William Voegli in the Wall Street Journal:
Military spending is a minor factor in the overall growth of government. It was 23.2% of federal spending and 5.2% of gross domestic product in 1981. Those percentages peaked in 1987 at 28.1% and 6.1%, respectively. Defense spending fell steadily thereafter, and was just over 16% of the federal budget and 3% of GDP from 1999 through 2001. Since September 11, defense spending has climbed to 20% of the federal budget and 4% of GDP. Despite the wars in Iraq and Afghanistan, both figures are lower than they were at any point during Jimmy Carter’s presidency.
One important thing to note, the wars in Afghanistan and Iraq are NOT part of the regular budget, so those figures aren’t accurate. The wars in Afghanistan and Iraq are being placed on a credit card, and our children will have to have increased taxes to pay for them.
Dan, are you claiming that Treasury is issuing special war bonds that separate spending on Afghanistan and Iraq from the 80% of the federal budget that isn’t defense?
No, what he is saying is that the wars in Afghanistan and Iraq are not being paid for out of the regular budget (or, at least, not completely). That’s why we have those occasional emergency spending bills. Those aren’t going into the budget figures you are citing.
John M, I think it is impossible (for me) to discern without hours of googling, whether Voegli’s figures include the Afghanistan and Iraq wars or not. He seems to be implying that he is including all federal spending, but Dan and John C may be correct.
I think the overall point of his article is a good one, however. The point is that new government programs always seem to grow exponentially. All you have to do is look at how much Medicare was projected to cost in the 1960s and what it actually costs now. Medicare is at least 10 times the originally estimated cost (even adjusted for inflation).
It is also true that on a historical basis, when compared to GDP, which is the most accurate economic comparison point, defense spending has been much higher than now. In other words, even with massively expensive wars in Afghanistan and Iraq, defense spending as a percentage of the total economy is actually relatively modest. By relatively I mean compared to other times in U.S. history. Carter spent more on defense in the late 1970s (as a total percentage of the total economy) than Bush is spending now.
Interestingly, the president who really lowered defense spending substantially was Clinton. People with long memories may recall the “peace dividend” of 1993-1994, where defense spending was slashed as a percentage of the total economy.
Dan and John C. are correct. For 2008, for example, the president’s budget requests 481 billion for normal Dept. of Defense funding, 70 billion for non-DoD War on terror expenses (Homeland security and other departments), and 145 billion for expenses dealing with the Iraq and Afghanistan wars. The 145 billion is for one-time, or non-recurring, or emergency funding, and thus is placed in a supplemental budget request and not accounted for in the main budget. In previous years, some Katrina and tsunami relief funds were also included in these supplementals. So the budget is underreporting the increase in defense spending by around 20 per cent.
Another way to look at this spending is that it represent 65 per cent of all discretionary spending in the budget (non-discretionary spending is entitlements and interest on the debt). The biggest problem the budget faces in the future is the skyrocketing increase in the percentage that medicare will take up.
Clinton took a lot of grief over that from GOP hawks. I suppose the Carter reference is possible given the financial demands of the Cold War strategic nuclear arsenal. But I would like to know more on the Iraq expense figures. There has been so little accountability in spending on this war that it’s hard to say what is being spent over there. For one thing, you’ve got this elaborate shell game the administration has been playing by using private contractors. No one is really sure what those guys have been doing with the money they’ve been getting, or even how much money they’ve been getting.
As for the broader history on spending, I don’t think you’re going to turn back the clock on FDR and LBJ. What’s done is done. Back in the 70s some sociologist stated that Americans tend to be conservative in ideology, but liberal in practice. That is, they like to talk accountability, and will shrink from any attempts to “socialize health care.” But they are deeply wedded to the entitlements they are getting. This is true of both Republicans and Democrats, they all very deeply believe that government should be providing benefits and there are strong constituencies for most entitlements out there. The grief Bush is getting over S-CHIP is case-in-point. Even Republicans think he’s politically foolhardy for attacking that.
