In 2022, the U.S. government approved expenditures of $113 billion on aid to Ukraine. The Committee for a Responsible Federal Budget writes:
In total, CBO estimated that $6.6 billion of the $113 billion would be spent in FY 2022 and another $37.7 billion in FY 2023. Furthermore, CBO estimated more than half of the approved funds would be spent by the end of FY 2024 and more than three-fourths by the end of FY 2026.
How much will that cost the average household? There are approximately 131.2 million households in the United States. So the average cost per household is $113 billion divided by 131.2 million, which is $861.
Of course, averages are often under-informative. That’s true of this one. In 2018, according to the Brookings Institute, high-income households, those in the top 20% of the income distribution, paid about 68 percent of all the tax revenue that the federal government collected. To be in the top quintile that year, you needed to have an income of $153,301 or more.
Assume for simplicity that these numbers, adjusted for inflation, are about the same today. Also, I’ll assume, even though I know it’s false, that this $113 billion will be paid entirely out of taxes rather than new debt. It’s not as bad an assumption as it looks. To the extent it’s paid out of new debt and to the extent future taxes pay off that debt, based on a progressive tax structure such as the one we have now, it would be a pretty good assumption.
So the top quintile would pay 68% of $113 billion, which is $76.8 billion. There are approximately 26 million households in the top quintile. So the cost per top-quintile household is $76.8 billion divided by 26 million, which is $2,956.
That’s a lot to fight someone else’s war.
Consider my wife’s and my case. In 2018, our income put us in the top quintile, probably just below the top 10 percent. So because we aren’t socked by high income tax rates to the same extent as the top 10 percent, our cost is probably closer to $2,000 than to $2,956. Let’s say it’s about $2,200.
Put it in perspective this way. In the first month of the war, my wife and I wanted to “do something” to help Ukrainians. A friend recommended giving money to a local restaurant owner who has relatives in Ukraine. She trusts him and we trust her. So we gave him $100. I know that that’s not much, but the $2,200 number above gives an idea of just how “not much.” We’ll pay in federal tax revenues about 22 times the amount we contributed voluntarily.
READER COMMENTS
Physecon
Feb 18 2023 at 10:18am
A good exercise to start. Unfortunately this being an economics blog shouldn’t we also look at costs as compared to benefits? And also ask the classic question: what is the alternative?
Jon Murphy
Feb 18 2023 at 10:33am
Ok. What are the benefits? It seems to me the benefits to any given American is very close to zero.
Richard W Fulmer
Feb 18 2023 at 11:43am
A good economist not only looks at benefits as well as costs, but also asks “and then what?” Will Russia be content with Ukraine? It is already threatening Moldova and (the rest of) Georgia. Ramzan Kadyrov, President of Chechnya and a key Putin ally, has stated that Russia will attack Poland after they finish with Ukraine. He has also declared that East Germany is Russian territory. What would it cost Americans if a combined Russian-Ukrainian military invades Poland or East Germany?
Xi Jinping is, no doubt, watching the Ukrainian invasion not least to determine Western resolve. What would it cost Americans if Xi, heartened by a Ukrainian defeat, attacks Taiwan? What would it cost Americans if he succeeds in conquering the island?
Would a Russian victory in Ukraine lead to a realignment in the Middle East? What would a Middle East dominated by Russia, China, and Iran cost Americans?
Cuba, backed by Russia, China, and Iran, is working to spread its “revolution” across Latin America – most notably Bolivia, Ecuador, Nicaragua, and Venezuela. Russia wants to extend its influence throughout Central and South American beginning with strengthening its ties to Bolivia, Cuba, Nicaragua, and Venezuela. China has military ties with Bolivia, Ecuador, and Venezuela, and it has a presence in both Cuba and Haiti. Iran has developed close relationships with Cuba, Nicaragua, and Venezuela. What would increased Russian, Chinese, and Iranian influence in Latin America cost Americans?
Jon Murphy
Feb 18 2023 at 4:56pm
Sure, but they also need to be realizable alternatives. Anyone can play the “what if” game all day long.
Richard W Fulmer
Feb 19 2023 at 9:19am
All the scenarios I laid out are very realizable – in fact, they’re happening now. Russia is moving now to take over Moldavia and Georgia. Russia, China, and Iran are all working now to extend their influence in the Middle East and Latin America. China is working now toward taking over Taiwan. If the U.S. stops arming Ukraine, Russia will almost certainly conquer it. If that happens, Russia’s influence, and that of its allies, will grow and ours will shrink. There’s not a lot of “what if” there.
David Henderson
Feb 18 2023 at 4:58pm
Richard,
You ask a lot of questions, but I’ll focus on two of your points.
You ask:
I don’t know the answer but do you really think it’s likely that the Ukrainians in your hypothetical Russian-Ukrainian military would cooperate to invade Poland? Putin has not only angered Ukrainians who didn’t like him or Russia; he has angered a lot of previously pro-Russian Ukrainians.
You write:
That could be. And notice what got us to this point: Biden intervening in the Russia-Ukraine war. You’re making a point that was made about the Vietnam war: we must begin because our resolve is being tested. Notice, by the way, that “we” didn’t win, but the Chinese government didn’t do much to the U.S as a result and neither did the USSR government.
