NATO Squabble Provides Context to US Defense Spending Numbers

***Disclaimer: I know this post is going to be too long for half the people that respond. There will be numerous replies that completely ignore what is actually in this post and it will be obvious they didn't read it. They will instead lean on tired old straw man arguments that don't even address any of the points I'm about to make. The best I can tell you is, it would behoove you to actually read this. My purpose here is to inform. The purpose here is not to contend that the US military budget is exactly right, nor to debate the merits of particular US military operations. I'm merely putting the numbers into context.***

This whole NATO defense spending rigamarole has presented an opportune time for me to explain something that's long been a pet peeve of mine. Take notice that all of these discussions about NATO defense spending refer to what each country is spending as a percentage of their GDP. In 2006, NATO countries agreed to spend at least 2% of their GDP on defense, with the obvious implication being that in order to provide for their collective defense, 2% of GDP should be the minimum level member countries should spend keeping their military modernized and at a solid state of readiness. Now, the US spends between 3 and 4% of our GDP on defense, depending on the year. The current number is around 3.5%. As you can see by the chart linked above, many NATO countries are below 2%, with some down around 1% or even lower, only half of what they've pledged to spend. Anyway, that's not really the point of the thread, it just gives a good background to have this discussion.

Now, there's a very practical reason for looking at this metric as a percentage of GDP, because all of these countries have different size economies. It would not be fair or even logical to expect nations with smaller economies to spend as much, dollar-for-dollar, as the US does on defense. This is a common means of comparing any economic indicators between countries, where dollar-for-dollar comparisons just don't make sense. If you've been following this topic, in all the coverage the last few days, you haven't heard anyone go "Hey, this GDP metric is stupid, we should be comparing dollar-for-dollar and European countries should spend as much as the US does" because everyone knows that just makes no sense given the vast differences in size of economies between the countries in question.

However, there is one discussion where this context is ignored: debate about whether the US spends too much on defense never takes this route. This is where you hear the common retort that "The US spends more than the next [8, 10, 12, insert number that sounds good today] countries combined on the military." Since the desired effect of that point is to make it sound like the US spends an abnormal amount on its military, of course this is based on a dollar-for-dollar comparison, which makes no sense, as noted above.

So what if we do check on the more practical comparison like is being used in the NATO debate? How much more does the US spend than the next country or group of countries using the obviously more sensible metric of percentage of GDP? Well, none, because we're not even the top spender in the world, or even in the top 5:


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Now, this isn't to say the US doesn't spend a lot on its military. This year, we're projected to spend almost $800 BILLION. That's a lot of money no matter how you spin it. However, the idea that it's astronomically high in the context of the size of the US economy or the US federal budget just doesn't hold water. The US economy is a little over $19 TRILLION a year. The US federal budget is over $4 trillion a year.. If you've taken some courses in higher math, you can see that military spending accounts for less than 20% of our budget. Some people think we spend half our budget or more on the military, thanks to misleading charts like this that float around social media:



However, these charts intentionally mislead people by only including discretionary spending, of which the DoD budget does make up about half. However, discretionary spending is not the entire federal budget. As a percentage of the entire US federal budget, defense accounts for between 15 and 20% of our spending, depending on the year (that's in the last link). In all fairness, most of the people sharing these charts have no idea they've been tricked.

But 15 or 20% is still huge right? We probably don't spend that much on social programs and if we would just cut military spending we could get rid of the budget deficit and pay down the debt, right? Well, no. Actually, social programs are the biggest chunk of the US federal budget and largely responsible for our increasing debt. Sure, if you completely stopped spending on the military, you'd cut the deficit by a good chunk, but even if we cut military spending to zero we'd still be running a budget deficit. The budget deficit is bigger than our entire defense budget. And nobody thinks a zero military budget is a good idea.

