HOW SHOULD THE UNITED STATES DETERMINE DEFENSE SPENDING?
U.S. GDP is more than six times greater today than it was in 1950 in inflation-adjusted terms. Arguing that defense spending is historically low as a percentage of GDP, and therefore must be increased, is a bit like a landlord arguing that because a tenant received a much-deserved pay raise, their rent should be increased automatically. If the United States devoted 37 percent of its GDP to defense today, as it did during World War II, then defense spending in today’s dollars would be around $5 trillion. This level of spending is clearly unnecessary, but it highlights the methodological shortcomings of historical comparisons. If the American economy doubles in size, should American taxpayers be required to double the Pentagon’s budget automatically? Should our grandchildren spend three times more on defense than we do today just because they are three times richer? The answer is a resounding “no.” Intelligent defense planning relies on requirements, tradeoffs, and a thorough evaluation
