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the social and financial costs of gambling are mounting in america......

According to George Bernard Shaw, the most popular method of distributing wealth is the method of the roulette table.

As a result of rapid deregulation and mesmerizing technological change, such a spinning round of fortunes has recently reached epic proportions in the US, where revenues from gambling (which is euphemistically called “gaming” by its respective lobbying associations) has exploded in a short span of time. Bearing in mind that the Irish playwright’s aphorism constitutes one of his “Maxims for Revolutionists,” considerable upheaval and possibly a powerful backlash, too, may thus well be in store for the so-called land of opportunities. 

 

Prof. Schlevogt’s Compass No. 11: Legitimizing gambling – a study of the ‘Liberal Warfare Toolbox’
Liberals hail the explosive growth of gambling in the US. Their deregulation advocacy reveals patterns used to justify other evils, too

 

BY Prof. Dr. Kai-Alexander Schlevogt

 

According to the American Gaming Association (AGA), commercial gross gaming revenue (GGR), which includes sales in the three verticals of traditional casino gaming, sports betting and iGaming (also called online gaming), increased from about $30bn in 2020 to $67bn in 2023 (the last year for which a full data set is available). The rise in GGR represents a growth rate of 122% over a period of only four years or a smoothened compound annual growth rate (CAGR) of 22%. Since gross gaming revenue, also called game yield, is the difference between the amount players wagered and their gains, it also constitutes the total amount lost by gamblers. Consequently, the above trajectory shows that punters’ losses have been increasing at a high rate. The stellar performance of the gambling sector continued in 2024. 

In the first eleven months of that year, GGR, driven by a strong showing of sports betting and iGaming, reached about $66bn. The total amount of money spent on sports betting (which until 2018 was permitted only in Nevada) rose from $7bn in 2018 to an estimated $150bn in 2024 (with revenues totaling about $14bn in that year). This is equal to a compound annualized growth of sports-betting spending of 55%. According to the National Council on Problem Gambling, a staggering 60% of adults in the US had gambled in the preceding year; about 40% of Americans admit to placing sports bets. The US by now is the largest online gambling market in the world.

What is more, the betting bonanza in the US is predicted to continue unabated. Online gambling businesses alone are predicted to rake up revenues of roughly $60bn-70bn annually by 2030. In the near future, a commercial casino may even be built in New York’s Times Square, which would have been anathema only a few years ago. 

As regards gambling products, new, fast-growing and potentially dangerous types of wagers include, among other things, betting on election outcomes and making bets on very short-term moves in shares. Furthermore, long-shot compound bets, called parlays, which combine betting on the occurrence of several events occurring at the same time (such as several football teams winning their matches on a given day), are getting increasingly popular. Such accumulators are riskier than single wagers, but payouts are larger in case of success. Finally, peer-to-peer betting without intermediaries is on the rise, too. Obviously, the unfolding revolutionary drama of the deregulatory high-stakes gamble needs powerful backers with a convincing script not only to sustain itself, but to build further momentum.

In this context, it comes as no surprise that the radical changes in the US gambling industry are hailed by influential liberals in politics and the media, who cushion the gambling malaise in an ensnaring narrative. Their rhetoric reveals common, interrelated patterns with respect to the manipulative techniques employed. It is therefore worthwhile studying the specific cloak-and-dagger stratagems, which are synthesized in my new model entitled the ‘Liberal Warfare Toolbox’. Familiarity with these hidden methods of chicanery will help critical thinkers to reveal manipulation and thus catch the put-up jobbers in their attempts to justify, normalize, and popularize gambling and other social evils, such as drugs, prostitution, abortion, and euthanasia. 

At the start of our journey of exposing and debunking harmful liberal sophistry, let us uncover the first stratagem in the ‘Liberal Warfare Toolbox’, which relies on leveraging the typical philosophical grounding of a laissez-faire approach.

1. Appealing to higher-order good 

The core argument used by liberal plotters in their advocacy for deregulation is that people should be free to enjoy – and even harm – themselves. Applied to the gambling case, laissez-faire proponents argue for granting people full latitude when it comes to having a flutter. 

The philosophical underpinning for such a line of reasoning is the concept of negative freedom – or “freedom from,” paired with an obvious penchant for hedonism. According to the view of those who advocate giving people maximum latitude of action, freedom, understood as a scalar social good, is the absence of constraints imposed by other social actors and thus a maximum number of opportunities. 

On the surface, the appeal to freedom per se, due to its prīmā faciē persuasiveness, appears to be a clever gambit. Few people would openly and publicly profess that they oppose freedom and want to limit others’ possibilities. After all, freedom is based on a noble value, that is, the belief that it is right for people to determine their own destiny by being able to make their own choices. As a consequence, enhancing freedom by removing a legal constraint, in our case, by deregulating gambling, seems to be a good policy.

Yet liberal schemers who promote the removal of encumbrances to action usually fail to adhere to the full doctrine of an influential thinker who is widely considered to be one of the classic proponents of negative freedom. More specifically, the philosopher John Locke, in his Second Treatise of Government, clearly distinguished freedom from license and postulated that man needs to act in accordance with the Law of Nature, understood to be reason. The Christ Church don concluded that man is not free to do whatever he wants (§ 57). For example, he has no right to harm himself or others. Reasonable limits designed to protect man from “bogs and precipices” are not deemed to be confinements (§ 57). Given that unrestrained gambling constitutes immoral license, which most likely will harm the one who indulges in it and other stakeholders, too, wagering thus needs to be rejected even on the theoretical ground of the philosophy of liberalism. 

It is important to note that whereas Locke viewed freedom as a normative, morality-based concept, the modern proponents of the deregulation of gambling and other domains consider it to be a content-free and value-neutral construct. Their position is akin to radical neoclassical free-market advocates, who argue that there is no intrinsic value and the only thing that counts is the question whether there is a demand for a particular good, even if it may be harmful. Here is an example of such neoclassical value neutrality: When GDP is calculated, the market value of both harmful gambling products and beneficial services aimed at reducing the harm (such as the treatment of gambling addicts) are added up to arrive at an estimate of a nation’s national income.

