Nuclear Continues To Lag Far Behind Renewables In China Deployments

China can’t scale its nuclear program at all. It peaked in 2018 with 7 reactors with a capacity of 8.2 GW. For the five years since then then it’s been averaging 2.3 GW of new nuclear capacity, and last year only added 1.2 GW between a new GW scale reactor and a 200 MW small modular nuclear reactor.

Michael Barnard 13 Jan 24,  https://cleantechnica.com/2024/01/12/nuclear-continues-to-lag-far-behind-renewables-in-china-deployments/

Since 2014 I’ve been tracking the natural experiment in China regarding the ability to scale nuclear generation vs renewables. My hypothesis was that the modularity and manufacturability of wind and solar especially meant that it would be much easier for them to scale up to massive sizes.

That hypothesis was strongly confirmed when I first published the results in 2019, and again in 2021 and 2022 when I updated them. In what is becoming a dog bites man annual article, here are the 2023 results. Once again, China’s nuclear program barely added any capacity, only 1.2 GW, while wind and solar between them added about 278 GW. Even with the capacity factor difference, the nuclear additions only mean about 7 TWh of new low carbon generation per year, while wind and solar between them will contributed about 427 TWh annually, over 60 times as much low carbon electricity.

As a note, there were no new hydroelectric dams commissioned in China, so that continued acceleration of deployment is solely due to wind and solar. That’s going to change when the absurdly massive Tibetan Yarlung Tsangpo river dam is commissioned, likely in the mid 2030s. That dam will generate three times the energy annually as the Three Gorges Dam, making it by far the biggest dam in the world by every measure.

A few points. First, what’s a natural experiment? It’s something which is occurring outside of a laboratory or research setting in the real world that coincidentally controls for a bunch of variables so that you can make a useful comparison. An often referenced example was of a specific region where half was without electricity for a few months. Researchers posited that the blackout region would have seen more pregnancies starting in that period, and sure enough, that’s what they found.

So why is China a natural experiment for scalability of wind and solar? Well, it controls for a bunch of variables. Both programs were national strategic energy programs run top down. I started the comparison in 2010 because the nuclear program had been running for about 15 years by then and the renewables program for five years, so both were mature enough to have worked out the growing pains.

One of the things that western nuclear proponents claim is that governments have over-regulated nuclear compared to wind and solar, and China’s regulatory regime for nuclear is clearly not the USA’s or the UK’s. They claim that fears of radiation have created massive and unfair headwinds, and China has a very different balancing act on public health and public health perceptions than the west. They claim that environmentalists have stopped nuclear development in the west, and while there are vastly more protests in China than most westerners realize, governmental strategic programs are much less susceptible to public hostility.  And finally, western nuclear proponents complain that NIMBYs block nuclear expansion, and public sentiment and NIMBYism is much less powerful in China with its Confucian, much more top down governance system.

China’s central government has a 30 year track record of building massive infrastructure programs, so it’s not like it is missing any skills there. China has a nuclear weapons program, so the alignment of commercial nuclear generation with military strategic aims is in hand too. China has a strong willingness to finance strategic infrastructure with long-running state debt, so there are no headwinds there either.

Yet China can’t scale its nuclear program at all. It peaked in 2018 with 7 reactors with a capacity of 8.2 GW. For the five years since then then it’s been averaging 2.3 GW of new nuclear capacity, and last year only added 1.2 GW between a new GW scale reactor and a 200 MW small modular nuclear reactor.

So what’s going on? As I noted late in 2023, nuclear energy and free market capitalism aren’t compatible, but China isn’t capitalist, according to a lot of westerners. But it very definitely is a market and export capitalist economy, albeit with more state intervention and ownership, and the nuclear program is suffering as a result. That lone small modular reactor is a clear signal of that.

