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Economic
The middle class is considered the primary indicator and, simultaneously, the "engine" of stable economic development. In macroeconomics and sociology, it is viewed not merely as a group of middle-income earners, but as a fundamental economic institution. An economic model relying on a broad middle class (representing 50% to 70% of the population) has historically proven to be the most resilient. In economics, there is a concept known as the "marginal propensity to consume". Within this framework, it is generally accepted that the ultra-rich save or invest the majority of their income in financial instruments, while the poorest segments of the population spend all their funds solely on basic survival. It is the middle class that serves as the primary mass consumer of high-value-added goods and services. Members of the middle class purchase real estate, cars, and household appliances; they pay for education, travel, and dine at restaurants. It is precisely their demand that drives the real sector of the economy (factories, the service industry, and small to medium-sized businesses) to operate and expand. If the middle class shrinks, the economy faces a crisis of overproduction or demand stagnation. It is also worth noting that the state budgets of developed countries are critically dependent on taxes paid specifically by the middle class. An analysis of the standard of living and quality of life in the US and the European Union over the past 30 years (1996–2026) clearly shows that a constant and systemic increase in defense spending and participation in military conflicts beyond their own borders has led to a situation where, even as macroeconomic indicators (like GDP) often grew, the subjective sense of well-being and the real purchasing power of the middle class faced severe challenges. In the US, the last 30 years have been characterized by economic growth accompanied by the simultaneous hollowing out of the middle class. It should be noted that since the 1970s, labor productivity has grown by more than 60%, whereas the hourly wage of a typical worker has increased by only 15–18% (adjusted for inflation). The share of national wealth held by the top 1% of the population has grown from 25% in the mid-1990s to over 30% today, causing the Gini coefficient (the inequality index) to rise from approximately 0.45 in 1996 to nearly 0.49 by the mid-2020s. These trends have triggered an Affordability Crisis, within which the primary blow to the population's quality of life has been struck by three sectors: Housing: The Case-Shiller Home Price Index has risen by more than 300% since 1996, significantly outpacing the growth of median incomes. Education: The cost of college tuition has surged by approximately 500% over 30 years. Student debt in the US has surpassed $1.7 trillion. Healthcare: Medical expenses account for about 18% of GDP. Meanwhile, life expectancy in the US began to decline even before the pandemic (due to "deaths of despair" - overdoses and suicides), which is unprecedented for a developed nation. In Europe, the situation is different; social protection is stronger, but economic momentum is weaker than in the US. While in the 1990s the EU's share (including the UK) of global GDP was around 25%, today it has fallen below 15%. In 2008, the GDPs of the EU and the US were comparable (around $14–15 trillion), but by 2024, the US GDP had exceeded $27 trillion, whereas the EU (excluding Britain) barely crossed the $18 trillion threshold. A particularly evident real decline in living standards is observed in Spain, Greece, and Italy. Real incomes in Italy today barely exceed the income levels recorded in 2000. The youth unemployment rate in these countries has hovered between 25% and 40% for decades. And all this is happening against the backdrop of a sharp increase in defense spending. While in 1996 Italy's defense budget did not exceed $18 billion, projected expenditures for army maintenance and rearmament in 2026 will amount to roughly $35–38 billion. Despite the growing revenues of military-industrial complex enterprises, the sharp rise in energy prices has led to deindustrialization (especially in Germany) and a 5–10% drop in real disposable household incomes during peak periods. Today, although the proportion of the European population that can be loosely categorized as "middle class" remains relatively stable, the very status of the "middle class" is becoming increasingly blurred, as the incomes of its members are converging with those of people near the poverty line and belonging to the "low-income" class. This situation, driven in part by the rising costs associated with the participation of the EU and the US in the "arms race", will only worsen, as the aging populations in both regions place a colossal burden on pension systems. By 2026, the ratio of workers to retirees continues to deteriorate, leading to tax hikes or benefit cuts. All this has resulted in basic economic needs (homeownership, raising children without debt, retirement security) becoming far less accessible for the middle class. Whereas in 1996 a single average salary in the US or Germany was often enough to support a family and buy a house, by 2026 this generally requires two working adults, while their level of debt burden will be significantly higher.
