Why Every Country is Preparing for a War They Can't Afford

Summary

In 2024, global military spending soared to a record $2.7 trillion, straining economies already burdened by pandemic debt and inflation. The U.S., China, Europe, Japan, and smaller nations are rapidly modernizing militaries, producing advanced weapons, and increasing defense budgets, often exceeding 2–4% of GDP. This arms race, fueled by security dilemmas, technological competition, and regional conflicts like Ukraine, risks severe economic consequences. Even countries historically neutral, like Sweden and Switzerland, are rearming. With hypersonic missiles, AI defense systems, and costly naval programs, nations prepare for conflicts they can scarcely afford, raising the pressing question: are they ready for victory, or for mutual destruction?

Takeaways

• 💰 Global military spending hit a record $2.7 trillion in 2024, despite economic challenges like pandemic debt and inflation.
• 🛡️ The U.S. defense budget alone reached $886 billion, with emergency supplemental funding adding tens of billions more for ammo and foreign aid.
• 🇨🇳 China’s real military spending may be around $450 billion, with the largest navy, expanded nuclear arsenal, and hypersonic weapons, prompting expensive U.S. countermeasures.
• 🇪🇺 European nations, including Germany, Poland, Sweden, and Finland, are rapidly increasing defense budgets and modernizing militaries in response to Russian aggression.
• 🇨🇭 Switzerland is modernizing both its military and financial systems to maintain security and economic neutrality in a connected world.
• 🇯🇵 Japan is increasing defense spending to $50.2 billion, despite high national debt and an aging population, preparing for potential Chinese threats.
• ⚔️ Modern weapons are extremely costly, with individual systems like hypersonic missiles, stealth bombers, and advanced drones reaching millions to billions of dollars per unit.
• 💻 Cyber and AI-integrated defense systems create additional high-cost demands, while low-cost offensive options remain potent.
• 🔄 The global security dilemma drives nations to rearm in response to each other, escalating military spending and creating economic strain.
• 🌏 Ukraine exemplifies the staggering cost of modern warfare, consuming thousands of high-priced artillery shells, rockets, and drones, demonstrating unsustainable defense spending.
• ⏳ Forecasts suggest U.S. defense spending could reach $1.7 trillion annually by 2034, threatening economic stability and highlighting the risk of a fiscal and military spiral.
• ⚠️ The transcript raises the critical question: Are global powers preparing for victory or mutually assured destruction in a highly interconnected and militarized world?

Q & A

What was the total global military spending in 2024?

In 2024, global military spending reached a record $2.7 trillion, despite many nations facing pandemic-related debt and economic challenges.

How has U.S. artillery production changed since before 2022?

The General Dynamics Ordnance factory in Scranton increased production from 10–14,000 shells per month to nearly 40,000 shells monthly, operating three shifts, seven days a week, driven by Ukraine’s demand for 155mm ammunition.

How does U.S. defense spending compare to its GDP?

In 2024, the U.S. spent $886 billion on defense, which alone exceeds the GDP of many nations. Combined with debt interest payments of $640 billion, defense spending competes directly with other federal priorities.

What is the estimated real Chinese military budget for 2025?

Although China’s official 2025 military budget is $296 billion, Western intelligence estimates suggest the real figure could be around $450 billion when including off-budget programs and dual-use technologies.

How has Europe responded to the changing security landscape?

European nations have significantly increased defense spending. Germany, for example, created a €100 billion military modernization fund, while countries like Poland, Sweden, and Finland have expanded their military capabilities and joined NATO.

What measures has Sweden taken to prepare for potential conflict?

Sweden increased defense spending from $6.2 billion in 2021 to $8.75 billion in 2024, reintroduced military conscription, expanded civil defense programs, built underground command bunkers, and joined NATO as its 31st member.

What are some examples of the high cost of modern weapons systems?

Examples include U.S. hypersonic missiles costing over $14 million each, B-21 Raider bombers projected at $2 billion per plane, and F-35 jets priced at $80–$109 million each before lifetime maintenance.

What is the 'security dilemma' mentioned in the transcript?

The security dilemma occurs when one nation’s defensive buildup prompts rivals to rearm, creating an escalating cycle of military spending. This dynamic can spiral into high costs and heightened global tension.

How could a conflict over Taiwan impact the global economy?

A war over Taiwan could trigger a $10 trillion global economic shock, affecting half the world’s semiconductor supply and potentially disrupting critical industries and military supply chains worldwide.

Why is the current global arms race considered unsustainable?

Military budgets are soaring while nations carry record debt burdens, face manufacturing bottlenecks, and rely on scarce resources like rare earth minerals. Combined with the costs of modern warfare, this makes prolonged military competition financially and economically unsustainable.

How has Ukraine influenced global military spending?

Ukraine has driven unprecedented military aid and production. Western nations have provided over $200 billion in military and economic support since February 2022, and demand for artillery and advanced systems has strained U.S. production capacities.

What is an example of creative budgeting to meet NATO defense spending requirements?

Italy planned to classify the construction of the world’s longest suspension bridge between Sicily and the mainland as a 'national security expenditure,' allowing it to count toward NATO’s 2% GDP defense spending target.