A telling graphic from the International Institute for Strategic Studies’s newly released report on global military spending (click here for the original).

The International Institute for Strategic Studies (IISS) has released its annual series of reports on international defense spending, The Military Balance 2012. The full text is subscriber-only, but a summary press release, detailed table of contents, and a very useful overview of one of the more interesting volumes, “Comparative Defence Statistics,” are free online. The content of the comparative volume is important; it gives a view of the gigantic girth of the American defense budget.

First, however, to better appreciate what these figures reveal about the huge size of the US defense budget, a short discussion is needed about the caveats that some articulate to adjust the optics of the spending comparisons.

Some point out that the IISS numbers for the Chinese and Russian defense budgets do not include all their defense related spending. That is correct. For example, for 2010 the official Chinese defense budget is shown as the equivalent of $78.7 billion in US dollars, but if foreign arms purchases, R&D and other defense related spending is included, the amount is re-estimated at $111.1 billion. IISS also introduces a concept called “purchasing power parity” (PPP) to attempt to equalize the value of a dollar of spending in each country; the PPP version of the 2010 Chinese defense budget is $178.0 billion.

But there are some very important caveats to these caveats.

Just as the official Chinese and Russian defense budgets are incomplete, so is the US defense budget. The IISS does count the US spending outside the Pentagon’s nominal budget, such as for nuclear weapons, the Selective Service, and other defense related spending in what the Office of Management and Budget calls the “National Defense” budget function. However, the IISS does not count other US defense related spending. For 2011, this includes roughly $20 billion in military retirement spending outlayed by the Treasury Department (the DOD budget pays for less than half of annual military retirement costs). IISS does not count military aid to countries like Israel and Pakistan (in the International Affairs budget). It also does not count various homeland defense costs in the Department of Homeland Security (such as Customs and Border Patrol and the Coast Guard). It does not count the costs of caring for veterans of past and current wars in the Department of Veterans Affairs. Adding in all of these non-DOD agencies’ costs, plus a share of the annual interest on the national debt, can get total US defense-related spending up to about $1 trillion, rather than the $739.3 billion the IISS counts for the US for 2011. (The IISS version of the US defense budget for 2011 is further complicated by the fact that IISS counts the original Obama request for 2011, $739.3 billion, not the $717.4 billion that has actually been appropriated, but $20 billion is a minor error in such gigantic calculations).

In short, the IISS does not count all Chinese, Russian, or American defense spending. To achieve a complete and accurate apples to apples count would require more analysis than IISS has performed. To count all such spending for all such countries may, or may not, mean counting all of the items that total the US national security budget to about $1 trillion; it would depend on the methodology. The use of only each government’s officially counted defense budget undercounts the numbers, but it does so for each. How the relationships might change, especially the ratio by which the US budget exceeds the others, is unknown pending a better apples to apples comparison by IISS or others, but at first glance it does not appear that the ratio of US spending levels would be significantly disadvantaged.

The IISS estimate for the Chinese and Russian defense budgets is also affected by the “PPP” (Purchasing Power Parity) analysis, an effort to equalize various economic and other analytical factors. The effect of the PPP is large, larger than the effect of attempting to count all defense-related spending. For example, the official Chinese defense budget for 2010 grows from $78.7 billion to $111.0 billion when one includes all known defense spending, but that number grows much more, to $178.0 billion, in the PPP analysis. (I find no PPP analysis for China’s 2011 numbers.)

The PPP analysis, however, should be treated with care. Part of that caution is expressed by IISS itself. In its printed volumes, IISS states: “The use of PPP rates is a valid tool when comparing macroeconomic data, such as GDP, between countries at different stages of development. However, no specific PPP rate exists for the military sector, and its use for this purpose should be treated with caution. Furthermore, there is no definitive guide as to which elements of military spending should be calculated using the limited PPP rates available.” It is presumably for this reason that in its “Comparative Defence Statistics” analysis, IISS does not employ the PPP factor for comparing defense budgets across countries.

