Armstrong Economics’ Post

Debunking Ukraine aid myths: a fiscal reality check The USA has provided $175 bn in support to Ukraine since Russia's full-scale invasion. This substantial figure has drawn criticism, but many arguments against aid are based on misconceptions. Key facts: ❌ Myth: All Ukraine aid is spent overseas. ✅ Fact: 70% ($120 billion) of aid is spent inside the USA, supporting our defense industrial base. ❌ Myth: The USA is shouldering most of the burden. ✅ Fact: Europe's total aid to Ukraine actually exceeds the USA's. ❌ Myth: Ukraine aid significantly increases individual taxes. ✅ Fact: Only 2% of the average American's taxes go to Ukraine aid. ❌ Myth: Cutting Ukraine aid would boost funding for local services. ✅ Fact: Aid reduction wouldn't increase local service funding, which is primarily locally sourced. ❌ Myth: We must secure our border before helping Ukraine. ✅ Fact: A border wall wouldn't significantly reduce illegal migration; asylum system reform is needed. These myths stem from a politics of resentment, but the facts show minimal impact on American taxpayers or national security. It's crucial to base policy discussions on economic and fiscal realities, not emotions or misconceptions.

Researchers from the Kiel Institute for the World Economy, which tracks aid to Ukraine, have calculated hypothetical scenarios for what Ukraine's aid might look like in 2025 after Trump potentially assumes office in January. For comparison, the researchers estimate that aid to Ukraine in 2025 will amount to approximately $119 billion if the funding continues to follow the trends of 2024. If Trump were to cut all aid next year, this would reduce subsidies to just $85 billion, leaving a $34 billion gap compared to the baseline scenario. Since many European countries align their aid strategies with the United States, the researchers propose another scenario where European aid would also decrease by 50% if U.S. aid drops to zero. In this case, they estimate a $59 billion shortfall in 2025 compared to 2024. However, Ukraine still has other sources of funding. In July, NATO pledged $42 billion in coordinated aid to Ukraine through 2025, and the G7 recently finalized a plan to provide Ukraine with $48 billion in loans secured by frozen Russian assets. Together, these measures would fill the gap even under the most negative scenario. Interestingly, the analysts argue that instead of merely maintaining the current level of aid, it should be increased to lead Ukraine to victory. https://lnkd.in/dC9psUHM

#Ukraine / #Russia - War Update - Speaker Johnson moving forward with Ukraine aid bill despite pressure from hardliners - from CNN: Speaker Mike Johnson announced Wednesday he is sticking with his plan to put a series of foreign aid bills on the floor, including funding for Ukraine, after facing significant pressure from hardliners. Johnson said in a note to members that they will vote on these Saturday evening. “After significant Member feedback and discussion, the House Rules Committee will be posting soon today the text of three bills that will fund America’s national security interests and allies in Israel, the Indo-Pacific, and Ukraine, including a loan structure for aid, and enhanced strategy and accountability,” Johnson said in the note. The three-part supplemental package looks strikingly similar to the Senate’s bill in several key ways including that the package includes a little more than $9 billion in humanitarian aid for Gaza and other conflict zones around the world, which had been a red line for Democrats. The bills, taken together, also add up to about $95 billion in aid – the same amount the Senate bill included – with an adjustment that $10 billion in Ukraine economic assistance is in the form of a repayable loan. This specific assistance is the kind of direct payment that helps Ukraine’s government continue to function during a war. Those loans are through approximately $7.9 billion in economic assistance to Ukraine and another $1.6 billion in assistance for Europe, Eurasia and Central Asia, requiring the president to strike an agreement with Kyiv to repay the funding. The administration could cancel the debt if they choose to, according to a source familiar. The fight over the bills – and the potential for right-wing members of the GOP to attempt to oust Johnson over it – adds up to the most intense pressure that the speaker has faced over his future in his short time in the role. Rep. Thomas Massie of Kentucky on Tuesday said he would co-sponsor Rep. Marjorie Taylor Greene’s motion to vacate, which would boot Johnson from the speakership if it passed, leading the speaker to defiantly tell reporters that he would not be resigning. The loan structure around aid comes after a meeting and news conference with Johnson and former President Donald Trump, who said in February that the US should stop providing foreign aid unless it is structured as a loan. That weekend, Johnson earned full-throated support from Trump at a perilous time in his speakership. Story continues, for full report: https://lnkd.in/efCgNTxV