Circling back to the start though, it's worth noting that NATO agreed spending 2% of your GDP is the minimum we should be spending. So when people try to make it sound like we're spending way more than reasonable on our military, remember this context. We're actually not even spending twice what we're required to spend by our NATO obligations. Right now, we're about 75% over what they consider the bare minimum. And their bare minimum is based on the smallest and least capable countries in the NATO alliance. Also, some historical context may help here. A few decades ago, we were spending 8 or 9% of our GDP on defense, so we've significantly cut military spending historically and increased domestic spending. When you consider all these factors, our military spending doesn't look so crazy. Even if we cut it to 2%, you'd still need significant cuts in domestic spending to balance the US federal budget. This was true even before the tax cuts, as I'm sure someone will try to blame that.

Anyway, happy bashing.

a reply to: face23785

So after reading your OP, which is great by the way. What point are you trying to make? I have not watched the news in a bit so is there some backlash against NATO and our membership? I feel that I missed something.

a reply to: Allaroundyou

Pretty much, Trump called out NATO for not carrying their weight as far as defense spending for NATO while America has done all the heavy lifting for decades.

He then called out Germany for buying so much of their oil from Russia when the whole purpose of NATO is to defend Europe against Russia.

They all grumbled because he hurt their feelings then they caved in to his demands.

...and of course our leftists screamed and cried as per their script.

originally posted by: Allaroundyou
a reply to: face23785

So after reading your OP, which is great by the way. What point are you trying to make? I have not watched the news in a bit so is there some backlash against NATO and our membership? I feel that I missed something.

My point wasn't directly related to the NATO news, I just used it to highlight how it makes more sense to look at a military budget as a percentage of GDP or a percentage of federal budget.

My point was basically just that when you look at the outright US military spending, it's a huge number, but given some context it's not so crazy.

watchitburn pretty much summed up the NATO news. NATO member countries agreed to spend at least 2% of their GDP over a decade ago, and as of right now only 5 of them are actually meeting that, and most of them aren't projected to meet it for another 10 years. They're mainly in NATO as a defense against Russia, but they're not keeping their own militaries robust enough to do that and basically just relying on our military might to deter Russia. Several US presidents have asked them to step it up, so it's not just Trump giving them a hard time about it. Recently he's floated the idea of maybe closing some of our bases in Europe if the rest of NATO doesn't start pulling their weight.

a reply to: face23785

Now this is going to sounds a little messed up but if we stopped bolstering other countries and forced them to adhere to our demands would we save money or just spend the same? I mean world domination is the end game.

originally posted by: Allaroundyou
a reply to: face23785

Now this is going to sounds a little messed up but if we stopped bolstering other countries and forced them to adhere to our demands would we save money or just spend the same? I mean world domination is the end game.

If world domination was the endgame, it would've been wise to do it after WW2 when we were the only ones that had the atomic bomb. World domination in a nuclear world is a pipe dream.

a reply to: face23785

Excellent thread.

I loved seeing that misleading pie graph because I used that actual graph (along with a few others) for a lecture I gave on taxes and the federal budget last year.

Here is a link to the source I originally got those graphs from: www.nationalpriorities.org...

originally posted by: TycoonBarnaby
a reply to: face23785

Excellent thread.

I loved seeing that misleading pie graph because I used that actual graph (along with a few others) for a lecture I gave on taxes and the federal budget last year.

Here is a link to the source I originally got those graphs from: www.nationalpriorities.org...

Great link. Explains the difference between mandatory and discretionary spending, which I didn't really get.

a reply to: TycoonBarnaby

much better explanation

a reply to: TycoonBarnaby

Good on ya Ned Kelly. Explained a lot. Thank you.


Kind regards,

Bally

a reply to: TycoonBarnaby

Thanks for the clarification on spending, I learned something today.

originally posted by: watchitburn
a reply to: Allaroundyou

Pretty much, Trump called out NATO for not carrying their weight as far as defense spending for NATO while America has done all the heavy lifting for decades.

He then called out Germany for buying so much of their oil from Russia when the whole purpose of NATO is to defend Europe against Russia.

They all grumbled because he hurt their feelings then they caved in to his demands.
...and of course our leftists screamed and cried as per their script.

