How Much is Military Spending?

The Wars in Afghanistan and Iraq are costly, especially in terms of lost lives. However, they are probably not as expensive in financial terms as people think.

In 2010 national defense costs about 680 billion dollars, which translates to approximately 4.5% of GDP. The 2 wars are about 1-2% of GDP. During the cold war (1946-1989) defense spending as a share of GDP averaged 7.7%.

Overall, the share of national income that goes to defense has been declining, with the expectation of two minor bumps associated with the Iraq war and now the escalation in Afghanistan.

There are those in Europe who claim that the U.S is engaged in an arms race. However all of the increase in military spending is due to the operations in Afghanistan and Iraq, in fact in terms of procuring weapons excluding Iraq and Afghanistan U.S military spending as a share of GDP has declined.

This is from the Congressional Budget Office.

And this longer series from the White House:

Having undertaken the responsibility of two invasions, the U.S should try to win the wars in Afghanistan and Iraq, both for moral reasons and not to lose military prestige. After that however I hope America stays out of foreign wars for a while and cuts defense spending a few hundred billion, in light of the looming deficit problem.

About Tino Sanandaji 39 Articles

Tino Sanandaji is a 29 year old PhD student in Public Policy at the University of Chicago, and the Chief Economist of the free-market think tank Captus.

Visit: Super Economy

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