Defense Spending Trends

Article excerpt


This editorial begins a series that will argue for an increase in defense spending. First, however, we want our readers to understand current spending levels in the context of historical trends.

Annual military spending passed two important milestones in fiscal 2006. First, nominal defense spending exceeded half a trillion dollars for the first time in history. Second, when measured in constant dollars (a statistical technique that adjusts for inflation and relates every year's spending to the purchasing power of a base year), defense spending also exceeded military outlays in every single year during the post-World War II era, including the spending peaks during the Korean and Vietnam wars and the arms buildup undertaken by President Reagan, which resulted in the de facto bankruptcy and consequential implosion of the Soviet Union.

Official data will not be available until the administration releases its fiscal 2008 budget tomorrow, but back-of-the-envelope calculations indicate that defense spending hit an estimated $520 billion in 2006. Five years earlier, the spending totaled $305 billion. Measured in constant dollars calibrated to the base year of 2000, the defense budget totaled about $425 billion in 2006. Defense outlays in 2006 represented an inflation-adjusted increase of 43 percent since 2001. Thus, while the economy grew at an average annual rate of 2.75 percent between fiscal years 2001 and 2006, military spending over the same period increased at an average annual rate of 7. …