The PPP comparison also reminds one of a bizarre analytical technique the Cold War era intelligence community used when comparing US defense spending to that of the Soviet Union. To size the overall Soviet defense budget, an assumption was made, for example, to cost Soviet tanks, such as the T-72, as the cost equivalent of American tanks, such as the M-1, notwithstanding the fact that the American tank was far more complex and therefore much more expensive than the T-72. Thus, with the Soviets producing tanks in greater numbers than the US, the Soviet defense budget was counted as far larger than it actually was. It was threat inflation masked behind contrived budget analysis, and it was quite notorious to all, except those who welcomed the budget/threat inflation for bureaucratic or political reasons. The IISS description of its PPP analysis talks about adjusting for the cost of labor and materials in different countries and hints of an analytical technique vaguely like this discredited Cold War method; so the IISS admonition that its own PPP analysis “should be treated with caution” for the purpose of comparing military spending is an admonition that should be respected. If IISS did not use it for its comparative analysis, it seems reasonable for others to avoid it as well.

All that said, what do the IISS numbers show?

The first figure compares officially reported (and incomplete) US defense spending for 2011 ($739.3 billion) to the rest of the top ten defense spenders (also as officially reported): They are China, the UK, France, Japan, Russia, Saudi Arabia, Germany, India and Brazil–in that order. See the budget numbers at the link: note that not one breaks the $100 billion threshold, let alone coming anywhere close to the US. Added all together, the nine come to roughly two-thirds of the US amount, showing not balance but imbalance.

However, the contraposition of US spending to these nine is a bit odd; it suggests there is some sort of analytical comparison to be made between the US and these nine countries, other than that they are the next nine in spending levels. It would make more sense to compare US spending to that of opponents, or at least potential opponents. Assuming for the moment that China and Russia are “potential opponents” (an assumption often made by Cold Warriors with a hangover or others with no great respect for the ability of US policy makers to learn to live with regional powers or even a future superpower), the combined total for China ($89.8 billion) and Russia ($52.7 billion) comes to $142.5 billion.

Consider how puny that $142.5 billion is compared to the US’s $739.3 billion. Showing that relationship in a bar graph would almost seem to be a conscious act in diminishing China and Russia or bloating US spending. That, nonetheless, is the appropriate comparison. Moreover, adjusting it for the defense budgets of Syria, Iran, North Korea, Somalia or anyone else won’t change a thing. Not one of the latter breaks the $10 billion barrier, and if you add the defense related spending not officially reported (including for the US), the basic relationship in these spending totals will not likely change: The US spends roughly five times what these other countries spend.

In other words, the US defense budget is not just dominant; it is operating at a level completely independent of the perceived threat. In the nineteenth century, the Royal Navy sized itself to the fleets of Britain’s two most powerful potential enemies; America’s defense budget strategists declare it will be “doomsday” if we size to anything less than five times China and Russia combined.

The last figure, “Planned Defence Expenditure by Country 2011,” shows the proportion of US spending to all other regions and countries. The US accounts for 45.7 percent of total spending by the world’s 171 governments and territories. While, again, there is no comparison of the US and our allies vis-à-vis all of our “potential opponents,” the comparison becomes so unbalanced as to be odious. With most of the top ten on “our” side, the ratio of “us” to “them” is far more than five to one and more like ten, or more, to one – even assuming many governments are neutral.

As the Republicans argue in the coming (election) year that Obama is “cutting” defense to “dangerous” levels, and as Obama’s Secretary of Defense moans about “doomsday” to occur if existing spending is reduced below current plans, consider the numbers above. Do these people know what they are talking about? Do they want you to know?

Comments

  • Alfred Vail

    Wow. What a complete idiot yor are.

    Best regards from germany.