At a deeper level of philosophical analysis, the concept of negative freedom, promoted by liberal non-interventionists, can be exposed as being one-sided, since it fails to take into account another pivotal concept, that is, positivefreedom, or “freedom to.” For instance, a real or metaphorical gate may be open to you – which would constitute negative freedom – but, for various reasons, in contrast to a resourceful and empowered individual, you may not be able to walk through the opening – which means that you lack positive freedom. 

Proponents of negative freedom, who view latitude of action only as a social relation (focusing on obstacles imposed by others), miss the point that freedom is not only an external construct, but also an inner concept, including the lack of internal constraints, which act as inhibiting factors counteracting various enabling factors. For example, someone who is addicted to alcohol cannot be said to possess full freedom, since, because of this enslaving and debilitating condition, his capabilities are significantly reduced, and he is consequently prevented from exploiting many valuable opportunities. Since gambling ensnares punters and tends to make them addicted, it clearly risks undermining positive internal freedom.

Positive freedom hinges on various internal and external resources. Those include a person’s own capabilities and abilities, such as a high degree of self-mastery, without which he will be a slave to disordered desires, and the creative and critical faculties needed to detect and evaluate different options, in order to avoid being brainwashed. The availability of financial resources – an external resource – can also amount to positive freedom. Given that money is coined freedom, an activity with high odds of losing money, such as gambling, tends to reduce positive freedom. 

The presence of both forms of freedom, that is, the negative and positive variant – each in optimal doses and in the best possible blending – is vital for building and sustaining an enlightened and well-functioning society with high odds of providing an effective context for people to lead happy lives. 

This first stratagem of appealing to a higher-order good – and the ploys that will be discussed later – are used to justify other pernicious liberal policies, too. For example, advocates of abortion and euthanasia refer to the higher-order value of the dignity of human life, in order to dialectically – and rather cynically – justify the murdering of human beings in contravention of the Hippocratic Oath (“I will do no harm”). The very term “pro-choice,” used as a euphemistic epithet to describe abortion advocates, hints at the concept of “negative freedom,” which is about enlarging the portfolio of possibilities. 

Liberal Machiavellians intend on upending the established moral order usually employ a “thin-edge-of-the wedge” approach, trying to obtain initial permission in narrowly circumscribed, often extreme, vivid and emotion-invoking cases (such as rape, where abortion is argued to be justified on the ground that the victim deserves compassion and pity). The contrivers thus shatter an initial taboo, which, as a highly charged and untouchable “third rail” in politics, previously acted as a powerful impediment to the enactment of policy reversals. After the initial breakthrough, which opened the floodgates, the intrigants push for additional changes. To achieve their objectives, they commonly use “salami slicing,” gradually and often surreptitiously dismantling further prohibitions without much notice and resistance. Finally, the formerly outlawed practice, through a process of creeping normality, eventually becomes fully legitimate and widely popularized. In other words, the Overton window (also called the window of discourse), in degrees of acceptability and acceptance has expanded from utterly unthinkable deviancy to actual standard policy based on the new norm. This means that the new practice has left the sphere of controversy and entered the sphere of consensus, where it is considered normal, with opponents having spiraled into silence.

2. Delegitimizing and discrediting authority 

Closely related to the furtherance of negative freedom is the attempt to destroy authority by claiming that it is wrong for other people, in particular individuals or groups in positions of power or entire influential organizations, to teach or simply tell others how they should live. As part of this stratagem, liberals employ the two wiles of “damning the origin” and “poisoning the well” in tandem. More specifically, they aim to discredit the authority of both past and present opponents, among other things, by using distortionary and derogatory labels evoking negative mental associations (such as unfavorable stereotypes). 

To start with, permissive liberal connivers intent on promoting gambling are presenting a genetic account, arguing that the distaste for wagering has deep and unpleasant historical roots. In particular, they trace such negative attitudes back to the much-loathed Puritans, discrediting this Protestant group as allegedly being authoritative, fanatic, and driven by extreme asceticism. The liberal schemers insinuate that these purists condemn all pleasure and consider it their life’s only purpose to prevent others from enjoying themselves. In this context, it is worth noting that “puritan” nowadays is often used as an emotionally laden derogatory label.

As an example of genetic discreditation, the liberal magazine Economist, in an article that hails gambling deregulation, laments that America’s stance regarding intercourse, alcohol, narcotics and wagering have been molded by its puritanical heritage. Its journalist is utterly bewildered by some US states barring vendors from selling alcohol before the end of Sunday church services and Hollywood prohibiting the picturing of illegal drugs, morally offending nudity and sympathy-arousing criminals – even though all of these prohibitions are morally desirable and sensible. In this context it is worth noticing that the very terms “sin” and “vice” are being portrayed by religious deniers in many liberal quarters, who are intent on whitewashing their disordered desires and social deviancy, as old-fashioned relicts from a by-gone moralist stone age. This comes despite the fact that the occurrence of these aberrations is a sad empirical reality, occurring as a constant throughout human history.

A related authority-undermining form of machination is the ad hominem attack called “poisoning the well.” This technique involves preemptively discrediting and thus hamstringing an opponent so that once he states his case, his credibility has already been destroyed irrespective of the force of his argument. As an example of this technique, which automatically precludes discourse, a liberal journalist, before outlining the reasoning of advocates of gambling regulation, may label them religious zealots and bigots, red-tape loving bureaucrats and mad control freaks. Likewise, once someone has been labelled a notorious liar, his subsequent statements can be easily dismissed, although even habitual liars can occasionally tell the truth. 

The above-described trick is self-sealing, since any attempt at refutation can be taken as further evidence for the correctness of the initial label. If, after being called a control freak, you argue for putting constraints on gambling, opponents can rebut by claiming that what you have just said only provides more evidence that you are obsessed with lording it over others. The poisoning maneuver is often combined with the “strawman” technique, whereby the opponent’s thesis itself may also be presented in a distorted way so that it can be more easily dismantled thereafter. 