Richard W Fulmer
Feb 19 2023 at 1:40pm
Yes. If Russia conquers Ukraine, Ukrainians will be forced to do what they’re told. If reports are correct, most Russian conscripts don’t want to be in Ukraine, but they’re there fighting and dying, nonetheless. I expect that Ukrainian conscripts will also follow orders.
Your memory of the Vietnam War is different from mine. According to my understanding, the U.S. and South Vietnam won the war but lost the peace. The Paris Peace Accords were signed on January 27, 1973. In the agreement, the U.S. promised to provide South Vietnam with economic and military aid so that it could defend itself against renewed aggression by North Vietnam.
In 1974, the U.S. Congress passed the Foreign Assistance Act into law. The Act limited U.S. military aid to South Vietnam, making it clear to the North Vietnamese that the U.S. would abandon the South. When the North attacked on March 10, 1975 – two years after the peace agreement was signed – the South Vietnamese were heavily outgunned.
After Saigon fell, thousands of South Vietnamese were executed and perhaps as many as 165,000 were sent to reeducation camps. Communist regimes quickly took over Laos and Cambodia slaughtering tens of thousands in Laos and somewhere between 1.7 and 2.2 million in Cambodia.
While, in the short run, American taxpayers probably saved money by not adequately arming the South Vietnamese, in the end it was a bad bargain.
You’re proposing that we abandon the Ukrainians just as we abandoned the South Vietnamese.
Jim Glass
Feb 18 2023 at 10:07pm
Ok. What are the benefits? It seems to me the benefits to any given American is very close to zero.
It’s easier to see risks, so try that. A risk reduced = a benefit. For instance, reducing the risk of a nuclear war even modestly produces a benefit for the given American that’s worth a dang good deal more than zero! (Consider it “the thing unseen”.)
What are the risks? I dunno, But by revealed preferences — the way the nations around the Ukraine-Russia border are so very alarmed and upset — they surely see some very serious risks to them from the Russian invasion.
The Poles, Baltic states, Czechs et al, are pouring far more support into Ukraine than we are as a percent of their GDPs and military resources. The Danes just gave 100% of their artillery to Ukraine. (Lichtenstein could conquer them now!) Finland and Sweden are trying to get into NATO ASAP.
Assuming these states are rational actors (not in the grip of some mass delusion) we can safely say there is indeed some major risk facing them that they strongly believe must be averted by defeating the Russian invasion.
What is it? I dunno. But maybe we should listen to them to learn what it is, and be able to understand and express it ourselves — before deciding glibly “nah, we got nothing at stake over there.” Because here are some risks for sure…
If the Russians win in Ukraine and those Europeans are correct about the risk they will face as a result, any consequent Russian conflict with them will be an Article 5 real war, with nuclear possibility — surely that’s a risk we want to avert, to benefit Americans everywhere. (The Ukrainians are doing us a great favor by fighting to keep the Russians away from them.)
Or, at that point we could break NATO by then deciding, no, we aren’t going to pay the cost of living up to our alliance agreements … Or, we can cut to the chase and break NATO right now because paying $12 per month per household ($861/6 years) is too much of a price for Americans to incur to defend the liberty of 44 million Ukrainians and preserve the alliance. As the Poles, Finns, Baltics, gun-less Danes et al, would surely and very correctly take our abandoning Ukraine as us abandoning them too in their time of need.
They would never trust us again — and neither would any other sensible government around the world. So that would be the end of the USA as a world geopolitical leader. And liberal democracies everywhere would be endangered as the authoritarian regimes of Putin, Xi, Orban, etc. gain that much more freedom in dealing with them.
Is the breaking of NATO a risk, the avoidance of which is a benefit? I dunno. Trump wanted to break it. The Marxists who are still about want to break it. Putin and Xi surely want to break it. You decide for yourself.
Are American libertarians people who really value the liberty of people, millions of people around the world, so they are willing to invest in protecting the liberty of those millions? Or do they just not see any value in protecting the liberty of millions of “others”? Or are they ‘Rothbard’ libertarians, happy to actually endorse a slave state as long as the highest principles of liberty are heeded, like — “My liberty shall not be violated by forcing me to pay $12/month to protect the liberty of millions of others! That’s all somebody else’s problem.” I dunno.
Tom Gallagher
Feb 19 2023 at 8:59am
No benefit, Mr Glass? What in the world do we have 11 aircraft carriers for? Defending the US from Cuban or Samoan invasion? The massive US military is primarily an instrument by which the US projects power and influences the world in which we live. It’s done a heck of a job promoting free liberal market economic and liberal democracy (liberal meaning an emphasis on the rights of the individual over the government) around the world.
Ukraine is a great opportunity to solidify the cause of liberty and individual freedom deep inside former communist Europe. It’s also not a civil war, but one in which a nation was invaded. Kick out the invader and you’ve achieved your objective. It’s not messy, like Syria, or Somalia, or Iraq, or Afghanistan, or Vietnam… and on and on. If this isn’t a cause worth fighting for than the US might as well retreat into isolationism… which has a pretty terrible track record.
