It appears the U.S. is attempting to save an economy that, if nothing else changes, will die under the weight of the interest payments required to sustain a debt burden that grows by $1 trillion every 100 days.
The American administration is betting everything on growing its way out of the trap with AI and robots and material sciences and infrastructure boons or boondoggles.
In Europe it appears the plan is to overcome the entropy of a return to 1970's-style Eurosclerosis by way of investing in the hyper-Keynesian business of war.*
Following on February 6's "French Carmaker Renault to Produce Attack Drones In Former Car Factories".
From MIT's Technology Review, January 6, 2026:
Eighty years after total war transformed the continent, European countries are making big bets on new instruments of annihilation.
Last spring, 3,000 British soldiers of the 4th Light Brigade, also known as the Black Rats, descended upon the damp forests of Estonia’s eastern territories. They had rushed in from Yorkshire by air, sea, rail, and road. Once there, the Rats joined 14,000 other troops at the front line, dug in, and waited for the distant rumble of enemy armor.
The deployment was part of a NATO exercise called Hedgehog, intended to test the alliance’s capacity to react to a large Russian incursion. Naturally, it featured some of NATO’s heaviest weaponry: 69-ton battle tanks, Apache attack helicopters, and truck-mounted rocket launchers capable of firing supersonic missiles.
But according to British Army tacticians, it was the 4th Brigade that brought the biggest knife to the fight—and strictly speaking, it wasn’t even a physical weapon. The Rats were backed up by an invisible automated intelligence network, known as a “digital targeting web,” conceived under the name Project ASGARD.
The system had been cobbled together over the course of four months—an astonishing pace for weapons development, which is usually measured in years. Its purpose is to connect everything that looks for targets—“sensors,” in military lingo—and everything that fires on them (“shooters”) to a single, shared wireless electronic brain.
Say a reconnaissance drone spots a tank hiding in a copse. In conventional operations, the soldier operating that drone would pass the intelligence through a centralized command chain of officers, the brains of the mission, who would collectively decide whether to shoot at it.
But a targeting web operates more like an octopus, whose neurons reach every extremity, allowing each of its tentacles to operate autonomously while also working collaboratively toward a central set of goals.
During Hedgehog, the drones over Estonia traced wide orbits. They scanned the ground below with advanced object recognition systems. If one of them spied that hidden tank, it would transmit its image and location directly to nearby shooters—an artillery cannon, for example. Or another tank. Or an armed loitering munition drone sitting on a catapult, ready for launch.
The soldiers responsible for each weapon interfaced with the targeting web by means of Samsung smartphones. Once alerted to the detected target, the drone crew merely had to thumb a dropdown menu on the screen—which lists the available targeting options based on factors such as their pKill, which stands for “probability of kill”—for the drone to whip off into the sky and trace an all but irreversible course to its unsuspecting mark.
Eighty years after total war last transformed the continent, the Hedgehog tests signal a brutal new calculus of European defense. “The Russians are knocking on the door,” says Sven Weizenegger, the head of the German military’s Cyber Innovation Hub. Strategists and policymakers are counting on increasingly automated battlefield gadgetry to keep them from bursting through.
“AI-enabled intelligence, surveillance, and reconnaissance and mass-deployed drones have become decisive on the battlefield,” says Angelica Tikk, head of the Innovation Department at the Estonian Ministry of Defense. For a small state like Estonia, Tikk says, such technologies “allow us to punch above our weight.”
“Mass-deployed,” in this case, is very much the operative term. Ukraine scaled up its drone production for its war against Russia from 2.2 million in 2024 to 4.5 million in 2025. EU defense and space commissioner Andrius Kubilius has estimated that in the event of a wider war with Russia the EU will need three million drones annually just to hold down Lithuania, a country of some 2.9 million people that’s about the size of West Virginia.
Projects like ASGARD would take these figures and multiply them with the other key variable of warfare: speed. British officials claim that the targeting web’s kill chain, from the first detection of a target to strike decision, could take less than a minute. As a result, a press release noted, the system “will make the army 10 times more lethal over the next 10 years.” It is slated to be completed by 2027. Germany’s armed forces plan to deploy their own targeting web, Uranos KI, as early as 2026.
The working theory behind these initiatives is that the right mix of lethal drones—conceived by a new crop of tech firms, sprinted to the front lines with uncommon haste, and guided to their targets by algorithmic networks—will deliver Europe an overwhelming victory in the event of an outright war. Or better yet, it will give the continent such a wide advantage that nobody would think to attack it in the first place, an effect that Eric Slesinger, a Madrid-based venture capitalist focused on defense startups, describes as “brutal, guns-and-steel, feel-it-in-your-gut deterrence.”
But leaning too much on this new mathematics of warfare could be a risky bet. The costs of actually winning a massive drone war are likely to be more than just financial. The human toll of these technologies would extend far behind the front lines, fundamentally transforming how the European Union—from its outset, a project of peace—lives, fights, and dies. And even then, victory would be far from assured.
If anything, Europe could be laying its hand on a perpetual hair trigger that nobody can afford for it to pull.
Build it, then sell it
Twenty companies participated in Project ASGARD. They range from eager startups, flush with VC backing, to defense giants like General Dynamics. Each contender could play an important role in Europe’s future. But no firm among them has more tightly captured the current European military zeitgeist than Helsing, which provided both drones and AI for the project.Founded in 2021 by a theoretical physicist, a former McKinsey partner, and a biologist turned video-game developer, with an early investment of €100 million (then about $115 million) from Spotify CEO Daniel Ek, Helsing has quickly risen to the apex of Europe’s new defense tech ecosystem....
"If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing."
Related, November 1, 2012: "Frequent Bridge Collapses Help Boost China’s GDP"
...Zhao Wenjin, the lead commentator of Lanzhou Daily, commented on the incident, saying, “With each collapse, we need to reflect: why are we chasing GDP?” According to a Jingyang Net report, Wang Yang, Party secretary of Guangdong Province, said at a provincial Party meeting in 2009: “Sometimes the GDP number looks good, but it didn’t really create wealth for society. It was, instead, a waste of society’s wealth....
