USA and Allies Outspend Military Rivals by Four-to-One: America Carries Heavy Defense Burden for Allies

Carl Conetta. PDA Briefing Memo #55, 18 July 2012.
http://www.comw.org/pda/fulltext/120717-US-world-military-spending.pdf

Efforts to cull savings from the US defense budget for purposes of deficit reduction have been stymied by Pentagon claims that any significant cut might have “devastating” or even catastrophic” effects. However, a review of global defense spending data by the Project on Defense Alternatives shows that America and its allies outspend potential rivals by a margin of four-to-one.

Moreover, according to the PDA review, the United States carries much more than its share of the allied defense burden, as measured by percentage of Gross Domestic Product allocated to defense. Together, the United States and its close allies worldwide spent $1.23 trillion on their armed forces in 2010 – more than 68% of the global total. But had the burden been shared equally among the allies based on GDP, the United States could have reduced its military spending by one-third (33%), including spending for war. This proportion substantially exceeds the Pentagon budget cuts mandated under the sequestration provisions of the Budget Control Act.

Myths vs. Realities of Pentagon Spending

Stephen Miles and William D. Hartung. Center for International Policy Fact Sheet, 17 July 2012.
http://defensealt.org/NB2hfR

Excerpt:

Nearly all of the purported “cuts” to the Pentagon’s budget are actually reductions in the rate of growth, rather than true cuts in funding levels. In reality, even if sequestration is fully enacted as planned under the 2011 Budget Control Act, the Pentagon’s base budget would only return to 2006 levels (adjusted for inflation), which at the time was among the highest levels of spending since World War II.

The Pentagon has asked for $525 billion in funding for fiscal year 2013 — a reduction of only $6 billion from the current year. The Pentagon budget would then resume its upward climb, rising to $567 billion in 2017. As former Assistant Secretary of Defense Lawrence J. Korb has noted, “even when adjusted for inflation, Panetta’s reductions halt the growth in the Pentagon’s budget, but they do not bring the budget down much from its current level.” And while Congress has yet to enact funding for fiscal year 2013, it appears ready to increase the Pentagon’s budget, replacing the Defense Department’s extremely modest reductions with another year of growth.

Current reductions must also be measured against the unprecedented growth in Pentagon spending over the past 13 years. Since 1998, the Pentagon’s base budget has grown by 54% (adjusted for inflation). Moreover, with the country turning the page on a long decade of war in Iraq and Afghanistan, the planned reductions represent a historically small drawdown when compared with those following the end of Korea, Vietnam, and the Cold War.

US and Allies Dominate Group of Top Military Spenders

Project on Defense Alternatives, 29 June 2012.

How much is enough spending for the Pentagon? By various measures, the United States has outspent the next nine, 14, or 21 countries combined. What is perhaps more telling is that most of those other countries are staunch US allies.

* International Institute for Strategic Studies
** Stockholm International Peace Research Institute
*** PPP = Purchasing Power Parity, a measure that facilitates international budget comparisons by adjusting exchange rates to reflect the relative domestic buying power of national currencies.

Notes: The IISS column presents officially reported spending in USD at 2010 exchange rates, with two exceptions: China and Russia. For these, the number is an estimate of actual spending. The second column is SIPRI’s estimate of actual expenditures, also shown in USD at 2010 exchange rates. The PPP column converts estimates of actual expenditures into approximate purchasing power, mostly drawn from SIPRI data. For China and Russia, it also shows an IISS estimate of purchasing power, thus producing a range. Purchasing power calculations improve on estimates that use exchange rates alone. However, PPP ratios are based on comparisons between national economies as a whole, not the defense sectors specifically. This can overstate military purchasing power when a nation’s military sector is much more advanced than its economy overall or when a nation depends heavily on international arms purchases.

Comments: The biggest spenders of concern to the United States are Russia and China, although neither are considered US adversaries today.
• America and its top spending allies outpace these two countries taken together by margins exceeding three-to-one.
• America alone spent more than twice as much as these two countries in 2010, by some measures. By other measures, it outspent them combined by nearly four-to-one.
The review draws on data compiled by the International Institute for Strategic Studies (IISS) in London and the Stockholm International Peace Research Institute (SIPRI), both regarded as world leaders in the field of defense assessment.

Neither IISS nor SIPRI accept Chinese or Russian official defense budget numbers at face value. Their estimates seek to capture unreported military expenditure from other parts of the Chinese and Russian economy. Both also offer alternative estimates that aim to correct for exchange rate distortions when comparing nations at very different levels of economic development – although these corrections may somewhat over state the “purchasing power” of military budgets.

Differences in the IISS and SIPRI methods, and the difference between corrected and uncorrected exchange rate estimates, account for the range given in number of countries whose combined budgets equal that of the United States. The answer ranges from nine to 21 countries — and all but a few of these are US allies.

Sources: International Institute for Strategic Studies, The Military Balance 2012 (London, 2012); Stockholm International Peace Research Institute, SIPRI Yearbook 2011 (Oxford, 2011).

HTML version of this table www.comw.org/pda/120618-Military-Spending-Comparison.html

The Pentagon Jobs Machine Is A Bust

A Project on Defense Alternatives Commentary, 26 June 2012.

After years of touting the necessity of guns over butter, the defense establishment has changed its tune. With the official US unemployment rate stuck at over 8 percent, Pentagon flaks are now boldly declaring that “guns are butter.” The Department of Defense as a social program? It’s a cynical ploy as William Hartung and Stephen Miles point out in this article.

Here are the Pros and Cons on the story:
• A National Association of Manufacturers study released last week says Pentagon cuts will mean substantial jobs loss in the defense sector.
• At the same time, cutting defense spending may be among the least painful ways to trim the Federal deficit. This two minute video by Chris Hellman of the National Priorities Project explains why. His data is from a study by the Political Economy Research Institute at UMass.
• A $1 billion cut from the education sector will result in more than twice as many jobs lost as a $1 billion cut from the defense sector.
• We could cut $50 billion from the defense budget next year, put $25 billion to deficit reduction and put $25 billion into education and have a net increase of more than 20,000 jobs. That’s a win-win fiscal deal.

For more on Pentagon spending and jobs see this background compilation: The Pentagon Budget and Jobs.

Time to get U.S. nukes out of Europe

Stephen M. Walt. Foreign Policy, 18 April 2012.
http://defensealt.org/Ifat2Q

Excerpt:

There’s an overwhelming case for removing these archaic and unnecessary weapons from the European continent. Ideally, we would do this as part of a bilateral deal with Russia, but we ought to do it even if Russia isn’t interested.

Editor’s Comment:

Couldn’t agree more!

The Politics of Fleet Constitution

Galrahn. Information Dissemination, 27 March 2012.
http://defensealt.org/GY5CjA

Excerpt:

The Navy has put 7 cruisers up for early retirement. Keep in mind that all 7 cruisers put up for early retirement in FY13 and FY14 are capable of being modernized for ballistic missile defense…It is fairly obvious to this observer that the Navy put these cruisers on the chopping block precisely because they expected Congress to swoop in and save the 6 cruisers the Navy wants to save, and allow the Navy to dump the amphibious ships and no one will care. Cruisers are shiny toys that represent power projection, and these specific cruisers have a significant future ahead of them if the money was to be found and made available for the US Navy to keep them.