Your concerns about nuclear war are important, but this is more a problem of people coming to this conflict in February 2022. You wouldn’t have the knowledge of the area and history to realise that giving Putin what he wants when he rattles the nuclear saber is probably going to result in MORE nuclear saber rattling, not less. How much are you willing to give away to authoritarians in Moscow, Pyongyang, Tehran, and Beijing before you decide to stand up for what is right? Why give in at all?
The US has a rare opportunity to make a huge impact on the future of the world in which we live with little to sacrifice — a veritable decimal place in the DoD budget. It would be a shame to shrink from the occasion just because some people associate the action with the current administration in the White House. Would those folks retrack the fight against Imperial Japan and Nazi Germany just because a Democrat was president?
Deborah Pendleton
Feb 21 2023 at 1:50am
The problem is that the average American ultimately votes for their own economic position. As long as there’s economic suffering in the US there will be resistance to a ongoing economic support to Ukraine. When the American people hear Biden say he’s giving Ukrainians pensions all they hear is that they don’t have one. Regardless of the merits of the Ukraine war as everything has been stated, in the end the American voter still decides. And maybe unfortunately they’ll decide they don’t want to fund Ukraine‘s reconstruction.
Steven Carmichael
Feb 26 2023 at 11:03am
Most Americans are too young to remember the American policy of isolationism towards European conflict between WWI and WWII, and how that attitude resulted in global catastrophe where *enemy countries* would decide when and how Americans got involved – opportunistically, when most of our European Allies were already occupied – defining for us how expensive their defeat would be.
We later learned that *investing* in *desired* outcomes early, rather than “dealing with” *random* outcomes later, has a very high ROI for America as a self-interested result.
As an aside, this is also why we have a World Bank – it would be hard to get everyone involved in giving away their money to struggling nations, but we now know that preventing individual countries from failing is far cheaper than later global economic collapse – or even a marginal loss in trade long term.
People believe our contribution to Ukraine is charity – it’s not. It’s a long-standing American policy which looks more like a hard, cold actuary table than a Salvation Army bucket. Ukraine’s fall will require massive *long-term* increases in military spending and global economic and energy adjustment – probably US troops themselves – obviously not in Americas favor.
Ukraine falling is a bad outcome for the US, putting it mildly.
The same expert who predicted this invasion 7 years ago makes a clear case as to why it is the gateway to Russia taking several additional European countries with far lesser defenses whose geography creates a desired strategic barrier against NATO.
Why? Russia is running out of military age men due to birth rates, (Russian men also die at twice the rate of Americans due to an number of factors – alcoholism being a big one) and also needs the grain production of these states, for starters.
I suggest reading Peter Zeihan’s latest on the topic when you read this. There are many opinions, but Zeihan provides all the receipts and data sources to back up his opinion, unlike nearly everyone else whose support is purely a political alignment.
As an older American, I remember the Cold War and USSR quite vividly and how much risk Kennedy, Regan, and others took to defuse that bomb and drive the U.S.S.R. out of Eastern Europe.
Now the Republican Party wants to retreat to isolationism and appeasement, because the electorate is not old enough to remember what a catastrophe that policy got us into in WWII.
With no President in office, Conservatives want to blanket criticize – well, everything Biden does. But I’d bet you that if a Republican President were in office and the party had responsibility for the outcome of Ukraine, he would be following the *exact* same path.
David Henderson
Feb 26 2023 at 7:07pm
You write:
Actually, while you can make a strong case for U.S. intervention in WWII, the opposite is the case for WWI. Without the U.S. intervening in WWI, there would have been a fairer settlement for Germany (fairer than the punitive Versailles Treaty) and the odds that a Hitler would come to power would have been lower. Also, there’s even a case to be made that we wouldn’t have had the Soviet Union. I can’t make that case in a few words, but many historians have done so.
You write:
Actually, JFK almost started a nuclear war over the Cuban missiles. His cooler head prevailed over his initial reaction and he saved the day. And, since you do know history, I’m sure you’re aware that Reagan and the others didn’t drive the USSR out of Eastern Europe. They left, but they weren’t driven out.
Steven Carmichael
Feb 26 2023 at 7:56pm
Yes, driven out sounds tactical, when what happened is that US never took its foot off the gas pedal, and the USSR went broke playing the game – and even that wasn’t the only reason alone.
But one thing is for sure – we have a large segment of the Republican Party who believes in the simplistic argument – not a an expert or historically informed opinion – that isolationism will get us the best outcome, just like many of them believe libertarianism will result in some idealistic social order as a fantastical anti-entropic fairy dust.
David Henderson
Feb 18 2023 at 11:22am
You write:
Thanks.
You write:
I agree that we should compare costs to benefits. I have no idea how to monetize the benefits. But I’m game if you want to try. My best guess is that the benefits to U.S. households average way less than $861 per household. But I’m open to reading a contrary view.
You write:
Good question. There’s not just one; there are many. The five main ones are: (1) give no government aid; (2) give less government aid; (3) give more government aid; (4) enter the war directly not just using Ukraine as a proxy, and (5) allow millions of Ukrainians and Russians to immigrate, either as potential green card holders or as guest workers.
These alternatives are not all mutually exclusive. My preference is for (1) and (5).
Physecon
Feb 18 2023 at 12:09pm
To be honest I’m not sure how to quantify the benefits either. This is a bit of a Wild Problem.
