Follow us on social

Washington DC pentagon

Spending 5% of GDP on military now would be absolutely nuts

The system cannot accommodate such growth, and even more, it’s not necessary to defend the country — unless Washington wants WWIII

Military Industrial Complex

As a brand new Congress and administration settles in, the groundwork is being laid for a historic increase in military spending that could lead to catastrophic implications for the federal budget.

Senator Roger Wicker (R-MS), the new head of the Senate Armed Services Committee, is calling for a $120 billion hike over the next two years, and other key Republicans are calling for an increase of up to $200 billion. This follows a rise of some $160 billion over the four years of the Biden Administration.

But the accounting of annual dollar figures amid the technicalities of the budget reconciliation process today is perhaps less important than the conceptual and practical sea change in the long term approach to military budgeting being planned. Sen. Wicker is advocating setting a new floor for military spending at 5% of the national economy – a scheme apparently endorsed by President Donald Trump at Davos yesterday when he called for “all NATO nations” (presumably including the United States) to spend at least 5% of GDP on defense.

The implications of spending at least 5% of the entire national economy on the military each year are striking. The first is the sheer dollar figures involved. In 2024, a 5% floor would have led to approximately $1.45 trillion in military spending as opposed to the actual level of $886 billion — a difference of over $550 billion or some 60%.

That level of spending won’t happen overnight. The scale of the increase implied by a 5% floor is such that it can’t be accommodated in one or even two to three years. The additional funds are so great that the entire U.S. military-industrial complex would need to be scaled up to absorb them. But the long-run budgetary implications of such an increase are extremely concerning.

In recent work for the Quincy Institute, Steve Kosiak, a former senior White House defense budget official, projects that by 2034 a 5% of GDP floor on military spending would lead to an almost 90% increase in real (inflation adjusted) spending as compared to the current path for Pentagon spending.

A sustained expansion in military spending of this size would have a tremendous impact on the ability of the government to pursue other national priorities. This is especially true since the Trump Administration also appears committed to a major tax cut (far larger than any new revenues brought in by potential tariffs).

As Kosiak’s work documents, the combination of a massive boost in Pentagon spending and tax breaks would require either major cuts in central entitlement programs like social security or health care, or a long-term explosion in the Federal debt to levels two to three times the highest levels ever previously recorded. While it’s become fashionable to claim that “deficits don’t matter,” expanding the Federal debt to such unprecedented levels carries significant risks to economic growth.

Besides the implications for spending and deficits, a commitment to spend at least 5% of national economic production on the military would change the essential nature of military budgeting. Instead of setting the budget by assessing actual concrete needs for national defense — a process that already leads to a significant degree of waste and abuse— a spending floor would require spending to mechanically increase as the size of the economy grows, regardless of documented military needs.

The effect would be like a “military tax” on the U.S. economy, requiring a nickel of each additional dollar of production to go to the Pentagon.

The policy would also have significant effects globally, as it would tend to hard-wire an arms race dynamic into the world economy. With the U.S. and close allies increasing military spending each year as their economies grew, U.S. rivals would also feel pressure to spend more in order to keep up. Global military expenditures, already at the highest levels ever recorded, would likely spiral upward. This in turn would feed the U.S. justification for continuing to increase military spending.

While rivals that are significantly poorer than we are, such as Russia, Iran, or North Korea, would certainly feel stress to their economy in trying to keep up with our spending, a wealthier manufacturing power like China has a great deal of ability to boost military spending in response to a U.S. buildup. Estimates of Chinese military spending vary, but are generally at around 2% of GDP, leaving substantial room for growth.

At various times, when the economy was much smaller, the U.S. has certainly spent more than 5% of GDP on the military. But today, this would represent a much higher absolute level of military expenditure. More importantly, it is not necessary to actually defend the American public or secure vital national interests.

