US funding to Ukraine may hinder its economy: Experts
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According to experts, Washington's ambitions to give a $40 billion aid package to Ukraine might have consequences for the US economy, including increased inflationary pressure.
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US President Joe Biden signs the Ukraine Democracy Defense Lend-Lease Act of 2022.
Experts told Sputnik that Washington's ambitions to give a $40 billion aid package to Ukraine might have consequences for the US economy, including increased inflationary pressure.
The US Congress approved an additional $40 billion package of aid for Ukraine on Thursday.
Yesterday, Republican Senator Rand Paul, on Wednesday, said that Congress needs to borrow money from China to send aid to Ukraine, just a day before the US Senate voted by majority to send $40 billion in military and economic aid to Ukraine and its allies. According to Investopedia, the US owes China $1 trillion in debt.
Rand Paul and Josh Hawley both opposed the vote, and the aid tops up the $4.5 billion in aid supplied to Ukraine since the start of the war.
According to Robert Singh, a professor of politics at Birkbeck, University of London, Beijing has been buying US Treasury bonds for decades. He stated that "technically, Paul is correct - the US needs to finance its deficit and debt, and so unless the government either increases taxes or cuts social spending, it has to borrow."
Gloria Shkurti Ozdemir, a foreign policy expert at Turkey's SETA Foundation, highlighted parallels with Paul's 2020 comment on the COVID-19 stimulus programs. She pointed out that such assertions were disregarded as false at the time, and it was claimed that the Federal Reserve would fund the majority of the costs.
Shkurti stated that Paul's statements are at some point correct in the sense that this aid is very large, and it will have a great impact on the American economy, especially when the inflation has reached very high levels and the US economy is struggling.
Marshall Auerback, a market analyst and research associate at the Levy Economics Institute of Bard College, believes that what the US is facing is resource constraint and not financial restraint.
Auerback notes that "the US continuing to prosecute a proxy war vs Russia is likely to exacerbate those inflationary pressures, especially in the food and energy complex, where both Ukraine and Russia are significant marginal producers."
Paul told Breitbart that his colleagues oppose social expenditure but support it when it is tied to the military. He then mentioned a bipartisan agreement, with Democrats supporting more social assistance and Republicans supporting increased military spending.
According to Paul Gottfried, a political theorist and former Horace Raffensperger Professor of Humanities at Elizabethtown College, Republicans nag about government expenditure but then do the exact opposite of what they accuse Democrats of doing.
"The Republican Party is heavily subsidized by defense industries and has never seen a bill that favors its sponsors that it can turn down," he said.
Singh, for one, claims that despite some Republicans claiming to oppose government programs, the majority of them vote to keep them because such initiatives are popular and opposing them carries political risks, despite the fact that social programs drive the deficit and debt much more than defense spending.
"At the same time, I think the bulk of Republicans, like Democrats, see the aid to Ukraine as a special case," he said.
Last February, the US Treasury announced that its national debt had hit a record high of over $30 trillion, in addition to the inflation which has skyrocketed reaching the US' biggest jump in 40 years.
The United States first started supplying Ukraine with weapons labeled as "defensive", but later on, it started sending artillery, helicopters, and UAVs to the Ukrainian army. Not only that, but Washington trained Kiev's troops on using the equipment in third countries.
