions Post–Cold War

    The surge in US military spending over the last two decades mirrors a dramatic increase in the number of US military interventions. Monica Duffy Toft shows that US military interventions—i.e., the deployment of US armed forces to other countries—intensified over time, in particular after the Cold War.

    Approximately 392 US military interventions took place since 1800, as reported by the Congressional Research Service in October 2017. Their frequency increased steadily, over fifty-year periods, from 39 in 1800–1849, to 47 in 1850–99, 69 in 1900–1949, 111 in 1950–99, and to 126 over only seventeen years between 2000–2017. By March 2022, the number of foreign military interventions had increased by a few dozen more. Another striking finding is that the number of US military interventions increased at least four times from the Cold War (46) to the post–Cold War period (188) until 2017.

    Monica Duffy Toft also claims that the US military interventions since World War II have only rarely achieved their intended political objectives. The statistics presented show that big powers, such as the United States and Soviet Union, won a majority of conflicts with weaker adversaries up to 1950, but afterwards lost most of these asymmetric fights. Moreover, the interventions deemed “successful” have eventually cost much more that would have been considered reasonable previously.

    For example, the recent military debacles in the Iraq and Afghanistan bear an exorbitant price tag of about $4–6 trillion, if the liability of providing medical care and disability benefits to war veterans and the cost of financing the war are included.

    Economic Impact of Excessive Military Spending

    Like any other government expenditure, defense spending represents a transfer of factors of production from market-oriented activities to government ends, thus reducing consumer welfare. In the 1980s, annual military spending of about 6 percent of GDP on average represented a heavy burden on the standards of living of the Americans and contributed to fairly large budget deficits of about 4 percent of GDP (graph 2). In the 1990s, despite remaining at the same high level in nominal terms, military spending declined gradually to 3 percent of GDP as nominal GDP advanced, helping reduce the overall budget deficit. However, this favorable trend ended abruptly in the early 2000s when military spending jumped again to 5 percent of GDP worsening the budget deficit and overall debt level.

    Graph 2: Military spending, budget deficit and Fed’s interest rate

    Source: SIPRI and FRED.

    It can also be argued that the massive increase in military spending in the 2000’s not only contributed to a sizeable fiscal deterioration, but also swayed the Federal Reserve System’s (Fed) expansionary monetary stance. Zooming in into this period, Graph 3 shows how the acceleration of military spending to double digit growth rates went hand in hand with the Fed’s slashing of interest rates to record lows. Ramping up money creation was the most expedient way for the American government to finance the wars and the burgeoning pubic debt at lower costs. The increase in foreign holdings of US dollars, given the latter’s special status of number one reserve currency in the world, helped keep domestic inflation below the pace of money creation. Nevertheless, interest rates were cut for too low and too long2, fueling the real estate and stock exchange bubbles that caused the global financial crisis.

    Graph 3: Annual growth in military spending and Fed’s interest rate

    Source: SIPRI and FRED.

    The USA controls about750 foreign military bases spread across eighty countries worldwide and spends more on its military than the next ten countries combined. After the collapse of the USSR in 1991, the US has missed a “unipolar moment,” in which, as a sole remaining superpower could have put an end to the global arms race.

    Instead, it continued to increase its military budgets, greatly outspending the rest of the world and inciting other countries to follow suit. The US foreign military interventions have also multiplied and culminated into costly and lengthy wars, which left behind countries ravaged by civil wars in Iraq and Libya or under the same autocratic Taliban rule in Afghanistan.

    In addition, the justifications for the military interventions in both Iraq and Libya were seriously questioned and the international law principles were not consistently followed (e.g., the invasion of Iraq without a UN mandate, Guantanamo Bay), tarnishing the United States’ international reputation. Instead of a defender of international order and freedom, the USA now is perceived as an aggressive interventionist power, as illustrated by Lew Rockwell.

    Eventually most Americans realized that the wars in Iraq and Afghanistan had not been worth fighting. But, will the lesson be learnt that excessive US military spending should be cut and the military-industrial complex be kept under control in order to avoid such misadventures in the future?

