How Much Defense Spending?

Lt. Col. Peter W. Huggins writes an op-ed for the Washington Times:

The versatility and robustness of our armed forces will be crucial to our country’s future foreign-policy success in a world where the only certainty is uncertainty. Zero-sum arguments that advocate shifting money to one service at the expense of another overlook the other choice – increasing the defense budget. While the nature of the current conflict suggests that boosting defense spending to a share in line with past conflicts, such as World War II, Korea and Vietnam, is not necessary, an increase to the levels seen at the end of the Cold War – our nation’s most recent “long war” – is warranted.

So how much extra DoD spending is he talking about? In 2005, national defense spending was $589.3 billion as compared to $354.9 billion in 1988 – representing a 66% nominal increase. OK, we have to inflation-adjust these figures but the general price index rose by less than 50%. The price index for defense goods did rise by 64% over this period, which would mean that in real terms, we are still spending more on national defense than we did in 1988.

Is Lt. Col. Higgins suggesting that we set defense spending to be almost 7% of GDP, which is where we were in 1988? In 2005, nominal GDP was $12,455.8 billion so defense spending represented 4.73% of GDP. If it had been 7% of GDP, then we’d be talking about a defense budget of $872 billion. Just imagine how high Federal taxes would have to be if we were to fund this kind of defense spending and move towards fiscal responsibility! The scary part is that this may be what this White House has in mind for defense spending. But this White House is likely not going to formally recognize the need for higher taxes – leaving that responsibility for the next President. So much for this part of the State of the Union speech:

In the coming weeks, I will submit a budget that eliminates the Federal deficit within the next 5 years. I ask you to make the same commitment. Together, we can restrain the spending appetite of the Federal Government, and balance the Federal budget.