January 14, 2024 Posted by Christina Macpherson | Uncategorized | Leave a comment

‘The Evidence of Genocide Is Not Only Chilling, It Is Also Overwhelming and Incontrovertible’. Quotes from International Court of Justice

by SCHEERPOST staff,   https://scheerpost.com/2024/01/12/the-evidence-of-genocide-is-not-only-chilling-it-is-also-overwhelming-and-incontrovertible/

The World Court will hear the case on Jan. 11 and 12 at The Hague.

Notable quotes from Jan. 11 hearing

From South African attorney Tembeka Ngcukaitobi:

“There is an extraordinary feature in this case: that Israel’s political leaders, military commanders, and persons holding official positions have systematically and in explicit terms declared their genocidal intent… And these statements are then repeated by soldiers on the ground in Gaza as they engage in the destruction of Palestinians and the physical infrastructure of Gaza.”

“What state would admit to a genocidal intent? Yet the distinctive feature of this case has not been the silence as such but the reiteration and repetition of genocidal speech throughout every sphere of state in Israel.”

“We remind the court of the identity and authority of the genocidal inciters: the prime minister, the president the minister of defense, the minister of national security, the minister of energy and infrastructure, members of the Knesset, senior army officials, and foot soldiers… The evidence of genocidal intent is not only chilling, it is also overwhelming and incontrovertible.”

“Israel has subjected Gaza to what has been described as one of the heaviest conventional bombing campaigns in the history of modern warfare. Palestinians in Gaza are being killed by Israeli weaponry and bombs from air, land and sea. They are also at immediate risk of death by starvation, dehydration and disease as a result of the ongoing siege by Israel, the destruction of Palestinian towns, the insufficient aid being allowed through to the Palestinian population, and the impossibility of distributing this limited aid while bombs fall. This conduct renders essentials to life unobtainable.“

“…the level of Israel’s killing is so extensive that nowhere is safe in Gaza. … Palestinians in Gaza are subjected to relentless bombing wherever they go. They are killed in their homes, in places where they seek shelter, in hospitals, in schools, in mosques, in churches, and as they try to find food and water for their families. They have been killed if they failed to evacuate. In the places to which they have fled, and even while they attempted to flee along, Israeli declared safe routes.”

“Israel has killed an unparalleled and unprecedented number of civilians with the full knowledge of how many civilian lives each bomb will take.“

January 14, 2024 Posted by Christina Macpherson | Uncategorized | Leave a comment

TODAY. New heights of folly as UK government releases its Civil Nuclear Roadmap.

When Rishi Sunak rose to the political throne in Britain, I thought: ”Well, of the stupid Tories, at least he’s probably less stupid than the rest of them”

Well, now I wonder. With an election due by early 2025, surely Sunak and co. are not planning upon political suicide?

So I can only conclude that Sunak is as thick as a brick.

He’s launched the  Civil Nuclear Roadmap for UK to increase nuclear generation by up to four times to 24GW by 2050. The Prime Minister said: “Nuclear is the perfect antidote to the energy challenges facing Britain – it’s green, cheaper in the long term and will ensure the UK’s energy security for the long-term.” “This is the right long-term decision and is the next step in our commitment to nuclear power”

The UK intends to build up to eight new reactors, and will invest up to £300 million into producing the HALEU fuel required for new high-tech reactors, and which currently is only commercially produced in Russia.

And there’ll be a fleet of “small modular reactors” to be .built across Britain.

Sounds great, don’t it?

BUT:

Large nuclear reactors.  The cost of Hinkley Point C has spiralled to £33bn, a 30 per cent increase from 2015 when it forecast the cost at £25-£26bn.    Sizewell C has not yet received a final investment decision.

Six reactors on three sites have been shut down since 2021 and will be need  expensive dismantlement 

Most of the UK’s 9 functioning nuclear reactors are nearing the end of their operating lives, although 2 of them Heysham 1 and Hartlepool are to be extended.