New Post: Senate advances Ukraine aid, Israel funding and TikTok ban -WASHINGTON — The Senate voted Tuesday to advance the $95 billion aid package to provide critical aid to Ukraine and a provision that could lead to a nationwide ban on TikTok. The vote of 80-19 indicates the legislation has enough support to clear the Senate in a final vote, which could come as soon as... WASHINGTON — The Senate voted Tuesday to advance the $95 billion aid package to provide critical aid to Ukraine and a provision that could lead to a nationwide ban on TikTok.The vote of 80-19 indicates the legislation has enough support to clear the Senate in a final vote, which could come as soon as Tuesday evening, and then head to President Joe Biden’s desk to be signed into law.The package, which passed the House on Saturday, includes $60 billion in aid to Ukraine that President Volodymyr Zelenskyy said would give his country “a chance at victory” against Russia. It includes $26 billion in aid to Israel and humanitarian relief in Gaza, in addition to $8 billion for security in Taiwan and the Indo-Pacific.And it would give TikTok’s China-based parent company nine months, which the president could extend to a year, to sell the popular social media platform or be banned in the U.S. That puts TikTok closer than ever before to a prohibition while ensuring that it won’t be banned until after the 2024 election.U.S. and Ukrainian flags fly near the U.S. Capitol on Saturday as the House passed aid to Ukraine.Nathan Howard / Getty ImagesSenators on Tuesday afternoon will discuss whether they can reach a deal to quickly vote to give final passage to the bill later in the day or whether to wait until Wednesday to approve it.“The finish line is now in sight,” Senate Majority Leader Chuck Schumer, D-N.Y., said in a statement over the weekend, saying the bill’s passage would be “a watershed moment for the defense of democracy.”Two months ago, the Senate voted 70-29 to pass a similar $95 billion foreign aid package — but without the TikTok provision.RecommendedStill, there are signs that the Senate is receptive to the TikTok ban bill, which the House revised.Sen. Maria Cantwell, D-Wash., the chair of the Commerce Committee, endorsed the new bill, saying she’s “very happy” with the extended window for TikTok to be sold. An earlier House-passed bill would have given the parent company six months to sell TikTok. Cantwell noted that she recommended the change."I support this updated legislation," she said.Advocates for banning the app in the U.S. express concerns about TikTok’s relationship to ByteDance, a company based in Beijing, saying Americans’ data could, under Chinese law, be accessed by China’s government, a prospect that TikTok has downplayed, saying its headquarters are in Singapore and Los Angeles. They also claim China could manipulate the algorithm to advance propaganda.A TikTok spokesperson responded to the House’s vote over the weekend b

New Post: Senate advances Ukraine aid, Israel funding and TikTok ban -WASHINGTON — The Senate voted Tuesday to advance the $95 billion aid package to provide critical aid to Ukraine and a provision that could lead to a nationwide ban on TikTok. The vote of 80-19 indicates the legislation has enough support to clear the Senate in a final vote, which could come as soon as... WASHINGTON — The Senate voted Tuesday to advance the $95 billion aid package to provide critical aid to Ukraine and a provision that could lead to a nationwide ban on TikTok.The vote of 80-19 indicates the legislation has enough support to clear the Senate in a final vote, which could come as soon as Tuesday evening, and then head to President Joe Biden’s desk to be signed into law.The package, which passed the House on Saturday, includes $60 billion in aid to Ukraine that President Volodymyr Zelenskyy said would give his country “a chance at victory” against Russia. It includes $26 billion in aid to Israel and humanitarian relief in Gaza, in addition to $8 billion for security in Taiwan and the Indo-Pacific.And it would give TikTok’s China-based parent company nine months, which the president could extend to a year, to sell the popular social media platform or be banned in the U.S. That puts TikTok closer than ever before to a prohibition while ensuring that it won’t be banned until after the 2024 election.U.S. and Ukrainian flags fly near the U.S. Capitol on Saturday as the House passed aid to Ukraine.Nathan Howard / Getty ImagesSenators on Tuesday afternoon will discuss whether they can reach a deal to quickly vote to give final passage to the bill later in the day or whether to wait until Wednesday to approve it.“The finish line is now in sight,” Senate Majority Leader Chuck Schumer, D-N.Y., said in a statement over the weekend, saying the bill’s passage would be “a watershed moment for the defense of democracy.”Two months ago, the Senate voted 70-29 to pass a similar $95 billion foreign aid package — but without the TikTok provision.RecommendedStill, there are signs that the Senate is receptive to the TikTok ban bill, which the House revised.Sen. Maria Cantwell, D-Wash., the chair of the Commerce Committee, endorsed the new bill, saying she’s “very happy” with the extended window for TikTok to be sold. An earlier House-passed bill would have given the parent company six months to sell TikTok. Cantwell noted that she recommended the change."I support this updated legislation," she said.Advocates for banning the app in the U.S. express concerns about TikTok’s relationship to ByteDance, a company based in Beijing, saying Americans’ data could, under Chinese law, be accessed by China’s government, a prospect that TikTok has downplayed, saying its headquarters are in Singapore and Los Angeles. They also claim China could manipulate the algorithm to advance propaganda.A TikTok spokesperson responded to the House’s vote over the weekend b

