How Much Did Military Spending Increase From 1980 To 1990

How Much Did Military Spending Increase From 1980 To 1990 – Reagan’s military buildup versus Pentagon spending in the Trump-Biden era Speaking Security Newsletter | Note no. 166 | August 2, 2022

Like Ronald Reagan, Joe Biden seems to believe that increased military spending is the answer to all issues, foreign (defeat/destroy a rival power) and domestic (an economic buffer against declining social welfare).

How Much Did Military Spending Increase From 1980 To 1990

Simply put, outmaneuvering rival powers militarily promises security as a result. Biden described his $813 billion military budget request — now at $850 billion, after congressional additions — as “among the largest investments in our national security in history” as if security were a commodity that could be bought with Pentagon appropriations.

Military Spending, Technical Progress, And Economic Growth: A Critical Overview On Mainstream Defense Economics

In reality, increasing military spending may worsen the problem it purports to solve. Far from ‘buying more security’, it can escalate tensions, thereby increasing risk, as Reagan demonstrated in the 1980s. Here is historian Michael Brenes: (the following from his excellent book on the politics of military spending in the Cold War,

Reagan’s defense [spending] increased the simmering tensions between the United States and the Soviet Union, triggering a “second Cold War” and erasing the détente efforts begun by Kennedy in 1963. With “peace through strength,” the administration reignited the arms race, even while rejecting the premise behind mutual assured destruction. (p. 208)

That Biden appears to be following this pattern on China should have prompted progressives in Congress to pull the fire alarm already.

Military spending increased by an average of $23 billion (FY$23) per year under Reagan. Such was the pace during the Trump-Biden era. However, it rises to an average annual increase of $28 billion if you include either (a) part of this year’s additional funding for military aid to Ukraine, or (b) the Pentagon’s fiscal year 2023 budget, which is $850 billion – the House of Representatives voted to approve this amount in mid-July, and the Senate Appropriations Committee approved the same number last week.

Chart: China Steps Up Military Spending

Military expenditure, it is not even close. So far, annual military spending in the Trump-Biden era has averaged $220 billion more than under Reagan.

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Did you find this note useful? Please consider becoming a supporter of SPRI. Unlike establishment think tanks, we rely solely on small donations. In last week’s post on the future of military technology, I rebuked those calling for cuts in US defense spending. I argued that it is politically bad form to reduce military readiness at a time when totalitarian superpowers are attacking and massacring their neighbors. I also argued that because military technology is changing so rapidly, we need to be prepared for anything, which requires putting dollars into a number of different technology baskets.

That message did not sit well with everyone. Judd Legum, who wrote the blog post I criticized in passing, tweeted the following:

Judd Legum @JuddLegum . @ claims that anyone who criticizes the size of Biden’s $815 billion defense budget wants to “cut America’s military readiness” There is no real explanation why America needs $815 billion to be ready as opposed to $715 billion. Or $615 billion Just established as fact 19:39 ∙ March 31, 2022 446 likes 116 retweets

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Judd Legum @JuddLegum @ This is why the massive US military budget is something that is never substantively discussed. Anyone who criticizes is only attacked as weak. Little or no effort is made to consider the opportunity costs of this spending. 19:41 ∙ March 31, 2022 273 likes 43 retweets

I reiterate my belief that, politically speaking, this is a particularly bad time to be calling for cuts to the defense budget. It’s one thing for leftists with no real power to call for defunding the military – after all, seeking to reduce US power is their whole point. But for mainstream progressives, calling for defunding the military seems like a bad look at the exact moment when great power conflict has re-emerged. If the purpose of the US Armed Forces is not to help protect the world from people like Vladimir Putin, then what is? (To say nothing of the fact that the military is the last guard against any potential future Trumpist coup!) And with Biden calling for increased defense spending, it’s clear that progressive outrage will be utterly futile anyway. Why would progressives waste their breath on a failed effort that makes them look bad?

