Oct 9, 2026 · 17 min · 7 segments
(See also the Self Worth Series at the Respectonomics Living Journey). Respectonomics brings forward the forecast of defence spending on a world-wide scale. Significant increases are in the works…
And defense spending is all part of the entire deficit financing that we are seeing going on worldwide.
And deficits, as we all know, are increasingly running out of control.
They have become the sort of the choice of choice now by governments rather than raising taxes, rather than increasing output or productivity or capacity, new inventions, whatever.
We have resorted to this practice of just writing checks against the future generation's ability to repay it.
I mention that because the deficits we're incurring today are, roughly speaking, going to be paid by future generations.
Let's take a look, though, at the deficit programs we know are outside of the corridors of increased productivity or output.
And we also need to understand that the, the whole problem with these deficit financing is it's coming on the heels of tremendous appetite for capital and funding by the AI industry and in fact, in corporately generally, because corporations are borrowing great deals of money under the, under the process of mergers and acquisitions.
And the AI expansion, of course, is more to do with buil- out- building out data centers and the equivalent.
So the result is that we've got what is commonly called crowding out.
And then of course, we've got the AI corporate borrowing requirements as well.
What this is all to do with, though, is in, uh, this particular case, is looking at defense spending.
One of the biggest problems with defense spending is it's taking on a life of its own.
And let's talk about this everywhere problem, because if you have an everywhere problem, you need an everywhere solution.
The everywhere problem is that it's cultural, it's competitive, and it en- engages that principle of leapfrogging.
Leapfrogging is when the country says, "We're spending a billion dollars." The next one says, "Well, if you're spending a billion, we're spending two billion." And of course, the next country says, "Well, we'll make it three billion." So it becomes very accretive.
It becomes, as we call it, leapfrogging, and it becomes expansive in its own right.
It is estimated that over the next five or six years that the AI s- that the defense spending will be...
At the moment it's 2% of the GNP, 2% of the total output of the economy, value of the economy, and it looks like it's heading into 4%.
So you get a sense of the enormous increases that are coming along in defense spending.
And defense spending is all part of the entire deficit financing that we are seeing going on worldwide.
And deficits, as we all know, are increasingly running out of control.
They have become the sort of the choice of choice now by governments rather than raising taxes, rather than increasing output or productivity or capacity, new inventions, whatever.
We have resorted to this practice of just writing checks against the future generation's ability to repay it.
I mention that because the deficits we're incurring today are, roughly speaking, going to be paid by future generations.
Let's take a look, though, at the deficit programs we know are outside of the corridors of increased productivity or output.
And we also need to understand that the, the whole problem with these deficit financing is it's coming on the heels of tremendous appetite for capital and funding by the AI industry and in fact, in corporately generally, because corporations are borrowing great deals of money under the, under the process of mergers and acquisitions.
And the AI expansion, of course, is more to do with buil- out- building out data centers and the equivalent.
So the result is that we've got what is commonly called crowding out.
And then of course, we've got the AI corporate borrowing requirements as well.
What this is all to do with, though, is in, uh, this particular case, is looking at defense spending.
One of the biggest problems with defense spending is it's taking on a life of its own.
And let's talk about this everywhere problem, because if you have an everywhere problem, you need an everywhere solution.
The everywhere problem is that it's cultural, it's competitive, and it en- engages that principle of leapfrogging.
Leapfrogging is when the country says, "We're spending a billion dollars." The next one says, "Well, if you're spending a billion, we're spending two billion." And of course, the next country says, "Well, we'll make it three billion." So it becomes very accretive.
It becomes, as we call it, leapfrogging, and it becomes expansive in its own right.
It is estimated that over the next five or six years that the AI s- that the defense spending will be...
At the moment it's 2% of the GNP, 2% of the total output of the economy, value of the economy, and it looks like it's heading into 4%.
So you get a sense of the enormous increases that are coming along in defense spending.
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