This is a viewpoint editorial by Captain Sidd, a financing writer and explorer of Bitcoin culture.On the celebration of Veterans Day in the U.S., I desired to put down a few ideas on war. War is a repellent thing, yet likely countless people all over the world actively participate in it every year with over a quarter of the worlds population currently living in “conflict-affected areas” according to the UN. America, for its part, is almost constantly participated in armed disputes worldwide, either in an advisory capacity, with air and missile strikes, or with U.S. soldiers signing up with the fight directly. President Obama, who operated on a platform of ending U.S. intervention in Afghanistan and Iraq, was the “very first president to serve eight years and command American wars during every single day of his tenure,” per NPR. While he did decrease the number of American soldiers exposed straight to combat zones (from 180,000 to 15,000), he greatly broadened drone capabilities and supposedly-targeted killings, causing a tenure where, in 2016, every day was marked by three bombs dropped on unsuspecting heads. Even today, under an administration that slowed drone strikes on believed terrorists, we now seem to be on the precipice of World War III. Among the worlds biggest energy producers– Russia– invaded its neighbor– Ukraine– a breadbasket country with goals to join the NATO military alliance.Beyond conventional wars, societies today find themselves muddled in unlimited ideological and abstract wars that also hurt people and claim lives– some in numbers far exceeding standard wars. Several American examples consist of the War On Poverty, the War On Drugs and the War On Terror. How did we get to a world of limitless wars, and what can we do about it? To address that, we require to begin with what keeps war going: financing. War Is ExpensivePutting soldiers into battle zone, equipping them and feeding them is no low-cost endeavor. The U.S. military spent a record $801 billion to keep the machine running in 2021 alone. While military spending is dropping as a percentage of GDP in the U.S., it is still around 4% for the past 20 years.SourceIdeological wars also acquire immense expenses, though these are more difficult to quantify in many cases. The expenses of the War On Poverty launched by President Johnson in 1964 are approximated to amount to over $22 trillion as of a 2014 study by The Heritage Foundation. Dont like Heritages politics? Think About The Washington Posts truth check of Paul Ryans claim that $15 trillion was invested on the War On Poverty as much as 2013. While the post claims Ryan is deceiving with the figure, it offers no other concrete figure and can only muster around $1 trillion of possible overestimation. The expenses of the War On Drugs are lower in financial terms– around $1 trillion– however the second-order impacts of unregulated drugs and warring violent gangs create a certainly large problem on health care and policing systems. This is not to discuss the expense in human lives, with Mexico counting over 300,000 deaths in its country due to the War On Drugs between 2014 and 2020. Thats equal to the amount of Americans lost in the 2nd world war. The War On Terror gathers stunning numbers too, with over $8 trillion invested by the U.S. on the post-9/ 11 military interventions. The misadventures of violent “nation building” in distant lands likewise produce economic expenses, keeping countries and neighborhoods on their knees and unable to grow or prosper. However, all of these pale in contrast to spending on the 20th centurys total wars. The overall wars of the 1930s and 40s led to a huge amount of costs, with World War I costing the United States about 52% of gross national product and World War II running up a bill equaling 40% of GDP. Where does this cash originated from? Financing Sources For WarGovernments are just able to engage in expensive and prolonged wars through financing– so where does the cash originated from? The first financing technique is borrowing. Federal governments can issue “war bonds” that give the buyer a monetary return after the war concludes. In return, the government gets much-needed money now. In the past, the general public was motivated to purchase these bonds as their patriotic responsibility. Hugh Rockoff of the National Bureau of Economic Research estimates the U.S. raised 58% of the funds utilized to wage World War I through loaning from the public.Liberty Bonds supported the allied war effort in WWI. SourceThe second funding technique is tax. Governments can impose taxes to money war efforts, drawing below the publics coffers directly. Rockoff estimates the U.S. effort in WWI got 22% of its financing from taxation. Taxes were raised through the War Revenue Act of 1916, which taxed “earnings exceeding an amount determined by the rate of return on capital in a base duration– by some 20 to 60 percent,” per the National Bureau Of Economic Research (NBER). Earnings taxes also rose at top income brackets from 1.5% to over 18%. The final funding technique is cash printing. The mechanics of this technique vary by nation, however generally involves a central bank buying the bonds (financial obligation) of their own nations treasury using freshly-printed (or keystroked-into-existence) cash. While this