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00:00On the 9th of March, 2026, Open the Books released a report which showed just how the
00:04US government had managed to spend $50 billion in just five days the previous September,
00:11and buried in between all the things that you might expect from the military was something
00:14a little more shocking. In just one month alone, the Pentagon had spent $2 million on Alaskan king
00:21crab, $15 million on ribeye steak, and more than $7.4 million on lobster tails, not just once,
00:28but on four separate occasions. Just a few months before this story broke,
00:33Donald Trump took to Truth Social with a single announcement. He wanted to increase the US
00:38defense budget to $1.5 trillion. For context, the US is already the largest military spender in the
00:44world, but this would now mean it spends more on its defense than every other country on earth
00:49combined. But how do they even spend their existing $900 billion budget, yet alone another $600 billion
00:55on top of that? In just the first week of the Iran conflict alone, enough money was spent to cover
01:00the cost of nearly a million Americans' healthcare for a year. But even all of that is still a drop
01:05in the ocean, less than 1% of the total figure. So, where does that money actually go? The more
01:11we
01:11looked into it, the more we realized this isn't just a budget, it's a black hole at the very center
01:17of America's economy. And when you start reading through the documents, you realize this black hole
01:22is only growing. Here's how the US spends so much on its military, and why it's only getting bigger.
01:28The Pentagon is asking the White House for $200 billion in funding for its war against Iran.
01:33President Donald Trump has proposed over a 50% hike in US defense budget.
01:38$1.5 trillion in military spending.
01:41Imagine in Iran that instead of spending their wealth supporting terrorists or weapons,
01:45had spent that money helping the people of Iran, you'd have a much different country.
01:49We've spent $8 trillion in the Middle East, and we're not fixing our roads in this country?
01:55How stupid? How stupid is it?
01:57In the first quarter of 2026, the United States military showed the world exactly how impressive
02:02and expensive their war machine could be, from seizing Maduro in Venezuela to launching strikes
02:08on Iran. In fact, in the first week of the conflict against Iran, Pentagon officials briefed
02:13the White House that these seven days alone had cost the American taxpayer over $11 billion.
02:19On the first day alone, the US sent 200 Tomahawk missiles at $340 million, fighter jet sorties
02:27at $271 million, two carrier groups sitting in the water $15 million a day, and B-2 bombers
02:34flying nonstop from Missouri, another $30 million.
02:37All in all, $779 million. Add to that yet another billion to get it up to the official Pentagon
02:45estimate. Even then, at $1.9 billion, it's just 0.2% of the annual defense budget, one
02:52day of full-scale war.
02:53So, where is the other 99.8% going?
02:57Well, the answer lies somewhere in here.
03:00If you go onto the now aptly named US Department of War website, click through a few pages,
03:05you land on this document, a 144-page brief, which outlines just exactly where nearly a
03:11trillion dollars is being spent. So, let's dive in.
03:15We're going to look at exactly how this money is being spent, and also how more money than
03:19ever is going to companies like Palantir, OpenAI, and the new nuclear arms race, as
03:25well as quite a few other trends. But as well as all of these flashy projects, the US military
03:29also spends quite a lot on other things. One of the most obvious expenses is, of course,
03:33its nearly endless supply of military bases across the globe.
03:37This is a map of the world, and every red dot is somewhere where the US military has
03:42some sort of presence. Add all of these dots up, and you're left with roughly 750 military
03:48bases outside the US, stretching everywhere from Kosovo to Turkey, to even this small atoll
03:54in the Indian Ocean, Diego Garcia, which hosts roughly 2,000 military personnel, and even comes
04:00with its own bowling alley. In fact, in each one of these red dots, there is a gym, a movie
04:06theatre, all stocked with American food and American drinks, which are shipped over on
04:11a regular basis, to give personnel a home away from home. This fact, as well as the infrastructure,
04:17hazard pay, and literally every other conceivable expense, means it costs nearly $100 billion a
04:23year just to fund these bases.