Small Nuclear Reactors. Regulation and planning  rules will be loosened . A   developer-led approach will replace previous rules.     Rather than ministers specifying sites, developers will be asked to identify locations for small nuclear reactors . 

Nuclear plants will be ruled out in line with “population density” and “proximity to military activities” . But apart from those considerations, “All other criteria willbe discretionary, including size, flood risk, proximity to civil airports,  the natural beauty, ecological importance or cultural heritage of the site. ” 

Divorced from reality?  Does Rishi Sunak not know what happened to the USA’s one and only small nuclear reactor project –   the rapid decline and fall of the NuScale enterprise?

The mainstream media faithfully touts Rishi Sunak’s nuclear plans.  But investors and the general public are not that gullible. 

I think it more likely that the Nuclear Roadmap will prove the antidote to a Tory government for 2025

January 13, 2024 Posted by Christina Macpherson | Uncategorized | Leave a comment

Israel Is Terrified the World Court Will Decide It’s Committing Genocide

Public hearings on South Africa’s request for provisional measures will take place on January 11 and 12 at the ICJ which is located in the Peace Palace in The Hague, Netherlands. The hearings will be livestreamed from 4:00-6:00 a.m. Eastern/1:00-3:00 a.m. Pacific on the Court’s website and on UN Web TV. The court could order provisional measures within a week after the hearings.

Other States Parties to the Genocide Convention Can Join South Africa’s Case

South Africa, a party to the Genocide Convention, charged Israel with genocide in the International Court of Justice.

By Marjorie Cohn / Truthout, January 8, 2024,  https://scheerpost.com/2024/01/08/israel-is-terrified-the-world-court-will-decide-its-committing-genocide/

For nearly three months, Israel has enjoyed virtual impunity for its atrocious crimes against the Palestinian people. That changed on December 29 when South Africa, a state party to the Genocide Convention, filed an 84-page application in the International Court of Justice (ICJ, or World Court) alleging that Israel is committing genocide in Gaza.

South Africa’s well-documented application alleges that “acts and omissions by Israel … are genocidal in character, as they are committed with the requisite specific intent … to destroy Palestinians in Gaza as a part of the broader Palestinian national, racial and ethnical group” and that “the conduct of Israel — through its State organs, State agents, and other persons and entities acting on its instructions or under its direction, control or influence — in relation to Palestinians in Gaza, is in violation of its obligations under the Genocide Convention.”

Israel is mounting a full-court press to prevent an ICJ finding that it’s committing genocide in Gaza. On January 4, the Israeli Foreign Ministry instructed its embassies to pressure politicians and diplomats in their host countries to make statements opposing South Africa’s case at the ICJ.

In its application, South Africa cited eight allegations to support its contention that Israel is perpetrating genocide in Gaza. They include:

(1) Killing Palestinians in Gaza, including a large proportion of women and children (approximately 70 percent) of the more than 21,110 fatalities and some appear to have been subjected to summary execution;

(2) Causing serious mental and bodily harm to Palestinians in Gaza, including maiming, psychological trauma, and inhuman and degrading treatment;

(3) Causing the forced evacuation and displacement of about 85 percent of Palestinians in Gaza — including children, the elderly and infirm, and the sick and wounded. Israel is also causing the massive destruction of Palestinian homes, villages, towns, refugee camps and entire areas, which precludes the return of a significant proportion of the Palestinian people to their homes;

(4) Causing widespread hunger, starvation and dehydration to the besieged Palestinians in Gaza by impeding sufficient humanitarian assistance, cutting off sufficient food, water, fuel and electricity, and destroying bakeries, mills, agricultural lands and other means of production and sustenance;

(5) Failing to provide and restricting the provision of adequate clothing, shelter, hygiene and sanitation to Palestinians in Gaza, including 1.9 million internally displaced persons. This has compelled them to live in dangerous situations of squalor, in conjunction with routine targeting and destruction of places of shelter and killing and wounding of persons who are sheltering, including women, children, the elderly and the disabled;

