Back to the Rabbit Hole
Fiat, Taxes, and War: The Military Industrial Complex
War is expensive—astronomically so—and without the ability to print money, governments would be constrained by the actual resources they could raise through taxes and bonds. It used to be that nations would rally their citizens in a patriotic effort, urging them to buy bonds and contribute to the war cost, while taxes were hiked to cover the massive costs of conflict. But that was before we left the gold standard and fiat currency became the norm. Now, instead of relying solely on taxes and bonds, governments can simply print money to finance wars. During World War II, the U.S. still relied heavily on war bonds and taxes, but by the time of the Vietnam War and beyond, printing money became an increasingly viable option. Fiat currency has allowed nations to bypass these limits, funding conflicts with money that didn’t exist until it was created out of thin air. If governments had to rely solely on what they could collect from their citizens or borrow, many wars would simply be unaffordable.
It’s not just that fiat currency makes war more affordable—it’s that war itself has become a tool to justify the endless printing of money. The economy, reliant on constant growth, sometimes needs the stimulus that only large-scale government spending can provide. And what better excuse for massive spending than war? War provides that justification, keeping the wheels of the fiat economy spinning, even as it erodes the value of the very money it’s printing. Whether it’s a global conflict, a war on terror, or even a new Cold War, the narrative of external threats keeps the printing presses running and the economy humming, at least on the surface.
Combine this with the military-industrial complex: a powerful alliance of defense contractors, lobbyists, and politicians who profit from perpetual conflict. War is no longer just a matter of national security; it’s a lucrative business. The demand for weapons, technology, and military infrastructure creates a self-sustaining cycle where the need for war justifies the creation of more money, which in turn fuels the next conflict. The profits roll in, and the complex thrives, all while the public foots the bill in ways they may not even realize.
Just because the government isn’t taxing you directly to pay for war doesn’t mean you aren’t paying for it. Every dollar printed to fund military operations devalues the money in your pocket through inflation. It’s a hidden tax—one that erodes your purchasing power and chips away at your savings without you even noticing.