I often wonder myself what the optimal policy is. I do wish for goals like this we could reach a political compromise where tax payers are given a list of causes to contribute to and then elect the one(s) they favor subject to a minimum total. This would at least make people realize that contributing to goal X comes at the expense of goal Y, on some margin.
vince
Feb 18 2023 at 2:41pm
“These alternatives are not all mutually exclusive. My preference is for (1) and (5).”
How about a diplomatic solution?
David Henderson
Feb 18 2023 at 3:11pm
vince, You’re right. I should have included the diplomatic solution. My oversight. It’s tragic that the Prime Minister of Israel at the time of the invasion, Naftali Bennett, had Zelensky and Putin talking to each other in early March and then Boris Johnson stepped in to do Biden’s bidding, persuading Zelensky to keep fighting.
vince
Feb 18 2023 at 4:03pm
My fear is that there is too much money to be made in avoiding a diplomatic solution. Also, too much spite from those who still blame Putin for Clinton losing her run for president.
Physecon
Feb 18 2023 at 3:01pm
Thinking about this more the title of the post is a bit misleading, although to be fair it is phrased as a question so perhaps we should just call it unanswered.
The cost, from an economic perspective, is not necessarily the dollar-denominated accounting cost. There exists an argument that US aid for Ukraine also has externalities outside the CBO’s figures. For instance higher energy costs. Not that I necessarily support this argument, rather the scope here is so much broader than simple dollar accounting.
David Henderson
Feb 18 2023 at 3:13pm
You’re right. I should have said the budget cost. Although even that is an underestimate because the deadweight loss from increasing taxes further is on the order of 30% of revenue raised.
Physecon
Feb 18 2023 at 3:26pm
Ahh!! good point too!
ssumner
Feb 18 2023 at 12:01pm
In my view, these costs are trivial compared to the price we’ll pay if Russia is not stopped.
David Henderson
Feb 18 2023 at 3:11pm
Please elaborate.
Scott Sumner
Feb 19 2023 at 8:21am
I view history in terms of two stages. In stage one, it was normal for countries to invade other sovereign countries and annex their territory. Happened all the time. That stage ended in 1945, as it was viewed as too costly, too likely to lead to world war. In stage two, countries are forbidden from invading in order to annex. “No Argentina, you cannot take the Falklands by force.” “No Iraq, you cannot take Kuwait by force.” In my view, this regime is much less like to lead to a world war. Deterrence works.
While no one can predict Putin’s moves, he clearly would like to recreate the Russian empire. If he wins in Ukraine he won’t stop there. The results could be disastrous. There’s great value in enacting and enforcing an international norm against invasion/annexation of sovereign countries.
It’s like when people say “what’s so bad about 3% inflation.” The problem is that once you lose credibility, it won’t stop there. Why should it?
vince
Feb 19 2023 at 1:53pm
“While no one can predict Putin’s moves, he clearly would like to recreate the Russian empire. If he wins in Ukraine he won’t stop there. ”
Is it really that clear? That sounds like the domino theory of communist expansion during Vietnam.
Richard W Fulmer
Feb 19 2023 at 2:19pm
“Dominos” did fall after South Vietnam was conquered; communist regimes took over both Laos and Cambodia. The results were horrific. If we abandon Ukraine as we abandoned South Vietnam, we can expect similar outcomes: mass executions, reeducation camps, and more countries falling to Russia and its Chinese and Iranian allies.
vince
Feb 19 2023 at 4:24pm
“You’re proposing that we abandon the Ukrainians just as we abandoned the South Vietnamese.”
Sounds good. But I wouldn’t call it abandon. Rather, not meddling. Don’t we have enough problems of our own that we struggle to resolve? That’s what frustrates citizens who get tired of endless wars.
Richard W Fulmer
Feb 19 2023 at 5:49pm
As much as I dislike “meddling” in other people’s business, it’s in America’s interest that Russia not conquer Ukraine:
1. In general, we have an interest in ensuring that national boundaries are respected.
2. As I observed elsewhere, Ramzan Kadyrov, President of Chechnya and a key Putin ally, has stated that Russia will attack Poland after they finish with Ukraine. If Russia attacks Poland, a NATO country, we are obligated to go to their defense. As much as bankrolling Ukraine is costing us, going to war with Russia will cost far more.
3. We have an interest in deterring China from attacking Taiwan – if nothing else, most of our complex computer chips come from there.
4. We don’t want Russia, China, and Iran from meddling in the Middle East and Latin America any more than they already are. If Russia wins, their global influence will increase.
Monte
Feb 20 2023 at 10:30am
LOL!!!
vince
Feb 20 2023 at 1:19pm
Richard wrote: “As much as I dislike “meddling” in other people’s business, it’s in America’s interest that …”
Of course, we can use that phrase to justify whatever suits our purpose. Who get to decide what is in our interest? The military industrial complex that Eisenhower warned us about in 1961? How many wars have we had in the name of our national interest since then? What was our cost and benefit of those wars?
I would like us to try something different for a change.