(6) Failing to provide for or ensure the provision of medical care to Palestinians in Gaza, including those medical needs created by other genocidal acts that are causing serious bodily harm. This is occurring by direct attacks on Palestinian hospitals, ambulances and other healthcare facilities, the killing of Palestinian doctors, medics and nurses (including the most qualified medics in Gaza) and the destruction and disabling of Gaza’s medical system; 

(7) Destroying Palestinian life in Gaza, by destroying its infrastructure, schools, universities, courts, public buildings, public records, libraries, stores, churches, mosques, roads, utilities and other facilities necessary to sustain the lives of Palestinians as a group. Israel is killing whole families, erasing entire oral histories and killing prominent and distinguished members of society;

(8) Imposing measures intended to prevent Palestinian births in Gaza, including through reproductive violence inflicted on Palestinian women, newborns, infants and children.

South Africa cited myriad statements by Israeli officials that constitute direct evidence of an intent to commit genocide:

“Gaza won’t return to what it was before. We will eliminate everything,” Israel’s Defense Minister Yoav Gallant said. “If it doesn’t take one day, it will take a week. It will take weeks or even months, we will reach all places.”

Avi Dichter, Israel’s Minister of Agriculture, declared, “We are now actually rolling out the Gaza Nakba,” a reference to the 1948 ethnic cleansing of Palestinians to create the state of Israel.

“Now we all have one common goal — erasing the Gaza Strip from the face of the earth,” Nissim Vaturi, the Deputy Speaker of the Knesset and Member of the Foreign Affairs and Security Committee proclaimed.

Israel’s Strategy to Defeat South Africa’s Case at the ICJ

January 10, 2024 Posted by Christina Macpherson | Uncategorized | Leave a comment

Where your $trillions go, to risk all life

Peace and Planet News, by Anthony Donovan | Winter 2023 Edition

We’ve seen an amazing level of bipartisan support!” For what initiative do we hear this rare statement echoed about Congress today?

The 15th Annual Nuclear Deterrence Summit, held once again at the Hyatt Regency in Arlington, Va., Feb. 13–15. For three days the rooms are filled with a multitude of companies and government agencies from around the country connected to the Department of Energy, Department of Defense, and National Nuclear Security Administration that make up our nuclear weapons industry, and its terribly secretive renewed Mutually Assured Destruction (MAD) race.

What is termed the “Enterprise” is in full-out sales and confidence-building mode. It is here the relationships for securing contracts through the next 5 to 35 years are solidified.

One aged reporter who once covered the industry in the 1980s confides his shock after a dizzying day of presentations: “How did you know these gatherings were going on? I just found out last week!  Can’t believe this, I mean, this is a new unbridled arms race!  These people in there are totally convinced this is the only way to go.” Looking at only two of us with our sign, he asks, “Why aren’t more people in the streets? Where is the movement pushing back?”………………………………………………………………….

Attendees were a bit puzzled that I wasn’t with a company connected to the summit, but I continued to share my purpose, seeing that we desperately need their dedication and skillset to begin turning toward the critical needs before us today: sustainability, good jobs supporting our environment, food, water, air, housing, healthcare, education, infrastructure … you know the issue. Some were relieved that I was all for science and space exploration, but first, for the precious earth!

…………………………………………………… Most exhibitors were too young to remember that the vast majority of citizens had voted with their feet to end this madness, and that there was no transparency or democratic process in the decision to use our treasure to fund it all.

Inevitably the confounding old Cold War rhetoric arose, painting China and Russia as vile enemies that we can not trust to honor any agreements.  ……………………..

Naturally, I’d let them know we had a most worthy instrument, The Treaty on the Prohibition of Nuclear Weapons, now international law, to help guide this needed transformation, despite its being dismissed by our mainstream media.  Only a few had heard of it, and of those, few knew particulars.