Both “damning the origin” and “poisoning the well” aim at eliminating all opposition at the source before a debate has actually started, thus preventing opponents from getting a fair hearing. They are fallacies, though, since the alleged intellectual heritage of a view or argument – including its source and genesis – and the presumed characteristics and deeper motivations of its proponents have nothing to do with its merits, soundness, credibility, and viability in terms of logical validity. Moreover, there are many examples of greatness emanating even from humble and contaminated sources. After all, the model for Auguste Rodin’s famous sculpture “Le Penseur” (The Thinker) was a notorious prizefighter not known for mental prowess. The French artist, after finishing his work purportedly depicting “deep thought,” famously told Jean Baud, the wrestler who had posed for him: “O.K., stupid. You can come down now.” 

In general, opposing authority per se obviously courts disaster, since firm, central and discipline-instilling direction is needed to put the world in order and prevent a return to primordial chaos. There are many different types of authorities whose wise advice and guidance are essential and indispensable in life, including teachers, doctors, and priests. Oftentimes, they act as role models who inspire another person and give him valuable orientation with respect to how he needs to conduct himself to achieve true happiness. Such a positive influence is especially important in view of the well-known limits of human beings. For example, due to bounded rationality or outright irrationality, they tend to do certain things (such as smoking), even though they know that they are bad for them.

Without an ultimate central and ideally transcendental authority, there will be anarchy, since there is nobody who sets and enforces binding standards. In Dostoyevsky’s novel The Brothers Karamazov,Mitya (Dmitri) Karamazov, in a self-quote, asks: “Without God and the future life? It means everything is permitted now, one can do anything?” 

Liberals who delegitimize and discredit authority are dishonest, since they – in the same vein as everyone else – cite or implicitly rely on authorities themselves. An example is their recourse to influential classical philosophers of liberalism such as John Locke. This is reminiscent of the behavior of Protestants. They reject the Catholic Church’s magisterium (which literally means the “office of a teacher”) and claim that they will follow only scripture (sola scriptura). But in reality, they rely on other authorities, such as local ministers, for exegetical purposes and direction. This is because all texts need to be interpreted and explained, which often involves making subjective value judgments and using philological ruses to arrive at the desired meaning and ostensibly prove one’s point. 

What is more, as we have seen, even the views of the liberals’ foremost witnesses are often presented in a distorted light to fit the propagandist purposes of the schemers. Furthermore, proponents of the liberal creed themselves are usually eager to act as authoritative teachers. They callously call the entirety of their opponents a mob, which, according to the revolutionists, needs to be thoroughly educated to prevent them from being swayed by “populist demagogues.”

Like all stratagems in the ‘Liberal Warfare Toolbox’, the genetic fallacy and contrivance of poisoning the well are used not only to promote gambling deregulation, but to achieve ignoble ends in other fields, too. For example, as regards the preemptive slandering of an opponent, a man – including a Catholic priest – who opposes abortion can be easily discredited before he even has a chance to state his case. Permissive liberal abortion activists, as the first step, may simply highlight the mere fact that he is male. Then, they can draw the seemingly obvious, but in truth erroneous conclusion that because of his nature, he does not understand the predicaments of women and is driven by a deep-seated natural instinct to dominate females, which involves restricting their choices. Moreover, using verbal acrobatics, liberals may call him a “pro-forced-birth” person. The arsenal of liberal sophists is not limited to the above-described two methods of machination, though.

Prof. Schlevogt’s next column will uncover additional stratagems hidden in the ‘Liberal Warfare Toolbox’.

https://www.rt.com/news/612407-gambling-liberal-warfare-toolbox/

 

 

YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.

 

*THE AMOUNT OF MONEY LOST MAY NOT BE THE ONE IN THE CARTOON AT TOP....

losses.....

 

Are Americans Betting Their Future on Sports? Uncover the Surprising Stats

 

By JONATHAN PONCIANO

 

Since the 2018 U.S. Supreme Court ruling that legalized sports betting nationwide, the pastime has taken the U.S. by storm, driving the rapid expansion of online and in-person sportsbooks and fueling the growth of a burgeoning industry.1

 

Billions of dollars are being wagered annually, reshaping how people spend, save, and invest—though not always for the better.2

Tax Foundation. "Bets on Legal Sports Markets Pay Off Big for States, Sportsbooks, and Consumers."

 While states benefit from the new revenue streams, the social and financial costs of gambling are mounting. From dwindling savings to rising debt and bankruptcy rates, its impact is becoming increasingly apparent.3

 

 KEY TAKEAWAYS
  • On average, households spend $1,100 a year on sports betting while cutting back on investments and oftentimes spending more on cable TV and other forms of entertainment.
  • States that legalized online sports betting saw a 28% increase in bankruptcy filings within four years.
  • Despite significant tax revenue, concerns over addiction and financial harm have led to calls for tighter regulations and increased funding for responsible gambling initiatives.
How Much Are Americans Losing to Sports Betting? 

Americans have wagered almost $450 billion on sports since the Supreme Court struck down a federal law prohibiting sports gambling in 2018. That decision has been a big boon for sports betting operators—including market leaders FanDuel and DraftKings—which have generated close to $40 billion in revenue in the 38 states where sports betting is now legal, according to Legal Sports Report.4

 

As more Americans place bets, these revenues have been growing fast. In 2024 alone, preliminary reports show operators booked more than $14.2 billion after paying out bettors’ winnings, up 29% from 2023.5 So what does that mean for the people placing bets? 

 

These revenues are “essentially the take that operators are making," Scott Baker, an associate professor of finance at the Kellogg School of Management, told Investopedia. In other words, "it’s almost equivalent to the net losses for Americans," he says. Baker led a team of researchers who found that nearly 8% of households were involved in gambling by the end of 2023 in their working paper. On average, these bettors spent $1,100 per year on online bets.3

 

The researchers analyzed millions of financial transactions by hundreds of thousands of U.S. households and discovered that as people put more money into sports gambling, their savings and investments declined “significantly.” Net investments, for example, fell by an average of about 14% for households in states that legalized sports betting—meaning that for every dollar a household spent on sports betting, it put $2 fewer into investment accounts.

 

"For certain people who are prone to some of the addictive behavior from this, the effect is really bad, and I think it's going to cause some of these households a lot of hardship,” Baker says. 

 

The data also showed consumers spending money differently. The researchers found that increased access to sports gambling boosted spending on cable TV, restaurants, and other forms of entertainment, as well as participation in lottery games. 

