Why is the U.S. government underwriting Ukraine’s and Israel’s wars when it’s $33+ trillion in the hole? From David Stockman at lewrockwell.com:
When you are faced with an existential threat to your very national survival, this is what you do. You mobilize your economy for all-out struggle and impose heavy-duty “War Taxes” to pay for a dramatic build-up of military capabilities.
For instance, between 1939 and 1945 Federal government receipts rose nearly seven-fold—from $6 billion to $42 billion per year, owing to across-the-board tax increases that took the average income tax rate from 4% to 24% and the top rate to upwards of 90%. Relative to the national economy, Federal receipts (red bars) rose from 6% of GDP to a peak of nearly 20% in 1945.
On top of that came a huge amount of war bonds and borrowing. Accordingly, outlays from taxes and borrowing (blue bars), mostly for military mobilization, rose from less than 10%of GDP in 1940 to a war-time peak of 40% in 1944-1945.
Call that America’s national mobilization triggered by Pearl Harbor. It’s what a self-respecting democracy does when its very existence is called into question.
