What the growth of the navy finances says about our damaged monetary system

Below is a direct excerpt from Marty’s Bent Issue # 1136: “The Incentives Are Screwed: Exhibit 21,212.” Sign up for the newsletter here.

The externalities of unhindered money printing are extremely overweighted on the negative side of the spectrum. When the government has the opportunity to work with central banks to print money ex-nihilo to fund an activity, those in control of that activity are encouraged to be extremely wasteful about their printer-funded budgets to justify. There’s no better example of this than the U.S. military, which currently has an annual budget of $ 768.2 billion for 2022.

Year after year, the puppets in Washington DC debate whether or not to increase the military budget. The budget has inevitably expanded to obscene levels in the long run. Why is this happening? How does this happen? And what does an ever-growing budget do with the incentives for those in charge of the military?

Those from the Pentagon who hit the hill to explain to the puppets how much they need in a given year will tell you that the “why” is that there are ever-growing outside threats America is facing must defend and they will need more money to protect themselves from them. In reality, as our friend GodSaysHodl explains above, the “why is this happening” probably has more to do with the fact that bureaucratic institutions like to have money to spend and only get more money when it looks like they need it.

How exactly is a larger budget justified? Again we turn to our friend GodSaysHodl, who, through memories of his time in the Air Force, gives us a look behind the scenes, when he wasted money on unnecessary goods at the end of the year to make it look like the military was spending would have been on full budget and so was justified when the brass people on the hill were negotiating the next year’s budget. It is not a foreign threat and need to fight back that is driving this budget up, but greedy people working within a perverse incentive system that puts waste before safety. And one could argue that this perverse incentive system leads to far worse things than waste. Does unnecessary antagonism on the global stage lead to more spending and higher budgets? I think it can safely be said that it is.

What better way to reap the benefits of the money printer than to go out there and piss the world off, overpay defense companies and then come home and claim that the people who pissed you off are now threats against that you need more money to “defend” yourself? You know what they’re saying; Where there is smoke there is fire.

As an American, I am consistently dismayed that these budgets keep getting bigger when the quality of the services offered has been steadily declining all my life. One could argue that the consequent unnecessary foreign intervention of the US military has resulted in my life becoming worse off. The bombing of arbitrary people in the Middle East only creates extreme anger among these people, making them more likely to attack the US. Endanger the physical well-being of citizens. This is just a potential second order effect.

A good way to justify a higher budget year after year is to have a high rate of military equipment flowing through the various branches of the military. Equipment that is several years old is being replaced with brand new equipment, and not-like-new equipment is being “recycled” through the process of militarizing the local police force. The police, now looking like an occupying force, tend to take that picture to heart and act accordingly; Feeling empowered to trample on the civil liberties of Americans who live in the communities they are supposed to oversee. This is illustrated by “no knock” raids, the confiscation of civilian assets at borders and the use of intimidating force in legal and peaceful protests. In the course of my life, the term “innocent to proven guilty” seems to have been completely inverted, and I wouldn’t be the least bit surprised if the trickle-down effects of military overspending made possible by the free printing at the Fed played a part in it.

How would incentives change if bureaucrats didn’t have access to a money printer? Would those in charge of the military think twice about foreign intervention because the cost of failure would increase significantly? Would there be more focus on strengthening our defenses at home while trying to broker peace abroad to stave off potential physical conflict? I think a strong argument can be made for this, yes these are likely results. A Bitcoin standard creates incentives for efficient capital allocation, economic cooperation and more free trade – which has led to more peaceful results in the past.

Fix the money, fix the world.

I hope this piece doesn’t make it seem like I disrespect those who risk their lives to truly defend the ideals on which America was founded. I’m just trying to highlight high-level incentives that increase the likelihood of negative outcomes for all involved.


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