July 17, 2024
That is a question that should occur to people who read through the Republican Party’s platform. Not only does the platform promise to extend the 2017 tax cuts, which will potentially put tens of billions of dollars in Elon Musk’s pocket over the next decade, it also promises to “modernize the military.”
“Republicans will ensure our Military is the most modern, lethal and powerful Force in the World. We will invest in cutting- edge research and advanced technologies, including an Iron Dome Missile Defense Shield, support our Troops with higher pay, and get woke Leftwing Democrats fired as soon as possible.”
This looks to be hundreds of billions or even trillions of dollars in additional spending over the next decade. Elon Musk, among others, is likely to be well-situated to get some of the contracts that will be involved in modernizing the military.
It is also important to understand the prospect of a massive increase in military spending in its larger context. We currently are spending roughly $900 billion a year on the military, or a bit more than 3.0 percent of GDP. If we were to expand to the Cold War levels we saw under Reagan, that would take us to $1.8 trillion a year or 6.0 percent of GDP.
In this respect, it is worth noting that the Soviet Union’s economy at its peak was roughly 60 percent of the size of the U.S. economy. China’s economy is already almost 25 percent larger than the U.S. economy and growing considerably more rapidly. This means that if we are getting into a full-fledged arms race, the 1980s Cold War spending may be too conservative.
As far as how much Musk and other military contractors are likely to get out of an increase in spending, it is worth noting that excessive payments and outright fraud are already big problems with military contracting. However, the problem is likely to get considerably worse in a second Trump administration.
There are a number of potential checks on fraud and abuse in place at present. These include the Defense Department’s Inspector General, the Government Accountability Office (GAO), and the Justice Department, which can investigate allegations of fraud.
Donald Trump has said that he wants to remove these sorts of checks on his presidential power. They would all fit into his category of the “deep state.” These people are likely the “woke Leftwing Democrats” who the platform promises to fire as soon as possible.[1]
Trump also has complete authority to direct the Justice Department to ignore allegations of fraud in military contracts. The recent Supreme Court ruling on presidential immunity even stated that a prosecutor could not ask questions as to whether a payment to Trump or his family members, AKA “a bribe”, was a factor in the awarding of a contract. This means there could be quite a windfall in an expanded military budget for well-positioned contractors. (Elon Musk just promised to contribute hundreds of millions of dollars to Trump’s election campaign.)
Matt Yglesias has made a similar point about Trump’s proposal for massive taxes on imports, AKA “tariffs.” Trump would have complete control over the size of these taxes and could increase or decrease them on a whim. This means that if the CEO of a company angered him with a public comment, Trump could hugely increase the taxes imposed on an essential import for this company.
Alternatively, if the CEO were to make a large contribution to Trump’s political action committee or his pocket, Trump could lower the taxes imposed on the company’s imports. And remember, the Supreme Court says no one can ask any questions about Trump’s motives for these actions.
The long and short here is that we always have to worry about corruption in government dealings, however Trump is campaigning on a platform where he is explicitly committed to removing all the potential checks and the Supreme Court has just granted him complete immunity to be as corrupt as he feels like being.
In this context, Elon Musk’s campaign contributions look like to be a very good investment, and very costly for the rest of us.
[1] GAO is a congressional agency, but it is likely that with a Republican trifecta, Congressional leaders would respond to orders from Trump to fire any GAO investigators that were raising questions about contracts he awarded.
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