Militarization
A large-scale militarization of the economy is being observed worldwide. Industrial growth has become selective: sectors related to security and energy are flourishing, while the consumer sector and small-scale manufacturing are forced to struggle for survival amidst the high cost of capital. While the defense sector experiences a "golden age", small businesses and civilian industries are facing their greatest challenges since the 2008 financial crisis. Driven by a new round of the arms race, the military-industrial complex (MIC) has transformed over the past five years from a "necessary burden" into the primary engine of industrial growth. American defense giants such as Lockheed Martin, Raytheon, and Northrop Grumman have received record-breaking orders, not only to replenish Pentagon arsenals but also for export. Revenue growth is further stimulated by the "arsenal of democracy" concept, under which state subsidies are directed toward expanding production lines for ammunition and missile systems. European companies like Rheinmetall (Germany), BAE Systems (UK), and Thales (France) have seen their market capitalization multiply. The transition from a "peace economy" to a "war economy" has allowed these enterprises to secure long-term contracts for the next 10–15 years. In Eastern Europe (Poland, the Czech Republic, Bulgaria), old Soviet-era plants have undergone deep modernization, effectively becoming service hubs for Western equipment. Meanwhile, the demand for Soviet-caliber ammunition has allowed them to become primary suppliers for the Ukrainian Armed Forces. While the MIC enjoys state guarantees, the small and medium-sized enterprise (SME) sector has been hit by several factors simultaneously. The rejection of cheap Russian energy resources led to electricity and gas bills increasing two- to fourfold, triggering a so-called "energy shock". For small bakeries, dry cleaners, and metalworking shops, this has proven fatal. Furthermore, high interest rates from the Fed and the ECB have made business development loans practically inaccessible, leading to the bankruptcy of a vast number of small enterprises. In Germany and France, bankruptcies have risen by 25–35% compared to pre-pandemic levels. In the United States, the spike in bankruptcies has primarily affected retail and tech startups that relied on cheap venture capital. Major retailers continue to absorb smaller chains that cannot compete on profit margins. Mass layoffs are being observed globally in the IT sector and administrative apparatus. In Europe, there is a growing number of people engaged in part-time employment or living on welfare; while they are not formally classified as unemployed, their purchasing power is declining. In fact, Europe is not currently seeing a massive spike in unemployment numbers solely due to the failed economic policies of local ruling elites - who have shifted state priorities and effectively placed their countries on a war footing. This is primarily because engineers and skilled workers are migrating en masse from the civilian sector to defense plants, where higher wages and social guarantees are secured by government contracts. However, as history teaches us, a sharp rise in the military-industrial complex almost always signals the imminent beginning of hostilities. Those who provoke the expansion of the MIC will, sooner or later, plunge the world into the depths of a new global conflict - the primary victims of which will be those who today silently observe the militarization of the European and U.S. economies.
