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comparing superpowers
$600 Billion Ain't What It Used to Be

The fact that the United States spends more money on its military than any other country in the world (more than a third of the world total) is not so informative a factoid as it seems. It does not, for example, mean that it will continue to have a major military edge over China in the near future. A recent Bloomberg View article explains the problem with the blithe assumption that American defense spending ensures future U.S. military superiority:

[T]here are several problems with this perennial talking point. The first is that these dollar numbers aren’t adjusted for the cost of anything that any of these militaries buy. The lowest-paid U.S. soldiers earn about $18,000 a year. In comparison, in 2009, an equivalent Chinese soldier was paid about a ninth as much. In other words, in 2009, you could hire about nine Chinese soldiers for the cost of one U.S. soldier.

Even that figure doesn’t account for health care and veterans’ benefits. These are much higher in the U.S. than in China, though precise figures are hard to obtain. This is due to higher U.S. prices for health care, to higher prices in general, and because the U.S. is more generous than China in terms of what it pays its soldiers. Salaries and benefits, combined, account for a significant percentage of military expenditure.

The metrics that used to be relied on to determine the size of an economy, and the size of defense spending, are blunt instruments; they don’t factor in differences in expenses across regions. More and more now, metrics like Purchasing Power Parity (PPP) are being used to give a more accurate sense of how much various wealthy nations can actually afford.

Using PPP, the Chinese economy looks much more competitive with the U.S. economy, and Chinese defense spending does not lag so far behind America’s. After raising concerns about the sheer wastefulness of some U.S. defense budget items (like F-35 development), Bloomberg View goes on to explain another reason why the relative size of U.S. defense spending does not reflect a relative advantage:

[The] U.S. has different goals than its rivals — goals that are much, much more expensive. The U.S. has commitments to defend allies in Europe, Asia and the Middle East. We have to keep aircraft carriers sailing the seas and maintain overseas bases just to meet our existing commitments. That dramatically reduces the amount of money we would actually be able to spend on a major war. China and Russia, of course, have no such global commitments. It’s expensive being a hegemon.

So all of the pundits who constantly remind us that the U.S. reigns militarily supreme overstate their case. The U.S. still has the world’s most powerful military, but the margin is not nearly as huge as we hear.

If America is unwilling or unable to commit to a real overhaul of the DoD, or to allocating more resources for promoting stability and protecting the homeland in an increasingly hostile world, the data tell us that we will lose our considerable edge faster than we think.

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  • FriendlyGoat

    Our biggest edge has been nuclear superiority. But the deterrent effect of that has diminished, because just about everyone now understands that America is not going to launch a nuclear first-strike in response to anything short of incoming warheads. We have our nukes for mutually-assured destruction, but they are retaliatory weapons which mostly serve to dissuade others from launching nukes at us.

    When we are forced to think about conventional military actions, we do not have that much arsenal or manufacturing capacity.

    • Andrew Allison

      “not going to launch a nuclear first-strike in response to anything short of incoming warheads”? That would be a retaliatory response, not a first strike. Might I suggest that having learned nothing from Vietnam, et seq., the U.S is ill-equipped to deal with what, until recently, was unconventional, warfare.

      • B-Sabre

        My observation has been that we get the war we don’t plan on – quite possibly an example of the fact that we tend to be open about the wars we DO prepare for, thus our opponents know not to fight there. Either that, or it confirms my belief that the perversity of the universe tends toward a maximum.
        Based on current planning on operations in Asia, Africa and now (and again) Europe, I project our next war will be in Antarctica.

        • Dan

          + 1 Emperor Penguin

          • B-Sabre

            PBIED – Penguin-borne Improvised Explosive Device.

  • Andrew Allison

    At the risk of being repetitious, allocating more resources to a grossly top-heavy military having weapons it doesn’t want or need stuffed down its throat by an utterly irresponsible Congress is the last thing we need. DoD needs majorl reform, including radical overhead reduction and re-establishing the right to decide what weapons it needs and can afford. We can’t afford either guns or butter at the current budget levels, let alone increasing them. The response to the threat levels around the world must be to cut fat, not increase the DoD budget.

  • Andrew Leighton

    Wow. First it was this:

    Now, TAI is referencing Bloomberg View. Am I missing something new here folks??

    Until very recently I considered TAI to be a legitimate source of news commentary. I have had this assumption severely challenged by whatever (seemingly slipshod) editorial process it’s currently employing.

    But, yes, you’re right, as a veteran I agree we should be paying our soldiers $2,000 a year to be abused by communist party cronies and then thrown out into the cold once they’re no longer useful.

    • B-Sabre

      “But, yes, you’re right, as a veteran I agree we should be paying our soldiers $2,000 a year to be abused by communist party cronies and then thrown out into the cold once they’re no longer useful.”
      Wow. Where did you get that from? I didn’t read anything close to that in either article. I didn’t read a single line talking about cutting military pay or veterans’ benefits.
      All I read was what I had long believed – that un-examined comparisons on defense budgets on dollar value alone are meaningless. Ironically, I was playing with the idea of measuring relative defense spending in terms of “grunts” ie how many basic infantrymen per year can a nation’s defense budget purchase. the articles only confirm what I’ve said for a long time – China pays a lot less for their bang compared to what we do.

  • PKCasimir

    The effectiveness of a military is not measured by the amount of money spent on it, but by the effectiveness of the forces and weapons systems that result from the expenditure. Bloomberg doesn’t know the difference between an M-16 and an F-16 and can’t be taken seriously on any matters pertaining to the military.

    • Dan

      + M-80?

  • S.C. Schwarz

    Since the Vietnam war liberals have believed that a key problem in world affairs, if not the key problem, is American belligerence. Now, at last, they have a president that agrees with them. A weaker US military is a feature, not a bug. Indeed, under Obama’s planned budgets our military spending is planned to drop to around 2.5% of GDP, a level not seen since before WW2. (To provide some context, during the Cold War, military spending was routinely above 10% of GDP.) Obama’s goal, and the left’s goal in general, is that there will never be another Iraq. Future presidents will find, despite what they desire, another Iraq is beyond our capabilities.

    Our enemies around the world will rejoice.

  • lukelea

    We need to beef up our ability, working in concert with our allies, to impose sanctions on those states that fail to abide by international norms. Iran is a good test case of what this strategy can do if pursued with diligence. It is both cheaper and more effective for the West to leverage its combined economic and financial power, including control of the international banking system and the internet, to achieve its chief foreign policy goals.

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