Why am I so pro Ukraine aid? Many of you have asked me this question and some with even a touch of anger. As the debate on Ukraine aid packages continues, the question of why the US should provide support to the conflict arises frequently. This topic deserves attention, especially considering the implications for global security and global trade. In a world where Russia's antagonism towards the Western-led global order is evident, offering aid to Ukraine becomes imperative. Russia's aggressive posture poses a grave threat not only to the US but also to the principles of democracy and international stability. The misinterpretations surrounding the Ukrainian aid packages are largely a result of effective Russian propaganda. Let's dispel some common misconceptions: The aid sent to Ukraine primarily consists of surplus government equipment deemed outdated and surplus. This aid has no bearing on US readiness as it involves equipment scheduled for retirement. That’s right, Ukraine aid is a big Pentagon garage sale. Following the transfer of surplus materials to Ukraine, the allocated funds are channeled towards new programs. This process facilitates the modernization of the US military by phasing out obsolete equipment and adopting advanced technology. Remarkably, 90% of the Ukraine funding has, in fact, circulated back within the US. So not only are we disposing of our surplus we are using Ukraine aid to build out a modern US fighting force. Supporting Ukraine serves the crucial purpose of engaging Russia, affording Europe the opportunity to strengthen its military capabilities. This strategic move aims to enhance Europe's self-sufficiency in defense, thereby reducing dependence on US assistance in the event of further Russian aggression. The conflict in Ukraine acts as a testing ground for emerging warfare technologies, allowing for valuable insights without risking American lives. Despite potential inefficiencies and corruption risks, meticulous planning has been implemented to minimize losses and optimize the impact of aid delivery. There will always be some loss in fast moving large government programs, I’m looking at you Covid/TARP funds, but this program has been well managed and has little waste. Quoting the adage, "America always does the right thing after exhausting every other option," underscores the belief that the latest aid package for Ukraine represents a prudent investment in the collective future of North America and Europe. By extending support to Ukraine, we not only safeguard democratic values but also fortify global security amidst evolving threats. This commitment reflects a proactive approach to preserving stability and upholding shared values on the international stage. In a new world of regional powers the US as a Superpower will have to learn how to project power in new ways. The Ukraine model leverages our best weapons, the us economy and our industrial military complex, rather than the lives of US citizens.

U.S. House Approves $95 Billion Aid Package Amid Global Tensions On Saturday, the House of Representatives passed a sweeping $95 billion aid package intended to support Ukraine, Israel, and Taiwan, despite facing significant internal opposition from GOP members. Spearheaded by House Speaker Mike Johnson, the legislative package also includes a controversial measure to force the sale of the social media platform TikTok. Key Components of the Aid Package: - **Ukraine Aid:** The package allocates approximately $60 billion towards aiding Ukraine in its defense against the Russian invasion, with portions designated for economic loans and defense expenditures. - **Israel Support:** Around $26 billion is earmarked for Israel, which includes funding for U.S. defense activities and replenishing U.S. stockpiles. - **Taiwan and Indo-Pacific Region:** The aid extends about $8 billion in support, focusing on deterrence and regional stability. - **TikTok Sale:** A provision within the package mandates the sale of TikTok by its Chinese-owned parent company, ByteDance, within a year. Legislative Journey: The aid package, initially stalled due to GOP concerns over border security and fiscal responsibility, was divided into four separate votes to allow House members to address the various components distinctly. This strategic division led to broad bipartisan support for each segment, except for the more contentious Ukraine aid, which saw significant Republican opposition but passed with strong Democratic backing. Political Implications: Speaker Mike Johnson, who has faced criticism from within his party for his handling of the aid package, emphasized the need for American leadership in global conflicts and stability during his remarks following the vote. The move comes amid escalating tensions globally, particularly with recent attacks involving Iran and ongoing concerns about Russian aggression in Ukraine. Senate Prospects and Global Reactions: The bundled measures are now headed to the Senate, where they are expected to be taken up swiftly. Ukraine's President Volodymyr Zelensky expressed gratitude towards the U.S. House and Speaker Johnson for their support in these critical times, highlighting the global watchfulness over America's decisions. Conclusion: As the U.S. navigates its role on the international stage amid numerous global crises, the approval of this aid package by the House represents a significant stance on continuing to support international allies while also addressing domestic political challenges and concerns about foreign ownership of major tech platforms. The outcome in the Senate will further determine the extent of U.S. involvement and support towards these regions.

