There's a difference between the government's interests and the interests of individual politicians. Politicians don't have access to public funds, in the same way they have access to the money in their bank accounts, so public funds must be transferred into the private sector. The easiest way to do this is through military contractors like Raytheon and Lockheed Martin. There's a rampant and widespread conflict of interest where politicians give those companies lucrative contracts and the companies have various ways of giving them kickbacks. All the politicians have to do then is to sell the public on spending more on the military.

As long as the companies are paid, it doesn't matter whether the money is coming from domestic taxpayers or from other countries. In the case of Israel, there are also various lobbying groups focused on that issue who can also reward politicians from doing what they want. So yes the US government may be giving the weapons away for free, but the individual politicians are getting paid, so what do they care?

Before the 90's, it was easy to do that because they could just point to the Soviet Union as a threat (even though we massively outspent them even then). During the 90's, there was a period of relative peace, which was a crisis for the shareholders, and there was some expectation that the bloated military budget could be cut, since the primary threat is was supposedly there to counter disappeared. But with 9/11, they found a new threat to justify it. Once those wars wound down, then it became China, Russia, and Hamas. If if weren't them, it would be something else, and if they couldn't find something else they'd simply create it. There must always be some existential threat to justify the spending, or else the war profiteers stand to lose a lot of money.

Yeah a bit. It looks a bit like an act. Being based in Europe doesn't exactly mean much in terms of understanding world politics.