04:25This figure alone is more than the UK's entire military budget. And the uncomfortable truth is
04:30that this is really just the price you pay for being the global hegemon. And it's kind of the
04:34reason why campaigns like America First have been so successful, as visually, this is one of the
04:40easiest line items to see how money is being spent. All you need to do is look at a map.
04:45In reality, though, this isn't even the biggest line item on the defence budget. One of the largest
04:50expenses is hiding in plain sight. The Pentagon isn't just the world's largest military force,
04:56it's the world's largest employer, landlord, and one of the largest healthcare providers
05:01all at the same time. Nearly $200 billion a year goes purely on its workforce, not just on salaries,
05:08but housing, healthcare, pensions, childcare on base, even grocery stores. Things like these,
05:14which the military's own subsidised supermarkets, specifically for service members and their
05:19families. Everything a person needs to live, covered or heavily subsidised by the defence budget.
05:24Even stuff you don't really think of, like cleaning up unexploded bombs, chemical spills left on foreign
05:30soil, even disaster relief, means that before the military buys a single jet or ship, it spends nearly
05:37$352 billion just keeping the lights on. More than the entire economy of Portugal. At the end of the
05:43day, the US military is like its own business, and has running costs which are equally as mundane.
05:49What most businesses don't have, however, are things like this.
05:55In 2026 alone, the US will spend over $200 billion on one thing, military procurement. It's things like
06:03this, the F-35 Lightning, $13 billion, $6.5 billion on ammunition, even a $2 billion request, 100 times
06:12more than the last year on landing ships, which you could probably guess where they may be used.
06:17In this document here, which is the official programme acquisition cost of weapons for 2026,
06:22if you trawl through it, as well as all of the other expenses that you would expect,
06:26there are two massive trends hidden in the paperwork. And you really see it best in this chart here.
06:33What you're looking at is the growth trajectory of every major mission area in the US military over
06:37the last decade. And the line that jumps out most is this one, shipbuilding. Spending on this has
06:43increased 141% since 2017. But take a look at these others. Space, up 379%. Missiles, up 157%.
06:53Command and control networks, up 214%. Now look at the one line that's actually flat. Even declining.
07:01Ground systems. Tanks. Armoured vehicles. The stuff you'd actually need for a land war in Europe.
07:07This is all fading. Instead, the US is quietly buying a completely different military than the
07:12one it had 10 years ago. And if you look at what's growing and what's shrinking, it tells you exactly
07:17who they think they're going to fight. But secondly, buried across almost every category is a
07:22consistent theme. A full-spectrum nuclear rearmament happening inside this document.
07:28In February 2026, the last nuclear arms control treaty between the US and Russia,
07:33START, expired. For the first time since 1972, there is now no limit on how many nuclear weapons
07:40either side can have. The United States is seizing this moment and effectively replacing its entire
07:46nuclear arsenal at the same time. Most of it was built in the 1980s and is running out of life.
07:51And the Pentagon themselves admit there is very little gap between the old stuff dying
07:56and the new stuff being ready. So when all is said and done, the revamp for this year alone
08:01will cost $60 billion. This includes Columbia-class submarines, the still-in-production B-21 stealth
08:08bomber, and the Sentinel ICBMs, which replaces 400 missiles in silos across five states. And that $60
08:16billion is just the delivery systems alone. It doesn't include what the Department of Energy
08:21actually spends on building the warheads. So the real cost of America's nuclear insurance policy
08:27is quite a bit higher than that. All of this does, however, raise the important question.