Laser beamed on their one aspect of the industry, several with competitors present vying for the same contract, many met in the dozens of closed-door side rooms for private company presentations/briefings.  There were open “networking breakfasts” lunches and evening cocktail parties and several daily general gatherings in the large Hyatt Ballroom focused on the latest in pit production, delivery platforms, command-and-control infrastructure and communications, warhead modernization, STRATCOM reports, reports from the heads of all our labs, Los Alamos, Oak Ridge, Sandia, etc.   Presentations on increasing efficiency in product and organization, best practices, and cited pathways to “success.”   After all, we are leading and “winning.”   Exactly what we think we are winning made no sense to anyone on the nuclear abolition team.

There were exhibitors displaying highly specialized metal nose cones and delivery vehicle parts.  Designers of fabrics that claim to protect from radioactivity, cybersecurity “experts,” nuclear waste management specialists, triad infrastructure architects, specialists in improving uranium refining, nuclear physicists and engineers specializing in all materials and their “enhanced delivery” of precision warhead targeting and interception by “safety” umbrellas, inter-agency communication specialists, and those through it all maintaining secure communications.   My presence seemed harmless enough to this security.  I think of all our very brave colleagues who’ve risked life to enter the kill zones of these most highly sealed-off omnicidal compounds to render witness of the crime against humanity.

Amazon, a “Gold Sponsor” of the summit, had an exhibit:  “We have established good relations with the CIA, but we need to get better integrated with the NNSA.  This is new to us.  That’s why we’re here.”

In this very clearly white male-oriented world, there was also a presentation on the essential hiring of more “diversity” for the future.  One enticing statement read they “offer specialized worth to employees by valuing their entire career life cycle–creating stable careers…”  Ah, such security………..

The revolving door is astoundingly evident here, and the boundaries of government, military, with private companies is quite indistinguishable.  Those with Navy, Air Force, and other triad experience are now running these private companies or working as their specialized “experts in technical and professional innovation. support and security.”   One “private” company proudly advertising that 70% of “our expertise” hold all the necessary security clearances within the government!

…………………………….. Former General Lloyd Austin, who retired to become Raytheon’s CEO, was easily confirmed by our Congress to become our current Secretary of Defense under President Biden.  In his hearings, General/CEO Austin guaranteed to our representatives that the Triad would get his full support to obtain all that it needed.  What seems illegal goes unchallenged.

Along with the DOE, National Security Administration, and Budget Office, the regular old nuclear weapon corps were very present: General Dynamics, Huntington Ingalls, Bechtel, Flour, Honeywell, Aerospace, SAIC, etc., and a number of universities……………………………………………………………………………………………………..

Within 25 minutes we were surrounded by hotel security and managers asking us to leave the premises immediately.   They then claimed even the sidewalks outside the hotel were private and we could not remain there………………………………………………………..

Ask your representative to sign H. Res. 77, sponsored by Rep. James McGovern, supporting the goals of the Treaty on the Prohibition of Nuclear Weapons!   Ask your senator to call for the same in the Senate.  Thank all the nations ratifying the TPNW.   Ask your representative to observe the Ban Treaty’s Meeting of States this November in New York City at the United Nations.  They are welcome to learn, and think deeper.

Knowing the horror of war was pushing ahead and with it an increasing, completely unnecessary risk of nuclear annihilation, there was ever-present sense of unity with the citizens of the world who are pleading and advocating another way.  There were many thumbs up and waves from passing vehicles.  Thinking of those who have young children/grandchildren, including a good number I got to  speak with on this Summit floor, we felt there was nowhere else to be on this day celebrating the love in our hearts and in our lives, round the world, Valentine’s Day.  https://peaceandplanetnews.org/where-your-trillions-go/

January 10, 2024 Posted by Christina Macpherson | Uncategorized | Leave a comment

Energy Transition Minister Agnes Pannier-Runacher enthuses over “the rebirth of France’s nuclear industry”

EDF will construct the new plants with tens of billions in public financing

“EDF will construct the new plants with tens of billions in public financing ” – what could possibly go wrong?