Richard W Fulmer
Feb 20 2023 at 3:19pm
vince,
Instead of focusing on words like “meddle” and “interests,” let’s talk substance. Do you not want international boundaries to be respected? Do you think that Russia invading Poland would be fine? Do you want China to attack Taiwan? Would you like to see Russia’s, China’s, and Iran’s influence increase in the Middle East and in Latin America?
If you’re okay with all of that, then we can discuss. If you’re against all of that, then is your only problem the fact that I said that preventing it is in America’s national interest?
If you’re against all of that but you want to stop it through means other than sending weapons to Ukraine, then what are those means and why do you think that they would be more effective than arming Ukraine?
vince
Feb 20 2023 at 7:13pm
Richard, let’s take your questions one by one.
1. Do you not want international boundaries to be respected?
It depends on the situation. There’s plenty of disrespect for boundaries across the world. There always has been and always will. If I read Monte correctly, it’s hypocritical for the US to claim it respects boundaries. The sordid history of the CIA is an example.
2. Do you think that Russia invading Poland would be fine?
No, and I don’t equate that with Ukraine.
3. Do you want China to attack Taiwan?
Merely a loaded question.
4. Would you like to see Russia’s, China’s, and Iran’s influence increase in the Middle East and in Latin America?
That depends on the particular influence and how those countries feel about it.
4. If you’re against all of that, then is your only problem the fact that I said that preventing it is in America’s national interest?
No.
Now let me ask you a couple: What is the cost of all of our wars since Eisenhower spoke of the military industrial complex over 60 years ago, and how has our country benefited? Also, what would the Russian-Ukraine relationship be if we had not meddled in the 2014 coup in Ukraine? (Unfortunately, I can’t rely on media and the US governemnt reports about that coup. I reluctantly gave them the benefit of the doubt about weapons of mass destruction.)
Richard W Fulmer
Feb 20 2023 at 9:06pm
1. I agree with your assessment of the CIA and with the fact that the U.S. has not always respected international boundaries.
2. Are you saying that you’re okay with the Russian invasion of Ukraine? If so, why? If not, why do you make a distinction between the invasion of Ukraine and a possible invasion of Poland? Is it just that Poland is a NATO country? If so, why does Poland’s membership in NATO make invading it any more immoral than the invasion of Ukraine?
3. It’s not a loaded question. Do you want China to take over Taiwan or not? If not, do you think that allowing Russia to take over Ukraine will serve as a green light for the conquest of Taiwan?
4. When has Russian, Chinese, or Iranian influence been anything other than malign?
Estimated direct costs of U.S. wars since 1960 in today’s dollars:
Vietnam: $1.2 trillion
Gulf War: $180 billion
Afghanistan: $2 trillion
Iraq: $2 trillion
Total $5.4 trillion
I don’t believe that the U.S. has benefitted from any of these wars with the possible exception of the first Gulf War.
How did the United States meddle in the 2014 Euromaidan revolution? The Obama administration rhetorically supported the protesters and publicly condemned the government’s use of violence against them. Obama also encouraged the government to negotiate with the protesters. Do you oppose those interventions? There have been allegations of covert support for the protesters, but those claims haven’t been substantiated.
I don’t understand your reference to WMDs with respect to Ukraine. Are you referring to the 1994 Budapest Memorandum that codified the transfer of nuclear weapons from Ukraine to Russia back in the 1990s? The signatories to the memorandum – which included the U.S. and Russia – agreed to respect Ukraine’s territorial integrity.
However we got here, we’re here now. What should we do? Let Russia conquer Ukraine? If so, what do you think the consequences of that will be? If you don’t want Ukraine conquered, what do you propose we do?
Monte
Feb 21 2023 at 10:00pm
Exhaust all efforts at dialogue and diplomacy. This would be the optimal solution for ending a conflict that looks impossible for either side to win without devastating consequences, per The Elders. For our part, Cato Institute Senior Fellow Doug Bandow’s recommendation from 2014 still holds, IMO:
U.S. arguments in favor of defending national borders are hypocritical. We all know the U.S. would never permit a military alliance between any of its neighboring countries and either Russia or China. Let’s not forget that the U.S., in essence, fomented the development of hostilities as a result of our Senate’s 1998 ratification of NATO expansion up to Russian borders. American diplomat and historian George Kennan (at the time, recognized as one of the world’s foremost experts on Russia) said as much in a conversation with Thomas Friedman:
Beyond that, the proposed cornerstone of our 2022 National Defense Strategy is integrated deterrence: The integration of all national power tools with the robust network of allies and partners that the U.S. has to credibly deter aggression. Many ambiguities remain as to exactly what this entails, but this executive summary by Stacie Pettyjohn and Becca Wasser provides a basis for what the DoD should consider going forward.
In any event, Americans are beginning to grow weary of supporting Ukraine when the source of that support is conspicuously absent here at home. As Deborah Pendleton pointed out above, the issue will (and should) ultimately be decided by the voters.
Richard W Fulmer
Feb 22 2023 at 10:16am
Monte,
How do you negotiate with someone who doesn’t want to negotiate? Putin has made it clear that he doesn’t want a settlement, he wants Ukraine. He has been up front about his goal of reconstituting the Soviet empire. Just this week we’ve learned that he plans to absorb Belarus before the end of the decade.