    • 1. Until 2022, the cost of military interventions was not included in the DOD base budget and fell under “Overseas Contingency Operations” which spent about $2 trillion on the War on Terror since 2001.
    • 2. Even by the mainstream’s 
  2. Just How Common Are School Shootings?

    In response to the Robb Elementary School shooting in Texas this week, one now sees repeated claims that school shootings are somehow “normal” or common in the United States.

    For example, social media at this moment is teeming with users—assuming they’re not bots—posting about how they’re absolutely terrified if the idea of allowing their children to attend school. Yesterday, in a now-deleted post, Elizabeth Bruenig—notable for writing on the topic of Millennials having babies—declared that one reason Millennials don’t have babies is because they believe their children are likely to be killed in a school shooting. Bruenig compared sending to children to school as a sort of “lottery” system in which your child’s time to be killed in a school shooting may come up at any time.

    Some Europeans were eager to get in on the action also. El Pais, one of Spain’s largest dailies, presented “school shootings as a US norm.”

    This is a pretty odd claim, however, given that school shootings are so rare that in the United States in 2021 there was one school-shooting death for every 23 million Americans. By comparison, approximately one in 350,000 Americans dies from drowning each year. 

    If one is going to be “terrified” of the dangers faced by one’s children, obsessing over school shootings is a rather odd way to go about it. For all of us, our children are far, far more likely to be killed in an automobile accident than in a school shooting.

    The reason for the laser-like focus on an extremely rare phenomenon, however, is easy enough to explain. Many people genuinely believe—wrongly—that their children live daily in the shadow of school shootings. For gun-control advocates, that's all to the best since this false narrative can be used to push more legislation. 

    Moreover, gun control advocates spend so much time focusing on school shootings because they contend—whether earnestly or cynically—that changing just a few laws will end school shootings. To believe such claims, however, we’d need to see some evidence not only that such laws reduce homicides overall, but that they also reduce homicides specific to schools. Secondly, these laws would have to work so well that they’d be worth the enormous costs to society—costs brought on by necessary drug war-like enforcement measures—that such laws would entail. And in the meantime, far more widespread causes of mortality for children won't enjoy much attention in Washington because those awful things can't be turned into a gun control campaign. 

    On the other hand, more practical and attainable solutions directly related to school security will be ignored. 

    School Shootings Are Incredibly Rare

    Far from being a “norm” in American society, school shootings are a tiny subset of homicides which are themselves not exactly a leading cause of death in the United States. For example, there were approximately 16,700 homicides in the United States in 2019. That’s a rate of about 5 victims per 100,000 people. (By comparison, more than 100,000 Americans die of diabetes each year.)

    Of those 16,700 homicides in 2019, 17 of them were due to shootings at K-12 schools. That means school shootings were 0.1% of all homicides, and school shooting deaths occurred at a rate of .005 per 100,000 Americans.

    Some of the worst years for school shootings have placed homicides in the range of 20 to 30 deaths. Excluding the Bath Consolidated School killings of 1927 (which was a bombing rather than a shooting) 2018 was likely the most deadly year for schools, with 39 shooting victims. 2012—the year of the Sandy Hook shootings—was the second most deadly year. 2022 will likely be among the worst single years for school shootings, with at least 28 deaths.



    If we look at school shooting deaths since 1985, we see that school shooting deaths per 100,000 swing from year to year—as we'd expect when total events are so few. In some periods, they can be fairly consistent, as from 1991 to 1999.  (The nation in the early 1990s was emerging from a high-crime period during the 1980s.) But consistency has not been the case over the past decade with rates ranging from .006 per 100,000 in 2015 to .119 per 100,000 in 2018. These are small fractions of total homicide rates, and totals can change dramatically based on just 1 or 2 events.