    • bobbymike34

      My post is four months old. It took you four months to come up with such a witty rejoinder?
      Interesting, however, you are in Germany. Are you right now wearing your father’s SS uniform that he wore when he worked at the death camps?
      Best regards from a country that isn’t known for the worst atrosities in the history of the world.

      • Mike123

        Wow BobbyMike you are one total m0r0n – I just stumbled upon this site so do not accuse me of taking a year to come up with some rebuttal, all I can say is a) Why exactly do we need to spend $1.2 trillion on defense, including a lot of heavy (nuclear) weaponry that might have had some value if the USSR was still around but today has absolutely none? Or are you still living in the 1950s? Because if so that would describe b) your completely inane rebuttal to some ordinary German commenting on the stupidity of your first post insinuating that he is descended from an SS officer. Given that you are clearly a very silly man let me enlighten you to the fact that the US itself does not have a very good human rights record as evidenced by the millions of koreans it carpetbombed during the Korean war or the millions of Vietnamese civilians who were napalmed or poisoned by Agent Orange, or the millions of Iranians, Salvardorans, Argentinians, Congolese, etc who were murdered/tortured/deported by vile regimes that we supported because they were nominally ‘anti-communist,’ etc, etc, etc. But no one has succeeded in invading the US through overwhelming force and therefore the US has not been forced to acknowledge any of this, it is just quietly swept under the carpet.
        Best regards from the same country as you, where roughly half the citizens (the blue half) are educated, worldly, and think with their brains, and the other half (presumably including your) are ignorant, paranoid, delusional and think with their trigger fingers :)

        • bobbymike34

          Firstly, I was making an affordability argument and my response was tongue in cheek trying to get a rise out of little weasel boys sipping their lattes while claiming to change the world from a tent on Wall Street how laughable. Another hating American leftist. Probably some rich kid with a paid for education (you basically admit this) protected by my half of the country.

          Saying what you do about America is safe, there is no threat to you saying these things. That makes you a coward (not surprising) I would have more respect if you started in Iran protesting their treatment of homosexuals (protect your own kind at least)

          You are a worthless piece of trash please feel free to move to the countries you think are better. Seriously though if America is so bad why don’t you move you hypocrite?

          The thing I don’t like about the internet is that you never get to see the pimply faced losers that respond to you.

          • Mike123

            Wow, your posts are becoming more and more incoherent with each successive iteration…

            First your original argument was completely illogical, because the theme of this argument was about how the United States vastly outspends all potential rivals, to the point of absurdity, whereas your analogy about having the nicest house on the blog only alluded to the possibility that you (and by extension the US) might be more likely to need to ‘use’ that security spending at some point, and not that it is total overkill in the first place. And I might add the proper expression is “couldn’t care less,” not “could care less.” In addition to failing in logic you are also failing in English grammar, not that it clearly makes any difference to you. I can understand your hostility to the college educated though if you regularly engage them in arguments and embarrass yourself as much as you just did with me.

            Even more ironic is that instead of trying to deny, refute, or at least rationalize some of America’s more shameful behavior in the past fifty years, you simply accuse me of being a traitor for even mentioning it int he first place. Of course it is ironic because you just got through denigrating Germany over its own shameful historical record that was only brought about because its own citizens in the 1940s failed to hold their government accountable and instead embraced your style of “love it or leave it” philosophy. Oh, and by the way, Germans are acutely aware of their own historical mistakes which is why they are collectively determined not to repeat them. You on the other hand advocate total amnesia, and my guess is if you were running things twenty years from now we would still be bombing innocent civilians in third party countries, starting unprovoked wars, etc, etc. Great philosophy to have, my friend – ignore the past, so we can go on repeating it indefinitely…

            For the record I am a) not homosexual, although I have nothing against them as you clearly do seeing that you use that term as a means to offend someone you disapprove of; b) did self-finance college, whereas my guess is you did not even finish high school; c) have never belonged to Occupy Wall Street; and d) am a successful business owner so I am not, in your words, some “angry hating leftist” or a “pimply faced loser.”