Handing Ukraine over to Russia, which is what we would effectively be doing if we stop sending arms, would convince Japan, Taiwan, and South Korea that they cannot depend on the U.S. to defend them against Chinese imperialism. Their only recourse will be to go nuclear.
vince
Feb 22 2023 at 2:47pm
Thanks for your replies on 2/20, Richard. With respect to your new questions:
2. No, I don’t like the Russian invasion, but I look at it as more of a civil war. Segments of Ukraine are pro Russian. I believe we stoked conflict in 2014 as Ukraine moved toward Russia while we wanted it in NATO. Given our history, why wouldn’t we?
I don’t equate Ukraine with Poland and don’t believe morality is the right standard for war. I don’t want the US to be the arbiter of morality in the world. We can’t resolve our own morality issues. Take abortion.
3. No, I don’t want China to invade Taiwan. Allowing Russia to invade Ukraine is not an invitation for China to invade Taiwan. The US–if it really wanted to–could clarify that it won’t tolerate such an invasion regardless of Ukraine. I don’t conflate Ukraine with Taiwan. It’s a different situation.
4. I don’t know what you mean by Iranian, Russian, or Chinese influence being anything but malign. How do we know? What sources are you relying on, and what are the motives of those sources?
Thanks for your follow up on the costs of the wars. Those costs are only spending. Vietnam, for example, cost 58,000 US lives. Over 1 million were disabled.
5. How did the US meddle in the 2014 Euromaiden revolution? Many knowledgeable sources make the claim. Sure, it’s hard to prove those claims–CIA efforts would be classified. It’s also impossible to prove them wrong. But given the history of our CIA and the NATO statement in 2008 that Ukraine eventually would become part of NATO, I believe denying those claims is naive. That’s exactly why I mentioned WMD. I was referring to Iraq. I gave the government the benefit of the doubt. It was a lie.
I also believe we blew up the Nord Stream pipeline. The US denies it now. Previously, Biden openly said there would be no Nord Stream 2 if Russia invades Ukraine.
6. What should we do? A negotiated solution. We may have lost our best time to negotiate. It looks like we are on our way to losing another expensive war, and it will be humiliating. In my opinion, the US has much more to lose than to gain. At least the special interests who benefit from the $100 billion have some consolation.
Monte
Feb 23 2023 at 9:24pm
Richard,
I agree the possibility, for the present, seems remote. Both Putin and Zelensky remain intransigent (Zelensky has every right). The question remains, how to bring them to the table. Frank Hoffman, in this Foreign Policy Research Institute piece, offers some insights.
Many are calling Zelensky transformational, a president who exhibits the virtues of a consequential leader. For the very reason you point out, it is Zelensky who must acquiesce in the interest of peace. Putin is a totalistic ideologue who is not easily influenced. And I suspect any acceptable settlement will require some degree of Finlandization.
I disagree. The situation in Ukraine is unique. We have good reasons for not prolonging our involvement. If we were to withdraw our support for Ukraine, this wouldn’t necessarily signal a broader shift in U.S. foreign policy towards its allies. Our longstanding partnerships with the countries you mention go beyond any one specific issue. Although this might cause some concern on their part, I doubt any serious breakdown in those relationships would occur.
vince
Feb 24 2023 at 12:58pm
Richard wrote: “How do you negotiate with someone who doesn’t want to negotiate?”
That’s presumptuous to say. It would be easier to believe if serious efforts to negotiate were evident.
Powerful interests want this war to continue. There’s much money to be made. We see it over and over and over again.
Jim Glass
Feb 18 2023 at 3:34pm
Of course. If Russia wins, the risk of a major war that really could go nuclear goes up a lot.
BillD
Feb 18 2023 at 6:28pm
💯. The people who have provided the best analysis of the situation are the people who were the 20th century victims of Russia and the USSR – the Poles, Estonians, Finns especially. They were and are the ones most keenly aware of the likelihood of Russia’s moves – which would not end at Ukraine if the Russians were to “win”. Mainstream American analysis has been mostly horrible.
Mark Z
Feb 19 2023 at 1:52am
Stopped from… what exactly? As I see it, there are two problems with this. First, for Russia to go any further (maybe excepting invading Moldova), it would presumably involve Russia going to war with a NATO country, which is so qualitatively different from the war in Ukraine, from Russia’s point of view, that it seems unlikely that the probability of the former hinges on the success of the latter. Second, if Russia really is such a lunatic state that it is willing to go to war with NATO, how would would the west waging a successful proxy war in Ukraine stop it? Wouldn’t we just face an even more embittered, revanchist, militarist Russia 10 years down the line? For this line of reasoning to work, Russia must be sufficiently rational and measured to calmly accept a failed invasion of Ukraine as reason to abandon its ambitions (but for some reason not accept the already catastrophic costs of the war as reason to abandon its further ambitions), while also being insane enough to be willing to start a potentially nuclear war against NATO if it narrowly wins (or in some people’s minds, merely fails to lose totally) a slog of a war against its poorer, smaller neighbour.
To me this war, for the US, may really only be well-defended as essentially a humanitarian intervention, rather than a strictly self-interested one.
