Ocasio-Cortez didn’t have it quite right. Skidmore’s $21 trillion figure doesn’t mean that much money was wasted, or is sitting in a Swiss account somewhere. The Pentagon didn’t even receive that much money during the time period in question.
It was my understanding that the audit done by Skidmore was quite informal and simply compared paid receipts with appropriations over the period. It is hard to deny paid receipts, whatever the Pentagon officially received. There is another, perhaps more frightening, possibility.
When Congress gives war power authority to the Executive it includes a blank check for related spending that bypasses the requirement to match deficit spending with bond issues. The Fed simply makes sure the checks don’t bounce. Similar funding is available for disaster spending, both to facilitate rapid action without waiting for approval and because it is considered bad optics for investors to profit from war and disasters.
W Bush hinted at this several times when the nation was debating the Iraq war invasion. He used the term “off the books” several times when the topic of funding was raised. Simply directing war-related spending to the proper Treasury account at the Fed would not leave much of a trail to follow, but would provide military contractors with an endless slush fund to draw from.
This would not work for major projects, such as the F-35, but would provide cover for black ops and day to day actual cost of prosecuting a war above what the Pentagon is appropriated without obtaining additional Congressional approval. Note that Congress had to pass a bill to “exclude” any spending related to Yemen from the war power authorization, but that it also never “approved” the spending in the first place either.
In terms most familiar to most Americans this is “printing money”, although the actual process is entirely electronic and no more difficult than keystroking numbers into spreadsheets at the Fed. Until a couple of years ago when I did a deep dive into Fed operations I, like everyone else, would have been focused on where the money “went” and not “where it came from”. Our money is far less tangible than most believe and our taxes and bonds “fund” nothing at the federal level. The US dollar is a unit of measure, or a denomination of contracts depending on one’s perspective. Our government neither has nor doesn’t have money at any time as it creates each dollar it spends into the private sector without revenue restraint.
