The US spends far more on its military than any other nation on Earth, but very soon, it will not be the top expenditure of the US government. Rather, rising interest rates and years of mounting debts mean that soon, interest on the debt will overtake that.
Interest costs will be $390 billion next year, and more than $900 billion within a decade, according to the Congressional Budget Office. At present, US military budgets are in the $700 billion range, and themselves constantly growing.
Somewhere, these two growing lines will intersect, and the runaway military spending is a big reason why. There simply is no way for US to keep pouring substantial portions of a trillion dollars down the well annually for the military without borrowing, and that debt is just growing.
The US debt is huge, and that is in no small part because of decades of runaway military spending, and trillions dumped into nuclear weapons. Lawmakers largely are not interested in this matter right now, likely reflecting their unwillingness to cut military spending to try to get the debt back in line.
This is what makes the push to war with Iran so particularly dangerous right now. They’re really trying to get it underway before they simply can’t even afford to start a war. War with Iran would destroy what’s left of the economy.
Who do they owe? Who collects the interest? Who creates the money?
From wikipedia:
“As of September 2014, foreigners owned $6.06 trillion of U.S. debt, or approximately 47% of the debt held by the public of $12.8 trillion and 34% of the total debt of $17.8 trillion. As of 2018, the largest holders were China, Japan, Ireland, and Brazil.”
At least in the past, long-term US treasury notes were seen by many foreign governments as good insurance against financial instability. Not for long, the way things are going.
Of course our debt is the result of selling US bonds which are bought by US dollars and eventually redeemed in US dollars so paying for interest and military spending is never a problem.
There are two real problems. First, in order to keep spending these enormous sums, we must find justification for it, hence endless wars. Second, while the federal debt can always be paid off and while deflation is the bigger threat currently, we may want to be careful about how much money we put into the private sector and at what point does aggregate demand spur general inflation.
Far better to understand what kind of spending increases productivity and benefits the people the most. I can think of several things ahead of paying for empire expansion and maintenance and propping up FIRE.