Pierre Lemieux
Feb 18 2023 at 12:06pm
David: Note to myself: we have to be very careful in using individual analogies to explain or evaluate collective or state behavior. Yet, isn’t there something useful in the following analogy? Suppose that X has threatened to harm you and all your friends? He attacks your friend A. Can you say that “it’s someone else’s war”?
David Henderson
Feb 18 2023 at 3:12pm
No you can’t.
I’m not sure why you ask that question in this context, though.
vince
Feb 18 2023 at 2:38pm
“Furthermore, CBO estimated more than half of the approved funds would be spent by the end of FY 2024 and more than three-fourths by the end of FY 2026.”
Another endless war. What’s included in the $113 billion? I doubt that it includes all the personnel and overhead costs that could be allocated to it.
Pierre Lemieux
Feb 18 2023 at 2:50pm
Vince: Overhead costs, if they are really overhead, that is, fixed costs, must not be included because, by definition, they would have been included without the war in Ukraine.
vince
Feb 18 2023 at 4:09pm
Fixed costs are costs nonetheless. If half of a building is used for some purpose, it’s a cost allocable to that purpose. That space could instead be used for some other purpose.
Jon Murphy
Feb 18 2023 at 4:58pm
Then it’s not a fixed cost. It’s a variable cost.
vince
Feb 18 2023 at 7:35pm
Wrong. A building is a fixed cost. Rent is a fixed cost. A fixed cost does not depend on the quantity produced. You could say it’s variable if it needed to be expanded for increased production, but then it would typically be called a semi-fixed cost.
Matthias
Feb 18 2023 at 9:54pm
Be careful with the headline figure.
It also includes a lot of obsolete equipment that the US would just scrap otherwise, but that obsolete equipment is included at replacement costs.
In the opposite direction: the graph in the article only mentions military aid. It doesn’t mention humanitarian aid, which eg Germany sends a lot of.
Ahmed Fares
Feb 18 2023 at 4:37pm
The burden of aid to Ukraine is borne mostly by the poor.
The rule in economics is that for someone to consume more, someone else has to consume less. Since the rich have a low marginal propensity to consume, most of what taxes do is alter their level of saving, for a while.
Because the extra consumption due to Ukraine is inflationary, the Fed will increase interest rates to a level higher than would otherwise be the case. The higher interest payments then flow to the rich, which offsets the taxes they paid.
Monetary policy is a stealth tax on the poor. Sure, the rich might pay taxes, but it’s the poor who give up resources. It’s the poor who are skipping meals and turning down their thermostats, not the rich.
Because money commands resources, giving money to Ukraine means Ukraine can bid away resources from the poor. It works the same way as taxes, or deficit spending, as it burdens the poor more, again through higher interest rates.
When you think about it, it’s actually impossible for the rich to be charitable. The money they give away just boomerangs back to them.
Matthias
Feb 18 2023 at 9:55pm
In absolute terms, the rich consume a lot more than the poor. So have a lot further to go in reducing their consumption.
Jim Glass
Feb 18 2023 at 8:03pm
That’s more than five years. Let’s cut it off at six.
the average cost per household is $113 billion divided by 131.2 million [households] which is $861.
Or $144 annually, $2.77 per week, 40 cents per day — 16 cents per person (2.5 per household).
That’s a lot to fight someone else’s war.
Is 40 cents a day really “a lot”? I guess it’s subjective. AND, of course, to judge whether one is spending a lot one must consider what one is receiving in exchange. A whole $1 might be “cheap” in some cases.
E.g.: it could be are real bargain if with it you are helping someone else fight a war that will keep you out of a much worse one. Plus, incidentally, saving the lives and liberty of literally millions of people who otherwise face oppression and Bucha-ization via a hostile dictator *again* (Alexander III, Lenin, Stalin). Plus, defending the liberty of your allies around the scene of the fight who are the openly stated targets (*again*) of that dictator and his spokespersons and state media. Plus, by keeping the dictator away from the border of his avowed enemy NATO, and busy with other things, protecting against the risk of an Article 5 real war for us with potential nuclear consequence…
I’d consider a good $1 per day for that cheap. And only 40 cents!!?
Let’s just stick to the liberty of 44 million Ukrainians — 40 cents per day to protect the liberty of those 44 million people … that is less than one penny per day to protect the liberty of a million people! Too much?
One thing I noticed about libertarians from when I was very young, they really place a very high value on liberty when it is their own — not so much value on the liberty of others. Murray Rothbard declaring the one just war fought by the US since 1789 was the Confederate side of the Civil War — high principles of liberty, yes! Actual liberty for millions of slaves, nah, leave them consigned forever in the only state in history constitutionally founded on race slavery. Don’t think about them, it’s just! And he’s still an icon to so many, including some writers I’ve seen here.
Not to compare this to that, but you go through a whole page of math calculations to figure how much this will cost you in dollars, but express zero – no – thought as to what the dollars are achieving … the liberty of 44 million Ukrainians? Putin stopped from his plan of running his army straight up to the border of Latvia, then for sure threatening, maybe saying “Gimmee!”. What then??? Not worth a thought?
It’s like Soviet accounting in reverse: Detail the cost, totally ignore the result.
Personally, I value the liberty of others so highly I will gladly pay my full 40+ cents per day. Heck, I’ll cut out a cup of coffee and donate another $1.50. To me, the liberty of millions of people is worth that.
