Thread by @gladstein

1/ Democratic Peace Theory rests on the idea that democracies have “skin in the game” when it comes to war and are less likely to fight than autocracies unless for a narrowly-defined, popular, vital cause.

This book by @sekreps argues convincingly that this theory is broken 🧵

2/ History shows that over time representative governments—especially in this case the US—inevitably turn to financing war through *borrowing* instead of through taxes or war bonds, hiding the immediate costs of war from a public that is less and less interested in war fighting.

3/ America’s wars in Afghanistan and Iraq (and the ongoing Global War on Terror) were — unlike WWI or WW2 or even Vietnam — paid for *entirely* by borrowing.

Bush even cut taxes during the Iraq War.

So far Americans have paid ~ $1 trillion on interest for this borrowing spree.

4/ These wars become essentially invisible, waged by a tiny elite, expanded in scope with no bound, disconnected from the public, forgotten by the media, with costs imposed unwillingly and unknowingly on today’s youth, going largely unopposed — breaking Democratic Peace Theory.

5/ One caveat: it is possible a Bitcoin Standard can mitigate this to some extent.

If wars are no longer able to be financed by schemes that rely on debt monetization and artificially-low interest rates, they may very well be smaller in scope and duration.

6/ A key concept: with a fiat central banking system, governments can easily buy their own debt, suppressing yields and keeping the cost to borrow for war lower than normal.

The ultimate price of this is likely currency devaluation, paid for by the public without their consent.

7/ I look forward to exploring this topic in depth for my next @BitcoinMagazine essay.

If anyone has resources on the intersection of modern war finance and central banking they think might be useful, please send them my way!