Misapprehensions about Military Spending

The passing of each year’s defense budget is often accompanied by screams of outrage from both sides of the political aisle, and this year was no exception. Even though the proposed budget by President Barack Obama and Defense Secretary Robert Gates increased defense spending by more than $15 billion, Sen. James Inhofe (R-OK) blamed Obama for “disarming America. Never before has a president so ravaged the military in a time of war.”1On the other side of the spectrum, Representative Barney Frank (D-Mass) remarked, “If we do not get military spending under control, we will not be able to respond to important domestic needs.”2 Only in Washington can the military budget be both too small and too large.

Unfortunately, as with many economic issues, the heated nature of the debate has led to a substantial amount of misleading information. Although in basic dollar terms, 2010’s $664-billion military budget will be the largest in American history,3 it is not exceptionally large either in terms of the proportion of the government’s budget consumed or as a percentage of GDP. Even with the added costs of two simultaneous wars and the continuation of the Global War on Terror, overall military spending constitutes both a smaller portion of the US budget4 and a smaller portion of GDP5 than it did at the beginning of the 1990s. Looking at the defense budget for 1986, which is 6.3 percent of GDP, Obama’s desired 4.5 percent of GDP seems rather small. Why the confusion? While military spending has been increasing almost every year for decades, most people forget that the United States’ economy has continued to grow during the same period of time. The pace of growth offsets the increase in spending. In fact, a growing economy makes increases in spending possible.

When searching for room or reason to reduce military spending, a lot is made of the comparisons between the US’s defense budget and the military spending of many other countries around the world. In quantitative terms, the United States spends considerably more on its military than any other country in the world. In fact, based on expenditures in the 2007 fiscal year, the United States alone constitutes 44.3 percent of all global military spending.6 The second-largest spender in the world, China, has a budget that is only 7.3 percent of the total sum of global military spending.7 But again, these numbers are misleading. While the US spends on 4.5 percent of its GDP on defense, China actually spends about the same as the US (when adjusted for PPP): 4.3 percent of GDP.8 Many countries actually spend much more. Israel, thanks to defense issues arising from the conflict with Palestine, spends 7.3 percent of its budget on defense.9 Saudi Arabia, who nobody usually accuses of having militaristic aspirations, spends a whopping 10 percent of its GDP on military purposes. The overwhelming difference in the share of global spending spent has less to do with inherent American militarism and more to do with America’s wealth. America’s GDP is much larger than the rest of the world’s, which allows it to spend much more on the military. China, Israel and Saudia Arbia, on the other hand, are able to purchase much more on less dollars, which makes estimations of their military budgets seem much smaller than they actually are.

Even though neither side of the budgeting argument wants to admit it, defense spending as a percentage of GDP in the US actually peaked in 1953, and has been steadily falling since.9 Even though the US Government made significant sacrifices at the end of the Cold War in order to maintain an extremely high level of weapons capacity, these were offset by a continuously strengthening economy. In the end, each process fuels the other: a growing economy allows for a quantitatively larger amount of military spending, while a proportionally smaller amount of military spending will free up more resources to help the economy grow.

There is no reason that this trend shouldn’t, or won’t, continue. The most current spike in spending is similar to increases in spending that occurred during other Republican administrations, which was later offset by further cuts. Ronald Reagan oversaw a military spending increase of about 1.5 percent of GDP during his first five years in office, which is similar to the increase under the exiting Bush administration. If history is any guide, the most recent increase will undoubtedly disappear as priorities shift in the coming years.


Works Cited
1 Corley, Matt “Inhofe: Gates’ Defense Budget ‘Disarms America’ And ‘Cuts Funding For Our Troops In The Field’” Think Progress. Apr 7th, 2009.http://thinkprogress.org/2009/04/07/inhofe-defense-budget/

2 Bauman, Nick. “Barney Frank to Obama: Cut Military Spending” Mother Jones. Feb. 24, 2009. http://www.motherjones.com/politics/2009/02/barney-frank-obama-cut-military-spending

3 Kaplan, Fred “ The New Pentagon Budget – So New?” Slate Magazine. Feb. 26, 2009.http://www.slate.com/id/2212323/

4 U.S. Defense Spending - % to Outlays.” Wikipedia.http://en.wikipedia.org/wiki/File:U.S._Defense_Spending_-_%25_to_Outlays.png

5 “Budget of the United States Government: Historical Tables Fiscal Year 2010” Table 15.5 — Total Government Expenditures by Major Category of Expenditure as Percentages of GDP: 1948–2008. GPO Access. http://www.gpoaccess.gov/usbudget/fy10/sheets/hist15z5.xls

6 “Worldwide Military Spending” Military Budget.http://www.militarybudget.info/WorldwideSpending.html

7 ibid.

8 “China” CIA World Factbook. May 27, 2009.https://www.cia.gov/library/publications/the-world-factbook/geos/CH.html

9 “Country Comparison: Military Expenditures” CIA World Factbook.https://www.cia.gov/library/publications/the-world-factbook/rankorder/2034rank.html