Today in charts: defense spending

It remains staggering to me how little the US discusses defense spending. When you look at the enormous rise since 9/11, you can see one major reason why the budget is now in such trouble. It would seem an obvious place to start when considering how to get the numbers back in order. But relatively little is ever considered.

Although Obama’s plan is to shave $400 billion off over the next decade, this is small beer in the bigger scheme of things, and his cuts to less “discretionary” things (surely a subjective judgement) are proportionally greater. Even after the US leaves Iraq, Afghanistan and Libya, it will spend a higher proportion of GDP on the military than it did a decade ago. 9/11 ushered in permanently high defense spending – even compared to the Cold War.

The obvious reasons for this are 1) that the US likes fighting wars (or feels it needs to fight them because no-one else will), and 2) that both parties shy away from the issue for fear for being painted unpatriotic. But the deeper reason is also the extent to which the economy relies on defense spending for jobs and technology investment. According to this blog by Steve Clemons (who also produced the chart), the US held on to 7 million jobs during the last 11 years as a result of defense expenditure – jobs that would be difficult to generate otherwise.

Defense spending is therefore an under-acknowledged jobs and industrial policy – the sort that politicians, who would normally be against state stimulus, can live with. (As someone said to me the other day: “the US doesn’t have an industrial policy, it has a defense policy”). This chart shows the extent to which the government is over-invested in defense, but also the extent to which the economy is dependent on that money also.

All of which is not really to make an anti-war statement, or to decry how much the US has become a deeply militarised country (which it has), but just to point out how spending and public policy can take on lives of their own. Once you hit upon a way of effectively generating jobs, trade, political consensus, and technology innovation, it’s hard to back away from, even if the consequences are not always appealing.

(Update: here is a chart showing defense spending under different US presidents).