President Donald Trump promised to run the government like a business. Unfortunately, his model seems to be the one that burns money.
Most CEOs who waste billions of dollars on failed projects get a summons from the board of directors — and often, the boot.
But we live in the era of Elon Musk’s rocket ships and OpenAI’s chatbots, where business leaders can burn staggering amounts of money chasing their own obsessions and simply ask investors for more.
Trump’s response to an expensive military failure is the same as Silicon Valley’s response to many unprofitable startups: spend even more money.
After five months, the official Pentagon estimate is that the Iran war has cost $38 billion so far. The actual bill likely will be even higher.
And that’s just the direct costs. The war has sent oil and gas prices higher while making one of the world’s most important shipping lanes — the Strait of Hormuz — more expensive and risky to navigate.
War-related inflation has already cost the average household $574 in higher fuel costs alone, according to a Brown University tracker.
Rather than rethink his strategy, Trump is doubling down.
Rather than rethink his strategy, however, Trump is doubling down, going back to Congress to ask for a 50% increase in defense spending.
The U.S. defense budget already tops $1 trillion per year, accounting for 45% of “discretionary” spending that doesn’t automatically go to benefit programs like Medicare and Social Security. It’s the largest pot of money any president oversees.
Trump is asking for $1.5 trillion for the next fiscal year, which begins on Oct. 1. Some of that money might even end up going to his two sons, who have somehow become defense contractors seemingly overnight.
The president wants to spend 50% more on the military even while promising to defend fewer places. He has questioned America’s commitments in Europe, scaled back support for Ukraine and repeatedly cast doubt on defending Taiwan. He’s asking taxpayers to spend vastly more for a significantly smaller mission.
The last time America dramatically reduced its military ambitions was after the Cold War. Washington responded by shrinking the armed forces, cutting the Pentagon’s budget by roughly 30% in real terms and claiming a “peace dividend.” Trump wants the smaller mission, but not the peace dividend.
Trump’s spending priorities also remain stuck in the past.
Despite its much smaller economy and military, Iran demonstrated how a weaker adversary can still impose enormous costs on a superpower, disrupting global supply chains, driving up gas prices and striking vulnerable U.S. military installations.
For its part, Ukraine has relied on drones — much cheaper than manned combat jets — to blunt Russia’s overwhelming advantages in weaponry and sheer numbers on the battlefield.
The lesson military planners are drawing from both Iran and Ukraine is that the economics of warfare are changing. Cheap drones and other asymmetric tactics increasingly allow weaker countries to impose enormous costs on stronger ones. Around the world, militaries are racing to adapt.
Europe is buying drones, Taiwan is redesigning its defenses around them and NATO is rewriting doctrine.
Meanwhile, one of Trump’s signature defense proposals is a fleet of giant battleships named after himself.
Battleships have been obsolete for generations. Aircraft replaced them. Then missiles replaced aircraft for many missions. Now, inexpensive drones are reshaping naval warfare yet again.
But Trump wants to build floating monuments to World War II.
We are not rich enough to waste money like this. The national debt is about to hit $40 trillion. Interest payments are consuming a growing share of the federal budget. Social Security is projected to face a funding shortfall in six years; Medicare in seven.
This is not a bleeding-heart plea to defund the Pentagon.
This is not a bleeding-heart plea to defund the Pentagon. The world is a dangerous place, and there’s a solid case to make for robust defense spending and modernization of the military.
Silicon Valley companies can burn billions of dollars because investors volunteer to take the risk. Governments don’t have that luxury. Every dollar spent on a vanity project comes from taxpayers and investors who buy U.S. debt.
But America doesn’t need a bigger Pentagon nearly as much as it needs a smarter one. History is full of countries that spent fortunes preparing for the last war instead of the next and lost as a result.
Congress should not reward a strategy that mistakes spending for strength.
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