Benn Steil

Geo-Graphics

A graphical take on geoeconomic issues, with links to the news and expert commentary.

Can the U.S. Afford Global Military Supremacy?

by Monday, November 8, 2010

America’s share of global military spending is a measure, albeit crude, of its military supremacy. Viewed through this lens, the United States is clearly dominant, accounting for over 40% of the world’s total military spending, and 7 times that of the second largest spender, China. The U.S. share of global military spending has increased since 1990, but this twenty-year trend hides an underlying weakness. Any change in the U.S. share can be attributed to the operation of four factors: (1) changes in U.S. GDP, (2) changes in rest-of-world GDP, (3) changes in U.S. military spending as a percent of GDP, and (4) changes in rest-of-world military spending as a percent of GDP. Real GDP growth is a sustainable source of change, whereas changes in spending as a percent of GDP require painful tradeoffs and are ultimately unsustainable. Over the past twenty years, the increase in the ratio of U.S. military spending to world military spending has been driven primarily by unsustainable forces. The rest-of-world spent less as a percent of GDP (green) in the 1990s, and the United States spent more as a percent of GDP (blue) after 9/11. As the rest-of-world is growing faster than the U.S., the critical GDP-growth factors are increasingly becoming a drag on this ratio. Given worsening budgetary constraints, the United States must find new ways to maintain its relative military power while its spending share decreases – or it must prepare for a decline in its military supremacy. Read more »