Bitcoin and the State (as we know it) can't both survive, especially the US.
With suffient hashpower (of the levels that "Soft War" guy are advocating the Pentagon to acquire), mining empty blocks makes Bitcoin completely useless because transactions can't be put into blocks.
The State has nuclear power plants and ASIC fabs (ask the NSA). This will not be an easy fight and it could go either way.
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Yeah there's something off about him.
Budgets probably aren't relevant in a fight to the death, what really matters are capabilities - energy and ASIC production.