The Ongoing Wealth Transfer to Ukraine

Aid to Ukraine has increased astronomically, with no end in sight
August 31, 2022 Updated: September 6, 2022

Commentary

The Biden administration and its congressional allies continue to transfer U.S. wealth and treasure to Ukraine, with no end in sight. This includes lethal aid in the form of weapon systems and nonlethal aid in generic categories such as refugee assistance, energy security, anti-corruption activities, and logistics support.

Let’s examine the topic in greater detail.

As reported by Fox News, these are the Ukrainian aid numbers from 2001 to 2016:

  • 2001–2008 (George W. Bush presidency): $1.1 billion.
  • 2009–2016 (Barack Obama presidency): $2.1 billion.

All of that was nonlethal aid, with the Obama increase coming after the Ukraine election of 2010 and the Russian invasion and annexation of eastern Ukraine and Crimea in 2014. The $320 million in aid provided in 2014 is detailed by an Obama White House fact sheet in the following categories: economic stabilization, reform, and growth; security sector capacity building and reform; national unity, democracy, human rights, and media; anti-corruption initiatives; energy security; humanitarian assistance and early recovery; and trade diversification and promotion.

Former President Donald Trump provided the first lethal aid from the United States. A report by the Council on Foreign Relations states, “In March 2018, the State Department approved the sale of anti-tank weapons [Javelin missiles] to Ukraine, the first sale of lethal weaponry since the conflict began [in 2014].”

This was accomplished under the existing authority as part of the Department of Defense’s budget that includes funds for “overseas contingency operations” (OCO), which have been funded at up to about $65 billion per year. A special part of the OCO funding, called the European Deterrence Initiative (EDI), focuses on reinforcing allies in Europe and deterring Russian aggression.

Included in the EDI was the $250 million that Congress authorized for the Ukraine Security Assistance Initiative, which can be used to replace any “weapons or defensive articles” provided to Ukraine by the United States. (Note: Trump’s deliberations in providing these funds to Ukraine ended up being included in the Democrats’ articles of impeachment during the Ukraine hoax in 2019.)

Epoch Times Photo
Workers unload a shipment of military aid delivered as part of the United States’ security assistance to Ukraine, at the Boryspil Airport, outside Kyiv, Ukraine, on Jan. 25, 2022. (Efrem Lukatsky/AP Photo)

Since the Russian invasion of Ukraine in February, the Biden administration has dramatically increased aid to the country—with no strings attached. In May, Congress approved an aid package to Ukraine in the amount of $40 billion. However, the Senate refused to include language proposed by Sen. Rand Paul (R-Ky.) that would have required the appointment of a special inspector general to oversee the distribution of the money to ensure accountability for U.S. taxpayers. This is problematic since Ukrainian corruption is endemic, as summarized by The Borgen Project.

As of Aug. 2, the Ukraine Support Tracker estimated that U.S. aid to Ukraine had reached $44.38 billion (44.5 billion euros comprising 25.0 billion euros in military aid, 9.2 billion euros in humanitarian aid, and 10.3 billion euros in financial aid). The second-largest donor listed is “EU institutions,” with 16 billion euros already committed. Of the countries, the United Kingdom is the second largest donor behind the U.S. government, having committed 6.5 billion euros.

The total support pledged by Western governments (including “EU institutions”) reached almost 84 billion euros. Of the military aid, the United States had delivered about $2.06 billion, with $8.63 billion remaining committed. Additional aid was recently approved by Congress, bringing total U.S. aid to Ukraine in 2022 to about $54 billion. (The more than $40 billion in additional aid to Ukraine approved by Congress on May 19 brings the total U.S. commitment during the Russian invasion to about $54 billion, when combined with the aid package passed in March.)

According to the Defense Department, U.S. military aid so far has come in the form of mortar ammunition, counter-artillery radars, unmanned aerial systems and support equipment, and laser-guided rocket systems, as well as funding for training, maintenance, and sustainment. About 40 percent of the aid is directed to these weapons transfers, to medical and intelligence support to European allies, and to support the deployment of additional U.S. troops to Europe.

Epoch Times Photo
Servicemen of Ukrainian military forces move U.S.-made FIM-92 Stinger missiles and the other military assistance shipped from Lithuania to Boryspil Airport in Kyiv, Ukraine, on Feb. 13, 2022. (Sergei Supinsky/AFP via Getty Images)

Assuming an annual interest rate of 3 percent compounded annually over 30 years, the 84 billion-euro commitment will cost Western nations more than 200 billion euros. The U.S. commitment alone ($54 billion) will cost U.S. taxpayers more than $130 billion over the same period.

To put things in perspective, Ukraine spent about $5.9 billion on its military annually before the war. The financial aid commitment from Western nations (84 billion euros) to Ukraine is more than 14 times Ukraine’s entire annual military budget. The cost to Western nations (200 billion euros) will be more than Ukraine’s entire gross domestic product (155 billion euros).

Consider that Europe is facing catastrophic energy problems as Russian gas and oil supplies are being manipulated by Moscow. For example, as reported by Bloomberg News, “Europe’s industrial heartland faces a potential exodus as manufacturers of German car parts, chemicals and steel struggle to absorb power prices that rocket to new highs almost every day.”

Never mind the effect on individual citizens who are facing 20 percent to 30 percent cuts in gas supplies over the coming winter. And yet, Western nations are committing 200 billion euros to Ukraine aid over the next several years!

For the United States, the $130 billion committed dwarfs the roughly $5 billion needed to complete the construction of the U.S.–Mexico border wall in order to stop the ongoing flood of illegal immigrants into America (nearly 5 million since January 2021). Never mind the cost to cities and states in providing services to all the illegals, such as public school education, subsidized housing, and health care, as well as security and safety investments needed to combat the increased crime. The Federation for American Immigration Reform estimated those annual costs to be $116 billion in 2017, and that was before the 5 million let in by the Biden administration over the past two years!

The bottom line: This is the biggest wealth transfer since COVID-19, which resulted in nearly $4 trillion transferred from the middle class to the ruling class in 2020 alone, as discussed here and here. Let the U.S. political class make personal investments in Ukraine if they so choose, but leave U.S. taxpayers out of it, as we have other priorities—such as covering the staggering costs of inflation.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

Stu Cvrk
Stu Cvrk retired as a captain after serving 30 years in the U.S. Navy in a variety of active and reserve capacities, with considerable operational experience in the Middle East and the Western Pacific. Through education and experience as an oceanographer and systems analyst, Cvrk is a graduate of the U.S. Naval Academy, where he received a classical liberal education that serves as the key foundation for his political commentary.