As governments commit to long-term security strategies stretching to 2035, fiscal pressures are arriving much sooner and markets are already responding. What does sustained defence expenditure mean for sovereign debt, borrowing costs and economic priorities? Who ultimately pays, and over what timeline?In the second episode of the ‘Hard power’ series on defence, Udaibir Das, vice chair at OMFIF, is joined by Sarah Carlson, senior vice president of sovereign risk at Moody’s Ratings and Ron Smith, emeritus professor of applied economics at Birkbeck, University of London. Together, they discuss the historical record on defence build-ups and growth; the fiscal arithmetic facing higher-debt sovereigns and whether political ambitions, fiscal realities and market expectations can ultimately be reconciled.