There is simply not going to be any “grand reform” that I’m sure the Cato Institute folks would like to see. The best conservatives can do is opportunistically check spending wherever they can in small ways. The “welfare state” just isn’t going away I’m afraid.
Increased spending on veterans care and for debt service are also war costs not accounted for above.
I thought the article was very interesting and was surprised by the following:
“Spending by all levels of government in America amounted to 31.6% of GDP in 1981, and 31.8% in 2006.”
Sorry about the multiple posts – I had to rewrite them about 15 times and split them up to see what would pass through the filter. Still don’t know what the offending word was.
The biggest cost for the military is personnel. From 1989 to 1999, end strength dropped steadily from 2.1 million to 1.4 million, where it has remained. This is where most of the decrease in military spending came from.
While I can’t confirm the figures some might find this graph interesting:
http://www.nationalreview.com/nrof_buzzcharts/buzzcharts200601230854.asp
It’s a graph of wars as a ratio to GDP. Of course the Iraq war isn’t over so who knows how much it’ll cost.
I’ll also repeat my mantra that had Bush and Rumsfeld gone in with more troops and planning that it would have been much more expensive initially but much cheaper in the long term.
Anyway, from what I’ve read in a few places most estimate that the total cost of Iraq and Afghanistan will be $806 billion. Of course that’s a messy figure since we’ll maintain a presence probably indefinitely. (One wouldn’t, for example, account for our continuing presence in Korea as part of the cost of the Korean war – but then how does one count?)
To put this in perspective the US GDP is about 13 trillion. Let’s say that Iraq/Afghanistan end up costing around a trillion. That’s less than 10% of a year’s GDP. Although of course it’s amortized over many years. Then there’s the issue of separating out normal military expenditures versus war.
To add, just because Iraq isn’t as expensive as many wars doesn’t mean it’s well spent money.
Here’s another link that includes defense spending as percentage of GDP over time:
http://www.truthandpolitics.org/military-relative-size.php
It basically backs up my point that military spending is relatively small against total GDP and smaller now than when Carter was in office. However, Dan and Eric and Bill are correct that Iraq and Afghanistan are outside of the Defense department budget. I don’t know how this plays out in total defense spending once you include those wars as a percentage of GDP.
Geoff, using my numbers above, a rough estimate is that including the extra war costs would represent an increase as a percentage of GDP of about 1% (from 4% to 5%)
Notice in the graph that you link to that the really big spending (as per cent of GDP) happened during large mobilizations such as Korea (more than 3.5 million) and WWII (more than 13 million).
Yeah, there was an uptick for Vietnam also. I think depending on the point you want to make you can cook this data a lot of different ways.
One way is that we are spending relatively little on defense compared to the historical average of GDP.
Another way is that during the Clinton years we spent a lot less and in theory we should be able to lower defense spending again.
Another way is that the relatively low spending during the Clinton years hurt our military.
I really don’t want to get into that argument because it is really quite boring and tiresome and extremely partisan. I think all three arguments have some merit.
But, to go back to what I think was John M’s point, to claim as Pete Stark and others do that our military spending is somehow unprecedented and historically outrageous is simply false. I think you could plausibly argue that with an Al Gore presidency right now military spending might be slightly lower than it is now. But you can’t argue that it would somehow be half of what it is now.
My personal opinion is that we aren’t spending enough and should be doing more. Further I think that our spending on veteran health care as well as soldier salaries are nearly unconscionable.
I agree that the cuts under Clinton may have been slightly overdone. Remember however, that Rumsfeld was trying to streamline and modernize as well, and it turned out that his faith in technology and efforts to squeeze out efficiencies led to some very bad assumptions. (See Clark’s mantra, above).
Bush has had more than five years to start building the military back up, but it is only this year that the DoD has proposed a modest increase in troop strength for the army (40,000) and the Marines (20,000). Instead of doing the hard political work of trying to increase the number of active duty soldiers, Bush has preferred to let the sacrifice fall disproportionately on the backs of the reservists.
If Bush had to mobilize the National Guard to fight a war, he shouldn’t have fought it. It’s that simple. I agree with Clark on the health care and soldier salaries.
