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Edited by: James Desio and Hannah Bowen

Happy Thursday! In today’s newsletter, we examine the US military’s need for a greater quantity of personnel and equipment, the Canadian election results, and poverty rates for US retirees.

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1. America’s Ammunition Shortfall

Topline: Despite having the world’s most advanced military equipment, the US does not have enough military personnel and materials to meet the simultaneous challenges posed by adversaries such as China, Iran, North Korea, Russia, and terror groups. AEI’s Mackenzie Eaglen and Brady Africk warn that the further behind US defense capabilities fall, the more expensive it will be to catch up.

Ammunition Counts: Ukraine currently uses up to 15,000 artillery shells per day in its war against Russia’s invasion—but the United States only produces 40,000 artillery shells each month. The US also falls short on producing crucial munitions like precision-guided missiles and cruise missiles. In fact, in war game simulations, the US would run out of multiple vital weapons in as little as a week in a war against China.

Arms Race: Currently, only 3.5 percent of the Pentagon’s budget is dedicated to investments in missiles and munitions. Increasing the efficiency and scope of the Pentagon’s ammunition purchases and maintaining the defense industry’s demand are steps policymakers can take to help boost US military strength.

“If the United States hopes to retain its position as a global power, it needs a military force formidable enough to stave off any challenger. With Russia threatening security in Europe and China doing so in Asia, it is critical we marshal resources now.” —Mackenzie Eaglen and Brady Africk

2. The Canadian Election and Liberal Victory

Topline: In an era of populist conservative nationalism, Canadians voted in their fourth consecutive Liberal government just last week. This win makes Canada’s Liberal party the most politically successful left-leaning party in the Western World throughout the past decade, AEI’s Colin Dueck writes. Despite former Prime Minister Justin Trudeau’s falling approval ratings at the end of last year and increasing political opposition from the conservative party, Canadian voters chose to elect the former governor of the Bank of Canada and Bank of England, Mark Carney, as prime minister.

Recent Political Volatility: Following President Donald Trump’s “51st state” rhetoric and his oscillating tariff threats, support for Canada’s Liberal party started to rise. Canadian nationalism increased significantly, Justin Trudeau stepped down as party leader, and Mark Carney took over the Liberal party leadership.

Election Results: The conservative Tories won 41.3 percent of the popular vote, but the Liberals pulled through with a narrow—but clear—victory of 43.7 percent of the popular vote. The nature of Canada’s electoral system often skews the results geographically. The Tories gaining 70 percent majorities in rural electoral districts ultimately only wins them one seat at a time. In this election, the Liberal edge in vote distribution supplemented the Liberal edge in popular vote.

3. Poverty Rates for US Retirees 

Topline: According to official statistics, the poverty rate for Americans age 65 and older was 9.7 percent in 2024, and there has been no real progress in fighting elderly poverty in decades. AEI’s Andrew Biggs makes the case that the official statistics get it wrong. The federal government’s official measure, the Current Population Survey, is the most common source of data on retirees’ incomes—but this source fails to consider withdrawals from IRAs, 401(k)s, or other savings as “income.”

An Accounting Disaster: The Current Population Survey reports that in 2023, US seniors received $583 billion in income from retirement accounts, traditional pensions, and annuities. However, the IRS—which takes into account the income from IRAs and 401(k)s—reports $1 trillion in retirement account, pension and annuity income. When considering these alternative statistics, from 1990 to 2018, the true poverty rate for elderly Americans fell from 9.7 percent to 5.7 percent.

A New Retirement Landscape to Consider: Social Security reform is a looming policy challenge for lawmakers, and yet the federal government’s official statistics of retirement income don’t paint the full picture of the US retirement landscape. Retirement account withdrawals generated a 1.8 percentage point reduction in the elderly poverty rate for the year 2012. If that is the case for 2024, over one million seniors would be lifted above the poverty line.

“It is truly shocking that, with so much on the line regarding Social Security reform and the future of household retirement savings, we do not actually know the incomes and poverty rates of seniors in the United States today. We know with near-certainty that the official statistics overestimate poverty and underestimate retiree incomes, but we don’t know what the true rates of poverty and level of incomes are.” —Andrew Biggs

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