Sen. Wicker’s defense spending plan claims that the U.S. confronts “the most dangerous threat environment since WW2” due to facing an “axis of aggressors” that includes China, Russia, Iran, and North Korea. It claims that America needs to budget for fighting at least two active and protracted wars simultaneously, one to defeat China and another to defeat a second aggressor in another part of the world, while maintaining additional military forces in reserve to intimidate other potential aggressors.

Further, it insists that during such a conflict we must assume that America could not rely on effective military assistance from its alliance network.

Rather than assuming that it is necessary to prepare for this terrifying and extreme scenario of an isolated America fighting a two-front global war against multiple nuclear powers, we should ask whether it can be averted by less risky and expensive means than almost doubling our military budget over the next decade.

The decision to prepare for a “nuclear WW3” scenario would require major economic sacrifices for the entire American population. Unfortunately, it appears that many in Washington wish to take us in this direction.


Top photo credit: US Capitol (Shutterstock/ Andrea Izzotti) and F-16 Fighting Falcon flies over the Pentagon in 2001 (Air Force photo/public domain)
Military Industrial Complex
American Special Operations
Top image credit: (shutterstock/FabrikaSimf)

American cult: Why our special ops need a reset

Military Industrial Complex

This article is the latest installment in our Quincy Institute/Responsible Statecraft project series highlighting the writing and reporting of U.S. military veterans. Click here for more information.

America’s post-9/11 conflicts have left indelible imprints on our society and our military. In some cases, these changes were so gradual that few noticed the change, except as snapshots in time.

keep readingShow less
Recep Tayyip Erdogan Benjamin Netanyahu
Top photo credit: President of Turkey Recep Tayyip Erdogan (Shutterstock/ Mustafa Kirazli) and Israeli prime minister Benjamin Netanyahu (Salty View/Shutterstock)
Is Turkey's big break with Israel for real?

Why Israel is now turning its sights on Turkey

Middle East

As the distribution of power shifts in the region, with Iran losing relative power and Israel and Turkey emerging on top, an intensified rivalry between Tel Aviv and Ankara is not a question of if, but how. It is not a question of whether they choose the rivalry, but how they choose to react to it: through confrontation or peaceful management.

As I describe in Treacherous Alliance, a similar situation emerged after the end of the Cold War: The collapse of the Soviet Union dramatically changed the global distribution of power, and the defeat of Saddam's Iraq in the Persian Gulf War reshuffled the regional geopolitical deck. A nascent bipolar regional structure took shape with Iran and Israel emerging as the two main powers with no effective buffer between them (since Iraq had been defeated). The Israelis acted on this first, inverting the strategy that had guided them for the previous decades: The Doctrine of the Periphery. According to this doctrine, Israel would build alliances with the non-Arab states in its periphery (Iran, Turkey, and Ethiopia) to balance the Arab powers in its vicinity (Iraq, Syria, and Egypt, respectively).

keep readingShow less
Havana, Cuba
Top Image Credit: Havana, Cuba, 2019. (CLWphoto/Shutterstock)

Trump lifted sanctions on Syria. Now do Cuba.

North America

President Trump’s new National Security Presidential Memorandum (NSPM) on Cuba, announced on June 30, reaffirms the policy of sanctions and hostility he articulated at the start of his first term in office. In fact, the new NSPM is almost identical to the old one.

The policy’s stated purpose is to “improve human rights, encourage the rule of law, foster free markets and free enterprise, and promote democracy” by restricting financial flows to the Cuban government. It reaffirms Trump’s support for the 1996 Cuban Liberty and Democratic Solidarity Act, which explicitly requires regime change — that Cuba become a multiparty democracy with a free market economy (among other conditions) before the U.S. embargo will be lifted.

keep readingShow less

LATEST

QIOSK

Newsletter

Subscribe now to our weekly round-up and don't miss a beat with your favorite RS contributors and reporters, as well as staff analysis, opinion, and news promoting a positive, non-partisan vision of U.S. foreign policy.