What people don’t realize is that Bush is not setting us up for a temporary presence. Those facilities in the Green Zone and elsewhere are permanent. Bush is currently talking about us being in Iraq for the next 13 years. He’s planning a South Korea style deployment where the US gets some permanent bases in Iraq from which to maintain a serious military presence in the region.
I guess if you believe this “war on terror” rhetoric, it makes sense. But my feeling has always been that the war on terror is mostly a figment of the administration’s mind. No more a “war” than the “war on drugs” is.
On salaries – yes, it does make it difficult to meet recruiting targets and retain the best-trained soldiers when they can quit after a few years and sign up with Blackwater or Dyncorp or some other mercenary outfit and get paid 3 or 4 times as much. These contractors, far from saving the taxpayer money, are just one of many examples of fraud, waste, and abuse that plague defense spending.
Here’s an interesting view from an economist who thinks military spending is excessive:
http://www.aeaweb.org/annual_mtg_papers/2006/0108_0800_0302.pdf
It doesn’t matter what percentage of the GDP our defense bill is today. This kind of rationale is used to show that, hey, our wars today are proportionally not that expensive. Poppycock!
It still does not get to the most important point about our warfare today, and that is that THIS GENERATION is not paying for its wars. Don’t you guys see? While our defense budget is proportionally smaller, seeing that we’re vastly richer than ever before, we’re not paying for our own wars right now. THIS is when we SHOULD be paying for our own wars, because we are vastly richer than ever before. If ever there was a time when America should be paying for its own wars, instead of putting them on credit cards for future generations to pay, it is NOW! But we don’t.
If war supporters truly were serious about their wars, they would do all in their power to convince their fellow Americans to sacrifice by increasing taxes to pay for their wars, or convince their fellow Americans to sacrifice certain other programs to pay for their wars. It’s not like we don’t have the money. We’re FREAKING RICH!
But war supporters know that if they truly ask for a sacrifice, they might not actually get their wars funded. So instead of being honest, they sneak by by telling Americans, “hey don’t worry, you go on living your life, go shopping, be a consumer, meanwhile, we’ll pay for this war with our American Express card.”
The irony is that today’s war supporters also support lowering taxes, removing other programs, etc. But yet, the war they support will end up forcing their children to RAISE TAXES in order to pay for the bloated bill sure to end up at their door.
The taxman cometh. Just not to this generation.
The thought I am bringing up with that WSJ quote doesn’t have much to do with Iraq or even with the United States in particular. (Others are welcome to focus their comments on whatever interests them the most.) The thought is that the mantra that we need to beat swords into plowshares is out of date, and a bit out of touch. The swords have already been beaten. Plowshares are overwhelmingly what we spend our taxes on and borrow money from the future for already. Failure to recognize this leads to idiosyncratic obsessions like singling out a minor war as an exceptional cause of deficit spending, or inane complaints that the U.S. will build schools for Iraqi children but not for American children as if we don’t spend half a trillion public dollars on eduction already, or terror that China and Iran are preparing to fight a war. It has little to do with particular choices any one nation is making; it’s how the world overall is shaping itself these days.
Steve Sailer wrote a good item about this phenomenon last year:
Sailer also pointed out a book written by John Mueller, the Woody Hayes Chair of National Security Studies at Ohio State, titled The Remnants of War:
Come on John, how are we supposed to have a second coming if we stop shooting each other?
Are you saying the human condition is getting steadily better and likely to continue to do so?
The End-of-the-World folks will be mighty disappointed.
For the record, Voegli’s numbers appear to be consistent with actual spending in FY2006. That includes all funds spent on Iraq and Afghanistan, including those requested in supplemental appropriations.
Not that this makes the use of supplemental appropriations a good idea…
John,
It doesn’t matter how much a nation spends on warfare, though. What matters is that it participates in actual warfare. We are NOT beating our swords into plowshares. Rather, proportionally, we’re making our swords cost the equivalent of a pencil. It’s so easy to get your hands on a weapon and kill someone these days.