    So should parents suspect that their children are in some kind of ghoulish shooting lottery? The data suggests we should be far more concerned about children dying in drunk-driving incidents, car accidents in general,  suicide, drowning, cancer, or child abuse. Given the scarcity in this world of resources that can be devoted to addressing the dangers of the world, it only makes sense to put our efforts toward those measures that are likely to actually save lives. In the worst years, we’re witnessing around 30 deaths due to school shootings. That’s .000009% of the American population. I’m not saying that’s something we shouldn’t care about at all. But it is an odd thing around which to craft national policy or which we might think should prompt national “soul searching.” 

    This raises an obvious question, then: why are we not hearing about the urgent need to pass comprehensive federal anti-child abuse laws—or drunk driving laws? It's simple. Child abuse and drunk driving can't easily be framed as something that requires the abolition of private gun ownership. 

    The focus is clearly on the passage of legislation, not the actual pursuit of safety. This is why advocates are not deterred when we find there isn’t much evidence that any of these measures actually bring down school shootings, or even homicide rates overall. Given that school shootings are so rare, it is virtually impossible to establish any sort of correlation between certain laws and school shooting rates, and we can of course point to cases like Sandy Hook which occurred in locations with strict gun control laws. But even if we assume that a reduction of homicides overall correlates with school shootings, can we be confident that stricter gun control leads to lower homicide rates?

    We can’t be confident in that regard either. After all, if we look to the “Annual Gun Law Scorecard” from the Giffords Law Center, we find that of the top ten states with the lowest homicide rates, only two states (Massachusetts and Hawaii) get an “A-“ or better. Six of these states get an “C-” or worse (i.e., Vermont, Idaho, Utah, Wyoming, Maine, New Hampshire) for the strictness of their gun laws. 


    Basically, the gun-control position in these cases is to introduce hugely broad legal measures requiring enforcement and depriving countless peaceful citizens of the human right that is private self-defense.

    If addressing school violence is the real concern—and not just the headline grabber—the more practical solution is to address the security of schools specifically. Just as the private sector routinely employs security for its own facilities,  schools need to be more targeted and practical in this regard as well. In any case, when addressing events that are as rare as school shootings, we’ll never have enough data to really know which measures deterred violence and which didn’t.

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  3. McDonald's Closes All Stores in Russia as Woke Russophobes Rage

    The presence of American companies in foreign nations was once seen as a sign of American superiority and an instrument of American cultural power. Not anymore.

    Original Article: "McDonald's Closes All Stores in Russia as Woke Russophobes Rage"

    This Audio Mises Wire is generously sponsored by Christopher Condon. 

  4. Inflation, War, and Oil: How Today's Crises Are Rehashing the 1970s

    Persistently loose monetary policies always have negative growth and distributional effects that impair political stability. In extreme cases, there are civil wars and armed conflicts between countries.

    Original Article: "Inflation, War, and Oil: How Today's Crises Are Rehashing the 1970s"

    This Audio Mises Wire is generously sponsored by Christopher Condon. 

  5. Covid-19: Assessing the Madness in Year 3

    On the morning of Wednesday, May 4, I woke up feeling the onset of illness. My eyes burned and my muscles ached. As someone who had not been ill for more than a decade, I knew there was a problem, and I wondered if I had caught covid-19 after avoiding it ever since its outbreak in the United States more than two years ago.

    Because of the contagious nature of covid, I stayed in isolation in our bedroom. (My immune-suppressed stepdaughter lives with us, and my wife and I agreed we needed to take measures to protect her. And we have a VERY comfortable bedroom, one that would be the envy of most of our readers, so I didn’t exactly languish during my convalescence.)

    However, I did contact friends and acquaintances who had contracted covid, and most of them reported symptoms like mine. Although my experience was not necessarily “typical” of covid patients, the notion that covid was a deadly threat to everyone was overblown, and there is something we can learn from that, some very hard lessons.

    The first thing to remember about the outbreak of covid-19 is that the news media, academic, and political classes in general (or what we might call America’s “ruling class”) immediately saw covid as an opportunity to drive Donald Trump from the White House. I remember seeing posts by Democratic friends of mine on Facebook blaming Trump for every single death related to covid and excoriating him for not immediately locking down the entire country.

