For the eighth year in a row, the Department of Defense has failed its financial audit, marking the only major government agency to consistently receive a failing grade since mandated annual reviews began in 2018. The audit revealed 26 material weaknesses and two significant deficiencies, including inaccuracies and omissions related to the Joint Strike Fighter Program, specifically regarding the accurate accounting of assets in the Global Spares Pool. Despite these challenges, the Pentagon, which manages $4.65 trillion in assets and $4.7 trillion in liabilities, remains committed to improvement, with plans to address critical issues and achieve an “unmodified” audit opinion by 2028. Defense officials maintain that they are focused on efficient use of taxpayer dollars and strengthening national defense.
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Following recent clashes with Israel and the United States, Iran is formalizing plans for a major military expansion, with Brigadier General Mohammad Reza Ashtiani stating the country could sustain a war for up to a decade. The Iranian National Security and Foreign Policy Committee approved a draft bill to strengthen the armed forces in response to Israeli threats, a move that follows a 200% defense budget increase. This legislative action, coupled with Ashtiani’s comments, underscores Iran’s evolving security doctrine and its assertion of strategic endurance. The bill is now under review before a full parliamentary vote.
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A recent study analyzing Pentagon spending from 2020 to 2024 reveals that the majority of discretionary funds, totaling $2.4 trillion, were allocated to private military contractors. The report, from the Quincy Institute for Responsible Statecraft and Costs of War project, indicates that the US military budget has nearly doubled since 2000, driven by factors including the post-9/11 “global war on terror” and efforts to counter China. This substantial spending benefits top arms firms and the growing military tech sector, leading to a transfer of wealth from taxpayers to fund war and weapons manufacturing, as military aid and democracy promotion programs are simultaneously slashed.
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The New Zealand government has announced a $12 billion investment in its Defence Force over the next four years, increasing defence spending to over 2% of GDP within eight years. This funding includes replacing aging aircraft, upgrading naval vessels, and procuring new helicopters to enhance surveillance and humanitarian capabilities. While $50-100 million is allocated for personnel, the plan focuses on enhancing combat capabilities through missile upgrades and exploring land-based strike options. The government will review the plan biennially, emphasizing that this investment represents a minimum commitment.
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President Trump’s suggestion of a potential 50% cut to the U.S. defense budget sent defense stocks plummeting. This proposal, floated during a discussion about future conferences with China and Russia, sparked immediate market reaction, with shares of major defense contractors experiencing significant losses. While Trump has previously advocated for government efficiency and a swift end to the Ukraine conflict, he also champions a strong military and has supported initiatives like a national missile defense system, highlighting conflicting stances on military spending. The conflicting messages have created uncertainty in the market.
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Europe and Canada significantly increased their defense spending in 2024, with a reported 20% boost, according to NATO. This substantial increase follows years of calls for member nations to meet the agreed-upon 2% of GDP commitment to defense spending. The move signals a notable shift in priorities for these nations, potentially spurred by ongoing geopolitical tensions and a reassessment of reliance on external military support.
This substantial increase in defense spending is a significant development, especially considering the historically low levels of investment in military capabilities by some European nations. For years, several European countries had fallen far short of their NATO commitments.… Continue reading
John Q. Hosedrinker 
Matt Underwood