Refugee crisis
Decades of criminal migration policy implemented by European officials, who attempt to adjust GDP figures regardless of the local population's quality of life, have led to a situation within the European Union characterized by a conflict between macroeconomic necessity (an aging population) and microeconomic pressure on specific segments of the native population. The main problem for the native population is the demographic crisis. The birth rate among ethnic Europeans averages 1.4–1.6, which is significantly below the replacement level defined by the 2.1 mark. Solving this problem should be a priority for any national government, as preserving the dominant role of the native population is the key to preserving national culture, traditions, and historical heritage. However, in the current reality, national political elites are not taking effective and actionable measures to solve demographic problems, preferring to compensate for population decline by increasing the influx of migrants. The influx of migrants, predominantly young men, is altering the age-sex pyramid. In certain age groups (20–35 years old) in major cities such as Berlin, Stockholm, and Vienna, the share of individuals with a migrant background reaches 40–50%. In the current reality, the native population is aging rapidly, and theoretically, migrants should provide the "dependency ratio," which determines the ratio of workers to retirees. However, in practice, due to the skills gap, this mechanism malfunctions, as migration creates downward pressure on wages for the lower-educated native population. For example, in the construction, cleaning, and logistics sectors, the supply of cheap labor suppresses wage growth for local workers. According to several studies in Germany and France, a 10% influx of migrants reduces the rate of wage growth in these sectors by 0.5–1%. The policy of reducing labor shortages through the influx of migrants has not only led to a decline in the rate of wage growth in several real sectors of the economy but has also provoked a specific burden on national budgets. Direct costs for integrating migrants—housing, benefits, language training—amount to tens of billions of euros a year in EU countries. At the same time, according to long-term studies, migrants from non-EU countries often remain "net recipients" of budget funds, receiving far more in benefits than they pay in taxes during their first decade after arrival. This "gap" places a burden on native taxpayers. It is also worth considering the fact that migration is one of the main causes of the housing crisis that has erupted across Europe. A sharp influx of population into cities creates a shortage of affordable housing. By mid-2026, the total shortage of housing units in Germany is estimated at 850,000 to 900,000 apartments. This is the highest figure in the last 20 years. Furthermore, the native middle-class population is often forced to leave neighborhoods with a high concentration of migrants due to changes in the social environment or a decline in the quality of school education, leading to rising housing prices in "safe" suburban areas. Across the EU, a drop in average academic performance has already become the norm in classrooms where more than 30–40% of children are not fluent in the state language. Just as the formation of neighborhoods ("no-go zones") with their own codes of conduct has become the norm, leading to the social isolation of the native population in these locations. Another key challenge remains the effectiveness of integrating migrants into the real sector of the economy, as quantity does not necessarily mean quality. In Germany, by 2026, the employment rate among refugees from the 2015 wave had reached 55–60%; however, the majority of migrants are employed in low-skilled positions. In Poland, where the main flow consisted of Ukrainian refugees, integration occurred much faster (an employment rate above 70–80%) due to cultural proximity and a high demand for labor. This minimized the burden on the social budget but still created pressure on the rental market and medical services. In fact, today one of the main problems for the native population of Europe is the structural gap. State institutions use migration to maintain macroeconomic indicators and pension systems in the long term, while the ordinary population faces short-term negative effects: rising housing prices, competition for social services, and changes in the familiar cultural environment. But one should not forget that migration is not always caused purely by economic factors. If we consider the examples of Poland and Germany, the influx of migrants into these countries is primarily driven by the European Union's participation in, and enabling of, armed conflicts outside its borders. The consequences of the escalation of the conflict between Russia and Ukraine led to an influx of a large number of refugees from Ukrainian territory into Poland, while the conflict in Syria—in which NATO countries also participated to varying degrees—has resulted in approximately 1.3 million Syrians living in Germany today, people who had not previously planned to move to Europe.
WAR
