U.S. Wars Abroad Increase Inequality at Home

Who Foots the Bill for American Hegemony?

Two U.S. Navy aircraft carriers during training in the Sea of Japan, June 2017.  U.S. Navy/Z.A. Landers/REUTERS

To understand the staggering proportions of economic inequality in the United States today, take your pick from a long list of dizzying statistics. In 2016, the top 0.1 percent of households owned about the same share of wealth as the bottom 90 percent.” While the average wealth of the bottom 90 percent of households has remained at the same level since 1986, the average wealth for the top one percent has more than tripled. As The Economist noted in 2014, current conditions in the United States make a modern passenger plane, where business travelers stretch out their legs while the less fortunate squeeze into economy seats, look like a “socialist utopia.”

We know how we got here. The United States’ descent, since the late 1970s, into quasi-oligarchic levels of wealth concentration is a story of globalization, declining union membership, and technological change, among other factors. But one explanation is often missing from this list, and that is the fact that the United States is a country at war.

The U.S. military intervention in Afghanistan is currently in its seventeenth year. Together with the Iraq war and an array of “War on Terror” operations spanning the globe, such military engagement has cost the United States dearly in both blood and treasure. By one estimate, the United States’ post-9/11 military campaigns have cost the country all of $5.6 trillion.

When a bill is that large, the means by which a country chooses to pay it will profoundly affect its economy, to the point of helping determine who gets rich and who stays poor. In the twentieth century, the United States financed some of its biggest wars with direct taxes and bond campaigns. These measures were progressive in nature, distributing the war burden according to citizens’ means. For this reason, many twentieth century wars had an equalizing effect on U.S. society. In recent decades, however, U.S. leaders have preferred to finance war by borrowing money while cutting taxes. This method is politically expedient, but it exacerbates inequality by

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