Panetta’s Second-Rate Understanding of Defense Spending

Leon Panetta, the outgoing U.S. Secretary of Defense, made an interesting claim during his exit interview. Automatic defense budget cuts will take place on March 1 unless Congress reworks the Pentagon’s allotment. Panetta urged Congress to act, saying that if the ten year, $500 billion cuts take effect, the U.S will become a “second-rate power” (his words).

$500 billion is a lot of money, so you may be inclined to agree. But anyone who has spent more than ten seconds looking at world defense spending would know the absurdity of Panetta’s claim.

Take a look at this Wikipedia article on defense spending. SIPRI keeps good data on defense expenditures around the world[1], and the Wiki gives a nice comparative visualization. Last year, the world’s militaries consumed about $1.7 trillion.

The U.S.’s share? $711 billion.

That’s approximately 41% of the entire world’s spending.

It’s more than Chinese (8.2%), Russian (4.1%), British (3.6), and French (3.6%) spending…combined.

It’s more than every non-permanent member of the United Nations Security Council…combined.

So, the U.S. isn’t exactly at a crossroads when it comes to military spending.

Moreover, $500 billion over the course of ten years comes out to $50 billion a year. That would still give the United States $661 billion in defense spending, still 39% of the new world’s spending and more than 4.5 times as large as China’s receipts. Thus, even if you think of China as having a second-rate military, ours would still be substantially better.

I understand that $50 billion will result in meaningful cuts to our military. But the United States needs to reduce spending somehow. Among all the alternatives, this one seems relatively painless.

[1] SIPRI has to estimate expenditures from a lot of countries, notably China and Russia. While their figures may be underestimates, SIPRI would have to have made massive mistakes for the effects to be relevant to the argument.

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