France sees potential for 14 new nuclear reactors. 8 Jan 24,  https://www.power-technology.com/news/france-may-build-14-new-nuclear-reactors/

France may need to build more than 14 new nuclear power plants, more than the six currently planned, if the nation is to meet its energy transition goal of reducing fossil fuel dependence from 60% to 40% by 2035.

Energy Transition Minister Agnes Pannier-Runacher stressed that nuclear will play an increasingly vital role in France’s energy mix. Speaking to La Tribune Dimanche just a few weeks before parliament reveals a bill relating to energy sovereignty, Pannier-Runacher said: “We need nuclear power beyond the first six EPRs [European Pressurised Reactors] since the existing (nuclear) park will not be eternal.”

This new energy strategy will be debated in parliament from late January and must be codified into law.

In 2022, French nuclear power output fell to a 30-year low after operational issues forced many reactors offline. This placed additional upward pressure on European energy prices, which were already being driven up reduced gas flows from Russia. However, French President Emmanuel Macron emphasised the importance of nuclear, stating: “What our country needs, and the conditions are there, is the rebirth of France’s nuclear industry.”

Over the course of 2023, availability improved, falling in line with state-controlled energy provider EDF’s target of 300–330 terawatt-hours. EDF will construct the new plants with tens of billions in public financing and chief executive Luc Rémont said his company aims to build roughly one 1.6GW reactor a year.

President Macron also reinforced his country’s commitment to nuclear at the recent COP28 climate summit in Dubai, where he led a group of 20 world leaders signing a pledge to “triple nuclear energy capacity from 2020 by 2050”. Shortly after signing, Macron pronounced that “nuclear energy is back”.

France currently has 56 operable reactors that produce around 70% of the nation’s electricity. Comparatively, Germany, another European superpower, does not produce any of its electricity from nuclear power, while in the UK the figure is 15%.

January 10, 2024 Posted by Christina Macpherson | Uncategorized | Leave a comment

The ‘Ghost Budget’: How America Pays for Endless War

The post-9/11 war funding pattern was completely different. For the first time since the American Revolutionary War, war costs were covered almost entirely by debt. There were no wartime tax increases or cuts in spending. Quite the reverse

a “culture of endless money” inside the Pentagon.

the ability to keep borrowing and spending with minimal oversight allowed the United States to keep fighting indefinitely.

Prior to 2001, U.S. wars were financed through a mixture of higher taxes and budget cuts, and funded mostly through the regular defense budget. The post-9/11 war funding pattern was completely different.

By  Linda Bilmes / Just Security https://scheerpost.com/2024/01/08/the-ghost-budget-how-america-pays-for-endless-war/

The post-9/11 wars in Iraq and Afghanistan were enabled by a historically unprecedented combination of budgetary procedures and financing methods. Unlike all previous U.S. wars, the post-9/11 wars were funded without higher taxes or non-war budget cuts, and through a separate budget. This set of circumstances – one that I have termed the “Ghost Budget” – enabled successive administrations to prosecute the wars with limited congressional oversight and minimal transparency and public debate. I adopted the name “Ghost Budget” because the term “ghost” appeared frequently in post-9/11 government reports in reference to funds allocated to people, places, or projects that turned out to be phantoms.

The Ghost Budget was the result of an interplay between changes in the U.S. budgetary process, a more assertive military establishment, and the conditions in global capital markets. It has had far-reaching implications for the conduct and course of the post-9/11 wars and for defense policy today.

