Also: The Bond Market and Walkability

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Edited by Carter Hutchinson and Hannah Bowen

Happy Thursday! In today’s newsletter, we examine the dangerously low stock of American munitions, the possibility of international bond market crises, and policy solutions to walkability for children and families.

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1. America’s Stockpile Shortage ([link removed] )

5.14_Eaglen ([link removed] )

Topline: Operation Epic Fury has shown the dangerous shortage of America’s defensive- and offensive-weapon stockpiles. While the US military retains a plentiful supply of legacy munitions, these underperform against the high-tech weaponry of our adversaries, and the country has alarmingly bare stocks of exquisite, high-probability-of-kill weapons. In Iran, the US military recently fired more than 1,000 Tomahawk cruise missiles in a few weeks. Without accelerating production and procurement, it would take roughly 10 years to replenish this key armament, writes ([link removed] ) AEI’s Mackenzie Eaglen.

The Conflict in Iran: The large expenditures of offensive and defensive weapons during Operation Epic Fury expose how unprepared America is for a long war with China. American stocks of the defensive weapons that protect our troops and territory are running low or almost empty. The US military fired 150 Terminal High Altitude Area Defense interceptors during 2025’s 12-day war with Iran, despite having produced only around three dozen of the weapons per year since 2021. With current production rates, it would take three and a half years to replace what we fired in the two-week conflict.

Solutions for Success: A production surge to rebuild the industrial base and accelerate manufacturing is part of the solution, Eaglen explains, but it is necessary to rethink what we build and how we build it. She suggests that the US military can repurpose older weapons, making modest modifications to legacy weapons systems. The US government can also offer more multiyear contracts, inviting companies to invest in capital expenditures and encouraging startups to work with the military. Furthermore, the US military can learn from other nations, like Ukraine, that focus on speed over perfect quality.

“A wartime production surge to rebuild the industrial base and boost manufacturing capacity is part of the answer. But it’s just as important to rethink what America builds and how we build it—pursuing production with intention, putting more key assets underground, and modifying what we already possess.”

—Mackenzie Eaglen ([link removed] )

More on the American Arsenal
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2. International Bond Market Crises ([link removed] )

5.14_Lachman ([link removed] )

Topline: In 2030, the US government's budget deficit is set to exceed 6 percent of GDP, or more than $2 trillion a year, which will cause the debt held by the public to surpass the historical high of 106 percent of GDP. The US is not alone on this unsustainable public finance path. AEI’s Desmond Lachman asserts ([link removed] ) that the public finance problems facing France, Italy, the United Kingdom, and Japan merit expeditious economic corrective measures.

Europe’s Conundrum: Three of Europe’s four largest economies, France, Italy, and the United Kingdom, are drowning in debt. All three of these countries’ ratios of public debt to GDP are over 100 percent, with France and the United Kingdom running budget deficits of around 5 percent of GDP. Europe is facing price shocks from the Iran war that could send the economy into a recession. Simultaneously, the continent is confronting 25 percent US import tariffs on its automobile sector.

Challenges in Japan: Lachman contends that Japan’s economy looks well on the way to a bond market crisis, with its ratio of public debt to GDP around 230 percent. Additionally, Japan is one of the countries most vulnerable to oil price shocks from the Iran war, which could cause the government to respond to the increase in oil prices with additional energy subsidies. The Japanese government’s 10-year bond yield has approximately tripled from 0.75 percent to 2.5 percent, reaching its highest rate in 20 years. If corrective measures are not taken to improve the public finance trajectories of the US, France, Italy, the United Kingdom, and Japan, a bond market crisis in any of these five countries could lead to contagion that affects the international economy.

“The urgency of the need for such action is underlined by the fact that there appears to be government bond market problems brewing in each of these three major economies and that could have contagion effects should a bond market crisis occur in any of these economies.”

—Desmond Lachman ([link removed] )

More on the Bond Market
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3. Why Don’t Kids Walk to School Anymore? ([link removed] )

5.14_Carney ([link removed] )

Topline: In 1969, 40 percent of American high schoolers walked to school, but in 2016, that number had dropped to just 10 percent. AEI’s Timothy P. Carney highlights ([link removed] ) that American children walk far less than they used to. This is due partially to a decline in freedom to roam given by their parents but also to their neighborhood’s walkability.

Family Experience: Most American 11-year-olds may not leave their property without supervision, while most 17-year-olds may not leave their neighborhood. Whether these children are walking less because of their parents’ fear, their environment’s walkability, or some combination of the two, parents are driving more, and overly structured schedules leave kids less well-adjusted.

A Walkable Path Forward: The preferred measure of walkability, produced by the Environmental Protection Agency, prioritizes the adult life experience, not the reality for families and children. The two most important factors for children’s safety when walking are the volume and speed of traffic. Carney suggests that these factors should be most heavily weighted in a walkability index, along with the presence of sidewalks and trails and proximity to schools and parks. He also suggests that the walkability index should be housed under the Department of Transportation and that future initiatives for federal spending on roads and bike lanes must consider walkability and child safety.

“We desperately need a world where kids can be let loose in a neighborhood and told to come home for dinner. That requires more walkable places, which in turn requires a fuller and smarter discussion about walkability.”

—Timothy P. Carney ([link removed] )

More on Neighborhood Walkability
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Dive into More Data

5.14_Housing Center ([link removed] )

Property Tax Rates by State ([link removed] )

More on Single-Family Housing
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5.14_Cooper ([link removed] )

Tuition Recovery Funds ([link removed] )

More on Higher Education
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Special thanks to Henry Long, Rosalie Blacklock, and Drew Kirkpatrick.

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