 

"If you start sports betting, you start watching more sports, you might go out to sports bars more," Baker explains. "It's a sign that sports betting isn't necessarily offsetting these other activities, but amplifying them instead."

 

If you or someone you know has a gambling problem, call the National Problem Gambling Helpline at 1-800-522-4700, or visit NCPGambling.org/Chat to chat with a helpline specialist.67

How Is Sports Betting Affecting Debt and Bankruptcy? 

Legalized sports betting isn’t just changing consumers’ spending habits—it’s also impacting their financial health, according to research led by UCLA Anderson School of Management’s Brett Hollenbeck. Overall, consumer financial health is “modestly deteriorating” in states that legalized sports gambling, Hollenbeck and his colleagues conclude in their working paper.

 

Within four years of a state legalizing online sports betting, Hollenbeck and the team found that credit scores decreased by an average of 1%, debt collection amounts jumped by 8%, and bankruptcy filings soared by 28%—representing roughly 30,000 additional bankruptcies per year.

 

“By reducing the frictions, people might bet a lot more than they otherwise would have—and they might make worse decisions,” Hollenbeck explains.

 What Are the Benefits of Sports Betting? 

Despite growing concerns about gambling addiction and financial strain among bettors, the rapid adoption of sports betting has delivered financial benefits to states where it’s legal. States raked in more than $1.8 billion from taxes on sports betting in 2023—helping to fund infrastructure projects, education, and even counseling services for gambling problems.82

 

Industry leaders have also taken steps to address challenges. Major gaming companies including Bally's, FanDuel, and DraftKings joined together to form the Responsible Online Gaming Association, committing over $20 million to promote responsible gambling initiatives.9

 The Bottom Line 

The growing legalization of sports betting has helped states and operators cash in on billions of dollars—but the cost to Americans’ financial health is becoming increasingly evident with time. Studies show a troubling rise in debt, bankruptcy, and reduced investments among bettors. 

 

As states navigate this booming industry, the challenge lies in balancing the tax windfall with the mounting social costs. On the other hand, Bettors should approach this high-stakes pastime with caution to avoid long-term financial consequences.

 

Baker sums it up: “Sports betting is still ramping up, so whether people lose a bunch of money and then quit, or if they really fall into some bad patterns, that all remains to be seen,” he says. "But it’s clear that gambling often gets the best of some people—maybe because they don't understand the odds or how much this is really costing them."

https://www.investopedia.com/americans-sports-betting-losing-8768618 

READ FROM TOP.

 

YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.

 

AUSTRALIANS BET (AND LOSE) A LOT MORE PER CAPITA...

 

Gambling is a major public policy issue in Australia, affecting the health and wellbeing of individuals and families in a range of ways. Estimates suggest that Australians lose approximately $25 billion on legal forms of gambling each year, representing the largest per capita losses in the world (Letts 2018; QGSO 2022).

The social costs of gambling – including adverse financial impacts, emotional and psychological costs, relationship and family impacts, and productivity loss and work impacts – have been estimated at around $7 billion in Victoria alone (Browne et al. 2017). Gambling-related harms affect not only the people directly involved, but also their families, peers and the wider community (Goodwin et al. 2017).

This page aims to:

  • improve understanding of gambling participation and expenditure in Australia
  • describe gambling-related impacts on health and wellbeing
  • highlight emerging gambling trends and opportunities for improved monitoring.

Data on gambling trends should be interpreted in the context of recent global events and changes to some state and territory data collections. This includes:

  • changes in the availability of gambling in Australia during the COVID-19 pandemic and related government restrictions, with land-based gambling venues temporarily closed and major national and international sporting codes suspended. Individual state and territory governments implemented and eased restrictions at different times during 2020 and 2021 (for more detail see ACMA 2022, Biddle 2020, Jenkinson et al. 2020).
  • changes to gambling policy and legislation in Australia by state and territories (see Section 3 of latest Australian Gambling Statistics- external site opens in new window report by the Queensland Government Statistician’s Office (QGSO))
  • changes to the way wagering (see glossary) is taxed by Australian state and territories (see Table 1 of the latest Australian Gambling Statistics- external site opens in new window report by the QGSO).

 https://www.aihw.gov.au/reports/australias-welfare/gambling

phantoms....

 

Prof. Schlevogt’s Compass No. 15: Kakistocratic defense splurgers destroy Europe
Eighty years after WW II, EU leaders are approving huge budgets to solve a self-made security problem. Yet the silver bullets are defective

 

It has been said that quantity has quality all of its own.

The origins of this dictum, which is often attributed to Soviet leader Joseph Stalin, can be traced back to ancient dialecticians. They argued that continued quantitative changes will eventually lead to qualitativetransformations. After all, if you incessantly add one grain of sand to another, finally a heap will emerge.

Imbued with an unshakeable belief in the power of quantity, European leaders, who due to their incompetence form a veritable kakistocracy (rule of the worst), in March 2025 hastily adopted financial mega-packagessimultaneously at the supranational level (European Union) and national level (Germany) for additional defense spending and other outlays far exceeding one trillion Euro.

This catchpenny action, which served special interests (such as those of the defense industry), was touted as an antidote to a much-hyped security problem. The quagmire allegedly consisted of an acute threat of Russia exploiting a vacuum, which had been created by the United States’ decoupling from Europe, by invading the old continent in no time. On the occasion of the 80th anniversary of the end of the Second World War, the European alarmists exploited threat bias by conveniently reinforcing long-harbored fears concerning Russia. More specifically, they remined their audiences of the latter’s iron grip on Eastern Europe in the wake of the worst military conflict in history - irrespective of the fact that the Russian Soviet Federative Socialist Republic constituted only one part of the Soviet Union and this federation of republics had long ceased to exist.

However, the mega-spending approach is highly questionable in terms of process and content. In this context, it needs to be remembered that there is no free lunch - food in officers’ messes not excluded! The veracity of this dictum is revealed by a closer look at the following, partially interrelated problems associated with the gargantuan debt-financed defense packages and other new mega-spending programs adopted across Europe.