Funding the Post-9/11 Wars

The “Ghost Budget” was the biggest budgetary anomaly in U.S. history. Prior to 9/11, U.S. wars were financed through a mixture of higher taxes and budget cuts, and funded mostly through the regular defense budget. One third of the costs of World War I and half the costs of World War II were met through higher taxes. During World War II, President Franklin D. Roosevelt described paying taxes as a “patriotic duty” as he raised taxes on business, imposed a “wealth tax,” raised inheritance taxes, and expanded the number of income taxpayers to roughly 80 percent of the workforce by 1945. Wars in Korea and Vietnam largely followed a similar pattern, with President Harry Truman pledging to make the country “pay as you go” for the Korean War. War funding was also a central issue in the Vietnam War, which ended when Congress refused to appropriate money for the South Vietnamese military.

The post-9/11 war funding pattern was completely different. For the first time since the American Revolutionary War, war costs were covered almost entirely by debt. There were no wartime tax increases or cuts in spending. Quite the reverse: far from demanding sacrifices, President George W. Bush slashed federal taxes in 2001 and again in 2003, just as the United States invaded Iraq. President Donald Trump reduced taxes further in 2017. Overall, federal taxes declined from 18.8 percent of GDP in 2001 to 16.2 percent by the start of 2020. In the same period, outstanding federal debt held by the public rose from $3.5 trillion to $20 trillion. War spending contributed at least $2.2 trillion to this increase.

Not only was the financing strategy unprecedented, but the budgetary mechanism used to approve the vast post-9/11 wartime spending also diverged radically from the past. In all previous conflicts, the United States paid for wars as part of its regular defense appropriations (the defense “base budget”), after the initial period (1-2 years) of supplemental “emergency” funding bills. By contrast, for the entire decade from FY 2001 to FY 2011, Congress paid for the conflicts in Iraq and Afghanistan as “emergencies,” devoid of serious legislative or executive oversight.

By statute, emergency spending is defined as “unanticipated…sudden…urgent…unforeseen…and temporary” and is typically reserved for one-off crises such as floods and hurricanes. Such emergency spending measures are exempt from regular procedural rules in Congress because the intent is to disburse money quickly in situations where delay would be harmful.

Congress continued to enact “emergency supplemental” funding even as the war effort expanded. The United States sent 130,000 military personnel into Iraq in 2003 (alongside troops from more than 30 countries). By 2009, there were 187,200 U.S. “boots on the ground” in Iraq and Afghanistan, supported by a similar number of military contractors, with nearly 500 U.S. military bases set up across Iraq, but the conflict was still being paid for as an “emergency.” In FY 2012, President Obama renamed the “Global War on Terror” as “Overseas Contingency Operations” (OCO) but the war continued to be funded using money that – although not designated as “emergency” – was explicitly exempted from regular spending limits on other government spending programs.

How We Got Here

There were three primary drivers of the Ghost Budget: unusual economic conditions, congressional budget dysfunction, and military assertiveness.

Economic Conditions: Unlike earlier wars, the post 9/11 conflicts took place in an era of free-flowing international capital markets. That provided the U.S. Treasury with access to a deep and global pool of capital, making it easy to borrow large amounts without negatively affecting the cost. It was also a period of historically low interest rates. Real interest rates (nominal rate minus inflation) on 10-year Treasury bonds fell from 3.4% at the start of 2001 to negative (-0.4%) by early 2021 — a 40-year low. Consequently, the Treasury was able to borrow trillions of dollars to pay for the wars, and simultaneously finance the tax cuts of 2001 and 2003 without having any material effect on the amount of debt service being repaid through the annual budget. By FY 2017, total public debt had more than tripled, but debt service payments as a percentage of annual budget outlays had decreased to 6.6 percent, compared to 8.5 percent of federal budget outlays in FY 2002. In terms of cash outlays, this meant that the United States paid only slightly more in interest payments in FY 2017 than it had in FY 2002 ($268 billion versus $232 billion in 2018 dollars). Borrowing seemed virtually painless.