But okay. I am not a populist; I think that policies should be defended on their merits. People who call for cuts to the defense budget should not be called out or vilified as weak or unpatriotic. Legum’s questions about the appropriate size of the military budget and opportunity costs are perfectly reasonable, so it’s good to discuss those issues. I’m not a military expert, but I’ll try to outline how I think about defense spending.

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Economists have a standard way of thinking about military spending, which you’ll learn in most 101 classes. It’s called the “anti-butter weapon,” and it basically just says that there’s a trade-off between using society’s productive power for military goods versus consumer goods:

Should The U.s. Increase Or Decrease Defense Spending?

This trade-off is certainly real. During WW2 we went “guns” in a big way – GDP went up but consumer spending went down.

Progressives often seem to think in terms of this anti-butter weapon model. I’ve been seeing arguments like this all my life:

It’s especially galling to see Congress eagerly embrace increased defense spending at a time when Republicans and Joe Manchin have successfully used inflation as an excuse to end the child tax credit, send millions of children back into poverty, and destroy Biden’s ambitious climate change agenda. If we didn’t have money for poor children and preventing environmental disaster, then how do we have money for fancy new weapons?

It annoys me too. I am incredibly frustrated that CTC and Build Back Better have been cancelled. It is especially embarrassing that inflation was used as an excuse, because the Build Back Better bill would not have contributed significantly to inflation. But I don’t think defense spending is to blame here; we didn’t choose guns over butter, we simply chose “no butter”.

The President’s 2017 Defense Budget

One way to see this is to look at how much less of our economy we spend on defense than before:

In the Korean War, which was not nearly as big as World War II, we spent over 13% of our total GDP on the military. In Vietnam, it was 8-9%. Reagan’s famous Cold War defense buildup was 6-7%.

In comparison, we now spend less than 4% of GDP on the military. Biden’s request of $813 billion would actually be a pittance

From the Trump years — less than 3.5% of our >$23 trillion GDP. Defense budget critics like Judd Legum only look at headline numbers; instead, they should look at the share of GDP, because it represents the part of our resources that we divert to other purposes.

Military Spending, External Dependence, And Economic Growth In Seven Asian Nations: A Cross National Time Series Analysis

Greater share of our GDP during the halcyon days of the decade after World War II—in fact, for just a few years during the late 1990s, we turned

Compare that to how much our government spends in total. Federal government spending as a share of GDP has generally risen over the decade, even as military spending has fallen:

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So the portion of our economy that the federal government spends on non-military things – i.e. “butter” – must be on the rise. Let’s take a look at what we spent money on in 2019 (before Covid spending took off):

Note that defense here represents a fairly modest share — about 15% of the total. Critics of defense spending like to point to pie charts showing that defense spending represents a huge percentage of government spending. But those pie charts only include

A Record Defense Budget Begins The Next Phase Of Japan’s Military ‘normalization’

Spending, which is a bit of a meaningless term here – it just means that we’ve decided to label most of our health and social care spending as “compulsory”. (Which in a way suggests that we value spending on health and social care very highly!)

Then inflation has to be taken into account. Currently, consumer price inflation is around 7.9%. Biden’s request of $813 billion represents a 7.9% increase over the $753 billion we spent in fiscal year 2021. In other words, Biden

All of this in itself does not prove that $813 billion is the amount we should be spending on defense. But it seriously undermines the argument that we are depriving our people of paying for a large army.

Another point to consider is the common claim that much of our military spending is wasted. In his post, Legum cites the infamous F-35 Lightning II, which is way over budget, costs an enormous amount to operate, and has ongoing performance and malfunction issues.

Military Budget Of The United States

This is a big problem. Not only does the money spent on the F-35 represent wasted resources that could have been used to buy food for starving children, but it points to serious undetected problems in our military’s actual combat capabilities—perhaps not to the same extent as Russia, whose vaunted military is grinding a much smaller and poorer opponent, but still a concern. I think you’d be hard-pressed to find anyone who is happy with the way the F-35 program has gone.

But the next question is, how do we prevent such debacles from happening? It seems that simply cutting the defense budget will not work, because

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