            On the subject of America, I personally think America is a great place, with the exception that roughly one third of its citizens are like you – ignorant, bigoted, paranoid, zealously nationalistic to the point of xenophobia, and incapable of any kind of informed, constructive and logical debate on any topic of contemporary interest because your sole source of information is Fox News and Sarah Palin’s facebook page. I would instead suggest that YOU and all the people LIKE you be the ones to leave, although I cannot imagine which other country would possibly take your kind as immigrants.

            And going back to the original point of the article, whatever protection your half of the country provides is totally unnecessary given the threats we currently face. Moreover, Blue States are almost all net “tax donors” to the federal government, which means that they pay fare more in federal taxes then they receive back from Washington, in no small part because so much of that money is remitted to impoverished Red states supposedly in the name of national defense, but in reality just to keep people in those red states employed, who would otherwise exist at the margins of our current knowledge society – in fact, people like you I might add.

            You are right though that it is fortunate that the internet protects your anonymity, otherwise you would be publicly humiliated as the idi0t you are :)

          • bobbymike34

            So you are logical and rational and start your first response off by calling me a moron? You criticise my grammar yet you type ‘moron’ using zeros m0r0n or is that some internet thing and by the way couldn’t care less is perfectly acceptable but you correcting me proves you are a fascist at heart.

            My first post makes perfect sense if you were capable of basic understanding if everyone wants to rob me I need to deter them before the fact not after and if I have to spend only 3.3% of my gross income (defense as a percentage of GDP roughly) and that just happens to equate to what my next 20 neighbors combined spend then I don’t really care what they spend do I? I can afford it and I am protecting my family at a reasonable cost TO ME. The US defends its citizens at a very reasonable cost as a percentage of GDP as a whole.

            The other thing to take into consideration is our global strategic posture. Does our budget match our strategy. Do you know how many carriers we have? How many, of the same size, does the rest of the world have? What about our alliances? Is there any other nation on earth that has such an interwoven complex alliance structure?

            So the original point I was making is that the US national security and defense strategy makes it totally unique in its’ defense requirements SO THEREFORE comparing what we spend to what other nations spend IS irrelevant.

          • http://defense.aol.com/ Colin Clark

            Bobbymike34 and Mike123,

            Regardless of who is at fault, please desist in this name calling. Personal attacks are a violation of our rules.
            Thank you.

            Colin Clark
            Editor
            Breaking Defense

    • David Ben-Gurion

      Hey Alfred,

      Thanks to Germany for helping out with spreading freedom and democracy in the world. We know that it was difficult for you to lose some exports by making hard moral decisions and taking the high-ground for human rights. Thanks to Germany’s leadership, Libya is now a democracy, as is Mali, Egypt, Tunisia, and Iraq. Thanks for showing leadership by taking a stand against Russia and preventing it from influencing the politics in the Ukraine and Georgia, which saved them from backsliding on their progress toward democracy and freedom. We know it was very hard for Gerhard Schroder to confront Russia and stop them from influencing and dividing Europe as it used energy supplies as a weapon because all he had to do was sell out to win his election by denouncing America and making sure the Nord Stream project was approved. He could have had a home in St. Petersberg, Russia and been given a high position with Gazprom and so much money, but he held firm on his convictions and championed the principles that underpin the West.

      Thank you for being German, Alfred. Thank you.

  • ted

    You forgot to deduct the money paid to American workers it takes to design,engineer.supply,To build these projects. Just like the space program did before
    someone decided to kill that program almost completely. Yes their is lots of Government waste in almost every thing we build but it also feeds Americans.

  • Guest

    “(an assumption often made by Cold Warriors with a hangover or others with no great respect for the ability of US policy makers to learn to live with regional powers or even a future superpower)” What was that again? Well look at the world now my poor naive and ignorant Winsler Wheeler wacko.