US Aid to Ukraine Helps the American Economy and Boosts US Jobs

Last week US president Joe Biden signed a stopgap funding bill to keep the government open until late January. The continuing resolution—the second passed this fall—has no new money for Ukraine. Though foreign aid is scheduled to be considered at a later date, the current appropriations process has caused some anxiety among US allies. The suspension of US military aid to Ukraine in particular would pose serious risks for Ukraine: in the realities of the full-scale invasion, we measure time not in hours, days, or months but in human lives. However, the risks for major Western democracies are also enormous. 

Since February 24, 2022, Ukraine has enjoyed bipartisan support from the United States, and for the entire time, Russia has been looking for cracks in this support. Russia failed to achieve any downsizing in aid through military and diplomatic means. The Kremlin is now seizing the opportunity of the fractious upcoming election period to refresh another time-tested tactic: information-psychological special operations. 

This tactic can briefly be described as divide and conquer. Unfortunately, it can bear fruit.

Aid or Investment?

US military support for Ukraine was the response of a strong leading nation to Russia’s unprovoked aggression against a neighbor, which threatened the European and global security order. 

This aid has also helped the US economy thrive and has provided jobs for Americans, while undermining Russia’s military readiness. 

Since the start of the large-scale invasion in February 2022, the volume of U.S. military aid to Ukraine over the ensuing one and a half years has exceeded $44 billion. While the figure looks daunting, it is less than 0.5 percent of the U.S. defense budget for 2023. At the same time, the funds provided by the United States and other of Ukraine’s allies have significantly eroded Russia's military potential.

For example, the number of Russian military equipment units destroyed by Ukraine has surpassed 13,000, at an estimated value of $34 billion. Russia has lost more than 315,000 personnel in the war, and the number of wounded and missing fighters exceeds half a million, according to various estimates. Russia's total war expenditures have crossed the threshold of $167 billion.

At the same time, most of the money allocated for military aid to Ukraine stays in the United States, particularly on jobs with American manufacturers. "When we use the money appropriated by Congress, we use it to replenish our own stocks, our own supplies of new equipment that protects America and is made in America," President Biden said in a televised address from the Oval Office.

This has already had a positive impact on the American defense industry. 

Manufacturers of munitions and missiles for Multiple Launch Rocket Systems, highly mobile automated systems that launch surface-to-surface missiles with precision targeting, are currently experiencing the biggest boom. For example, a unit of General Dynamics Corp., General Dynamics Combat Systems, which produces mission-critical technology such as armored vehicles and artillery, increased its revenues by almost 25% compared to the previous year. The company plans to increase production of certain munitions by seven times. 

As another example, the company RTX, a manufacturer of AIM-120 AMRAAM missiles—Advanced Medium-Range Air-to-Air Missiles effective beyond visual range—has received new orders for over $3 billion since February 2022. 

Weapons sales have already increased by 6% this year at Northrop Grumman, which produces missiles for HIMARS and the M270 MLRS.

Protecting NATO from War

By investing in military aid to Ukraine today, much of which funding remains in the United States and underwrites jobs and technological advances in fields related to US national security and readiness, the United States avoids much larger expenses in the future.

Russia does not hide its intentions to continue waging war, including with NATO member countries such as Poland, Lithuania, Estonia, and Latvia. Russia has violated every ceasefire agreement, about twenty, it has signed since annexing Crimea in 2014. 

At the same time, the waffling of the West in providing ongoing, timely aid signals other authoritarian countries that aggressing against their neighbors might not be met with a robust U.S. response.

US opponents of assistance to Ukraine argue that the United States is not obligated to support Ukraine. That's true. However, the United States would be obligated to invoke Article 5 of the NATO Charter should Russia expand its military aspirations with operations elsewhere in Europe. Russia's intentions in this regard are evident. 

Another argument of opponents of continuing military aid is that if the United States stops supporting Ukraine, the war will end. That is a dangerous fallacy. If Putin is not defeated in Ukraine, neighboring NATO countries will fall under threat. In that event, the costs to the United States would be expected to be much higher, and NATO troops, including American soldiers, could be forced to defend European soil.

The US Congress must answer the question: Is it preferable to provide assistance now or to send American soldiers—minimally as peacekeepers, potentially as fighting forces—to Europe later? Which choice would better promote U.S. geopolitical interests and national security? 

In light of the Kremlin’s proclivity to violate treaty terms and ceasefire agreements, the most promising chance for effective negotiations with the Kremlin entails Russia's military defeat. For the West, this is an issue of ideological and civilizational victory. Finding an off-ramp for Putin is no longer relevant. Now it's about saving the West.

The opinions expressed in this article are those solely of the author and do not reflect the views of the Kennan Institute