1. Widening democratic deficit and credibility gap

Across the EU, the success of conservative Eurosceptic parties, which are defamatorily labelled “extreme right-wing” and “populist” by the governing elites and their media mouthpieces, shows that broad swathes of the electorate there are opposing the building of a European superstate. Especially the new EU-wide defense splurge aimed at financing one building block of this expensive European mansion (that is, a common defense capability), thus clearly defies the popular will in many places.

At the EU-level, the decision-making process, which is opaque, has been driven by the upper caste of EU bureaucrats, who lack democratic legitimacy. They routinely jump the bandwagon and succumb to groupthink and delusional, hubris-fueled wishful thinking, with no political-economic Cassandra warning them of the clear and present dangers courted by their foolishness. Feeling safe inside the herd and being absolved of individual accountability and responsibility, the members of the exclusive EU club tend to take overly risky decisions. Clearly, the grand ambition of the EU to become the new “leader of the free world”, after the US has retired for good reasons (including financial ones!), is both unaffordable and anachronistic (especially given that a growing number of people around the world are rejecting unchecked, woke-filled liberalism).

Worse, the dire predictions regarding Russia are fraught with the grave risk of becoming self-fulfilling prophecies, since the so-called enemy might feel threatened and take reactive and preventive measures (as happened in Ukraine according to Russia’s account of the special military operation). This, in combination with the strategic failure of not incorporating exit ramps into the grand European plans, which can be used to transit from crisis mode to normalcy, might result in a dangerous spiral of escalating commitments and violence.

Using a combination of scaremongering and the slippery slope argument based on domino theory, Russia’s attack on Ukraine is framed as being just the prelude to Russian invasions of other countries if Moscow remains unchecked. The recycling of the rhetorical device of the slippery slope, which is classified as a fallacy, bodes ill. It was used to great effect by the U.S. to justify its participation in the Vietnam war, allegedly to prevent the spread of Communism to other Asian countries. However, it is extremely unlikely that Russia, assuming that it will not be provoked, will invade Germany, for example, which is a member of NATO and has a long history of friendly ties with the Eastern bear in manifold spheres.

Even though different options always exist, the president of the European Commission, Ursula von der Leyen, in an oxymoronic antithesis claimed apodictically on 18 March 2025 that the “choice is none”. After touting the alleged virtues of pacifism and individualism for decades, European leaders suddenly in unison are preaching a new dangerous form of collectivism, demanding heavy sacrifices for what is portrayed as the common good.

Using the alleged Russia threat as a red herring and smokescreen, as well as igniting and exploiting one upheaval after another, they create a perpetual crisis and constant threat reminiscent of the situation depicted in George Orwell’s dystopic novel Nineteen Eighty-Four. They are thus impeding critical thinking through tactics of continuous diversion and detraction, in order to pursue a hidden agenda in a mendacious and unencumbered fashion. The pernicious effect of the stratagem of blurring the water to catch a fish is heightened by the sheer speed by which EU groupthinkers are hastening through the mega spending packages at different levels, leaving potential opponents little time to mount resistance.

In Germany, a softening of constitutionally enshrined debt ceilings, known as the Schuldenbremse (debt brake), among other things, limiting annual structural deficits to 0.35% of a gross domestic product (GDP), was approved in March 2025 in a hastily reconvened lame-duck Bundestag (federal parliament), even though a new parliament had already been elected. The loosening of fiscal shackles was destined to make it possible to borrow large amounts of money for new mega-spending packages. Due to the increase in the number of seats of the Eurosceptic AfD, the radical constitutional change, which required a supermajority, would most likely not have been adopted by the new parliament.

Even if, in purely technical terms, the gambit of using the old parliament was legal, it clearly bore witness of utter disrespect for the popular will. Since the sweeping change of the constitutional debt limits and the spending spree were not clearly highlighted in party programs and on the campaign trail, the move also amounts to egregious voter deception. In addition, the CDU, given that it failed to achieve stellar results in the 2025 federal election and thus was forced to enter another grand coalition with the SPD, which pursues different objectives, has no sweeping mandate for transformation. As a consequence of all the machinations and disregard for the wishes of voters, the democratic credentials and political credibility of mainstream parties in Germany are further undermined.

2. Waste of resources and corruption potential

Lacking strategic focus, the big spenders in Europe are pursuing an excessive number of mutually conflicting objectives and employ a reactive shotgun approach aimed at combating the phantom enemy in the east and conveniently solving other problems at the same time. As a consequence, resources are likely to be wasted at a grand scale. The German language, with its great capacity for compounding words, possesses an apt, humorous term that is well-suited for describing the all-in-one financial mega packages adopted in March 2025 and their wished-for all-inclusive results, that is, eierlegende Wollmilchsau, which is literally translated as egg-laying wooly dairy pig. Would it not be great to have such a fabulous multifunctional animal as a cornucopian source of myriad desirable products?

Apparently inspired by a comparable unrealistic, perfectionist vision of completeness in the field of politics, the German all-in-one package adopted by the Bundestag in March 2025, among other things, included spending on infrastructure, defense and climate projects (see Figure 1).

 

 

Clearly, the addition of environmental spending aimed at combatting yet another phantom, that is, a changing climate (which by nature is always changing!), constitutes a surrender to the demands of clientele politics pursued by the Green Party. Money, so the German spendthrifts think, is the answer to all problems – a conception as erroneous as hoping that pouring an ever-increasing amount of water on a plant will further healthy growth. Again, adopting a shoot-then-aim approach and trying to be a jack of all trades, while being master of none, undermines the credibility of the political mavericks and tricksters.

Due to the package approach, vaguely stated purpose and large amounts of money involved – coupled with the lack of democratic due process and concomitant intransparency – there is a high risk of moral hazards and unintended consequences occurring, including wide-spread and large-scale misappropriation of funds under different disguises by officials who simply do not care or are outright corrupt. In fact, it is quite easy to hide expenditure items, which are not related to the overall stated purpose, inside a large financial package, especially if one uses budget tricks and “creative accounting”. For example, given the vague nature of spending labels, it is easy to misappropriate infrastructure funds for defense.

The problems get compounded when a fast-track approval, steam-roller-like process without due diligence and accountability is used to deceive voters and confront them with a fait accompli before they can react. A case in point is Western military aid to Ukraine, in regard to which some critics doubting whether all funds and arms reached the intended destination. As an earlier example, the hastily approved European Covid-19 rescue funds were partially misappropriated by corrupt actors. The EU president even negotiated a deal with Pfizer via SMS, in order to procure the American pharma giant’s vaccines without proper accountability.