Apr 1: Ukraine aid is alive again in Congress and is likely approved by the House in April, according to US House Speaker Johnson Sunday night.  Positive House movement on Ukraine aid is an incremental markets plus because it’s evidence of slightly lessened geopolitical risk with Washington fulfilling its global leadership role, which has been teetering in many ways, including:  *Bipartisan irresolution on Ukraine, from Republican waffling on aid to Biden’s slow-walking on weapons and Biden’s inability to get Congress to act or the American people to understand and agree with Ukraine aid as an urgent priority. *Biden/Democrats’ Israel schizophrenia.  *Continued high tensions in the South China Sea, now China with the Philippines, so it’s mostly off the US news radar.  But the differences and loose ends in Congress’ Ukraine aid approaches today - we discuss below the knowns, unknowns, and unknown unknowns in the House approach - complicates things, so the pluses should be accompanied by a salt shaker in the event progress gets bogged down.  The good news:  *House action would set up a House-Senate conference to agree how Ukraine aid is done.  *Congress could act quickly and Ukraine aid could become law by end April.  But there's plenty of potential bad news: the House and Senate will have different enough approaches to Ukraine aid that it could take weeks or months to resolve, if they’re resolved at all.  The House’s Ukraine aid approach looks different to the Senate’s or Biden’s, which is straight ‘here’s the money’ aid.  The House approach is a work in progress, but Speaker Johnson says the House’s approach will include: *Using the seized assets of Russian oligarchs as one way to fund Ukraine’s efforts; *Loaning Ukraine part or all of the money, something mooted by Trump.  The specifics are unclear from Johnson’s discussion, but Senator Graham (R-SC) says the terms would be forgivable and interest-free; and  *Having “natural gas exports that will help un-fund…Putin’s war effort”, which seems to mean expanding US energy exports across the board. There are more complicators, including  *No specifics on how Israel and ‘Indo-Pacific’/Taiwan aid would happen - not a small detail in view of Democrats’ agonizing over Israel and Gaza and Johnson likely needing some D votes.  *How the House Republican majority’s border security quid pro quo would be resolved, which Johnson says remains Republicans’ “only leverage we have to force change on the border”, noting that Biden continues to toy with executive actions but hasn’t done any.    *Whether Johnson’s Ukraine aid push triggers his potential ouster, with a potential ‘vacate’ the Speaker’s chair from Congresswoman Greene (R-GA) and Greene waving it around again Monday in response to Johnson’s Ukraine thoughts.  #ukraine #biden #trump #congress #geopoliticalrisk #lng #energy #politics

New Post: Senate advances Ukraine aid, Israel funding and TikTok ban -WASHINGTON — The Senate voted Tuesday to advance the $95 billion aid package to provide critical aid to Ukraine and a provision that could lead to a nationwide ban on TikTok. The vote of 80-19 indicates the legislation has enough support to clear the Senate in a final vote, which could come as soon as... WASHINGTON — The Senate voted Tuesday to advance the $95 billion aid package to provide critical aid to Ukraine and a provision that could lead to a nationwide ban on TikTok.The vote of 80-19 indicates the legislation has enough support to clear the Senate in a final vote, which could come as soon as Tuesday evening, and then head to President Joe Biden’s desk to be signed into law.The package, which passed the House on Saturday, includes $60 billion in aid to Ukraine that President Volodymyr Zelenskyy said would give his country “a chance at victory” against Russia. It includes $26 billion in aid to Israel and humanitarian relief in Gaza, in addition to $8 billion for security in Taiwan and the Indo-Pacific.And it would give TikTok’s China-based parent company nine months, which the president could extend to a year, to sell the popular social media platform or be banned in the U.S. That puts TikTok closer than ever before to a prohibition while ensuring that it won’t be banned until after the 2024 election.U.S. and Ukrainian flags fly near the U.S. Capitol on Saturday as the House passed aid to Ukraine.Nathan Howard / Getty ImagesSenators on Tuesday afternoon will discuss whether they can reach a deal to quickly vote to give final passage to the bill later in the day or whether to wait until Wednesday to approve it.“The finish line is now in sight,” Senate Majority Leader Chuck Schumer, D-N.Y., said in a statement over the weekend, saying the bill’s passage would be “a watershed moment for the defense of democracy.”Two months ago, the Senate voted 70-29 to pass a similar $95 billion foreign aid package — but without the TikTok provision.RecommendedStill, there are signs that the Senate is receptive to the TikTok ban bill, which the House revised.Sen. Maria Cantwell, D-Wash., the chair of the Commerce Committee, endorsed the new bill, saying she’s “very happy” with the extended window for TikTok to be sold. An earlier House-passed bill would have given the parent company six months to sell TikTok. Cantwell noted that she recommended the change."I support this updated legislation," she said.Advocates for banning the app in the U.S. express concerns about TikTok’s relationship to ByteDance, a company based in Beijing, saying Americans’ data could, under Chinese law, be accessed by China’s government, a prospect that TikTok has downplayed, saying its headquarters are in Singapore and Los Angeles. They also claim China could manipulate the algorithm to advance propaganda.A TikTok spokesperson responded to the House’s vote over the weekend b