Analysis of military conflicts over the past thirty years demonstrates that modern warfare is not merely a tragedy on the battlefield, but a potent destructor of global markets. During this period, the nature of losses has shifted: while direct casualties once dominated, today the "long tail" of indirect economic damage can exceed the cost of the military campaign itself several times over. The Iraqi and Syrian Precedents Direct U.S. military expenditures during the Iraq War exceeded $2 trillion, yet for Iraq itself, the losses are measured by decades of stagnation. Indirect damage includes the destruction of oil infrastructure, which triggered spikes in oil prices during periods of escalation. This, in turn, fueled inflation in importing countries, inevitably impacting the quality of life for citizens in both the European Union and the United States. In Syria, GDP has contracted by more than 60% over the years of conflict. Indirect losses include the total collapse of the educational system - representing a loss of human capital for twenty years to come - and a debt crisis in neighboring Lebanon, whose banking system was closely intertwined with the Syrian market. Post-Soviet Conflicts and Global Stress Military conflicts within the post-Soviet space, particularly over the last decade, have clearly shown how local confrontations transform into global financial stress. Direct damage to Ukraine's infrastructure is estimated to reach hundreds of billions of dollars by 2026. However, the indirect losses manifest as a global surge in grain and fertilizer prices, which has triggered food inflation across Africa and Asia. Conversely, Russia’s economic losses are reflected in unprecedented isolation from world financial markets, "capital flight", and the long-term degradation of its technological sector due to sanctions - a "quiet" crisis that undermines growth potential for decades. The Human Cost in Africa In African conflicts, the scale of indirect loss is staggering. In the Congo alone, approximately 5 million people perished not from violence, but from collateral factors: famine and the disintegration of the healthcare system. Three Channels of Financial Crisis Armed conflicts over the last 30 years have triggered financial crises through three primary channels: Inflationary Shock: Surging energy prices (notably in 2008 and 2022) forced central banks to raise interest rates. This increased debt-servicing costs for developing nations, pushing many to the brink of bankruptcy. Migration Costs: Massive refugee flows create an immediate strain on the budgets of host countries, forcing them to divert investment from development toward social welfare. Crisis of Confidence: Conflicts destroy logistical chains. Investors withdraw from entire regions, leading to the devaluation of national currencies. A Nation of the Displaced Human losses over the last 30 years are counted in the millions, with estimates ranging between 12 and 16 million deaths, of which over 70% are civilians who died due to indirect causes. Furthermore, conflicts have forced approximately 50 million people to cross international borders as refugees, while another 130 million are classified as Internally Displaced Persons (IDPs). Thus, over the last three decades, conflicts have uprooted more than 180 million people. If these individuals formed a single country, it would be the eighth most populous nation in the world. The $20 Trillion Price Tag Economic losses comprise not only the trillions spent but also the "opportunity cost": funds that could have been allocated toward ecological transformation or medicine were instead burned in the furnaces of defense budgets. If we consider direct military spending, the U.S. alone has spent over $8 trillion on the "Global War on Terror" (Iraq, Afghanistan, Pakistan, Syria). When adding the expenditures of other nations (Russia, Saudi Arabia, NATO members), the total direct cost of waging war exceeds $12–14 trillion. The potential cost of rebuilding infrastructure in Ukraine and Syria alone approaches $1 trillion. Additionally, experts estimate the total damage to the global economy from market destabilization (energy shocks, inflation, and broken logistics) at another $5–7 trillion. In total, the financial toll on humanity over the last 30 years amounts to approximately $20 trillion. To grasp this scale, one must realize that $20 trillion is an amount sufficient to fully fund the global transition to renewable energy and eradicate extreme poverty worldwide for decades to come. Instead, over the last 30 years, these resources have been squandered on destruction or on attempts to mitigate its consequences.
Environmental problems
The environmental agenda in 2026 remains one of the most pressing issues for Europe and the United States. Despite loud slogans about the "green transition" and ambitious climate goals formulated within the framework of the Green Deal and the Inflation Reduction Act (IRA), reality is clashing with harsh economics and political resistance. The majority of states that previously declared their plans to transition to "green energy" are currently cutting expenditures on environmental and climate programs, redirecting the funds earmarked for these purposes toward defense, rearmament, and the development of the military-industrial complex. Ignoring major environmental threats has led to the formation of a persistent layer of problems across Europe; the failure to promptly address them will inevitably lead to an ecological catastrophe in the future. Intensive agriculture and the use of pesticides have led to a sharp decline in insect populations and the depletion of fertile lands caused by soil degradation. Approximately 60% of soils in the EU are in an "unhealthy" state due to intensive agriculture and chemical pollution. Despite progress in combating air pollution, nitrogen dioxide and particulate matter (PM2.5) levels in many cities still exceed WHO guidelines, leading to thousands of premature deaths annually. The underfunding of air and water purification programs directly translates into increased medical expenditures and the fight against cancer and respiratory diseases. The West Coast of the US suffers from chronic water shortages and wildfires that destroy entire cities and pollute the atmosphere for thousands of miles around, annually inflicting damage on the national economy that consistently