08:32Why does all of this stuff cost so much? In the recent attacks in the Middle East,
08:36the Iranian forces have managed to cause mass chaos and panic across the region with a swarm of
08:41drones, which cost as little as $500 each, whereas the US has spent nearly $50 billion in a single
08:47month. In fact, in 1991, this Stinger missile here cost $25,000, and in 2026, it now costs half a
08:55million dollars, 20 times more. A very big reason for this, and I guess why the US spends so much
09:01more than any other country, is a procurement process that's so slow, so expensive, and so captured
09:08by a handful of companies that it might be the single biggest reason the US military costs what
09:13it does. Out of roughly $850 billion in the discretionary defense spending in 2026, around
09:19$450 to $500 billion will end up with private contractors. And roughly a third will go to
09:26these five companies here, Lockheed Martin, RTX, Boeing, General Dynamics, and Northrop Grumman.
09:33It wasn't always like this. In fact, there used to be around 51 major defense contractors in the US.
09:39But through decades of mergers and acquisitions, that number is now 5. Which means if the Pentagon
09:45needs an F-35, there's one company on Earth that makes it. Lockheed Martin. Now, normally when we
09:51imagine a monopoly, it is a large company selling to consumers in a market that no one else can really
09:56access. Think of things like electricity or water providers. Because there is only one seller,
10:02the consumers of the product are effectively forced to pay whatever price the company asks for.
10:06And it's exactly the same dynamic that the government finds itself in when negotiating
10:10with these military contractors. Because only a couple of companies are able to produce weapons
10:15the US wants, they can basically charge whatever they want. This has led to the emergence of what
10:20is called cost-cutting contracts. The premise of which is kind of insane, and also not cost-cutting.
10:27Essentially, the government guarantees to cover whatever a project ends up costing,
10:31plus a fixed profit margin on top. So if a program runs over budget, and bear in mind they pretty
10:37much always do, the contractor doesn't absorb any of that loss, the government does. For the
10:42companies who are building these weapons, there's basically no pressure to be efficient. If anything,
10:47the incentives point in completely the opposite direction. The more expensive a project becomes,
10:52the more impressive it looks on the company books. Take the F-35 fighter jet, one of the cornerstones
10:58of the current American Air Force. When the contract was awarded in 2001, the total projected cost was
11:04around $200 billion. That has now risen to more than $2 trillion over its lifetime, a tenfold
11:11increase. And an internal Pentagon report said themselves, affordability is no longer embraced
11:16as a core pillar of the program. Which is a pretty crazy thing to say after spending more than 80
11:21years
11:21of the NASA budget on it. Given how obsessed the US government is with its military capabilities,
11:26you might expect them to spend a bit more effort getting these contracts down to a reasonable price.
11:30But that's actually a lot easier said than done. For starters, US weapons manufacturers have spent
11:36more than $2.5 billion on lobbying since 2001. And yes, having one of your board members as a
11:42Secretary of Defense definitely helps. But there's actually a much more important reason why this is
11:47so hard to change. You see, when these companies receive billions in contracts to build new weapons,
11:52they aren't just looking for scientists and engineers. Physical labor is still needed to
11:57build the thing. And these aren't really the kind of products that you can simply just offshore to
12:01China. So instead, the contractors deliberately spread out the construction operations in as many
12:06congressional districts as possible. The F-35 program alone had suppliers in 45 US states.
12:12And if any lawmaker tries to cut the program, they'd be cutting masses of jobs from their own
12:17district, something which no politician is overly keen on doing. So regardless of how poorly these
12:23programs perform, they become almost impossible to kill, which for decades has defined the US
12:28defense industry. But as is often the case, the worst inefficiencies end up creating the greatest
12:34opportunities for companies to profit. By the early 2000s, Silicon Valley had begun to notice just how
12:40much money these defense contractors were making, despite providing a pretty subpar service.
12:45Palantir today is worth three times as much as Lockheed Martin. It works by combining every
12:50available stream of intelligence data, drone footage, satellite imagery, phone records, financial
12:56transactions, with advanced data analytics software so they could identify a target's precise location
13:02in real time. The US military used this tool combined with AI systems provided by Anthropic to strike over
13:08a thousand targets in the first 24 hours of its attack on Iran, something which would previously have
13:14been impossible. In fact, the Pentagon's own chief of AI called the system revolutionary.
