Most "Aid" to Ukraine is Spent in the US Thus Benefiting US Defense Contractors and Adding to Inflation
by John Lawrence
Financial aid to Ukraine mostly benefits the US military-industrial complex from which Ukraine buys most of its weapons. This money, therefore, floods into the US economy thus increasing inflation because it's well known that money injected into the US economy by the government has an inflationary impact. In an article entitled "Most ‘aid to Ukraine’ is spent in the US. A total shutdown would be irresponsible" we find the following: "A lot of money considered to be "aid to Ukraine" is actually spent in the US. In this op ed, Mark Cancian argues that eliminating that funding would be bad business for both Ukraine and American interests." And the following: "As the discussion above shows, a large part of the aid is spent in the United States. Funding of US agencies, most of the funding for US military forces, most of the military equipment backfill and Ukrainian equipment purchases, and a part of the humanitarian assistance stay in the United States. In all, about $68 billion of the $113 billion enacted (60 percent) would be spent in the United States, benefiting the armed forces and US industry." So advocates for the military-industrial complex itself are arguing that, since the war in Ukraine benefits US business interests, taxpayers should continue to fund it.
Of course no one wants to talk about or connect the facts that when the government spends too much money into the US economy, it tends to have an inflationary impact. I support President Biden with the historic $1.9 trillion American Rescue Plan, the $1 trillion Bipartisan Infrastructure Law, the $53 billion CHIPS and Science Act, the $740 billion Inflation Reduction Act. Biden has accomplished more than any President since Franklin Roosevelt. Nevertheless, critics of the war in Ukraine are correct when they say that supporting a US proxy war in Ukraine is having an inflationary effect on the US economy. Probably all the previous government spending, although beneficial, had a lot to do with causing inflation in the first place. More government spending is pouring even more money into the US economy at a time when the government should be using its authority to decrease the US money supply thereby helping to bring inflation down. Thy could do this, for example, by taxing the rich. Too much money sloshing around in the economy causes inflation. Too little money in the US money supply has the opposite effect - deflation.
The possibility arises that the US has gotten itself into a forever proxy war of attrition in Ukraine based on the noble premise that Ukraine has a right to join NATO. The alternative to that forever war, which will only result in the loss of many more Ukrainian lives, the destruction of Ukrainian families and the loss of billions of dollars of Ukrainian real estate and infrastructure, is a peaceful solution to the war along the lines of a ceasefire and Russian control of the portion of eastern Ukraine that it has controlled since 2014 including Crimea with western Ukraine becoming a member of NATO. Additionally UN peace keepers could patrol the border between those two entities to maintain a peaceful, stable border. Historically, Ukraine had been a part of Russia since the era of Catherine the Great in the eighteenth century, but only gained full autonomy by virtue of the fact that Premier Nikita Khrushchev granted it independence in 1954. So the history is complex. What is important now is to settle the conflict by a ceasefire and recognition of the current de facto borders. This is important not only from the point of view of Ukraine in light of a continued loss of life and real estate, but in view of the continued drain on the US economy. The money going to fund the war in Ukraine by the US could be better spent at home or not spent at all in light of the continuing, albeit reduced, inflation.