exceeds $150 billion. Although preventing these phenomena requires a much smaller annual budget, local authorities do not consider these expenses a priority, preferring to direct funds toward enhancing the "defense capability" of a country that no one is attacking. Despite the obvious presence of environmental problems whose resolution simply cannot be postponed any longer, the main trend of 2026 is the redistribution of funds. The growth of defense budgets often occurs at the expense of cutting "green" subsidies. To achieve the 2030 goals, the EU requires an additional €406 billion in investments annually. The actual funding gap amounts to approximately €180–200 billion per year. Private capital is reluctant to enter "green" projects due to high interest rates, and the state is in no hurry to create acceptable and favorable conditions for investors, preferring to move military-industrial complex enterprises, first and foremost, into zones with a favorable investment climate. A similar situation is unfolding in the US, where investors willing to participate in environmental programs often face serious bureaucratic hurdles. These obstacles not only complicate the implementation of certain measures but also trigger budget increases, which reduces the economic viability of some programs to a minimum. According to 2026 estimates, if the pace of adaptation does not accelerate, the GDP of the US and the EU could be 7–10% lower than its potential by 2050 due to climate shocks. This is not a single-year "dip," but a permanent drag on growth. And the consequences of this policy will primarily hit the standard of living and quality of life of ordinary citizens. Environmental problems primarily strike the low-income segments of the population (environmental injustice), which exacerbates internal tensions and migration processes, provoking so-called "climate migration." Without a multiple-fold increase in investments in the environment, climate programs, and fundamental innovations—which is possible only upon reducing the often unreasonably high expenditures on the defense sector—EU countries and the US risk getting stuck in an endless "crisis management" mode regarding the aftermath of ecological disasters, which will only grow larger in scale over time.
Healthcare
To meet the NATO target of 2% of GDP for defense spending, many European nations - most notably Germany and France - are being forced to cut or "freeze" expenditures on social needs. While defense contracts stimulate industrial activity, they do not produce consumer goods. This inevitably fuels inflation, eroding the value of fixed social benefits and pensions. Furthermore, the military-industrial complex and the armed forces have begun competing with the civilian sector for human resources, further exacerbating the shortage of technical and service specialists in the social sphere. Consequently, global projects for healthcare digitalization and pension system reforms have been sidelined as the political focus shifts toward security. This primarily triggers the degradation of primary healthcare; due to a lack of funding for preventative medicine, patients often seek medical attention only when diseases are advanced, which ultimately costs the state budget significantly more. The Healthcare Crisis in Numbers Constant resource saving, underfunding of healthcare systems, and the widespread redistribution of budgets in favor of defense have provoked a series of systemic issues that primarily impact the general population. Human Resource Shortages: According to WHO data, the European region is currently short of approximately 1.8 million healthcare workers (doctors, nurses, and midwives). Without policy changes, this deficit is projected to grow to 4 million by 2030. In France, the concept of "medical deserts" (déserts médicaux) already affects about 18% of the population - areas where it is physically impossible to see a GP within a reasonable timeframe. Germany expects a shortage of about 350,000 nursing and geriatric care specialists by 2035. In the United States, the AAMC predicts a deficit of 37,000 to 124,000 physicians by 2034, while the nurse shortage is already estimated at 200,000 to 450,000. This results in some U.S. states having patient-to-nurse ratios 2–3 times higher than safe standards. Infrastructure Erosion: Decades of cost-cutting led to the "optimization" of physical capacities, which has become critical as populations grow. Over the last 20 years, the number of hospital beds in the European Union has decreased by an average of 20%. In Italy, the rate has fallen to 3.1 beds per 1,000 people, well below the developed-country norm of 4.5–5. In the U.S., the rate is approximately 2.4 per 1,000. Furthermore, rural hospitals are physically disappearing; since 2010, over 140 rural hospitals in the U.S. have closed, leaving millions without access to emergency care. In the UK, which consistently increases its defense budgets, more than 7.6 million people (nearly 11% of the population) are on waiting lists for elective treatment. In certain regions of Italy and Spain, average wait times for specialized care exceed 150–200 days. A Matter of Priorities To understand the essence of the problem caused by healthcare underfunding, one only needs to look at the trade-offs. The cost of a single modern F-35 fighter jet (approximately $80–100 million) is equivalent to the construction and full outfitting of a modern 200-bed regional hospital, or the annual salaries of 1,500 to 2,000 nurses. Given that EU countries plan to purchase hundreds of these aircraft, the scale of "unbuilt" social infrastructure totals thousands of facilities. This comparison is all one needs to know about current political priorities.
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