13:19But that's where the story gets a bit strange, because despite the praise and the enormous amounts
13:24of money being spent, there isn't any single AI line item in the US budget. The official reason from
13:30the Pentagon is that it's not a single technology to develop, but an overlaying capability that will
13:35pervade every system, which kind of seems like Pentagon speak for, we're not going to tell you how much
13:40we're spending on it, because we don't really want you to know. Regardless, it's more or less possible
13:44to piece together how much is being spent on these new programs. And spoiler alert, it's a lot.
13:50$13.4 billion on autonomous systems. That's robot submarines, drone ships, ground robots,
13:57aerial drones. $800 million just on developing those AI wingmen. $15 billion on cyber, with AI-powered
14:04threat hunting and offensive hacking baked in. Since 2016, the Pentagon has spent at least $75 billion
14:10on AI programs. Okay, so regardless of whether the money is going on AI tech or traditional weapons,
14:16the money kind of seems to just disappear into a massive black hole. Which brings us to what Trump
14:22actually wants to do with that $1.5 trillion, and whether it makes any sense for America.
14:28Now, before we get into the specific weapons and programs, there's something worth understanding
14:32about how this budget actually works. Every year, Congress votes on a defense budget. For 2026,
14:38that number is $848 billion, the same as last year. But sitting alongside it is a second,
14:45separate spending mechanism called a reconciliation bill, which bypasses normal spending caps entirely.
14:51The second track is how you get to $1.5 trillion. And because it faces far less scrutiny than a
14:57normal budget process, it's also where the slightly crazier ideas tend to get placed.
15:01This $500 billion military spending spree breaks down into three categories. The first of which is
15:07the Golden Dome. The idea to send thousands of satellites into low Earth orbit, each carrying
15:13interceptor missiles, which would destroy incoming threats within seconds of launch.
15:17This is the kind of thing that you would see in a sci-fi movie, and quite reminiscent of the
15:22Star Wars program under Reagan in the 1980s. But MIT physicists have pointed out that defending
15:27against a full Russian or Chinese missile salvo would require hundreds of thousands of satellites
15:33in orbit. Something which with today's technology is basically impossible. And even if it were
15:39theoretically possible, it would still be insanely expensive. The Congressional Budget Office puts
15:44the figure at $542 billion. But the American Enterprise, a Washington think tank, puts that
15:51figure at $3.6 trillion, more than triple the current military budget. And like we said,
15:57it's not the first time this has been tried. Reagan did something similar in the 80s, spending the
16:01equivalent of $80 billion in today's money. But it was abandoned well before deploying a single
16:07weapon. Then there's the second category of spending, which to be fair, does hold slightly
16:12more promise. Trump has asked for a golden fleet, what would be called Trump-class battleships.