Budget Dysfunction: For several decades, the federal budget process has become increasingly dysfunctional. This breakdown may be traced to the post-Watergate budget reforms enacted in 1974, which shifted power away from the President and to the Congress. Most budget experts from both parties agree that the reforms made the budget process weaker, less predictable, less capable of reconciling competing demands, and more prone to fiscal crises. Prior to 1974, the federal government had never ceased operations for lack of funding. Since then, it has “shut down” 22 times, completely or partially. There have been only four years in which Congress passed its annual appropriations bills on time, and a series of near-defaults and other fiscal crises. In the absence of reliable budgets, Congress has enacted hundreds of short-term stopgap “continuing resolutions” to pay the bills. In this context, it was convenient for all the stakeholders to fund the wars as an “emergency” outside the regular process. The President was able to exclude war funding from his annual defense budget request to Congress, thus presenting an artificially low number for the federal budget deficit. This helped the Bush administration sustain the pretense that the wars would be short, while pursuing its political agenda of cutting taxes. Meanwhile, Congress was freed from the need to find politically painful spending cuts elsewhere to pay for the war, and the Pentagon was able to prosecute the wars without worrying about whether Congress would pass the defense appropriations bills on time.

Military Assertiveness: In 2001, the Pentagon was actively seeking to increase its budget after a decade of post-cold war budget cuts. The Afghanistan and Iraq conflict not only reversed the downward trend in military spending, but opened the floodgates to a spending bonanza due to the nature of emergency and OCO appropriations. Unlike the regular defense base budget, the wartime supplemental money was easier to secure, had few restrictions on how it could be spent, and avoided the lengthy internal Planning, Programming, Budgeting & Execution Process (PPBE) budget justification process. Consequently, the Defense Department was able to shift war funding into other categories to obtain items on its long-time “wish list” that were only tangentially (or not at all) related to the wars in Iraq or Afghanistan. Former Defense Secretary Robert Gates termed this a “culture of endless money” inside the Pentagon.

By 2009, war spending accounted for almost one quarter of the total military budget; the Pentagon budget had grown to its highest level since the Second World War, and military spending had rebounded from 2.9% of GDP in FY 2001 to above 4% of GDP, where it remained through FY 2019. The OCO budget had evolved into a second defense budget that was largely untethered from the wars, and protected the military from congressional budget volatility.

Implications for Perpetual War

The Ghost Budget provided the ability to keep borrowing and spending in an almost unconstrained manner for more than two decades. The absence of new taxes insulated the public from the mounting cost of the wars and broke the expectation that wars would inevitably involve higher taxes. The OCO budget extended far beyond the immediate operational needs of the wars in Afghanistan and Iraq, perpetuating military actions throughout the region. As Immanuel Kant predicted in Perpetual Peace (1795), the ability to keep borrowing and spending with minimal oversight allowed the United States to keep fighting indefinitely.

Implications for Perpetual War

The Ghost Budget provided the ability to keep borrowing and spending in an almost unconstrained manner for more than two decades. The absence of new taxes insulated the public from the mounting cost of the wars and broke the expectation that wars would inevitably involve higher taxes. The OCO budget extended far beyond the immediate operational needs of the wars in Afghanistan and Iraq, perpetuating military actions throughout the region. As Immanuel Kant predicted in Perpetual Peace (1795), the ability to keep borrowing and spending with minimal oversight allowed the United States to keep fighting indefinitely.

The legacy of the Ghost Budget is that money is no longer a serious deterrent to war. To date, 99% of US assistance to Ukraine has been funded by supplemental emergency funds – which means that this spending is in addition to the $840 billion regular defense budget. The Biden administration has asked Congress to approve another $106 billion in emergency funding for the Middle East, Ukraine, and other regions. Regardless of the merits of any particular endeavor, the use of Ghost Budgets makes it far easier to prolong the fighting at any cost.

January 9, 2024 Posted by Christina Macpherson | Uncategorized | Leave a comment