U.S Military Defence Spending: It’s Not What You Think

The National Interest, 2018 Peter Robertson and Jingdong Yuan

Recent calls for an increase in military spending and renewed U.S. military dominance reflect a growing alarm over defense readiness. At the center of the debate is a declining defense budget share at a time when global events are said to be destroying the post-Cold War order. Currently, the United States spends barely three percent of its gross domestic product (GDP) on defense, nearly half the rate of the Reagan era. While some have argued that that concerns are exaggerated, others have responded that the plan falls short of what is needed to restore the defense budget share to recent levels.

Against this background, a newly released global database from the Stockholm International Peace Research Institute (SIPRI) suggests that historical budget shares are not an appropriate reference points for determining todays defense budget.

The database records defense spending shares for 172 countries since the 1950s. First, it clearly shows that the recent decline in the defense budget share is part of a longer historical trend. Overall there has been a remarkable three-fold decline in the United States’s relative defense budget since 1960. While the current U.S. level of around three percent of GDP is well below the six percent attained in the Reagan era, the during that period of time the spending rate was likewise well below the nine percent of GDP attained in Kennedy/Johnson era. Thus, although as President Donald Trump says, the defense share is “on track to its lowest level ever,” this is true of every decade since the 1960s.

Second, the historical data also show that the decline in American spending is part of a global trend covering Western Europe, Russia and Eastern Europe and, to an extent, also Asia and the Middle East. The overall pattern of decline is highly pervasive across regions and across countries within these regions. Thus, whereas the world spent six percent of GDP on defense in 1960, it spends just over two percent today.

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