The so-called thin-edge-of-the-wedge effect becomes clearly visible when one analyzes political patterns in the EU: After taboos have been shattered and the breaking of national, democratically legitimized resistance has become a well-established pattern, erstwhile unthinkable action – such as mutualizing debt and misappropriating funds earmarked for other purposes - is now taken publicly without shame.

While the financing of the Covid-19 packages through European loans constituted a crossing of a German red line, creating another European financing vehicle for the EU defense package prompted no real debate and met no serious resistance. Furthermore, as an example of budget tricks used, one key ingredient of the European defense package announced in March 2025 is the redirecting of funds originally earmarked for the promotion of interregional cohesion to investments in defense projects. Even the lifting of EU fiscal rules to allow for defense spending of 650 billion Euro was calmly accepted by all important players.

In this context, it is important to note that referring to the Covid-19 rescue packages as a precedent to justify new mega spending packages constitutes a false analogy, given that there are crucial differences with respect to their financing costs. When the pandemic broke out in 2020, the key interest rate set by the European Central Bank (ECB) was 0%. Yet in 2022, the monetary authority started to increase rates to combat high inflation. In March 2025, at the time the new mega spending packages were announced, the key interest rate stood at 2.5%.

Finally, the promise to do “whatever it takes” (WIT) in a perpetual crisis mode – as part of a reactive pattern of long-time procrastination followed by sudden bursts of radical measures – coupled with the lack of a clearly defined exit ramp back to consolidation ensures that waste and corruption can go on for a long time, with commitments being escalated all along - in for a penny, in for a pound (even if one does not have a penny to bless oneself with!).

The WIT approach is adopted despite the fact that as regards spending, there are always costs and benefits, as well as declining marginal returns, which makes it necessary to strive for an optimum instead of continuously pouring more funds in a limitless fashion (which is particularly pernicious if the problem is a phantom one). The idiomatic “whatever it takes” label thus is clearly ominous, since, according to its definition, in certain contexts it serves as a euphemism for improper behavior, including harmful measures in the pursuit of a given objective.

In fact, EU leaders are behaving like addicted gamblers, opting for one stimulus after another, such as injecting funds into defense after the COVID-19 stimuli have fizzled out, while the amount of funds spent increases at an exponential rate. By behaving like a gambler at the roulette table who is ready to spend whatever it takes to win, they are essentially gambling their own nations away.

Theoretically, the entire spending process can go on indefinitely, since the targets are extremely soft and subjective and thus elusive. For example, there is no point where one can conclude with absolute certainty that Europe is “properly defended”, especially when there is considerable heterogeneity between the countries on the old continent in many regards. Given such fuzziness and the lack of solid anchors, it comes to no surprise that targets are shifted easily, as witnessed by the raising of the minimum that NATO members are supposed spend on defense (lately, the minimum expenditure measured as a percentage of GDP has risen from 2% to 5%).

3. Imbalances due to lopsided Keynesianism

During the Great Depression (1929-c.1939), the British economist John Maynard Keynes managed to transform public policy by challenging the neoclassical view that labor markets would adjust automatically to changing economic conditions and instead arguing for increased government spending to combat unemployment. In his view, the specific nature of the spending did not matter, as long as it contributed to employment. In his book, The General Theory of Employment, Interest and Money, published in 1936, he praised the building of pyramids and even suggested that it would make sense for the government to pay for the digging of holes and then again to spend money on filling them up!

After his widely popular theory fell into disrepute during the period of stagflation (declining output coupled with inflation) in the 1970s and rule-based, fiscally conservative ordo liberalism gained supremacy over discretionary economic pump priming, Keynesianism became fashionable again during the 2008 financial crisis and was reignited during the Covid-19 pandemic. The bonanza of spending announced in March 2025 with the aim of combatting the imagined Russia threat continues this trend of Keynesian revival.

However, Keynesian economic policy is lopsided, since it focuses only on the demand side of the economy. In figurative terms, it is concerned only with how to slice the economic cake – allocating economic output to consumption, investment, government expenditure and net exports respectively – instead of focusing on how to actually increase the gâteau, which requires supply-side economic measures that expand the production possibility frontier.

Increasing demand - through measures such as raising defense spending - without expanding supply, ceteris paribus, eventually will push up prices. Such inflation distorts economic signals and leads to a misallocation of economic resources, thus creating serious imbalances in society (such as pensioners on fixed incomes being hurt more than people whose nominal income will be increased when the general price level rises). An inflationary spiral ensues when (a) wages are incessantly increased to compensate for losses in purchasing power due to price rises and (b) inflationary expectations, which are particularly difficult to dampen, are heightened as a result.

Instead of lopsided, inflation-fueling neo-Keynesianism and mere occasional lip services to the future removal of structural bottlenecks, a robust combination of different economic policies is needed in the EU and many other places, focusing on both the demand side (as long as the production possibility frontier has not been reached) and the supply side (aiming at expanding the production possibility frontier). Unlike Keynes, who, when push came to shove, did not exhibit real interest in the particular nature of government expenditure (as long as it contributed to employment), supply-side economic measures need to be targeted, focusing on the drivers of long-term growth, that is, capital, labor and technological progress.

4. Negative impact of reckless financial engineering

In theory, Keynesian stimuli programs can be financed by various means, but in practice, they most often rely on borrowing, which also applies to the EU spending packages approved in March 2025. This particular financing approach – used instead of offsetting spending cuts, for example – is problematic in various regards.

First, financing the huge spending packages via loans instead of by means of proportional reductions in other expenditure constitutes an act of deception, since it hides crucial tradeoffs. More specifically, one aim of such financial engineering is to hide the “guns versus butter” tradeoff in the short run. Given limited resources, in the absence of supply-side economic growth, higher spending on military goods (which are a deadweight in times of peace) at least partially comes at the opportunity cost of lower spending on civilian goods – now or in the future. Put simply, the money you spend on a tank will not be available for building a hospital.