Nah they complained because Trump's numbers were wayy off, pretty much everything he said was a lie.

He said 60-70% of gas comes from Russia when it's 40-50%, 10% of their overall energy needs come from Russia, plus it's none of Trump's business and it's a method used to store gas long term and buy from many suppliers which is critical to security of Europe.

He's also wrong in his claims on NATO spending - no country is in arrears, he's used the wrong figures (claiming US spends 1% more and Germany 0.4% less than the NATO records).

Since 9/11 the vast majority of US and overall NATO spending has gone into US defence and the US-led wars in Iraq, Afghanistan, Syria, Libya etc..rather than Europe.

No NATO member or Head of State has endorsed the 2% spending recommendation. It's only a recommendation, not a legally binding limit, plus the recommendation of meeting the 2% target only comes into effect in seven years.

a reply to: TycoonBarnaby

Interesting link, I noticed spending on welfare is somewhat negligible, makes me wonder why people get so bent out of shape when only a very small percentage of the budget .

Oh Trump, if we add the costs for the refugee situation your "U"SA caused, then you will have to pay back something, then we are about these silly 2% in Germany. It´s not 2024 anyway, and as bastion wrote before, it´s not a not a legally binding limit, only a recommendation.

And the "U"SA should maybe try to lower their horrendous costs for their military and spend some money for the needs of it´s people. Not only some rich people.

Would make the world a more peaceful place, by the way.

It´s funny how everybody tells us we need the NATO because of the "aggressions" of Russia. Just look what Russia spends for it´s military and then look what the NATO spends.

And somebody really thinks we need to spend more?
Even if the "U"SA leaves, the NATO spends way more than Russia, per year.

So, why should anyone pay more, is there a really logical reason?

originally posted by: DerBeobachter

So, why should anyone pay more, is there a really logical reason?

Well said, and all true. It seems to be based on trade rather than defense with Trump claiming the US-Europe trade deficit was $58Bn/40% greater than it is.

In April the US relaxed weapons export controls to boost US jobs and exports. There's been a major push to boost US arms sales in recent months. US arms sales to Europe/NATO members have boomed by 20%, totalling $7.2Bn; the rise has been attributed to tensions with Russia.

a reply to: DerBeobachter

I am shocked you would take a moment to bash the US. See my surprised face...

Trump has been saying Russia is not the boogyman, and Germany, and France, and parts of the UK, and members of the DNC have been screaming at him that Russia is manipulating the world and getting ready for WW3.

So which is it?

Why the 2% I don't know because Nato member states agreed to it, silly I know actually doing what you agreed to do.

But hey be happy there is a growing move for the US to leave Nato and pull our troops out of most of Europe, so you should be happy, when we take our toys and billions that we spend in Europe and go home.

a reply to: Irishhaf

America needs its bases in Europe to continue its bloodshed in the Middle East, perhaps when Iran becomes the last name on the list to be liberated you can pull out and create new bases in the Far East for the next victims

NATO has worked very well for the USA

a reply to: Whereismypassword

Yes yes I know... America is responsible for every ounce of blood shed in the world since the beginning of recorded history...

Europe never colonized, or eradicated people and species, never waged unjust wars, they are as pure as new fallen snow.

The rampant hypocrisy from some in Europe is truly getting tiresome.

Yea we can do better, yea we have screwed things up... but compared to the colonial powers of Europe we are still babes in the woods.

a reply to: Irishhaf

YEAH! Please pack up and leave! Tomorrow? Can't you leave today?
And don't forget to take your "billions" with you.

Because all those billions of dollars and thousands of soldiers lives were spent on fighting the war on terror. Which did not work out at all.

Syria? Yes, there were missiles. How much did those help?
Afghanistan? Yes, you are leaving. A failed state you leave behind.
Irak? Another near-failed state.

Your troops were for nothing. Your efforts were wasted.

Can someone pick up the details of this graphic to show how many soldiers are coming from which country?

a reply to: Irishhaf

THAT was hundreds of years ago or in a much minor scale. Your comparison is wrong.