16:17According to the initial plans, they would be the largest surface combatant the US has ever built
16:22since World War II, weighing between 30,000 and 40,000 tons, each armed with hypersonic missiles,
16:29electromagnetic railguns, and nuclear-armed cruise missiles. The plan is to build 20 to 25 of them,
16:35but defense analysts estimate the first ship won't be commissioned before the mid-2030s at the
16:40earliest. Finally, and perhaps most importantly, an upgraded autonomous weapons program. $13.4 billion
16:47in this year's defense budget alone. The first time the Pentagon has ever broken it out as a dedicated
16:52line item. That covers drone swarms, robot submarines, and autonomous ground vehicles. Exactly the kind of
16:59thing we've seen deployed during the war in Iran. All in all, this is expected to add about $500
17:04billion to the US military budget every year, which is obviously an insane amount of money to be
17:10spending. Now, as crazy as that all might sound, there was something of a plan to pay for it when
17:14he first came into office. And this really rested on two pillars. Firstly, tariffs alone were projected
17:20to bring in around $2.5 trillion over a decade, which wouldn't cover everything, but would go a long
17:25way. And add to that Doge, Elon Musk's famed government efficiency drive, which promised to
17:31cut $2 trillion in federal waste. And the numbers could just about be made to work. But this plan
17:37on both fronts has fallen apart almost immediately. The targeted savings from Doge shrank from $2 trillion
17:43to $1 trillion to $150 billion over the course of a few months. And independent analysts from the
17:50American Enterprise Institute put the real verified figure closer to $10 billion, not even enough to
17:56pay for one of the single proposed Trump-class battleships. Then, last month, the same thing
18:01happened to the tariffs. The Supreme Court ruled, with six votes to three, that Trump wasn't legally
18:06permitted to impose most of them in the first place. And without those revenues, tariffs would cover
18:11around 15% of the proposed defense hike, leaving the rest to be borrowed. So, the plan to pay for
18:17the dream military has essentially collapsed. And what's left is a massive pile of debt, added to a
18:23country that already owes $39 trillion. But as crazy as these plans might seem, the underlying pattern
18:30isn't anything new. It's actually one of the most recognizable themes in history. Rome, the British
18:35Empire, the Soviet Union, each of them, as their economic foundations began to weaken relative to
18:41rising competitors, leaned harder onto the one thing they still had, military power. America is now
18:48spending more and more on its military, whilst its share of global GDP continues to decline, which is
18:53generally not a good sign. A few decades earlier, the USSR found itself in a similar situation. Back in the
18:591960s, it was spending just 10% of its GDP on the military, which is still a lot, but within
19:05two
19:05decades, that number had doubled, the equivalent of the US increasing its defense budget by six times.
19:11Strangely enough, the reason for this had nothing to do with the Soviet economy. In 1962, Khrushchev placed
19:17nuclear missiles in Cuba, and when he was eventually forced to back down, it was humiliation. Brezhnev came
19:23to power two years later, with almost religious commitment to military parity with the United States.
19:29Whatever the cost. But by massively increasing the size of the military, they had cut back on
19:34consumption and investment spending, the things that actually make an economy work. By the 1990s,
19:39this all came crashing down. Now, it's important to note that the US is of course not the Soviet Union.
19:45Its economy is larger, more dynamic, and it holds the world's reserve currency, which gives it a level
19:51of borrowing power the USSR never had. But there's still some worrying similarities. The US share of global
19:57GDP has been falling for decades, from around 40% in 1960 to roughly 24% today, as China, India,
20:05and other large economies have grown. But its share of global military spending still accounts for 40%
20:10of everything the entire world spends on its militaries. A worryingly similar trend to what
20:15we saw in the USSR decades ago. Of course, when a country's economic weight is declining relative to
20:21its rivals, military spending can serve a purpose. It can be a genuine tool of deterrence and competition.
20:27But it can also become something else. A way of projecting power a country no longer holds
20:33economically, and a way of maintaining the appearance of dominance while the underlying
20:38foundations quietly shift. But historically, it has always been the move that declining powers make
20:43when they've run out of better options, reaching for the one lever they still control.
20:47Whatever the case is for the United States, nobody truly knows, but it certainly isn't the best sign.
20:52Okay, so I wanted to show you another interesting update from the Pentagon.
20:56We have now entered an era of resource-constrained warfare. And the message is clear. Critical minerals
21:03and rare earth metals are now treated like oil in the 20th century. Strategic, scarce, and weaponizable.
21:09There are currently very limited substitutes, and if you want advanced defense, you need them.
21:14The modern battlefield is no longer defined solely by troops and tanks. Instead, it's categorized
21:20by technology, AI systems, and precision weaponry. At the core of all of these lies a foundational
21:26input, critical minerals and rare earth elements. The defining conflict of this decade may start
21:31with export restrictions, and the countries that win might not be those with the strongest armies,
21:36but those with the strongest control over the materials that make those armies possible.
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