Monte
Feb 19 2023 at 8:12pm
Do you place a higher value on the liberty of others than those lives sacrificed to procure it? War is worth every penny to those who have had no experience of it.
Mark Barbieri
Feb 18 2023 at 8:39pm
Interesting post. I’m so far from being an expert in foreign and military policy that I don’t know how much (if any) direct support for Ukraine is appropriate. But I really like totaling the cost and estimating how much of a burden that is for each household and for my household.
I don’t want to burden the Feds with another expensive task and I harbor no illusions that it wouldn’t be twisted for political purposes, but I like the idea of having them send an itemized receipt each year showing your total direct federal taxes paid (federal income, SS, medicare) and estimates for the other taxes like gas taxes, corporate taxes, tariffs, etc) and then show how much of that money was spent on different things. And they should include spending that they market as tax deductions, like the mortgage interest deduction and the SALT subsidies. I’m not sure if it would change anything, but I think it would be healthier if people knew how much their household and how much a typical household was spending on the different things the government spent money on.
Thomas Gallagher
Feb 19 2023 at 8:39am
Sorry, Amigo, but your initial assumptions are inaccurate. The US aid numbers need considerable scrutiny. A large junk of the number you cite involve double-counting. For example, Congress approves an amount, and then the White House touts the approval of the same appropriation and both numbers get counted.
More significantly, though, the numbers are not cash. The vast majority in material aid comes from draw downs, and so you’re counting a 10yo 155mm shell at its 2023 replacement cost. That might seem reasonable since we’re going to have to replace those 155mm shells and all the GRMLS rounds, etc, except that many of those would be decommissioned if not used. Similarly, the heavy weapons were sitting in reserve. The only thing I’m aware of that’s being made anew so far is the small-diameter glide rounds, which is a head-scratcher since we have quite a few collecting dust.
The larger point here is that all those weapons were developed and purchased for a purpose, and in the case on an Abrams or A-10 Warthog or M777, they were built primarily for the defense of Europe against a Russian/Soviet invasion. You’ve got more in a DoD depreciation expense every year than you have in military aid to Ukraine so far. 2023 Defense budget is around $850-billion, and the amount of aid that has made it to Ukraine in the first year is under $50-billion with much of it in economic aid. So Ukraine really is not a big part of the US defense budget, maybe about 5%, but it’s the part of the DoD budget that is actually doing its job. Compare that to the $9-billion per month in expenditures on just Iraq.
Andrew Wallen
Feb 19 2023 at 9:28pm
David,
Is your preference of zero military funding to Ukraine lexicographic with respect to price and outcomes? Conversely, is there some outcome resulting from zero military funding that, given a sufficiently high probability, would change your mind?
Is it a principle about never using taxpayer funds in a foreign war, or is it more that your perception of the risks is not worth your $2200 ($113B FY22 Appropriation).
Some of the risks of a zero funding policy are laid out above. You seem unfazed to even consider that these cases merit your ~$2,200 today vice the cost in blood and treasure from one of the alternatives.
David Henderson
Feb 19 2023 at 11:55pm
Good questions. It’s late. I’ll think about them and answer tomorrow.
David Henderson
Feb 20 2023 at 1:46pm
You ask:
Good question and my answer is no. If the price/outcome combination were low/good, I would favor U.S. military funding.
You asked:
Yes. If the result were that the Russians invaded and took Poland, for example. But it’s more complicated. I think that even a tiny increased risk of nuclear war, say on the order of 1 in 10,000, which is what I think Biden is adding, justifies staying out even if, for example, the Russians took Poland.
You write:
I don’t think that’s true. I’ve considered them and in some of the cases above, such as Richard Fulmer’s, I’ve answered them. You might not like my answers, but that’s a separate issue.
Andrew Wallen
Feb 20 2023 at 2:42pm
Thank you for your response. I agree that the problem is complex.
David Henderson
Feb 20 2023 at 5:31pm
You’re welcome, Andrew. And thank you for both asking good questions and being civil in a discussion where emotions can take over.
john hare
Feb 20 2023 at 5:50pm
There are so many places where we (US) should have left alone to wallow in their own problems, that my thought probably seems strange. This is absolutely with hindsight, not that I would have known at the time.
If the US and other countries had massively supported China in 1931 when Japan grabbed Manchuria, it is possible that WW2 might have been averted. Chinese corruption at that time was legendary, and it may not have worked, but it may have created a stop line for the Japanese even if they had gained a bit of territory.
Similar for Italy/Ethiopia 1936 and Germany reentering the Rhineland.
Obviously there are many counter examples. But sometimes deterrence works based on the idea that certain activities are likely to be expensive out of proportion to gain.
Warren Platts
Feb 22 2023 at 7:00pm
I would add that at least for the military aid, the “cost” mainly consists of sunk costs of pre-existing stockpiles of munitions manufactured in order to destroy Russians that were slowly going obsolete & requiring annual maintenance costs. Yes, the stockpiles will have to be replenished, but they would have needed to be replenished sooner or later anyways. And of course, that money will go to U.S. factories, with all the wages & profits, taxes, & multiplier effects that entails, so it’s not as if the materiel is in form of remittance checks made out to Ukraine.
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