    Thus, covid-19 entered the USA as both a novel virus and a political vehicle to place progressives back in power, as progressive politicians and their media allies used covid as a political weapon, not just against Trump, but against anyone that dissented from the narrative created by the Centers for Disease Control and the National Institutes of Health.

    By turning covid into a political virus (just as the CDC and NIH had done with AIDS nearly forty years before), governments at all levels imposed the typical political “solution,” operating according to the fiction that everyone was equally at risk, which thus supposedly required lockdowns, school closures, and shutting down huge swaths of the economy. Note that this one-size-fits-all approach was not necessary, but once the situation was labeled a crisis, all that was left was for the authorities to crack down on American liberties, knowing that the media had their backs.

    Not that the politicians made these decisions without voices of “authority” behind them. Perhaps the loudest voice in the early days was that of Neil Ferguson of Imperial College London, who created an epidemiological model that predicted up to 2.2 million covid deaths in the US unless authorities immediately imposed hard lockdowns. Not surprisingly, the New York Times immediately endorsed the “study” and urged American authorities to enact draconian policies immediately.

    From that point on, progressive American governors and mayors engaged in a perverse competition to see who could close the most businesses and lay out the most draconian policies of school closure and quarantine of healthy people. Those governmental executives who favored an approach of personal freedom and personal responsibility, like South Dakota governor Kristi Noem, were savaged by the progressive media.

    While the media called Noem an “angel of death,” they heaped praise upon a real angel of death, the former New York governor Andrew Cuomo, who recklessly ordered covid patients into nursing homes, resulting in mass deaths. To put it another way, much of the media coverage of covid and the policies used to deal with covid followed strict narratives that were upheld even when those narratives collided with the facts.

    Two years later, we know things that progressives still don’t like to admit. The first is most important: by emphasizing covid reduction above everything else, progressives created a string of disasters elsewhere that now are destroying civil society. Politicians believed that they could shut down millions of businesses, put people out of work, and then print trillionsof dollars to ostensibly replace the lost incomes and lost goods and services. The result has been the highest rates of inflation in forty years, and these are almost guaranteed to go higher.

    There is almost no part of US life that has not been harmed by the covid measures. Even government authorities that two years ago were gung ho for closing schools and locking down whole communities now are reassessing those policies. Austrian economist Henry Hazlitt in Economics in One Lesson noted that the difference between “good” economists and “bad” economists involved looking at the entire effects of policies, not just immediate effects:

    The whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence: The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

    How one assesses the success or failure of public health policies—in this case, the response toward the covid infections—should follow the same line of reasoning. While public health officials and the media have demanded policies that emphasized keeping as many people as possible from getting covid in the first place, they ignored the harmful effects of zero-covid measures.

    Furthermore, we know now that the vast majority of people who have caught the virus have mild symptoms, much like what I experienced. Those most at risk are over sixty-five years old or have other physical conditions, such as diabetes, that make people vulnerable to other illnesses. The official death toll of covid shows that most fatalities were concentrated in the upper age groups and in people who had other health issues.

    Even in the early days of the pandemic, it was obvious who was most at risk of dying from covid, yet the progressive authorities treated everyone as being equally vulnerable, distributing resources to deal with the problem accordingly. The political response to the spread of covid produced political results: death and destruction. Massive school closures and isolating children has led to a rash of suicide and mental health crises, yet to this day, no one in an official capacity has admitted to wrongdoing.

    While no government entities in the USA have yet tried to emulate the massive lockdowns seen now in China, no progressive politician here has openly condemned those extreme measures, either. Instead, progressives continue to mirror what Charles-Maurice de Talleyrand wrote of the Bourbons when they were reinstated to power in France: “They had learned nothing, and forgotten nothing.” Indeed, people in authority who refuse to admit they were wrong the first time almost surely will do the same thing again and again.

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