only accounted for 20% of WWI funding in the U.S., per NBER, borrowing from our main bank is now an increasingly-popular choice for politicians wanting to put cash towards all sorts of pet projects.Federal Reserve assets proliferated over the last 20 years. SourceWhile loaning needs counterparties ready to provide, and taxation raises the general public ire, printing money is a much more palatable choice politically. It enables investing now without requiring to make immediate sacrifices or hard choices. As the U.S. foreign and military impact grew over the 20th century, Americas capability to borrow from its own central bank increased. The party nearly concerned an end due to heavy spending on the Vietnam War and the War On Poverty in the 1960s, which led countries like France to trade in their dollars for gold. At the time, the U.S. dollar was backed by gold at a rate of $35 to one ounce of gold. Foreign governments could hence trade their dollars in for gold at any time, and the U.S. government needed to honor that rate– however, there were numerous quietly-printed dollars in flow by the late 1960s that the rate ought to have been around $200 to one ounce of gold. Nixon chose in 1971 to “temporarily” take the U.S. dollar off the gold requirement– though it never ever returned. Without any hard, unforgeable cash backing the U.S. dollar, the federal government was free to happily print cash, taking acquiring power from all wage-earners and holders of U.S. dollars to support government programs. With money printing, waging war practically forever is now possible. Whereas tax and borrowing dry up when residents honestly defy the war, printing cash requires far less oversight or arrangement from the people. Lets take a look at a few recent “forever wars” that survived through printed money. The War On PovertyThe War On Poverty stemmed in the mid-1960s with legislation developing and expanding federal aid programs aimed at poverty reduction. These programs include the Job Corps, which helps location disadvantaged youths into jobs, and the Volunteers In Service To America (VISTA), a domestic variation of the Peace Corps focused on helping the poor in America. The objective of the War On Poverty, as mentioned in Lyndon B. Johnsons 1964 State Of The Union Address, was “not just to ease the symptom of hardship, but to treat it and, above all, to prevent it.” Was the War On Poverty reliable towards those ends?While a few of the many federal programs created to attend to poverty helped individuals in certain times and locations, the total results are not favorable. While the U.S. federal government spent vast and increasing sums on hardship reduction, the rate of poverty has hovered between 10% and 15% for decades.SourcePoverty actually declined steadily into the 1964 launch of the War On Poverty, from over 22% in 1959 to around 17% when the Economic Opportunity Act was signed into law in August 1964. This poor efficiency of the War On Poverty also sits against a backdrop of rising earnings inequality, where the middle class dropped from 62% of U.S. aggregate income to 43%, with the upper income bracket taking up that entire drop. How could this war go on for so long, consuming more and more resources without producing outcomes? The U.S. government printed more cash, obtaining from the future and from its own main bank– which began broadening its balance sheet in the 1960s for the very first time because WWII concluded. Without the ability to print U.S. dollars, the governments ability to wage misadventurous wars in poverty and in Vietnam at the same time would have been seriously limited. The War On DrugsThe War On Drugs began in the 1970s with Richard Nixon stating drug abuse public enemy number one. In the past 50 years, regardless of military interventions and stringent policing all over the world, drug use and abuse is still rampant and causing accelerating deaths. Drug overdose deaths progressively rose over the previous 20 years according to the NIH, and a 2018 survey discovered that less than 10% of Americans think the War On Drugs is being won. Imprisonment for drug offenses is destroying education and work opportunities, producing an underclass of many disadvantaged and often Black or Hispanic people. Why does the War On Drugs continue, then?A drug usage room in Paris, which lowers harm for addicts through tidy needles and in some nations– like Switzerland– safe prescription heroin. Source.Unfortunately, the War On Drugs does not require popular assistance. The money printer permits financing for the system of policing and prisons required to continue the war. Without the discomfort of taxation or the option to provide to the war effort, the general publics ire never ever reaches the fever pitch needed to change political tides. The War On Drugs is now unaccountable, a rogue government program with few checks on its spending or actions. What we are left with is an institutionalized damage of society, kept alive by the money printer. The War On TerrorThe War On Terror started following the September 11 attacks, and put American soldiers throughout the Middle East to stomp out al-Qaeda and other extremist groups. While the War On Terror declared a triumph in the death of Osama bin Laden, the evolution of Americas 20-year war claimed an estimated one