Moreover, the increased demand of the government for loanable funds, ceteris paribus, is bound to drive up real interest rates. As a foretaste of things to come, Germany’s borrowing costs rose quickly after the new huge spending package was announced in March 2025, with 10-year note yields jumping by over 20 basis points. Increased rates in turn make it more expensive for businesses to finance their investments. As the final result of increased government borrowing, private investment is crowed out.

Furthermore, as confirmed by cutting-edge academic research using input-output analyses, the positive economic impact of spending on arms purchases (a hidden form of industrial policy) tends be smaller than the effect exerted by non-military government spending. In addition, military expenditure is also positively correlated with income inequality.

The net multiplier effect of defense spending viewed in isolation, which hinges on technological spillovers from the defense industry to other sectors within the same economic region, tends to be lower as compared to many other investments with lower opportunity costs. In particular, the multiplier is likely to be comparatively small in the EU, since it procures approximately 80% of defense products from outside the block.

Furthermore, debt-financed Keynesian policies also tend to deceive uneducated and myopic consumers in other ways. More specifically, the short-term demand-side growth of an economy that has not yet reached the production possibility frontier comes at the expense of future consolidation of state finances – a fact not known to economic laymen. In a form of yo-yo-effect, consumers may provoke a temporary spike in aggregate demand by pulling forward consumption, which, however, in a later “snap-back”movement, will need to be curtailed when the government adopts austerity measures. In the final analysis, the impact of a government’s fiscal expansion program on the demand side is positively correlated with the degree of irrationality of consumers, which it is ruthlessly exploiting. More specifically, Keynesianism partly hinges on kindling consumers’ “animal spirits”, increasing their optimism by injecting stimuli funds into the economy, even though such optimism is misplaced when life-time income is considered.

If on the other hand, citizens are very savvy and farsighted, they at least instinctively grasp the so-called Ricardian Equivalence, understanding that debt-financed stimuli programs will necessitate fiscal consolidation in the form of future tax raises. This expectation will prompt them to curtail consumption after an expansion program has been adopted, so that they will have sufficient funds to pay the higher taxes in the future. If this happens, the demand boost that policymakers wanted to achieve through Keynesian stimulus packages will not materialize.

A responsible, prudent and honest statesman would need to offset increased military spending by either reducing other government expenditure or raising government income (such as by increasing taxes) or a combination of both. By seemingly effortlessly and quickly paying for the military buildup through new debt, EU leaders simply shift the economic pain, which current voters would probably be unwilling to endure, to future generations. Clearly, this ruse hinging on what I call “guilt-by-succession” gravely violates intergenerational justice. As soon as somebody calls out the bluff, EU leaders will suffer another blow to their credibility.

Apart from the serious problems associated with debt-financing mentioned above, ceteris paribus, an increasingly larger share of EU members’ budgets will need to be used for interest payments if debt levels continue to increase across the block. This means that less money will be available to meet other important public needs. Those include, among other things, financial means for coping with foreseeable problems undermining long-term supply-side economic potential (such as an aging population and concomitantly shrinking labor pool) and emergency funds to deal with various unforeseen shocks to the system.

The US, whose federal debt amounted to a staggering 35.46 trillion US-dollars in 2024, offers a cautionary tale in this regard. This is because the so-called leader of the free world had to spend more on interest in that year than on other big-ticket items. For instance, interest payment exceeded spending on higher education by a staggering 756 billion US dollars (see Figure 2).

 

 

 

In addition, rising debt levels are dimming the long-term prospects for growth in national income, partly because they lead to an increase in risk premiums and real interest rates. The mere expectation of slower long-term growth can negatively affect the current business cycle. This happens, for example, if entrepreneurs, due to high government debt, lose confidence in the economy and reduce investments in the expectation of future austerity programs. If the debt is monetized through loans from the central bank which prints new money, inflation is likely to be stoked in a vulnerable economy. Similarly to what usually happens in the wake of wage inflation, inflationary expectations will rise concomitantly, unleashing an inflationary spiral that is particularly difficult to end.

Moreover, the continuous increase in government debt across the EU can lead to members suffering from debt overhang whereby, due to their indebtedness, they cannot attract new funds even if there are investment projects that promise high yields. Finally, they are likely to end up in a debt trap, that is, a vicious circle where debt service obligations are met with a succession of new loans. This pernicious pattern is likely to trigger increasingly serious financial crises (including sovereign debt crises) and finally a total collapse of the entire system. Then, European leaders may conclude that the only solution to this plight is a great reset after a major war, possibly between former allies on European soil!

5. European disintegration

The new mega-financial packages threaten European unity in various ways. To start with, the huge spending programs announced in March 2025 create another layer of supranational debt, which comes on top of high national debt mountains. In particular, a new dedicated program of funding is to be launched at the EU level to finance military projects.

The scheme will be used as a smokescreen to deepen European integration and relies on new loans hinging on Germany’s still formidable financial prowess and still favorable credit rating. This approach enables member states with overshooting budget deficits and national debt to take a free ride. This is because, for the time being, they can profit from lower interest rates due to the favorable credit rating of the erstwhile financial poster child Germany, which also assumes the lion share of the EU budget and EU debt without commensurate returns in any form. This is bound to create additional tensions between Germany and the European spendthrifts in particular. Once a truly patriotic leader, who puts national interests first, has emerged in Germany, the land of poets and thinkers is likely to leave the EU and the whole European project will probably collapse, since its most important financier will have disappeared.

Furthermore, there are other destructive forces at work creating fissures that make European disintegration more likely. For example, a second pernicious yo-yo effect is bound to manifest itself at the macroeconomic level. As happened before, the spending surge in 2025 will have to wind back in the form of tough austerity measures in the future - with at least the same force as the initial measures, or, to resort to the yo-yo metaphor, using the full rotational energy unleashed.

After all, previous austerity programs, instead of being mere flashes of inspiration of ill-intentioned and moody economists, were desperately needed as antidotes to reckless overspending in the past and to recuperate subsequent layouts for bailouts. In this context, it is noteworthy that Germany is at least in a better position than many other heavily indebted countries to increase spending precisely because it endured austerity programs before, including the introduction of the above-mentioned constitutionally enshrined debt brake, a sound vehicle promoting fiscal rectitude, in 2009 as a response to the 2008 financial crisis.

