The costs of war are vast and horrific. Most people know this, which raises the question of why the US government seemingly can’t live without it. Is it simply a matter of applied Keynesianism, that of spending the country into vast riches while also spending ourselves safe? For the industrial recipients of the spending war signals successful lobbying, but only if it’s over there.
For most of us, war spending amounts to sponsorship of hell on earth. The Pentagon’s estimate is $37.5 billion for Trump’s attack on Iran so far, with the White House wanting an additional $87.6 billion. For the first nine months of fiscal 2026, Washington collected about $4.15 trillion and spent $5.52 trillion—a deficit of $1.37 trillion. Never forget, the state has no money of its own. Every dollar it acquires is ripped from you and me through force or the fraud of inflation.
Assuming Trump was elected honestly, it was still an extraordinarily crude and bundled transaction, as all elections are. Some voted for him to tame inflation and to avoid new wars. Voters didn’t have the option of voting for “Trump on the border, Ron Paul on Iran.”
The worst costs of war are measured in human suffering and deaths. When Trump launched his decapitation attack on Iran on February 28, a Tomahawk missile somehow hit a girls’ school in Minab, killing roughly 156-168 people, including at least 120 children. It was the first time the US started a war without getting hit first.
The US Constitution created the United States, and its chief author or “father,” James Madison wrote:
Of all the enemies of true liberty, war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other.
War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. . . .
No nation can preserve its freedom in the midst of continual warfare.
As president, Madison had a turn at bat with his War of 1812. Incentives change when a person becomes a state agent.
But liberty is a developed taste, and few of us know what it’s like to face an unknown wilderness alone, as many of our forebears did. What passes for liberty today has been warped by decades of war and countless other government intrusions. Keynes himself—before he became a Keynesian—had a deep appreciation of life as it existed before World War I. As he wrote in Chapter Two of The Economic Consequences of the Peace (1920),
What an extraordinary episode in the economic progress of man that age was which came to an end in August, 1914! The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot. But escape was possible, for any man of capacity or character at all exceeding the average, into the middle and upper classes, for whom life offered, at a low cost and with the least trouble, conveniences, comforts, and amenities beyond the compass of the richest and most powerful monarchs of other ages.
The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages. . . He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighboring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference.
But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper . . . (emphasis added)
His description of the world omitted conspicuous problems, but he understood the power and state-dependency (fragility) of the international division of labor and its appeal to those engaged in it. He also witnessed how states could shatter this world almost overnight and recognized the role of inflation in sponsoring a long bloodbath. In another famous passage from his book, he writes in Chapter Six,
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
And further:
In the latter stages of the war all the belligerent governments practiced, from necessity or incompetence, what a Bolshevist might have done from design. Even now, when the war is over, most of them continue out of weakness the same malpractices.
The politicians blamed the miserable state of their economies on “profiteers.” But in a period of rapidly rising prices (hyperinflation) they could not help but get rich since every “trader who has purchased for stock or owns property and plant inevitably makes profits.” In this way, governments were “fast rendering impossible a continuance of the social and economic order of the nineteenth century.”
Conclusion: State Incentives Are Incompatible with Civilization
You or I looking at the state’s wars might ask, “How can we stop the killing?” The state’s agents see it differently: “How can we stop without losing credibility?” In the state, responsibility is divided. One official approves funding, another launches the missiles, yet another tries to explain civilian deaths. Meanwhile, the central bank buys the state’s debt to make it all happen. Agents need the ability to speak comfortably about all the stuff most people find unspeakable.
If you or I were inserted into the White House we might see things differently than we do as regular people. The incentives change. We need to turn to the free market for governance and end the state.
