According to the President's Export Council, since 1993, the US has imposed more than 40 economic sanctions on 36 countries. The last one came back to haunt US and the Europeans.
US imposed economic sanctions on Russia for its Ukraine invasion on 24 February which is hurting the US and Europeans badly because they need Russian oil, gas, fertilisers, minerals, corn, wheat etc.
Although US is the biggest producer of oil in the world, it has to imports about 10% of its requirement. Russia is the 2nd biggest oil producer in the world and it exports about 40% of its oil production.
If inflation becomes too high, the economy can suffer; conversely, if inflation is controlled and at reasonable levels, the economy may prosper. With controlled, lower inflation, employment increases. Consumers have more money to buy goods and services, and the economy benefits and grows.
Prices climbed at the fastest pace in decades in the month leading up to the war in Ukraine, underlining the high stakes facing the United States — along with many developed economies — as the conflict promises to drive costs higher.
As a result, gas price has sky rocked, as shown on the price chart below.
The US Consumer Price Index rose by 7.9 percent through February, the fastest pace of annual inflation in 40 years. Rising food and rent costs contributed to the big increase, the Bureau of Labour Statistics said, as did a nascent surge in gas prices that will become more pronounced in the March inflation report.
The February report caught only the start of the surge in gas prices that came in response to Russia’s invasion of Ukraine late last month. Economists expect inflation to pick up even more in March because prices at the pump have since jumped to record-breaking highs. The average price for a gallon of gas was $4.32 on Thursday, according to AAA.
Rapidly climbing costs are hitting consumers in the pocketbook, causing confidence to fall and stretching household budgets. Rising wages and savings amassed during the pandemic have helped many families continue spending despite rising prices, but the burden is falling most intensely on lower-income households, which devote a big chunk of their budgets to daily necessities that are now swiftly becoming more expensive.
The United States spends more on national defense than China, India, Russia, United Kingdom, Saudi Arabia, Germany, France, Japan, South Korea, Italy, and Australia — combined. While the chart above illustrates last year’s defense spending in dollar terms, the United States has also historically devoted a larger share of its economy to defense than many of its key allies.
US military budget:
The military budget is the largest portion of the discretionary United States federal budget allocated to the Department of Defense, or more broadly, the portion of the budget that goes to any military-related expenditures. The military budget pays the salaries, training, and health care of uniformed and civilian personnel, maintains arms, equipment and facilities, funds operations, and develops and buys new items. The budget funds five branches of the U.S. military: the Army, Navy, Marine Corps, Air Force, and Space Force.
On 24 February, Russia invaded Ukraine. The cost of direct damage to Ukraine's infrastructure amid Russia's ongoing invasion has reached almost an estimated $63 billion, according to an analysis by the Kyiv School of Economics. More than 600 properties which include 50 schools, 1 maternity hospital, 1 theatre etc were damaged. Several thousands of people were killed. Practically the whole of Mariupol city was flattened by the Russian bombs.
More than 4 million Ukrainian refugees have fled to neighbouring countries for safety. NATO countries including US have been helping Ukraine with military weapons to fight the Russians.
Ukraine has tried a few times in vain to talk peace with Russia. Obviously, Ukraine cannot defeat Russia. Currently Ukraine needs money more than weapons to feed themselves and repair all the damaged buildings.
Record high inflation in US is the beginning of the end of US supremacy in the world.