million lives, with a 3rd of those being civilians. Meanwhile, brand-new horror groups emerged and developed throughout U.S. professions of Iraq and Afghanistan, causing the rise of ISIS. In the house, the War On Terror acted as a convenient excuse to pass sweeping security measures through the Patriot Act.Source Perhaps the most poignant example of the War On Terrors failure was the U.S. exit from Afghanistan. After 20 years of U.S. military profession, U.S. intelligence approximated the Taliban would reclaim Kabul in 30 to 90 days after U.S. soldiers withdrew. It took them simply five days.A million lives lost, $8 trillion spent, and what do we have to show for it? Extremely bit, thinking about the Middle East is likely less stable and most likely to harbor terrorists today than when the War On Terror started. The war had the ability to continue, despite an absence of direction or success, due to its unaccountability. There were no clear metrics to determine success and no citizens complaining about increased taxation to cover the wars costs. This is made it possible for in large part by the massive deficits the U.S. federal government now runs to wage permanently wars. Why Do We Wage These Wars?All of these examples of American forever wars were abject failures at achieving their mentioned aims, yet our federal government still invests time, energy and cash waging them. Why are these clearly-failed wars still moneyed? Since printing money leads to unaccountable programs, they get funding. Citizens do not sign off on printing cash to money these programs, and they feel no increased taxes or cuts in other locations that affect them. Its uncertain precisely what– if anything– residents are quiting to money federal government programs today. Even when the public voices opposition to a war, that opposition has no teeth. Ballot out political leaders who support an unpopular forever war causes a video game of whac-a-mole. There are always more aspiring political leaders competing for control over the money printer to money their own family pet jobs or forever wars, so the core problem remains unsolved. Additionally, effective corporations in the military commercial complex and other recipients of federal government money have a vested interest in keeping the payments flowing. Those structures have every incentive to keep political leaders in power who support using the cash printer to pay them, at the expenditure of the wage earner and middle class. How does Bitcoin alter any of this?Bitcoin Limits WarWidespread adoption of bitcoin as a financial system, in place of fiat currencies like the U.S. dollar, would firmly manage or completely eliminate a federal governments ability to print cash. Just as the gold basic kept U.S. spending mostly in check, a bitcoin requirement will limit spending on military adventures abroad and expensive programs in the house. Government programs will need the assistance of individuals to continue receiving financing, or else the increased tax required to fund those programs will result in voting out political leaders who support them. The feedback loop of increasing costs in between federal government and supported industries– like the arms market in the U.S.– will mainly vanish as public belief plays a larger function in allotment of government funds. I am hopeful we can achieve a bitcoin standard since doing so does not need us to lobby the extremely political leaders who benefit most from the existing monetary system. Accomplishing a bitcoin requirement only needs that we as neighborhoods and individuals continue to embrace bitcoin to a greater degree as a savings tool and financial medium. If all of us hold and transact in bitcoin instead of fiat currencies, the fiat money printer has no one to suck buying power from and the politics of money printing will always reform. Lets honor our military veterans by just putting soldiers into war when absolutely necessary. Our collective and peaceful actions can end the funding source for unaccountable, ruthless and life-destroying permanently wars.This is a guest post by Captain Sidd. Opinions expressed are entirely their own and do not always reflect those of BTC Inc or Bitcoin Magazine.
One of the worlds largest energy producers– Russia– invaded its next-door neighbor– Ukraine– a breadbasket country with goals to sign up with the NATO military alliance.Beyond standard wars, societies today discover themselves muddled in limitless ideological and abstract wars that also harm people and claim lives– some in numbers far going beyond traditional wars. Numerous American examples consist of the War On Poverty, the War On Drugs and the War On Terror. The costs of the War On Drugs are lower in monetary terms– around $1 trillion– however the second-order effects of uncontrolled drugs and warring violent gangs develop a certainly big problem on healthcare and policing systems. The total wars of the 1930s and 40s resulted in a huge quantity of costs, with World War I costing the United States about 52% of gross national item and World War II running up a bill equaling 40% of GDP. Hugh Rockoff of the National Bureau of Economic Research approximates the U.S. raised 58% of the funds used to wage World War I through loaning from the public.Liberty Bonds supported the allied war effort in WWI.