EU members states with particularly high debt-to-GDP ratios, such as Greece (158.2% at the end of Q3 2024), Italy (136.3%) and France (113.8%), whose dire straits are the result of a lack of financial rectitude in the past, are likely to be hit particularly hard by future austerity measures. As a consequence, populist politicians there will probably put the blame for unpopular budget consolidation efforts on the EU as a whole and ‘overly strict Germans’ (especially if Berlin again bails out the splurgers and demands tough fiscal measures). As a consequence of the painful policy zigzag between fiscal expansion and hang-over contraction, intra-European tensions will rise further and the very fundament of the EU again be damaged, increasing the chances of its final collapse.

Moreover, the Euro, the block’s common currency, is undermined by reckless, instability-inducing financial engineering. If countries with high budget deficits and national debt had their own national currency, they could devalue it to increase international competitiveness and thus increase demand-side growth through a rise in net exports. However, given that the spendthrifts inside the Eurozone are locked into a common currency, this option is not available to them. Instead, they must count on fiscal transfers from countries with better finances, whose citizens will not be amused by the solemn call to take on the burden of others in the name of “European solidarity”. Furthermore, the high budget deficits and national debt of individual member states can cause market panic, for example, since investors might be spooked by the specter of a sovereign debt crisis. Due to contagion in an intertwined financial system (including banks in sound economies holding debt of countries in trouble), problems may spill over to the rest of the Eurozone and trust in the system could be undermined. If, as a result of all these problems, the Euro is abandoned as a common currency, one prestigious European project will have failed and one important glue of European integration will have disappeared.

Incidentally, the reckless behavior of fiscally irresponsible member states such as Greece is also a classic case of postcontractual opportunism and time inconsistency in the form of reneging on ironclad promises, since they busted previously agreed-upon financial rules. More specifically, the Maastricht Criteria were introduced in 1992 as a basic requirement for the launch of the Euro in 1999. Among other things, those obliged countries that intended to join the Euro to adhere to strict convergence targets in terms of maximum permissible levels of budget deficits (3% of GDP) and national debt (60% of GDP) – precisely to avoid problems such as those outlined above. Furthermore, the Stability and Growth Pact (SGP) was concluded in 1997, which specifies binding financial restrictions for all EU member states, including the same ceilings related to budget deficits and national debt as the Maastricht criteria.

However, several members with little concern for sound public finances missed the clearly specified financial conditions to which they had earlier agreed. For example, as mentioned above, the national debt of Greece amounted to a staggering 158.2% of GDP at the end of Q3 2024, far exceeding the 60% ceiling to which the country had committed.

The disrespect shown for the various institutional constraints, functioning as much-needed checks and balances in a fragile system, witnessed in the past and in the case of the gargantuan spending packages announced in March 2025 is highly problematic. This is because such behavior constitutes a negative precedent opening the floodgates to future economic trouble created by unhinged actors and further undermines the trust in the EU, thus precipitating its eventual disintegration. In this context, the fact that Germany, the former guardian of sound public finances in the EU, strayed from fiscal rectitude by softening constitutionally enshrined debt limits bodes particularly ill.

 

Another factor contributing to European disintegration is the expected misappropriation of EU funds in the wake of the permission given in March 2025 to channel EU cohesion funds into defense projects. These cohesion funds, which are distributed to EU members with a gross national income (GNI) per capita that is lower than a threshold of 90% of the EU average (with an expected 37% of funds to be used to meet climate targets!), were destined to even out interregional differences inside the EU.

For Germany, which is the main contributor of cohesion funds, too, the scheme in essence meant that the country had to give its own money to foreign customers as a gift so that they could subsequently purchase products made by German companies and their competitors. Clearly, this giveaway had been approved by German politicians who did not pursue German interests.

Since less cohesion funds will flow to weak EU members, there will be less leveling out of existing disparities. The imbalances remaining as a result constitute another factor destabilizing the common European house. If more fiscal transfers will occur in the future to increase cohesion, the paymasters are likely to become disgruntled about another act of so-called solidarity, which will result in more disharmony inside the EU.

Finally, another dangerous centrifugal force will be the widening cleavage between Atlanticist EU members, who still believe in a strong defense alliance with the U.S., and Gaullists, keen on promoting European independence. This is partly due to the increasing disgruntlement of US loyalists about the gargantuan funds earmarked to build a standalone European defense capacity.

***

In conclusion, it has been said that if you want to make God laugh, you should tell him about your plans.

Rather ironically, the clique of EU leaders with the blueprint of building a stronger European house in the form of a veritable fortress, through their reckless spending spree that hides critical tradeoffs, are likely to undermine the existing building’s very foundations and thus eventually cause its collapse.

In this context, it is truly amazing how inventive human beings tend to become when trying to justify more debt. In this regard, they are prone to display the same seemingly boundless creativity and criminal energy as used for scheming, carrying out and covering up heinous crimes, especially through highly ingenious lies that distort facts in a devilish fashion - after all, etymologically the diabolos is the one who ‘throws through’ things and via distortion cunningly sows confusion.

Without a grand supranational idea and noble mission based on truth and honesty, which act as an invisible glue, the European project will eventually falter, especially, given that the interests of European nations in the political, economic, social, military, cultural and other spheres diverge widely. Undoubtedly, this destructive process is accelerated by reckless financial engineering at the supranational and national level.

To avoid committing collective political and economic hara-kiri, EU leaders need to immediately stop prioritizing politics over sound economics and refrain from exploiting the irrationality and myopia of their citizens. Instead, they should act as real statesmen, building their own nations rather than Europe at the expense of their homelands, and enrich their people through smart and enlightened human-centered policies, which also include education as an antidote to economic naivety. To sum up, when the band begins to play (a sad song), it is high time to change course (and advisable to play a different tune)!

This article forms part of a series on the new European spending packages. Previous column: Prof. Schlevogt’s Compass No. 14: ‘Whatever it takes’ revisited – Euromaniacs exploit threat bias again, 19 March 2025.

 

 

https://www.rt.com/news/617535-defence-splurgers-destroy-europe/

 

 

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         POLITICAL CARTOONIST SINCE 1951.